<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
Phillips-Van Heusen Corporation
-------------------------------
(Name of Issuer)
Common Stock, par value $1.00 per share
---------------------------------------
(Title of Class of Securities)
718592 10 8
-----------
(CUSIP Number)
David A. Boillot, Esq.
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Tel: (212) 626-4414
-------------------
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 22, 1995
--------------
(Date of Event which Requires Filing
of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [X]. (A fee is
not required only if the reporting person: (1) has a previous statement on file
reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Exhibit Index: Page 10
Page 1 of ___ Pages
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SCHEDULE 13D
CUSIP NO. 718592 10 8 PAGE 2 OF PAGES
------------------- ----- ---
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Vaneton International Inc.
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [ ]
3 SEC Use Only
4 Source of Funds*
WC, BK
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant
to Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
British Virgin Islands
7 Sole Voting Power
Number of
Shares
Beneficially 8 Shared Voting Power
Owned By
Each 2,835,794
Reporting
Person 9 Sole Dispositive Power
With
10 Shared Dispositive Power
2,835,794
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,835,794
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[ ]
13 Percent of Class Represented By Amount in Row (11)
10.7%
14 Type of Reporting Person*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
CUSIP NO. 718592 10 8 PAGE 3 OF PAGES
--------------------- ----- ---
1 Name of Reporting Person
S.S. or I.R.S. Identification No. of Above Person
Dr. Richard Lee
2 Check the Appropriate Box If a Member of a Group*
a. [ ]
b. [ ]
3 SEC Use Only
4 Source of Funds*
AF
5 Check Box If Disclosure of Legal Proceedings Is Required Pursuant to
Items 2(d) or 2(e) [ ]
6 Citizenship or Place of Organization
United Kingdom
7 Sole Voting Power
Number of
Shares
Beneficially 8 Shared Voting Power
Owned By
Each 2,835,794
Reporting
Person 9 Sole Dispositive Power
With
10 Shared Dispositive Power
2,835,794
11 Aggregate Amount Beneficially Owned by Each Reporting Person
2,835,794
12 Check Box If the Aggregate Amount in Row (11) Excludes Certain Shares*
[ ]
13 Percent of Class Represented By Amount in Row (11)
10.7%
14 Type of Reporting Person*
IN
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE>
SCHEDULE 13D
This statement on Schedule 13D is being filed by Vaneton International
Inc. and Dr. Richard Lee (sometimes hereinafter referred to as the "Reporting
Persons") with respect to the acquisition of shares of the common stock, par
value $1.00 per share (the "Common Stock"), of Phillips-Van Heusen Corporation
(the "Issuer"), a Delaware corporation.
ITEM 1. SECURITY AND ISSUER
This statement relates to shares of Common Stock of the Issuer. The
principal executive offices of the Issuer are located at 1290 Avenue of the
Americas, New York, New York 10104.
ITEM 2. IDENTITY AND BACKGROUND
(a), (b), (c) and (f). The names of the persons filing this statement
are Vaneton International Inc., a company incorporated under the laws of the
British Virgin Islands ("Vaneton"), and Dr. Richard Lee, a citizen of the United
Kingdom. Pursuant to Rule 13(d)-1(f) under the Securities Exchange Act of 1934,
as amended, Vaneton and Dr. Richard Lee file this statement jointly on behalf of
each of them. A copy of their Joint Filing Agreement is attached hereto as
Exhibit 1.
The principal business of Vaneton is to hold Common Stock of the
Issuer. The address of the principal business office of Vaneton is P.O. Box
3340, Road Town, Tortola, British Virgin Islands. The names, addresses,
citizenship and present principal occupations or employments, and the name,
principal business, and address of any corporation or other organization in
which such employment is conducted, of the executive officers and directors of
Vaneton are set forth on Schedule A hereto.
The present principal occupation or employment of Dr. Richard Lee is
serving as a Director of TAL Apparel Limited. The address of the principal
business office of Dr. Richard Lee is 6/F TAL Building, 49 Austin Road, Kowloon,
Hong Kong.
Pursuant to a Stock Purchase Agreement dated February 14, 1995, as
amended by the First Amendment Agreement dated March 17, 1995 (said Stock
Purchase Agreement, as amended by said First Amendment Agreement, is hereinafter
referred to as the "Stock Purchase Agreement") between South China (Jersey)
Holdings Limited, a Jersey, Channels Islands Company ("SCJH") and certain
shareholders of the Issuer, copies of which are attached hereto as Exhibits 2
and 3, respectively, SCJH agreed to acquire approximately 10.7% of the
outstanding shares of Common Stock of the Issuer. Pursuant to an Assignment
Agreement dated March 20, 1995 between SCJH and Vaneton (the "Assignment
Agreement"), a copy of which is attached hereto as Exhibit 4, SCJH assigned its
rights under the Stock Purchase Agreement to Vaneton.
SCJH directly owns 56.2% of the voting stock of Vaneton. SCJH also owns
100% of the voting stock of TAL Apparel Limited, a Hong Kong corporation
("TAL"), which in turn owns 46% of the voting stock of Upper Stream Corporation,
a Liberian corporation ("USC"). USC owns 11.4% of the voting stock of Vaneton.
Dr. Richard Lee is the beneficial owner of 55% of the voting stock of
Lees Holdings Incorporated, a Panamanian corporation ("LHI"), which owns 8.8% of
the voting stock of SCJH and 32.4% of the voting stock of Vaneton. LHI also owns
50% of Lees Investments Corporation, a
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Panamanian corporation ("LIC"), which owns 71.3% of the voting stock of SCJH.
USC, TAL, SCJH, LIC and LHI are hereinafter referred to as the "Related
Persons."
The address of the principal business office of TAL is 5th Floor, TAL
Building, 49 Austin Road, Kowloon, Hong Kong. TAL is principally engaged in the
garment manufacturing and exporting business. The address of the principal
business office of USC is 80 Broad Street, P.O. Box 292, Monrovia, Liberia. USC
is an unregistered mutual fund. The address of the principal business office of
SCJH is P.O. Box 621, Le Gallais Chambers, 54 Bath Street, St. Helier, Jersey,
JE4 8YD, Channel Islands. The address of the principal business office of both
LIC and LHI is the Comosa Building, 8/F, Manuel Maria Icaza & Samuel Lewis
Avenue, P.O. Box 55-0324, Panama, Republic of Panama. SCJH, LIC and LHI are all
holding companies.
(d) and (e). Neither of the Reporting Persons, none of the executive
officers or directors of Vaneton or any of the Related Persons has, during the
last five years, (i) been convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) been a party to a civil proceeding
of a judicial or administrative body of competent jurisdiction and as a result
of such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to the Stock Purchase Agreement, on March 22, 1995, Vaneton
purchased 2,835,794 shares of Common Stock of the Issuer (the "Shares") from
certain shareholders of the Issuer. Vaneton paid an aggregate of $51,044,292.00
(the "Purchase Price") to Lawrence S. Phillips, in his individual capacity and
as a trustee of the trusts created under (i) the Second Amended and Restated
Trust Agreement dated January 12, 1995 made by Madelyn S. Phillips (the "Trust A
Trust Agreement"), (ii) the Third Amended and Restated Trust Agreement dated
December 12, 1994 made by Madelyn S. Phillips (the "Trust B Trust Agreement")
and (iii) the Trust Indenture dated November 15, 1989 made by Carol Phillips
Green, as grantor (the "Carol Phillips Green 1989 GRIT Trust Agreement"); Carol
Phillips Green, in her individual capacity and as a trustee of the trusts
created under (i) the Trust A Trust Agreement, (ii) the Trust B Trust Agreement
and (iii) the Trust Indenture dated October 31, 1989 made by Lawrence S.
Phillips, as grantor (the "Lawrence S. Phillips 1989 GRIT Trust Agreement");
Cathy Green, solely in her capacity as a trustee of the trust created under the
Carol Phillips Green 1989 GRIT Trust Agreement; Madelyn S. Phillips, solely in
her individual capacity; Roxane Phillips, solely in her individual capacity;
Laura Phillips, solely in her individual capacity; and Douglas Green, solely in
his individual capacity.
In connection with the acquisition of the Shares, SCJH entered into a
Loan Agreement with Chemical Bank, Hong Kong Branch dated March 17, 1995, a copy
of which is attached hereto as Exhibit 5 (the "Loan Agreement"), pursuant to
which SCJH borrowed $28,000,000. SCJH advanced a portion of the proceeds of the
loan to LHI, which in turn contributed that amount to the capital of Vaneton.
The balance of the proceeds of the loan was contributed to the capital of
Vaneton directly by SCJH. The balance of the Purchase Price was obtained from
the working capital of Vaneton.
Pursuant to the terms of the Loan Agreement, SCJH will repay the loan
in ten equal semi-annual installments of $2,800,000 each, commencing on June 20,
1995. The loan consists of the A Facility in the principal amount of $23,000,000
and the B Facility in the principal amount of $5,000,000. Interest
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is payable on the last day of each interest period at the rate per annum equal
to (i) in the case of the A Facility, 1% plus the Singapore Interbank Market
rate for the relevant period and (ii) in the case of the B Facility, 0.25% plus
the deposit interest rate payable by Chemical Bank from time to time on an
amount equivalent to the size of the B Facility. Vaneton has entered into a Deed
of Charge, a copy of which is attached hereto as Exhibit 6 (the "Deed of
Charge"), pursuant to which it has pledged all the Shares to Chemical Bank as
security for the obligations of SCJH under the Loan Agreement.
ITEM 4. PURPOSE OF TRANSACTION
Vaneton acquired the 2,835,794 shares of Common Stock of the Issuer
purchased on March 22, 1995 for investment purposes. The Reporting Persons may
consider making additional purchases of shares of the Common Stock of the Issuer
in open-market or private transactions, the extent of which purchases would
depend upon prevailing market or other conditions. Alternatively, the Reporting
Persons may sell all or a portion of their shares of Common Stock in open-market
or private transactions, depending upon prevailing market conditions or other
factors.
Except as otherwise indicated above, none of the reporting Persons has
any plans or proposals which relate to or would result in any of the events,
actions or conditions specified in paragraphs (a) through (j) of the
instructions to Item 4 or any similar action or effect. Nothing in this
statement on Schedule 13D shall be deemed to preclude the Reporting Persons from
developing or implementing any such plan or proposal in the future.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a), (b) and (c). Vaneton directly owns 2,835,794 shares of Common
Stock of the Issuer, representing approximately 10.7% of the shares of Common
Stock of the Issuer outstanding as of the date hereof. For purposes of Rule
13d-3 of the general rules and regulations under the Securities Exchange Act of
1934, as amended, Dr. Richard Lee may be deemed to beneficially own 2,835,794
shares of Common Stock of the Issuer, or approximately 10.7% of such shares
currently outstanding. Pursuant to the Stock Purchase Agreement, Vaneton has
agreed to purchase up to 35,000 shares of Common Stock of the Issuer currently
held in the Issuer's 401(k) Plan for the account of one of the shareholders at
such time as such shareholder or his Individual Retirement Account, as the case
may be, shall be entitled to sell such shares.
Dr. Richard Lee may be deemed to have shared power to control the
voting and disposition of the 2,835,794 shares of Common Stock of the Issuer.
Except for the transaction described above, there have been no
transactions in the shares of the Common Stock of the Issuer by either of the
Reporting Persons, the Related Persons or any of the executive officers or
directors identified in response to Item 2 during the 60 days preceding the
filing of this statement on Schedule 13D.
(d). Not applicable.
(e). Not applicable.
Page __ of __ Pages
<PAGE>
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Pursuant to the Assignment Agreement, SCJH assigned its rights under
the Stock Purchase Agreement to Vaneton.
Pursuant to the Loan Agreement, Chemical Bank, Hong Kong Branch, loaned
$28,000,000 to SCJH in order to finance a portion of the Purchase Price for the
Shares payable by Vaneton pursuant to the Stock Purchase Agreement. Vaneton has,
pursuant to the Deed of Charge, pledged the Shares to Chemical Bank as security
for the obligations of SCJH under the Loan Agreement.
Except as set forth in this Item 6 or in response to other specific
items to this statement on Schedule 13D, the Reporting Persons (and those
persons identified in response to Item 2) do not have any arrangements,
contracts, understandings or relationships (legal or otherwise) with respect to
the securities of the Issuer, including but not limited to the transfer or
voting of any shares of the Common Stock of the Issuer, finder's fees, joint
ventures, loan or option arrangements, puts or calls, guarantees of profits,
division of profits or loss or the giving or the withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
The following materials are filed herewith as Exhibits:
Exhibit 1 Joint Filing Agreement, dated March 23, 1995, by and
between Vaneton and Dr. Richard Lee.
Exhibit 2 Stock Purchase Agreement, dated February 14, 1995, by and
among SCJH and Lawrence S. Phillips, in his individual
capacity and as a trustee of the trusts created under (i)
the Trust A Trust Agreement, (ii) the Trust B Trust
Agreement and (iii) the Carol Phillips Green 1989 GRIT Trust
Agreement; Carol Phillips Green, in her individual capacity
and as a trustee of the trusts created under (i) the Trust A
Trust Agreement, (ii) the Trust B Trust Agreement and (iii)
the Lawrence S. Phillips 1989 GRIT Trust Agreement; Cathy
Green, solely in her capacity as a trustee of the trust
created under the Carol Phillips Green 1989 GRIT Trust
Agreement; Madelyn S. Phillips, solely in her individual
capacity; Roxane Phillips, solely in her individual
capacity; Laura Phillips, solely in her individual capacity;
and Douglas Green, solely in his individual capacity.
Exhibit 3 First Amendment Agreement, dated March 17, 1995, by and
among SCJH and Lawrence S. Phillips, in his individual
capacity and as a trustee of the trusts created under (i)
the Trust A Trust Agreement, (ii) the Trust B Trust
Agreement and (iii) the Carol Phillips Green 1989 GRIT Trust
Agreement; Carol Phillips Green, in her individual capacity
and as a trustee of the trusts created under (i) the Trust A
Trust Agreement, (ii) the Trust B Trust Agreement and (iii)
the Lawrence S. Phillips 1989 GRIT Trust Agreement; Cathy
Green, solely in her capacity as a trustee of the trust
created under the Carol Phillips Green 1989 GRIT Trust
Agreement; Madelyn S. Phillips, solely in her individual
capacity; Roxane Phillips, solely in her individual
capacity; Laura Phillips, solely in her individual capacity;
and Douglas Green, solely in his individual capacity.
Page __ of __ Pages
<PAGE>
Exhibit 4 Assignment Agreement, dated March 20, 1995, by and between
SCJH and Vaneton.
Exhibit 5 Loan Agreement, dated March 17, 1995, by and between SCJH
and Chemical Bank, Hong Kong Branch.
Exhibit 6 Deed of Charge, dated March 17, 1995, made by Vaneton in
favor of Chemical Bank, Hong Kong Branch.
Page __ of __ Pages
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of his knowledge and belief,
each of the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: March 31, 1995
VANETON INTERNATIONAL INC. DR. RICHARD LEE
By: Richard Lee Richard Lee
------------------------ ----------------------
Name: Dr. Richard Lee
Title: Director
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<PAGE>
SCHEDULE A
LIST OF EXECUTIVE OFFICERS AND DIRECTORS
OF VANETON INTERNATIONAL INC.
<TABLE>
<CAPTION>
Principal
Name Position Address Occupation Citizen of
---- -------- ------- ---------- ----------
<S> <C> <C> <C> <C> <C>
1. Dr. Richard Lee Director 6/F TAL Building Director of TAL United Kingdom
49 Austin Road Apparel Limited*
Kowloon
Hong Kong
2. Dr. Harry Nai-Shee Director 4/F TAL Building Director of TAL United States
Lee 49 Austin Road Apparel Limited*
Kowloon
Hong Kong
3. Mr. Alexander Director 5/F TAL Building Director of TAL Canada
Kwok-Hung Chan 49 Austin Road Apparel Limited*
Kowloon
Hong Kong
</TABLE>
--------
*TAL Apparel Limited is principally engaged in the garment manufacturing and
exporting business. Its address is 5th Floor, TAL Building, 49 Austin Road,
Kowloon, Hong Kong.
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Page
---------- ----
<S> <C> <C>
1 Joint Filing Agreement dated March 23, 1995 by and between
Vaneton International Inc. and Dr. Richard Lee.
2 Stock Purchase Agreement dated February 14, 1995 by and among
South China (Jersey) Holdings Limited and Lawrence S.
Phillips, in his individual capacity and as a trustee of the
trusts created under (i) the Second Amended and Restated Trust
Agreement dated January 12, 1995 made by Madelyn S. Phillips
(the "Trust A Trust Agreement"), (ii) the Third Amended and
Restated Trust Agreement dated December 12, 1994 made by
Madelyn S. Phillips (the "Trust B Trust Agreement") and (iii)
the Trust Indenture dated November 15, 1989 made by Carol
Phillips Green, as grantor (the "Carol Phillips Green 1989
GRIT Trust Agreement"); Carol Phillips Green, in her
individual capacity and as a trustee of the trusts created
under (i) the Trust A Trust Agreement, (ii) the Trust B Trust
Agreement and (iii) the Trust Indenture dated October 31, 1989
made by Lawrence S. Phillips, as grantor; Cathy Green, solely
in her capacity as a trustee of the trust created under the
Carol Phillips Green 1989 GRIT Trust Agreement; Madelyn S.
Phillips, solely in her individual capacity; Roxane Phillips,
solely in her individual capacity; Laura Phillips, solely in
her individual capacity; and Douglas Green, solely in his
individual capacity.
3 First Amendment Agreement dated March 17, 1995 by and among
South China (Jersey) Holdings Limited and Lawrence S.
Phillips, in his individual capacity and as a trustee of the
trusts created under (i) the Second Amended and Restated Trust
Agreement dated January 12, 1995 made by Madelyn S. Phillips
(the "Trust A Trust Agreement"), (ii) the Third Amended and
Restated Trust Agreement dated December 12, 1994 made by
Madelyn S. Phillips (the "Trust B Trust Agreement") and (iii)
the Trust Indenture dated November 15, 1989 made by Carol
Phillips Green, as grantor (the "Carol Phillips Green 1989
GRIT Trust Agreement"); Carol Phillips Green, in her
individual capacity and as a trustee of the trusts created
under (i) the Trust A Trust Agreement, (ii) the Trust B Trust
Agreement and (iii) the Trust Indenture dated October 31, 1989
made by Lawrence S. Phillips, as grantor; Cathy Green, solely
in her capacity as a trustee of the trust created under the
Carol Phillips Green 1989 GRIT Trust Agreement; Madelyn S.
Phillips, solely in her individual capacity; Roxane Phillips,
solely in her individual capacity; Laura Phillips, solely in
her individual capacity; and Douglas Green, solely in his
individual capacity.
4 Assignment Agreement dated March 20, 1995 by and between South
China (Jersey) Holdings Limited and Vaneton International Inc.
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
5 Loan Agreement dated March 17, 1995 by and between South China
(Jersey) Holdings Limited and Chemical Bank, Hong Kong Branch.
6 Deed of Charge, dated March 17, 1995, made by Vaneton in favor
of Chemical Bank, Hong Kong Branch.
</TABLE>
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<PAGE>
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act of
1934, as amended, the persons named below each hereby agrees that the Schedule
13D filed herewith and any amendments thereto relating to the acquisition of
shares of common stock of Phillips-Van Heusen Corporation is filed jointly on
behalf of each such person.
Dated: March 23, 1995
Dr. Richard Lee
-----------------------------
Richard Lee
VANETON INTERNATIONAL INC.
By: Richard Lee
-----------------------------
Name: Dr. Richard Lee
Title: DIRECTOR
<PAGE>
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is entered into as of this 14th day of
February, 1995, by and between South China (Jersey) Holdings Limited, a Jersey,
Channel Islands company (the "Buyer"); Lawrence S. Phillips ("LSP"), in his
individual capacity and as a trustee of the trusts created under (i) the Second
Amended and Restated Trust Agreement dated January 12, 1995 made by Madelyn S.
Phillips (the "Trust A Trust Agreement"), (ii) the Third Amended and Restated
Trust Agreement dated December 12, 1994 made by Madelyn S. Phillips (the "Trust
B Trust Agreement") and (iii) the Trust Indenture dated November 15, 1989 made
by Carol Phillips Green, as grantor (the "Carol Phillips Green 1989 GRIT Trust
Agreement"); Carol Phillips Green ("CPG"), in her individual capacity and as a
trustee of the trusts created under (i) the Trust A Trust Agreement, (ii) the
Trust B Trust Agreement and (iii) the Trust Indenture dated October 31, 1989
made by Lawrence S. Phillips, as grantor (the "Lawrence S. Phillips 1989 GRIT
Trust Agreement" and, together with the Trust A Trust Agreement, the Trust B
Trust Agreement and the Carol Phillips Green 1989 GRIT Trust Agreement, the
"Trust Agreements"; the trusts created under the Trust Agreements are sometimes
hereinafter collectively referred to as the "Trusts"); Cathy Green ("CG"),
solely in her capacity as a trustee of the trust created under the Carol
Phillips Green 1989 GRIT Trust Agreement; Madelyn S. Phillips ("MSP"), solely in
her individual capacity; Roxane Phillips ("RP"), solely in her individual
capacity; Laura Phillips ("LP"), solely in her individual capacity; and Douglas
Green ("DG"), solely in his individual capacity. LSP, CPG, and CG in their
capacities as trustees under the Trusts are sometimes hereinafter referred to as
the "Trustees" and the Trustees, together with LSP, CPG, MSP, RP, LP and DG, in
their individual capacities, are hereinafter collectively referred to as the
"Shareholders."
W I T N E S S E T H:
WHEREAS, (i) each of LSP, CPG, MSP, RP, LP and DG is the beneficial
owner of the number of shares of Common Stock, par value $1.00 per share (the
"Common Stock"), of Phillips-Van Heusen Corporation, a Delaware corporation (the
"Corporation"), set forth opposite his or her name in Part A of Schedule 1
attached hereto and made a part hereof, (ii) the Trustees are the owners, for
the use and benefit of the respective beneficiaries (collectively, the
"Beneficiaries") pursuant to the terms of the respective Trust Agreements, of
the number of shares of Common Stock of the Corporation set forth opposite their
names in Part B of Schedule 1, and (iii) LSP has the right to acquire, pursuant
to stock options which are currently exercisable, the number of shares of Common
Stock set forth opposite his name in Part C of Schedule 1 (the "Option Shares");
and
WHEREAS, on the terms and conditions hereinafter set forth, each
Shareholder is willing to sell, and the Buyer is willing to purchase, the number
of shares of the Common Stock of the Corporation set forth opposite the name of
such Shareholder on Schedule 1 attached hereto and made a part hereof.
<PAGE>
-2-
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Sale by the Shareholders.
Subject to the terms and conditions of this Agreement, each Shareholder
agrees to sell, convey, transfer and deliver to the Buyer at the Closing
described in Section 3 hereof (the "Closing"), and the Buyer agrees to purchase,
the number of shares of the Common Stock of the Corporation set forth opposite
the name of such Shareholder on Schedule 1 (such shares being hereinafter
collectively referred to as the "Shares"). Such sale, conveyance, transfer and
delivery of the Shares by the Shareholders to the Buyer shall be free and clear
of any and all liabilities, obligations, pledges, security interests, liens and
encumbrances. The Shareholders agree that such Shares shall be delivered to the
Buyer at the Closing duly endorsed for transfer to the Buyer with a full
warranty that by such transfer the Buyer will receive good and marketable title
thereto, free and clear of any and all liabilities, obligations, pledges,
security interests, liens and encumbrances, other than those created, or which
arise as a result of the ownership of the Shares, by the Buyer. The Shareholders
shall be responsible for the payment of all transfer taxes, if any, payable in
connection with such sale, conveyance, transfer and delivery.
2. Purchase Price.
Subject to the terms and conditions of this Agreement, and in
consideration of the sale and transfer of the Shares to the Buyer, at the
Closing the Buyer shall pay to each Shareholder by transfer of immediately
available funds the sum set forth opposite the name of such Shareholder on
Schedule 1, or $18.00 per Share (the "Purchase Price").
3. Closing.
The Closing of the transaction provided for herein shall take place at
the offices of Shereff, Friedman, Hoffman & Goodman LLP, 919 Third Avenue, New
York, New York 10022, no later than the date which is the third business day
after the day on which the conditions set forth in Sections 6 and 7 hereof have
been satisfied, at 10:00 a.m. New York City time (the "Closing Date") or at such
other time and place as the parties may mutually agree.
<PAGE>
-3-
4. Representations and Warranties of the Shareholders.
Each of the Shareholders, severally but not jointly, represents and
warrants that with respect to the Shares being sold by such Shareholder
hereunder and to the extent that such representations and warranties are
applicable to such Shareholder:
(a) Ownership. The Shares are, and on the Closing Date the
Option Shares will be, validly issued and outstanding, fully paid and
nonassessable. Each of the Shareholders is the beneficial owner, and on
the Closing Date will be the record and beneficial owner, of the number
of shares of the Common Stock of the Corporation set forth opposite the
name of such Shareholder on Schedule 1 being sold hereunder, free and
clear of all claims, liens, charges, commitments, restrictions,
equities or other encumbrances or rights of any person not a party to
this Agreement of any nature whatsoever, except that (i) in the case of
the Shares owned by the Trustees, such Shares are owned solely for the
benefit of the Beneficiaries of the Trusts pursuant to the terms of the
Trust Agreements, (ii) in the case of the Option Shares, LSP has the
right to acquire such Shares and will be the record and beneficial
owner of the Option Shares on the Closing Date and (iii) in the case of
Shares owned by LSP, certain of such Shares are currently held in, and
are subject to the terms of, a margin account (the "Margin Shares").
Except, in the case of the Shares owned by the Trustees, for the Trust
Agreements, there are no agreements, arrangements or understandings
(including, without limitation, options or rights of first refusal) to
which any of the Shareholders is a party or by which any of them is
bound which provide for the purchase, sale or other disposition of any
of the Shares (other than the Margin Shares) or any interest therein or
which grant to any third party any interest or right therein. At the
Closing, each Shareholder will have full power of disposition over, and
full right to sell, assign, transfer and setover to the Buyer good and
marketable title to, the Shares to be sold by such Shareholder
hereunder, free and clear of all claims, liens, encumbrances, charges
and equities whatsoever, or contractual obligations or commitments in
respect thereof to the Corporation, other shareholders or to third
parties, or restrictions as to ownership, voting or transferability
imposed by any agreement or arrangement or by any government authority,
other than those created, or which arise as a result of the ownership
of the Shares, by the Buyer.
(b) Trust Agreements. Schedule 2 attached hereto and made a
part hereof sets forth the sole and duly appointed trustees of each of
the Trusts, and none of such Trustees have resigned or been removed or
replaced. True and correct copies of each of the Trust Agreements,
including all amendments thereto through the date hereof, have
heretofore been delivered to the Buyer. The Trustees have adequate
power and authority to own the assets held by the Trusts, including
without limitation, the Shares held by the Trusts. Neither the Trustees
nor any of the Beneficiaries has heretofore in any way assigned,
transferred or encumbered, or permitted the assignment, transfer or
encumbrance of, either voluntarily or involuntarily, all or any part of
the assets currently held by the Trusts, including, without limitation,
the Shares held by the Trusts.
<PAGE>
-4-
(c) Beneficiaries. Schedule 2 attached hereto and made a part
hereof sets forth the current income Beneficiaries of each of the
Trusts.
(d) Execution of the Agreement. Each of LSP, CPG, MSP, RP, LP
and DG has all necessary legal capacity, right, power and authority to
execute and deliver this Agreement in his or her individual capacity
and to consummate the transaction contemplated hereby. The execution
and delivery of this Agreement by the Trustees and the performance by
them of their obligations hereunder have been duly and validly
authorized and approved by all action required under applicable law
relating to the Trusts and under the terms of the Trust Agreements. The
Trustees have full authority under the terms of the Trust Agreements
and any other document relating to or applicable to the Trusts to
execute and deliver this Agreement on behalf of the Trusts and to
perform their obligations hereunder.
(e) Binding Agreement. This Agreement constitutes the legal,
valid and binding agreement of each Shareholder, enforceable in
accordance with its terms against each of LSP, CPG, MSP, RP, LP and DG
in their individual capacities, the Trustees and the Trusts.
(f) No Violation. Neither the execution of this Agreement, the
consummation of the transactions contemplated hereby nor the compliance
with or fulfillment of the terms and conditions hereof will: (i)
violate or conflict with any provision of the Trust Agreements or any
other document relating to or applicable to the Trusts, (ii) violate or
conflict with, result in the breach or termination of, or otherwise
vary, or constitute a default (or an event which, with the lapse of
time, or the giving of notice, or both, will constitute a default)
under, any contract or other instrument to which any of the
Shareholders are parties or by which any of the Shareholders are bound
or (iii) violate or conflict with any law, regulation, ordinance,
judgment, order, writ, injunction or decree or any other requirement of
any court or governmental or regulatory body of any jurisdiction that
prevents the making of, or the consummation of the transactions
contemplated by, this Agreement.
(g) Consents. Except for filings with the Federal Trade
Commission ("FTC") and the United States Department of Justice ("DOJ")
pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976
(the "HSR Act"), no consent, approval, authorization or order of,
registration or filing with, or notice to, any governmental authority
or court is required under applicable law, for the execution, delivery
and performance of or compliance by any of the Shareholders with this
Agreement or the consummation by any of the Shareholders of any other
transaction contemplated hereby.
5. Representations and Warranties of the Buyer.
(a) Investment Purpose. The Buyer represents and warrants that
the Buyer is purchasing the Shares for investment only and not with a
view to the distribution
<PAGE>
-5-
thereof in violation of the Securities Act of 1933, as amended, but
subject, nevertheless, to the disposition of the Shares being at all
times within its control. The Buyer acknowledges that within three
years prior to the date hereof, LSP acquired an aggregate of 11,909
shares of Common Stock of the Corporation in satisfaction of certain
commissions owed to him by the Trusts. The number of shares so acquired
(the "Commission Shares") and the dates of acquisition are set forth on
Schedule 3 hereto. The Buyer acknowledges that (x) the Commission
Shares are "restricted securities" (as such term is defined in Rule 144
promulgated under the Securities Act of 1933, as amended) and may only
be sold in accordance with the registration requirements of such Act or
pursuant to an available exemption therefrom and (y) the certificate(s)
representing the Commission Shares may bear an appropriate restrictive
legend and have stop transfer orders entered against them in the stop
transfer books maintained by the Corporation.
(b) Due Organization and Good Standing. The Buyer is a company
duly organized, validly existing and in good standing under the laws of
Jersey, Channel Islands.
(c) Execution of the Agreement. The execution, delivery and
performance of this Agreement by the Buyer and the consummation by the
Buyer of the transactions contemplated hereby have been duly authorized
by all necessary corporate action of the Buyer.
(d) Binding Agreement. This Agreement constitutes the legal,
valid and binding agreement of the Buyer, enforceable in accordance
with its terms against the Buyer.
(e) No Violation. Neither the execution of this Agreement, the
consummation of the transactions contemplated hereby nor the compliance
with or fulfillment of the terms and conditions hereof will: (i)
violate or conflict with any provision of the Memorandum and Articles
of Association of the Buyer, (ii) violate or conflict with, result in
the breach or termination of, or otherwise vary, or constitute a
default (or an event which, with the lapse of time, or the giving of
notice, or both, will constitute a default) under, any contract or
other instrument to which the Buyer is a party or by which the Buyer is
bound or (iii) violate or conflict with any law, regulation, ordinance,
judgment, order, writ, injunction or decree or any other requirement of
any court or governmental or regulatory body of any jurisdiction that
prevents the making of, or the consummation of the transactions
contemplated by, this Agreement.
(f) Consents. Except for filings with the FTC and the DOJ
pursuant to the HSR Act, no consent, approval, authorization or order
of, registration or filing with, or notice to, any governmental
authority or court is required under applicable law, for the execution,
delivery and performance of or compliance by the Buyer with this
Agreement or the consummation by the Buyer of any other transaction
contemplated hereby.
<PAGE>
-6-
(g) Financial Capacity. The net worth of the Buyer is in
excess of the aggregate Purchase Price being paid for all of the Shares
to be sold to the Buyer hereunder.
6. Conditions Precedent to Obligations of Buyer.
All obligations of the Buyer under this Agreement are subject to the
fulfillment of each of the following conditions prior to or at the Closing:
(a) Validity of the Shareholder's Representations and
Warranties. Except for changes contemplated and permitted by this
Agreement, the representations and warranties of the Shareholders
contained in this Agreement or in any certificate or document delivered
to the Buyer pursuant hereto shall be deemed to have been made again at
and as of the Closing and shall then be true in all material respects,
and the Shareholders shall have performed and complied with all
agreements and conditions required by this Agreement to be performed or
complied with by them prior to or at the Closing.
(b) Antitrust Matters. Any filings required to be made by the
Corporation under the HSR Act shall have been made, and the specified
waiting period with respect to such filing and the filing to be made by
the Buyer shall have expired without the receipt of any objections from
the appropriate governmental agencies.
(c) No Material Adverse Change. From the date of this
Agreement to the Closing, the Corporation shall not have suffered any
material adverse change in its business condition (financial or
otherwise), property or assets.
(d) Closing Documents. The Buyer shall have received at the
Closing the following documents, which shall be in form and substance
satisfactory to the Buyer and its counsel:
(i) Certificates representing the Shares duly
endorsed for transfer to the Buyer, or accompanied by duly
executed stock powers, free of any restrictive legends other
than with respect to the Commission Shares.
(ii) A Consent in the form attached hereto as Exhibit
A with respect to each of the Trusts duly executed by each of
the current income Beneficiaries of such Trust.
(iii) An opinion of Rosenman & Colin addressed to The
Bank of New York, the Corporation's transfer agent (the
"Transfer Agent"), in form and substance satisfactory to the
Transfer Agent, together with such other documents and
instruments as the Transfer Agent may require in order to
issue to the Buyer a certificate representing the Shares to be
purchased hereunder, free of, except in the case of the
Commission Shares, any restrictive legend.
<PAGE>
-7-
(iv) A receipt from the Shareholders for payment of
the Purchase Price (as described in Section 2 hereof).
(v) Opinions of Weitzner, Levine, Hamburg & Chill and
Shereff, Friedman, Hoffman & Goodman LLP, in form and
substance reasonably satisfactory to the Buyer and its
counsel.
7. Condition Precedent to Obligation of the Shareholder.
All obligations of the Shareholders under this Agreement are subject to
the fulfillment of each of the following conditions prior to or at the Closing:
(a) Validity of the Buyer's Representations and Warranties.
Except for changes contemplated and permitted by this Agreement, the
representations and warranties of the Buyer contained in this Agreement
or in any certificate or document delivered to the Shareholders
pursuant hereto shall be deemed to have been made again at and as of
the Closing and shall then be true in all material respects, and the
Buyer shall have performed and complied with all agreements and
conditions required by this Agreement to be performed or complied with
by it prior to or at the Closing.
(b) Antitrust Matters. Any filings required to be made by the
Corporation under the HSR Act shall have been made, and the specified
waiting period with respect to such filing and the filing to be made by
the Buyer shall have expired without the receipt of any objections from
the appropriate governmental agencies.
(c) Purchase Price. The Shareholders shall have received the
Purchase Price due at the Closing in accordance with the provisions of
Section 2.
8. Covenants of the Buyer.
(a) HSR Filing. As soon as practicable after the date hereof,
the Buyer shall file with the FTC and the DOJ the Notification and
Report Form required under the HSR Act requesting early termination of
the applicable waiting period. The Buyer shall cooperate with the
Corporation and use its best efforts to assist the Corporation in
making and pursuing such filings and shall promptly respond to all
requests for additional information or documentation.
(b) 401(k) Shares. The Buyer hereby agrees to purchase, at a
purchase price of $18.00 per share, up to 35,000 shares of Common Stock
currently held in the Corporation's 401(k) Plan for the account of LSP
at such time as LSP or his Individual Retirement Account, as the case
may be, shall be entitled to sell such shares.
<PAGE>
-8-
9. Indemnification of Buyer.
(a) Shareholders' Agreement to Indemnify. Each of LSP, CPG,
MSP, RP, LP, DG and the Trustees, severally, but not jointly, agrees to
defend, indemnify and hold harmless the Buyer against and in respect of
any and all losses, claims, liabilities, damages, expenses (including
reasonable attorneys' fees) or deficiencies resulting from a breach of
any representation, warranty, covenant or agreement of such Shareholder
made in connection with or contained in this Agreement and any
nonfulfillment by such Shareholder of any obligation under this
Agreement or, in the case of the Trustees, any claim asserted by any of
the Beneficiaries of the relevant Trust related to the sale of the
Shares hereunder.
(b) Notice of Liability. The Buyer shall, in a timely manner,
provide an indemnifying party with notice of any third party actions,
suits, proceedings, claims, demands or assessments subject to the
indemnification provisions of this Section 9 (collectively, "Third
Party Claims") and shall otherwise make available all relevant
information material to the defense of any Third Party Claims against
it. The indemnifying party shall have the right to elect to assume the
defense of any Third Party Claim with counsel reasonably satisfactory
to the Buyer and to settle and compromise any Third Party Claim;
provided, however, that such settlement or compromise shall be effected
only with the consent of the Buyer, which consent shall not be
unreasonably withheld. The failure by the Buyer to give timely notice
or to provide copies of documents or to furnish relevant data in
connection with any Third Party Claim shall not constitute a defense
(in part or in whole) to any claim for indemnification by the Buyer,
except and only to the extent that such failure shall result in any
prejudice to the indemnifying party.
(c) Amount of Indemnification. The maximum aggregate liability
of any Shareholder under this Section 9, including the maximum
aggregate liability of any Trust in respect of the indemnification made
by the Trustee(s) of such Trust pursuant to this Section 9, shall not
exceed the Purchase Price for the Shares sold by such Shareholder or
Trustee(s) on behalf of the Beneficiaries of such Trust, as the case
may be.
10. Miscellaneous.
(a) Survival of Representations and Warranties. All
representations and warranties made by the Shareholders and the Buyer
under this Agreement in connection with the transactions contemplated
herein or in any certificate, list or other instrument delivered
pursuant hereto shall survive the Closing and any investigation made at
any time with respect thereto.
(b) Waiver. Any failure of any of the parties hereto to comply
with any of its obligations or agreements or to fulfill any conditions
herein contained may be waived only by a written waiver from the other
parties.
<PAGE>
-9-
(c) Notices. All notices, requests or other communications
hereunder shall be in writing and shall be deemed to have been duly
delivered pursuant to this Agreement if delivered, or if telecopied, or
if sent by registered or certified mail, postage prepaid, return
receipt requested, to the parties at the following addresses (or at
such other addresses as shall be designated in writing by a party):
If to the Shareholders, to:
c/o Steven G. Chill, Esq.
Weitzner, Levine, Hamburg & Chill
437 Madison Avenue
New York, New York 10022
Telecopy No.: (212) 752-2922
with a copy to:
Shereff, Friedman, Hoffman & Goodman LLP
919 Third Avenue
New York, New York 10022
Telecopy No: (212) 758-9526
Attention: Scott Zimmerman, Esq.
If to the Buyer, to:
South China (Jersey) Holdings Limited
Ordnance House
31 Pier Road
St. Helier
Jersey, Channel Islands
with a copy to:
Coudert Brothers
1114 Avenue of the Americas
New York, New York 10036
Telecopy No: (212) 626-4120
Attention: David A. Boillot, Esq.
<PAGE>
-10-
(d) Captions and Paragraph Headings. Captions and paragraph
head- ings used herein are for convenience only and are not a part of
this Agreement and shall not be used in construing it.
(e) Entire Agreement. The making, execution and delivery of
this Agreement by the parties has been induced by no representations,
statements, warranties or agreements other than those herein expressed.
This Agreement embodies the entire understanding of the parties and
there are no other agreements or understandings, written or oral, in
effect between the parties relating to the subject matter hereof,
unless expressly referred to by reference herein. This Agreement may be
amended or modified only by an instrument executed by the parties or
their duly authorized agents. The Shareholders and the Buyer make no
representations or warranties not specifically referred to in this
Agreement. This Agreement supersedes and terminates all prior
arrangements and agreements between the parties.
(f) Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall be
deemed an original but all of which together shall constitute one and
the same instrument.
(g) Successors and Assigns. None of the parties hereto may
assign this Agreement without the prior written consent of the other
parties; provided that the Buyer can assign this Agreement to one or
more of its affiliates; provided that the Buyer shall guarantee in a
manner satisfactory to the Shareholder the obligations of the assignee
to pay the Purchase Price hereunder. Any impermissible attempted
assignment of this Agreement without such prior written consent shall
be void. This Agreement and the provisions hereof shall be binding upon
and inure to the benefit of, in the case of each Shareholder, his, her
or its heirs, beneficiaries (including the Beneficiaries of any Trust),
personal representatives, executors, successors and assigns, and, in
the case of the Buyer, its successors and assigns.
(h) Governing Law; Submission to Jurisdiction. The validity,
construction, operation and effect of any and all of the terms and
provisions of this Agreement shall be determined and enforced in
accordance with the internal laws of the State of New York
<PAGE>
-11-
without regard to the conflicts of law. Each of the parties hereto, by
its execution of this Agreement:
(i) irrevocably submits to the jurisdiction of the state
courts of the State of New York and to the jurisdiction of the United
States District Court for the Southern District of New York for the
purpose of any suit, action or other proceeding arising out of or based
on this Agreement (and each other agreement delivered or to be
delivered in connection herewith) or the subject matter hereof or
thereof; and
(ii) waives, to the extent not prohibited by applicable law,
and agrees not to assert, by way of motion, as a defense or otherwise,
in any such proceeding brought in any of the above-named courts, any
claim that it is not subject personally to the jurisdiction of such
courts, that its property is exempt or immune from attachment or
execution, that any such proceeding is brought in an inconvenient
forum, that the venue of such proceeding is improper, or that this
Agreement (and each other agreement delivered or to be delivered in
connection herewith) or the subject matter hereof or thereof may not be
enforced in or by such court.
The parties hereto hereby agree that any action brought under this
Agreement (and each other agreement delivered or to be delivered in connection
herewith) shall be brought exclusively in one of the above-mentioned courts.
The parties hereto hereby consent to service of process in any such
proceeding in any manner permitted by the laws of the State of New York and
agree that service of process by registered or certified mail, return receipt
requested, at its address specified in or pursuant to Section 10(c) is
reasonably calculated to give actual notice.
<PAGE>
-12-
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement on the date first above written.
SOUTH CHINA (JERSEY) HOLDINGS LIMITED
By: Richard Lee
------------------------------------
Name: Dr. Richard Lee
Title: DIRECTOR
By: Lawrence S. Phillips
------------------------------------
Lawrence S. Phillips, individually,
and as a Trustee under the Trusts
created under the Trust A Trust
Agreement, the Trust B Trust
Agreement and the Carol Phillips
Green 1989 GRIT Trust Agreement
By: Carol P. Green
------------------------------------
Carol P. Green, individually, and
as a Trustee under the Trusts
created under the Trust A Trust
Agreement, the Trust B Trust
Agreement and the Lawrence S.
Phillips 1989 GRIT Trust Agreement
By: Cathy Green
------------------------------------
Cathy Green, solely in her capacity
as a Trustee under the Trust created
under the Carol Phillips Green 1989
GRIT Trust Agreement
By: Madelyn S. Phillips
------------------------------------
Madelyn S. Phillips, solely in her
individual capacity
<PAGE>
-13-
By: Roxane Phillips
------------------------------------
Roxane Phillips, solely in her
individual capacity
By: Laura Phillips
------------------------------------
Laura Phillips, solely in her
individual capacity
By: Douglas Green
------------------------------------
Douglas Green, solely in his
individual capacity
<PAGE>
-14-
EXHIBIT A
CONSENT
The undersigned, on behalf of himself/herself and on behalf of all
contingent remaindermen of the trust created under
___________________________________________ (the "Trust"), hereby irrevocably
ratifies, confirms and approves (i) the sale of the Shares held by the Trust
(the "Trust Shares") on the terms and conditions set forth in this Agreement,
and (ii) all actions taken by ________ and ________ (the "Trustees") in
effecting the sale, including, without limitation, the execution and delivery of
this Agreement by the Trustees and the performance by the Trustees of their
obligations under this Agreement. Without limitation of the foregoing, the
undersigned, on behalf of himself/herself and on behalf of all contingent
remaindermen of the Trust, hereby irrevocably acknowledges and agrees that the
purchase price, payable in accordance with the terms of this Agreement,
represents full and adequate consideration for the sale of the Trust Shares.
The undersigned hereby agrees that, in the event and to the extent that
he or she receives any distribution from the Trust which is attributable to any
payment to the Trust pursuant to this Agreement or income earned in respect
thereof (whether upon the termination of the Trust or otherwise), the
undersigned, in his or her individual capacity, shall be jointly and severally
liable with the Trustees for any and all indemnification of the Buyer by the
Trustees hereunder. Each of the undersigned agrees that the foregoing
obligations shall be binding upon and inure to the benefit of his or her
respective heirs, beneficiaries, personal representatives, executors,
administrators, successors and assigns.
_______________________________________
<PAGE>
SCHEDULE 1
SHAREHOLDINGS
<TABLE>
<CAPTION>
NUMBER OF TOTAL
OWNER SHARES HELD PURCHASE PRICE
--------------------------------------------- ----------- ---------------
<S> <C> <C>
PART A.
Lawrence S. Phillips 647,497 $ 11,654,946.00
Carol P. Green 145,448 $ 2,618,064.00
Madelyn S. Phillips 75,601 $ 1,360,818.00
Roxane Phillips 790 $ 14,220.00
Douglas Green 3,000 $ 54,000.00
Laura Phillips 2,550 $ 45,900.00
PART B.
Carol P. Green and Lawrence S. Phillips, 916,685 $ 16,500,330.00
as Trustees under SECOND AMENDED AND
RESTATED TRUST AGREEMENT, dated
January 12, 1995, made by Madelyn S.
Phillips, as grantor ("Trust A")
Lawrence S. Phillips and Carol P. Green, 965,223 $ 17,374,014.00
as Trustees under THIRD AMENDED AND
RESTATED TRUST AGREEMENT, dated
December 12, 1994, made by Madelyn S.
Phillips, as grantor ("Trust B")
Carol P. Green, as Trustee under TRUST 194,000 $ 3,492,000.00
INDENTURE dated October 31, 1989, made by
Lawrence S. Phillips, as grantor ("Lawrence S.
Phillips 1989 GRIT")
Cathy Green and Lawrence S. Phillips, as 85,000 $ 1,530,000.00
Trustees under TRUST INDENTURE dated
November 15, 1989, made by Carol P. Green
("Carol P. Green 1989 GRIT")
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
NUMBER OF TOTAL
OWNER SHARES HELD PURCHASE PRICE
--------------------------------------------- ----------- ---------------
<S> <C> <C>
PART C.
Lawrence S. Phillips (options) 42,648 $ 767,664.00
</TABLE>
<PAGE>
SCHEDULE 2
TRUSTS
<TABLE>
<CAPTION>
TRUST CREATED UNDER TRUSTEES BENEFICIARIES
<S> <C> <C> <C>
1. SECOND Carol P. Green and Madelyn S. Phillips
AMENDED AND Lawrence S. Phillips
RESTATED
TRUST
AGREEMENT,
dated January 12,
1995, made by
Madelyn S.
Phillips, as grantor
("Trust A")
2. THIRD Lawrence S. Phillips and Madelyn S. Phillips
AMENDED AND Carol P. Green
RESTATED
TRUST
AGREEMENT,
dated December 12,
1994, made by
Madelyn S.
Phillips, as grantor
("Trust B")
3. TRUST Carol P. Green Lawrence S. Phillips
INDENTURE dated
October 31, 1989,
made by Lawrence
S. Phillips, as
grantor ("Lawrence
S. Phillips 1989
GRIT")
4. TRUST Cathy Green and Lawrence Carol P. Green
INDENTURE dated S. Phillips
November 15,
1989, made by
Carol P. Green
("Carol P. Green
1989 GRIT")
</TABLE>
<PAGE>
-15-
SCHEDULE 3
COMMISSION SHARES
<TABLE>
<CAPTION>
DATE ACQUIRED NUMBER OF SHARES
<S> <C> <C>
Lawrence S. Phillips 2/14/94 3850
2/14/94 3100
12/22/93 940
12/22/93 575
1/20/93 64
1/20/93 3380
</TABLE>
<PAGE>
FIRST AMENDMENT AGREEMENT
THIS FIRST AMENDMENT AGREEMENT dated as of the 17th day of March 1995
is entered into by and among South China (Jersey) Holdings Limited, a Jersey,
Channel Islands company (the "Buyer"); Lawrence S. Phillips ("LSP"), in his
individual capacity and as a trustee of the trusts created under (i) the Second
Amended and Restated Trust Agreement dated January 12, 1995 made by Madelyn S.
Phillips (the "Trust A Trust Agreement"), (ii) the Third Amended and Restated
Trust Agreement dated December 12, 1994 made by Madelyn S. Phillips (the "Trust
B Trust Agreement") and (iii) the Trust Indenture dated November 15, 1989 made
by Carol Phillips Green, as grantor (the "Carol Phillips Green 1989 GRIT Trust
Agreement"); Carol Phillips Green ("CPG"), in her individual capacity and as a
trustee of the trusts created under (i) the Trust A Trust Agreement, (ii) the
Trust B Trust Agreement and (iii) the Trust Indenture dated October 31, 1989
made by Lawrence S. Phillips, as grantor (the "Lawrence S. Phillips 1989 GRIT
Trust Agreement" and, together with the Trust A Trust Agreement, the Trust B
Trust Agreement and the Carol Phillips Green 1989 GRIT Trust Agreement, the
"Trust Agreements"; the trusts created under the Trust Agreements are sometimes
hereinafter collectively referred to as the "Trusts"); Cathy Green ("CG"),
solely in her capacity as a trustee of the trust created under the Carol
Phillips Green 1989 GRIT Trust Agreement; Madelyn S. Phillips ("MSP"), solely in
her individual capacity; Roxane Phillips ("RP"), solely in her individual
capacity; Laura Phillips ("LP"), solely in her individual capacity; and Douglas
Green ("DG"), solely in his individual capacity. LSP, CPG, and CG in their
capacities as trustees under the Trusts are sometimes hereinafter referred to as
the "Trustees" and the Trustees, together with LSP, CPG, MSP, RP, LP and DG, in
their individual capacities, are hereinafter collectively referred to as the
"Shareholders."
W I T N E S S E T H:
WHEREAS, the Buyer and the Shareholders entered into that certain Stock
Purchase Agreement dated February 14, 1995 (the "Stock Purchase Agreement")
pursuant to which the Buyer has agreed to purchase from the Shareholders, and
the Shareholders have agreed to sell to the Buyer, the number of shares of
Common Stock, par value $1.00 per share (the "Common Stock") of Phillips-Van
Heusen Corporation, a Delaware corporation (the "Corporation"), described
therein; and
WHEREAS, the parties to the Stock Purchase Agreement wish to amend the
terms thereof to reflect the reduction in the number of shares of Common Stock
to be sold by LSP and Trust B thereunder.
<PAGE>
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:
1. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Stock Purchase Agreement.
2. Schedule 1 of the Stock Purchase Agreement is hereby amended to read
in its entirety as set forth in Exhibit A hereto.
3. Except to the extent each is expressly amended by the terms of this
First Amendment Agreement, all terms and conditions of the Stock Purchase
Agreement and all other instruments and agreements executed thereunder remain in
full force and effect.
4. The validity, construction, operation and effect of any and all of
the terms and provisions of this Agreement shall be determined and enforced in
accordance with the internal laws of the State of New York without regard to the
conflicts of law.
IN WITNESS WHEREOF, the parties hereto have duly executed this First
Amendment Agreement on the date first above written.
SOUTH CHINA (JERSEY) HOLDINGS
LIMITED
By: R. Lee
------------------------------------
Name: R. Lee
Title: Director
By: Lawrence S. Phillips
-------------------------------------
Lawrence S. Phillips, individually,
and as a Trustee under the Trusts
created under the Trust A Trust
Agreement, the Trust B Trust
Agreement and the Carol Phillips
Green 1989 GRIT Trust Agreement
By: Carol P. Green
-------------------------------------
Carol P. Green, individually , and as
a Trustee under the Trusts created
under the Trust A Trust Agreement,
the Trust B Trust Agreement and the
Lawrence S. Phillips 1989 GRIT Trust
Agreement
<PAGE>
By: Cathy Green
-------------------------------------
Cathy Green, solely in her capacity
as a Trustee under the Trust created
under the Carol Phillips Green 1989
GRIT Trust Agreement
By: Madelyn S. Phillips
-------------------------------------
Madelyn S. Phillips, solely in her
individual capacity
By: Roxane Phillips
-------------------------------------
Roxane Phillips, solely in her
individual capacity
By: Laura Phillips
-------------------------------------
Laura Phillips, solely in her
individual capacity
By: Douglas Green
-------------------------------------
Douglas Green, solely in his
individual capacity
<PAGE>
EXHIBIT A TO FIRST AMENDMENT AGREEMENT
SCHEDULE 1
SHAREHOLDINGS
<TABLE>
<CAPTION>
Number of Total
Owner Shares Held Purchase Price
<S> <C> <C>
Part A.
Lawrence S. Phillips 647,497 $11,654,946.00
Carol P. Green 145,448 $ 2,618,064.00
Madelyn S. Phillips 75,601 $ 1,360,818.00
Roxane Phillips 790 $ 14,220.00
Douglas Green 3,000 $ 54,000.00
Laura Phillips 2,550 $ 45,900.00
Part B.
Carol P. Green and Lawrence S. Phillips, 916,685 $16,500,330.00
as Trustees under SECOND AMENDED AND
RESTATED TRUST AGREEMENT, dated
January 12, 1995, made by Madelyn S.
Phillips, as grantor ("Trust A")
Lawrence S. Phillips and Carol P. Green, 765,223 $13,774,014.00
as Trustees under THIRD AMENDED AND
RESTATED TRUST AGREEMENT, dated
December 12, 1994, made by Madelyn S.
Phillips, as grantor ("Trust B")
Carol P. Green, as Trustee under TRUST 194,000 $ 3,492,000.00
INDENTURE dated October 31, 1989, made by
Lawrence S. Phillips, as grantor ("Lawrence S.
Phillips 1989 GRIT")
</TABLE>
<PAGE>
2
<TABLE>
<CAPTION>
Number of Total
Owner Shares Held Purchase Price
<S> <C> <C>
Cathy Green and Lawrence S. Phillips, as 85,000 $ 1,530,000.00
Trustees under TRUST INDENTURE dated
November 15, 1989, made by Carol P. Green
("Carol P. Green 1989 GRIT")
</TABLE>
<PAGE>
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT is entered into as of this 20th day of March,
1995 by and between South China (Jersey) Holdings Limited (hereinafter called
the "Assignor"), a Jersey, Channel Islands Company, with its registered office
at LeGallais Chambers, 54 Bath Street, St. Helier, Jersey, Channel Islands, and
Vaneton International Inc. (hereinafter called the "Assignee"), a corporation
organized and existing under the laws of the British Virgin Islands, and having
its registered office at P.O. Box 3340, Road Town, Tortola, British Virgin
Islands.
W I T N E S S E T H
WHEREAS, Assignor entered into that certain Stock Purchase Agreement
dated February 14, 1995, as amended by the First Amendment Agreement dated March
17, 1995 (said Stock Purchase Agreement as amended by said First Amendment
Agreement is hereinafter referred to as the "Stock Purchase Agreement") by and
among Assignor and Lawrence S. Phillips ("LSP"), in his individual capacity and
as a trustee of the trusts created under (i) the Second Amended and Restated
Trust Agreement dated January 12, 1995 made by Madelyn S. Phillips (the "Trust A
Trust Agreement"), (ii) the Third Amended and Restated Trust Agreement dated
December 12, 1994 made by Madelyn S. Phillips (the "Trust B Trust Agreement")
and (iii) the Trust Indenture dated November 15, 1989 made by Carol Phillips
Green, as grantor (the "Carol Phillips Green 1989 GRIT Trust Agreement"); Carol
Phillips Green ("CPG"), in her individual capacity and as a trustee of the
trusts created under (i) the Trust A Trust Agreement, (ii) the Trust B Trust
<PAGE>
Agreement and (iii) the Trust Indenture dated October 31, 1989 made by Lawrence
S. Phillips, as grantor (the "Lawrence S. Phillips 1989 GRIT Trust Agreement"
and, together with the Trust A Trust Agreement, the Trust B Trust Agreement and
the Carol Phillips Green 1989 GRIT Trust Agreement, the "Trust Agreements"; the
trusts created under the Trust Agreements are sometimes hereinafter collectively
referred to as the "Trusts"); Cathy Green ("CG"), solely in her capacity as a
trustee of the trust created under the Carol Phillips Green 1989 GRIT Trust
Agreement; Madelyn S. Phillips ("MSP"), solely in her individual capacity;
Roxane Phillips ("RP"), solely in her individual capacity; Laura Phillips
("LP"), solely in her individual capacity; and Douglas Green ("DG"), solely in
his individual capacity (LSP, CPG, and CG in their capacities as trustees under
the Trusts are sometimes hereinafter referred to as the "Trustees" and the
Trustees, together with LSP, CPG, MSP, RP, LP and DG, in their individual
capacities, are hereinafter collectively referred to as the "Shareholders")
pursuant to which Assignor has agreed to purchase from the Shareholders, and the
Shareholders have agreed to sell to Assignor, the number of shares of Common
Stock, par value $1.00 per share (the "Common Stock") of Phillips-Van Heusen
Corporation, a Delaware corporation (the "Corporation"), described therein; and
WHEREAS, Assignor wishes to assign all of its right, title and interest
in the Stock Purchase Agreement to Assignee, and Assignee wishes to accept such
assignment.
-2-
<PAGE>
NOW THEREFORE, in consideration of the mutual promises contained herein
and other good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. Assignment. Assignor hereby assigns to Assignee all its right, title
and interest in the Stock Purchase Agreement and Assignee, in consideration of
said assignment, agrees to assume all the obligations and liabilities of
Assignor under the Stock Purchase Agreement.
2. Governing Law. The validity, construction, operation and effect of
any and all of the terms and provisions of this Agreement shall be determined
and enforced in accordance with the internal laws of the State of New York
without regard to the conflicts of law.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment Agreement on the date first above written.
SOUTH CHINA (JERSEY) HOLDINGS LIMITED
By: R. Lee
---------------------------------------
Name: R. Lee
Title: Director
VANETON INTERNATIONAL INC.
By: R. Lee
---------------------------------------
Name: R. Lee
Title: Director
-3-
<PAGE>
DATED 17th MARCH 1995
A TERM LOAN FACILITY OF US$28,000,000.00
made by
CHEMICAL BANK
HONG KONG BRANCH
to
SOUTH CHINA (JERSEY) HOLDINGS LIMITED
J O H N S O N
Solicitors
S T O K E S &
Hong Kong
M A S T E R
<PAGE>
CONTENTS
<TABLE>
<CAPTION>
Clause Heading Page No.
------ ------- --------
<S> <C> <C>
1. Purpose and Definitions............................................. 1
2. Amount and Drawdown................................................. 4
3. Interest............................................................ 4
4. Repayment and Prepayment............................................ 5
5. Fees and Expenses................................................... 6
6. Payments............................................................ 7
7. Representations and Warranties...................................... 8
8. Undertakings........................................................ 11
9. Conditions Precedent................................................ 12
10. Events of Default................................................... 13
11. Indemnity........................................................... 16
12. Illegality and Increased Costs...................................... 16
13. Assignment.......................................................... 17
14. Miscellaneous....................................................... 17
15. Law and Jurisdiction................................................ 18
THE SCHEDULE Form of Drawdown Notice....................................... 19
</TABLE>
<PAGE>
THIS AGREEMENT is dated the 17th day of March, 1995 and made BETWEEN:-
(1) SOUTH CHINA (JERSEY) HOLDINGS LIMITED as Borrower; and
(2) CHEMICAL BANK, HONG KONG BRANCH as Lender.
IT IS HEREBY AGREED as follows:-
1. Purpose and Definitions
1.1 This Agreement sets out the terms and conditions upon and subject to
which the Lender agrees to make available to the Borrower a term loan
facility of up to United States Dollars Twenty Eight Million
(US$28,000,000) for the purpose of financing part of the acquisition
costs by the Chargor of shares in Phillips-Van Heusen.
1.2 In this Agreement, unless the context otherwise requires, the following
words and expressions shall have the following meanings:-
"Agreement" means this loan agreement;
"Banking Day", unless otherwise specified, means a day on which banks
are open for business in Hong Kong, Singapore and (if payment is
required to be made on such day) on which banks are open for business
in New York City, but excluding Saturdays;
"Borrower" means South China (Jersey) Holdings Limited, a company
established under the laws of Channel Islands and having its office at
Le Gallais Chambers, 54 Bath Street, St. Helier, Jersey, Channel
Islands; "Borrowed Money" means Indebtedness incurred in respect of (i)
money borrowed or raised, (ii) any bond, note, loan stock, debenture or
similar instrument, (iii) acceptance or documentary credit facilities,
(iv) deferred payments for assets or services acquired, (v) rental
payments under leases (whether in respect of land, machinery, equipment
or otherwise) entered into primarily as a method of raising finance or
of financing the acquisition of the asset leased, (vi) guarantees,
bonds, standby letters of credit or other instruments issued in
connection with the performance of contracts and (vii) guarantees or
other assurances against financial loss in respect of Indebtedness of
any person falling within any of (i) to (vi) above;
"Charge over Deposit" means the charge over deposit to be executed by
the Borrower in favour of the Lender whereby the Borrower agrees to
charge its deposit of not less than US$5,000,000 in such account with
the Lender as may be accepted by the Lender as security for the
Borrower's obligations under this Agreement and the Security Documents,
being in such form as the Lender may require;
"Chargor" means Vaneton International Inc., a company incorporated in
the British Virgin Islands, having its registered office at P.O. Box
3340, Road Town, Tortola, British Virgin Islands;
<PAGE>
-2-
"Deed of Charge" means the deed of charge to be executed by the Chargor
in favour of the Lender whereby the Chargor charges all the shares held
by it in Phillips-Van Heusen to the Lender as security for the
Borrower's obligations under this Agreement and the Security Documents,
being in such form as the Lender may require;
"Default" means any Event of Default or any event which with the giving
of notice or lapse of time or the satisfaction of any other condition
(or any combination thereof) would constitute an Event of Default;
"Drawdown Date" means the date being a Banking Day falling not later
than 31 March 1995, on which the Loan is to be drawn down;
"Drawdown Notice" means the notice of drawing substantially in the form
set out in the Schedule hereto;
"Encumbrance" means any mortgage, charge (whether fixed or floating),
pledge, lien, hypothecation, assignment, security interest, title
retention or other encumbrance of any kind securing or any right
conferring a priority of payment in respect of any obligation of any
person but does not include liens arising in the ordinary course of
trading by operation of law and not by way of contract;
"Event of Default" means any of the events or circumstances described
in Clause 10;
"Facilities" means the loan facilities of up to US$28,000,000 extended
by the Lender to the Borrower hereunder comprising "A Facility" as
described in Clause 2.1(a) and "B Facility" as described in Clause
2.1(b) and the Facility shall mean either of them;
"Final Maturity Date" means 31 March 2000;
"Group" means the Borrower and its subsidiaries at any relevant time
and "member of the Group" shall be construed accordingly;
"Indebtedness" means any obligation for the payment or repayment of
money, whether as principal or as surety and whether present or future,
actual or contingent;
"Interest Payment Date" means the last day of an Interest Period;
"Interest Period" means each period for the calculation of interest in
respect of the Loan ascertained in accordance with Clause 3.2;
"Lender" means Chemical Bank, a banking corporation incorporated under
the laws of the State of New York, United States of America, operating
through its Hong Kong office at 44th Floor, Edinburgh Tower, 15 Queen's
Road Central, Hong Kong which definition shall include its successors
and assignees;
<PAGE>
-3-
"Loan" means the aggregate principal amount owing to the Lender under
this Agreement at any relevant time;
"Margin" means: (a) in respect of an Interest Period applicable to A
Facility, one per cent. (1%) per annum; and (b) in respect of an
Interest Period applicable to B Facility, zero point twenty five per
cent. (0.25%) per annum;
"Repayment Date(s)" means subject to Clause 6.3 each of the 10 dates
falling at six (6) months intervals, commencing on the day falling
three (3) months after the Drawdown Date and thereafter on the even day
of each succeeding six (6) months;
"Security Documents" includes (i) the Deed of Charge, (ii) the Charge
over Deposit and (iii) any such other documents as may have been or
shall from time to time hereafter be executed to secure the Loan,
interest thereon and all other monies from time to time owing (whether
the same shall be due and payable or not) by the Borrower pursuant to
this Agreement and/or to all or any of such documents;
"Shares" means the common stock of US$1.00 each in Phillips-Van Heusen,
a company listed on the New York Stock Exchange;
"SIBOR" means in relation to a particular period the arithmetic mean
(expressed as a percentage rounded upwards, if necessary, to four
decimal places) of the rates quoted by the Lender to be that at which
deposits in US Dollars and in an amount comparable with the amount in
relation to which SIBOR is to be determined and for a period equal to
the relevant period were being offered by first class banks to the
Lender in the Singapore Interbank Market at or about 11 a.m. (Singapore
time) on the second Banking Day before the first day of such period;
"subsidiary" means a subsidiary as defined in Section 2(4) of the
Companies Ordinance (Cap.32) of the laws of Hong Kong;
"US Dollars" and "US$" means the lawful currency at any relevant time
hereunder of the United States of America.
1.3 References to a time of day are to Hong Kong time unless otherwise
specified.
1.4 Clause headings and the table of contents are inserted for convenience
of reference only and shall be ignored in the interpretation of this
Agreement.
1.5 In this Agreement, unless the context otherwise requires:
(a) references to Clauses and Schedules are to be construed as
references to clauses of, and schedules to, this Agreement and
references to this Agreement include its Schedules;
<PAGE>
-4-
(b) references to any enactment shall be deemed to include
references to such enactment as re-enacted, amended, extended,
consolidated or replaced, and any orders, decrees,
proclamations, regulations, instruments or other subordinate
legislation made thereunder;
(c) words importing the plural shall include the singular and vice
versa; and
(d) references to a person shall be construed as references to an
individual, firm, company, corporation, unincorporated body of
persons or any State or any agency thereof.
2. Amount and Drawdown
2.1 Subject to Clause 2.2, the Lender relying upon each of the
representations, warranties and undertakings set out in Clauses 7 and 8
hereby agrees to make available to the Borrower loan facilities of
US$28,000,000 comprising:-
(a) the A Facility: being a facility of US$23,000,000 under which
the Borrower may draw in full in one lump sum on the Drawdown
Date; and
(b) the B Facility: being a facility of US$5,000,000 under which
the Borrower may draw in full in one lump sum on the Drawdown
Date subject to the terms of this Agreement Provided That the
Lender shall have received, not later than 11 a.m. on the
third Banking Day before the proposed Drawdown Date, the
Drawdown Notice, specifying the Drawdown Date (which shall be
a Banking Day) and the initial Interest Period which shall be
one, two, three or six months. A Drawdown Notice shall be
effective on actual receipt by the Lender and once given shall
be irrevocable.
2.2 The Facilities shall end on the Final Maturity Date whereupon the Loan,
all interest accrued thereon and all other sums payable under this
Agreement shall be repaid by the Borrower to the Lender.
3. Interest
3.1 Interest shall be payable by the Borrower on the Loan in respect of
each Interest Period relating thereto on each Interest Payment Date at
the rate per annum determined by the Lender to be the aggregate of in
the case of A Facility (i) the Margin and (ii) SIBOR and in the case of
B Facility the Margin and (ii) the deposit interest rate payable by the
Lender from time to time on an amount equivalent to the size of B
Facility.
3.2 The Borrower may, not later than 11 a.m. on the third Banking Day prior
to the commencement of an Interest Period, by notice to the Lender
select an Interest Period for the Loan of one (1), two (2), three (3)
or six (6) months but so that:-
<PAGE>
-5-
(a) the first Interest Period will be as specified in the Drawdown
Notice and will commence upon the Drawdown Date and each
subsequent Interest Period will commence forthwith upon expiry
of the previous Interest Period;
(b) in the absence of any determination by the Borrower the
Interest Period shall be deemed to be one (1) month or if the
Lender shall certify that US Dollars are not available to it
for the Interest Period so selected or deemed to be selected
by the Borrower, the Interest Period shall be of the length
reasonably determined by the Lender which shall be conclusive
and binding on the Borrower;
(c) the expiry of any Interest Period shall not exceed beyond the
Final Maturity Date of the Facilities referred to in Clause
2.2;
(d) an Interest Period which would otherwise end beyond a
Repayment Date shall end on such Repayment Date; and
(e) if any Interest Period would otherwise end on a day which is
not a Banking Day, that Interest Period shall be extended to
the next succeeding Banking Day unless it would thereby end in
the next calendar month, in which event such Interest Period
shall end on the preceding Banking Day.
3.3 If the Borrower fails to pay any sum (including, without limitations
any sum payable pursuant to this Clause 3.3) on its due date(s) for
payment under this Agreement or any of the Security Documents, the
Borrower shall pay interest on such sum on demand from the due date up
to the date of actual payment (as well after as before judgment) at a
rate determined by the Lender to be two per cent per annum above the
aggregate of the Margin and SIBOR. Such interest shall be due and
payable on the last day of each period as determined by the Lender.
3.4 The certificate of the Lender as to any rate of interest determined by
it pursuant to this Agreement shall, in the absence of manifest error,
be conclusive and binding on the Borrower.
4. Repayment and Prepayment
4.1 The Borrower shall repay the Loan in ten (10) equal semi-annual
installments of US$2,800,000 each on each of the Repayment Dates.
4.2 The Borrower may by giving not less than five (5) Banking Days' prior
notice in writing to the Lender specifying the amount to be prepaid and
the proposed date of such prepayment (which notice shall be irrevocable
and shall oblige the Borrower to prepay the relevant amount on the date
specified) prepay the Loan in whole or in part (and if in part, in a
minimum amount of US$ 1,000,000 or an integral multiple thereof)
without premium or penalty (but with accrued interest on the principal
amount to be prepaid to
<PAGE>
-6-
the date of prepayment and any other sum then payable under this
Agreement) on any Repayment Dates. Where the Borrower prepays on a day
other than any Repayment Dates or gives less than five Banking Days'
prior notice in writing, the Borrower shall reimburse the Lender the
greater of (i) any losses that the Lender incurs, arising from such
prepayments, from the date of prepayment to the next Repayment Date and
(ii) 1% on the amount prepaid.
4.3 Every notice of prepayment shall be effective only on actual receipt by
the Lender. The Borrower may not prepay the Loan or any part thereof
save as expressly provided in this Agreement.
4.4 In the event that the Chargor shall fail to acquire 3,200,000 Shares
within 6 months from the date hereof, the Lender may by giving not less
than five (5) Banking Days' prior notice in writing require the
Borrower to prepay the Loan together with accrued interests on the next
immediate Repayment Date in an amount calculated as follows:-
(number of Shares charged by
3,200,000 - the Chargor in favour of
the Lender)
--------------------------------------------- X US$28,000,000
3,200,000
Where the Borrower prepays on a day other than a Repayment
Date, the Borrower shall reimburse the Lender the greater of (i) any
losses that the Lender incurs, arising from such prepayments, from the
date of prepayment to the next Repayment Date and (ii) 1% on the amount
prepaid.
5. Fees and Expenses
5.1 The Borrower shall pay to the Lender on demand:-
(a) all expenses on a full and unqualified indemnity
basis(including legal and out-of-pocket expenses) incurred by
the Lender in connection with the negotiation, preparation,
execution and, where relevant, registration of this Agreement
and the Security Documents and of any amendment or extension
of or the granting of any waiver or consent under this
Agreement and/or any of the Security Documents;
(b) all expenses on a full and unqualified indemnity basis
(including legal and out-of-pocket expenses) incurred by the
Lender in connection with the enforcement of, or preservation
of or, the attempted enforcement of, or preservation of any
rights under, this Agreement and/or any of the Security
Documents, or otherwise in respect of the monies owing under
this Agreement and/or any of the Security Documents; and
<PAGE>
-7-
(c) interest at the rate referred to in Clause 3.3 on such
expenses from the date on which such expenses were incurred to
the date of payment (as well after as before judgment).
5.2 The Borrower shall pay all stamp, documentary, registration or other
like duties, taxes, fees or charges (including any duties, taxes, fees
or charges payable by the Lender) imposed on or in connection with this
Agreement and/or any of the Security Documents or the Loan and shall
indemnify the Lender against any liability arising by reason of any
delay or omission by the Borrower to pay such duties, taxes, fees or
charges.
6. Payments
6.1 All payments to be made by the Borrower under this Agreement and/or any
of the Security Documents shall be made in full without set-off or
counterclaim of any nature whatsoever and, subject to Clause 6.2, free
and clear of and without any present and future withholdings taxes,
levies, duties, imposts or deductions of whatever nature which may be
required by the laws of Hong Kong or Channel Islands or elsewhere, in
US Dollars in same day available funds not later than 11:00 a.m. on the
due date by transfer to such account(s) of the Lender as designated by
the Lender from time to time.
6.2 If at any time the Borrower is required by any applicable law,
regulation or regulating requirement or any governmental authority,
monetary agency or central bank to make any deduction or withholding in
respect of any taxes, duties or other charges or withholdings of
whatever nature from any payment due under this Agreement or any of the
Security Documents, the sum due from the Borrower in respect of such
payment shall be increased to the extent necessary to ensure that,
after the making of such deduction or withholding, the Lender receives
on the due date for such payment a net sum equal to the sum which it
would have received had no such deduction or withholding been required
to be made and the Borrower shall indemnify the Lender against any
losses or costs incurred by it by reason of any failure of the Borrower
to make any such deduction or withholding or by reason of any increased
payment not being made on the due date for such payment. The Borrower
shall promptly deliver to the Lender any receipts, certificates or
other proof evidencing the amounts (if any) paid or, payable in respect
of any such deduction or withholding as aforesaid.
6.3 When any payment under this Agreement or any of the Security documents
would otherwise be due, on a day which is not a Banking Day, the next
succeeding Banking Day shall be substituted for such day, unless such
Banking Day falls in the next calendar month, in which case the
immediately preceding Banking Day shall be substituted therefor.
6.4 All interest under this Agreement or any of the Security Documents
shall accrue from day to day and be calculated on the actual number of
days elapsed in a year of 360 days.
<PAGE>
-8-
6.5 Any certificate or determination of the Lender as to any rate of
interest or any other amount payable under this Agreement or any of the
Security Documents shall be conclusive and binding on the Borrower in
the absence of manifest error.
6.6 The Lender shall maintain, in accordance with its usual practice, an
account or accounts evidencing the amounts from time to time lent by,
owing to and paid to it under this Agreement and the Security
Documents. Such account or accounts shall in the absence of manifest
error be conclusive as to the amount from time to time owing by the
Borrower to the Lender under this Agreement and the Security Documents.
6.7 All sums to be advanced by the Lender to the Borrower under this
Agreement shall be remitted in US Dollars on the Drawdown Date to such
account of the Borrower as specified in the Drawdown Notice.
6.8 The Borrower authorises the Lender to apply any credit balance to which
the Borrower is then entitled on any account of the Borrower with the
Lender at any of its branches in or towards satisfaction of any sum
then due and payable from the Borrower to the Lender under this
Agreement. For this purpose the Lender is authorised to purchase with
the monies standing to the credit of such account such currencies as
may be necessary to effect such application. The Lender shall not be
obliged to exercise any right given to it by this Clause 6.8. The
Lender shall notify the Borrower forthwith upon the exercise or
purported exercise of any right of set-off giving full details in
relation thereto.
7. Representations and Warranties
7.1 The Borrower hereby represents and warrants to the Lender that:
(a) the Borrower is duly incorporated and validly existing under
the laws of Channel Islands and has power to carry on its
business as it is now being conducted and to own its property
and other assets;
(b) the Borrower has power to execute, deliver and perform its
obligations under this Agreement and/or the Security Documents
to which it is a party, all necessary corporate, shareholder
and other action has been or will be taken by it to authorise
the execution, delivery and performance of this Agreement
and/or the Security Documents to which it is a party, no
limitation on its powers to borrow will be exceeded as a
result of transactions contemplated under this Agreement and
this Agreement constitutes and the Security Documents to which
it is a party will constitute valid and legally binding
obligations of the Borrower enforceable in accordance with its
terms;
(c) the execution, delivery and performance of its obligations
under and compliance by the Borrower with the provisions of
this Agreement and/or the Security
<PAGE>
-9-
Documents to which it is a party will not (i) contravene any
applicable law, statute, rule, regulation, authorization or
any judgment, decree or permit to which it is subject, or (ii)
conflict with or result in any breach of or constitute a
default under any agreement or other instrument to which the
Borrower is a party or is subject or by which it or any of its
property is bound, or (iii) contravene or conflict with any
provisions of the Borrower's constitutional documents;
(d) every consent, authorization, license or approval of, or
registration with, or declaration to governmental or public
bodies or authorities or courts required by the Borrower (ff
any) in connection with the execution, delivery, performance,
validity, enforceability or admissibility in evidence of this
Agreement and/or the Security Documents to which it is a party
or the performance by the Borrower of its obligations
hereunder or thereunder has been, or in the case of the
Security documents, will prior to the execution thereof,
obtained or made and is, or in the case of the Security
Documents, will prior to the execution thereof be, in full
force and effect and there has been no default in the
observance of any of the conditions or restrictions imposed in
or in connection with any of the same;
(e) no material litigation, arbitration or administrative
proceeding is taking place, pending or, to its knowledge,
threatened against the Borrower or any of its subsidiaries or
could have a material adverse effect on the business, assets
or financial condition of the Borrower or any of its
subsidiaries;
(f) the audited financial statements of the Borrower and the
unaudited consolidated financial statements of the Borrower
and its subsidiaries in respect of the financial year ended on
31st March 1994 as delivered to the Lender have been prepared
in accordance with generally accepted international accounting
principles and practices which have been consistently applied
and present fairly and accurately the financial position of
the Borrower and the consolidated financial position of the
Borrower and its subsidiaries respectively as at such date and
the results of the operations of the Borrower and the
consolidated results of the operations of the Borrower and its
subsidiaries respectively for the financial year ended on such
date and, as at such date, neither the Borrower nor any of its
subsidiaries had any significant liabilities (contingent or
otherwise) which are not disclosed by, or reserved against in,
such financial statements and the Borrower did not have any
unrealized anticipated losses;
(g) there has been no material adverse change in the financial
position of the Borrower and its subsidiaries from that set
forth in the financial statements referred to in Clause
7.1(f);
(h) no Default has occurred and is continuing;
<PAGE>
-10-
(i) the Borrower and/or its subsidiaries are not in default in the
payment of any principal of or interest on any Indebtedness
for Borrowed Money and are not in breach of or in default
under any provision of any indenture, deed of trust, agreement
or other instrument to which it is a party and under or
subject to which any such Indebtedness for Borrowed Money has
been issued and is outstanding, and no event, condition or act
which with the giving of notice or lapse of time, or both,
would constitute an event of default under any such indenture,
deed of trust, agreement or other instrument has occurred or
is continuing which has not been properly waived or remedied
thereunder;
(j) the obligations of the Borrower under this Agreement and/or
the Security Documents to which it is a party are direct,
general and unconditional obligations of the Borrower, and
rank at least pari passu in all respects with all its other
present and future, unsecured and unsubordinated indebtedness
and obligations (including contingent obligations), with the
exception of indebtedness and obligations mandatorily
preferred by law and not by contract;
(k) the information, exhibits and reports furnished by the
Borrower and/or any of its subsidiaries to the Lender in
connection with the negotiation and preparation of this
Agreement and each of the Security Documents are true and
accurate in all material respects and not misleading, do not
omit material facts and all reasonable enquiries have been
made to verify the facts and statements contained therein;
there are no other facts the omission of which would make any
fact or statement therein misleading;
(l) the Borrower and its subsidiaries and their respective assets
are not entitled to immunity on the grounds of sovereignty or
otherwise from any legal action or proceeding (which shall
include, without limitation, suit, attachment prior to
judgment, execution or other enforcement);
(m) all advances, loans or other monies made available to the
Borrower by its shareholders or stockholders or any related or
associated company shall rank after and inferior to the Loan
and the Borrower's Indebtedness under this Agreement; and
(n) the choice by the Borrower of Hong Kong law to govern this
Agreement and the Security Documents and the submission by the
Borrower to the non-exclusive jurisdiction of the Hong Kong
courts are valid and binding.
7.2 The representations and warranties in Clause 7.1 (and so that the
representation and warranty in Clause 7.1(f) shall for this purpose
refer to the then latest financial statements delivered to the Lender
under Clause 8.1) shall be deemed to be repeated by the Borrower, on
and as of each day from the date of this Agreement until all monies due
or owing by the Borrower under this Agreement and the Security
Documents have been
<PAGE>
-11-
paid in full as if made with reference to the facts and circumstances
existing at each such date.
8. Undertakings
8.1 The Borrower hereby undertakes with the Lender that, from the date of
this Agreement and so long as any monies are owing under this Agreement
or the Security Documents, the Borrower will :-
(a) use the Loan exclusively for the purpose specified in Clause
1.1;
(b) ensure that its and/or the Chargor's obligations and
liabilities under this Agreement and/or the Security Documents
shall rank at all times at least pari passu with all its
and/or the Chargor's other present or future, joint or
several, unsecured and unsubordinated obligations and
indebtedness, with the exception of indebtedness and
obligations mandatorily preferred by law and not by contract;
(c) obtain, maintain in full force and effect and comply in all
material respects with any conditions and restrictions (if
any) imposed in or in connection with, every consent,
authorization, license or approval of governmental or public
bodies or authorities or courts, and do, or cause to be done,
all other acts and things, which may from time to time be
necessary or desirable under applicable law for the continued
due performance of all its and the Chargor's obligations under
this Agreement and the Security Documents;
(d) prepare its financial statements and consolidated financial
statements in accordance with generally internationally
accepted accounting principles and practices consistently
applied in respect of each financial year and (save in case of
the consolidated financial statements of the Borrower and its
subsidiaries) cause the same to be certified by its auditors
and submit the same to the Lender as soon as practicable but
not later than 150 days after the end of the financial year;
(e) provide the Lender with such financial and other information
concerning the Borrower as the Lender may from time to time
reasonably required;
(f) file or cause to be filed all tax returns required to be filed
in all jurisdictions in which it is situate or carries on
business or is otherwise subject to taxation and pay all taxes
shown to be due and payable on such returns or any assessments
made against it (other than those being contested in good
faith and where such payment may be lawfully withheld);
(g) promptly inform the Lender of any occurrence of which it
becomes aware which might adversely affect its ability or the
ability of any member of the Group to perform its obligations
under the Security Documents (or any of them) to which
<PAGE>
-12-
it is party and of any Default forthwith upon becoming aware
thereof and will from time to time, if so requested by the
Lender, confirm to the Lender in writing that, save as
otherwise stated in such confirmation, no Default has occurred
and is continuing.
8.2 The Borrower undertakes with the Lender that from the date of this
Agreement and so long as any monies are owing under this Agreement or
the Security Documents, it will ensure that Lees Investment Corporation
and Lees Holdings Incorporation shall, from time to time, remain
shareholders of not less than 60% of the issued share capital of the
Borrower.
8.3 The Borrower undertakes with the Lender that from the date of this
Agreement and so long as any monies are owing under this Agreement or
the Security Documents, it will not, without the prior written consent
of the Lender merge or consolidate with any other company or person
which consent shall not be unreasonably withheld;
9. Conditions Precedent
9.1 The Lender shall not be obliged to make any amount available under this
Agreement unless it shall have received, before the Drawdown Notice is
given, the following documents in form and substance satisfactory in
all respects to the Lender as it may reasonably require and consider
sufficient for the purpose of the Facilities :-
(a) this Agreement duly executed by the Borrower;
(b) certified copies of all consents, licenses, approvals and
authorizations of all governmental agencies and authorities
required for or in connection with the execution, delivery,
performance, validity and enforceability of this Agreement and
the Security Documents;
(c) evidence satisfactory to the Lender in all respects that the
terms of this Agreement and the Security documents and the
execution and performance thereof have been duly approved and
authorised by the board of directors and the shareholders of
the Borrower and parties to the Security Documents;
(d) a favourable legal opinion issued by a firm of lawyers in
Channel Islands to be chosen by the Lender with respect to the
legality, validity and enforceability of this Agreement, the
Security Documents and all other related documents;
(e) a favourable legal opinion issued by a firm of lawyers in the
British Virgin Islands with respect to the legality, validity
and enforceability of the Deed of Charge;
<PAGE>
-13-
(f) a favourable legal opinion issued by a firm of lawyers in the
United States with respect to the legality, validity and
enforceability of the Deed of Charge; (g) certified true
copies of all constitutional documents of the Borrower and the
Chargor and such of their other incorporation documents as the
Lender may reasonably require, together with an up-to-date
specimen signature list of their respective directors,
secretary and persons authorised to sign the Drawdown Notice
and to give other notice and instruction to the Lender;
(h) letter of acceptance addressed to the Lender and issued by the
service agent appointed by the Borrower pursuant to Clause
15.2 confirming the acceptance by such service agent of its
appointment;
(i) the Deed of Charge duly executed by the parties hereto; and
(j) the Charge Over Deposit duly executed by the parties thereto.
9.2 The conditions precedent set out in Clause 9.1 are inserted for the
sole benefit of the Lender, and may be waived in whole or in part, with
or without conditions by the Lender on or before the Drawdown Date
without prejudicing the right of the Lender to require fulfillment of
such conditions in whole or in part at any time thereafter.
10. Events of Default
10.1 There shall be an Event of Default if:-
(a) the Borrower fails to pay any sum payable by it under this
Agreement and/or any of the Security Documents at the time
stipulated in this Agreement or the relevant Security Document
or in the currency or in the manner stipulated in this
Agreement or the relevant Security Document; or
(b) the Borrower or any other party to the Security Documents
defaults in the due performance of or commits any breach of or
omits to observe any of its obligations or undertakings under
this Agreement and/or any of the Security Documents and, in
respect of any such breach or omission which in the opinion of
the Lender is capable of remedy, such action as the Lender may
require shall not have been taken within seven (7) days of the
Lender notifying the Borrower or any other party to the
Security Documents of such required action; or
(c) any representation or warranty made or deemed to be made or
repeated by or in respect of the Borrower or any other party
to the Security Documents in or pursuant to this Agreement
and/or any of the Security Documents or in any notice,
certificate or statement referred to in or delivered under
this Agreement and/or any of the Security Documents is or
proves to have been incorrect in any material respect; or
<PAGE>
-14-
(d) any Indebtedness of the Borrower or any of its subsidiaries in
respect of Borrowed Money is not paid when due or becomes due
or capable of being declared due prior to the date when it
would otherwise have become due (unless as a result of the
exercise by the Borrower of a voluntary right of prepayment)
or any guarantee or indemnity given by the Borrower or any of
its subsidiaries in respect of such Indebtedness is not
honored when due and called upon, the occurrence of which, in
the reasonable opinion of the Lender, would materially and
adversely affect the ability of the Borrower to perform its
obligation hereunder; or
(e) any consent, authorization, license or approval of or
registration with or declaration to governmental or public
bodies or authorities or courts required by the Borrower or
any other party to the Security Documents in connection with,
the execution, delivery, performance, validity, enforceability
or admissibility in evidence of this Agreement and/or any of
the Security Documents to which it is a party or the
performance by the Borrower or any other party to the Security
Documents of its obligations hereunder or thereunder is
modified in a manner unacceptable to the Lender or is not
granted or is revoked or terminated or expires and is not
renewed or otherwise ceases to be in full force and effect; or
(f) an encumbrancer takes possession of the whole or any material
part of the assets, rights or revenues of the Borrower or any
of its subsidiaries or a distress, execution, sequestration or
other process is levied or enforced upon or sued against any
of the undertakings, assets, rights or revenues of the
Borrower or any of its subsidiaries and is not discharged
within fifteen (15) days; or
(g) the Borrower or any of its subsidiaries stops or suspends
payment of its debts or is unable to or admits inability to
pay its debts as they fall due or commence negotiations with
one or more of its creditors with a view to the general
readjustment or rescheduling of all or part of its debts or
propose or enter into any composition or other arrangements
for the benefit of his creditors generally or proceedings are
commenced in relation to the Borrower or any of its
subsidiaries under any law, regulation or procedure relating
to reconstruction or readjustment of debt; or
(h) the Borrower or any of its subsidiaries takes any action or
any legal proceedings are started or other steps taken for (i)
the Borrower or any of its subsidiaries to be adjudicated or
found bankrupt or insolvent (ii) the winding-up or dissolution
of the Borrower or any of its subsidiaries (other than
voluntary liquidation of any of its subsidiaries) or (iii) the
appointment of a liquidator, trustee, receiver or similar
officer of the Borrower or any of its subsidiaries or of the
whole or any part of its undertakings, assets, rights or
revenues; or
<PAGE>
-15-
(i) any event occurs or proceeding is taken with respect to the
Borrower or any of its subsidiaries in any jurisdiction to
which it is subject which has an effect equivalent or similar
to any of the events mentioned in sub-clause (f), (g) or (h)
of this Clause 10.1; or
(j) the Security Documents shall at any time and for any reason
become revoked, invalid or unenforceable or otherwise cease to
remain in full force and effect, or if the validity or
enforceability of the Security Documents shall at any time and
for any reason be contested, or it becomes impossible or
unlawful for the Borrower or any other party to the Security
Documents to fulfil any of its substantial covenants and
obligations contained in this Agreement or the Security
Documents to which it is a party or for the Lender to exercise
the rights vested in it thereunder or otherwise; or
(k) the Borrower suspends or ceases to carry on its business; or
(l) any other event occurs or circumstance arises which is likely
materially and adversely to affect the ability of the Borrower
or any other party to the Security Documents to perform all or
any of its material obligations under or otherwise to comply
with the material terms of this Agreement and/or any of the
Security Documents to which it is a party or affect the
security created by this Agreement and/or any of the Security
Documents; or
(m) the Borrower or any other party to the Security Documents
repudiates this Agreement or any of the Security Documents to
which it is a party or does or causes or permits to be done
any act or thing reasonably evidencing an intention to
repudiate this Agreement or any of the Security Documents; or
(n) all or a material part of the undertakings, assets, rights or
revenues, or shares or other ownership interests in the
Borrower or any of its subsidiaries are seized, nationalized,
expropriated or compulsorily acquired by or under the
authority of any government; or
(o) it becomes unlawful at any time for the Borrower to perform
all or any of its obligations under this Agreement.
10.2 The Borrower shall notify the Lender forthwith in writing of any
occurrence of an Event of Default or any event which, with the giving
of notice and/or the lapse of time and/or upon the fulfillment of any
other condition under Clause 10.1 might constitute an Event of Default.
10.3 The Lender may at any time after the happening of an Event of Default,
unless and until that Event of Default and any others shall have been
fully remedied to the satisfaction of the Lender, by notice in writing
to the Borrower declare that the Loan and all interest
<PAGE>
-16-
thereon, and all other sums owing or payable hereunder have become
immediately due and payable, whereupon the same shall become
immediately due and payable, and the Borrower shall forthwith repay the
Loan and all interest accrued and all other sums payable under or in
relation to this Agreement and the Security Documents to the Lender.
11. Indemnity
11.1 The Borrower shall indemnify the Lender on demand, without prejudice to
any of the Lender's other rights under this Agreement and/or any of the
Security Documents against any loss (including loss of profit)
liabilities, damages, costs or expense which the Lender shall certify
(except in the case of manifest error) as sustained or incur as a
consequence of (a) any default in payment by the Borrower of any sum
due under this Agreement or any of the Security documents when due; (b)
the occurrence of any Event of Default; (c) any prepayment of the Loan
or part thereof being made under Clauses 4 and 12 otherwise than on the
Repayment Date; (d) the Loan not being drawdown for any reason
(excluding default by the Lender) after the Drawdown Notice has been
given by the Borrower including, in any such case, but not limited to,
any loss or expense incurred in maintaining or funding the Loan or any
part thereof or in liquidating or re-employing deposits from third
parties acquired to effect or maintain, the Loan or any part thereof.
11.2 No payment to the Lender under this Agreement or any of the Security
Documents pursuant to any judgment or order of any court or tribunal or
otherwise shall operate to discharge the obligation of the Borrower in
respect of which it was made unless and until payment in full shall
have been received in US Dollars and to the extent that the amount of
any such payment is not received in US Dollars and shall on actual
conversion into US Dollars fall short of the amount of the obligation
expressed in US Dollars, the Lender shall have a further and separate
cause of action against the Borrower for the recovery of such sum as
shall after conversion into US Dollars be equal to the amount of the
shortfall. Any amount due from the Borrower under this Clause 11.2
shall be due as a separate debt and shall not be affected by judgment
being obtained for any other sums due under or in respect of this
Agreement or any of the Security Documents.
12. Illegality and Increased Costs
12.1 If at any time as a result of any change to present or future
applicable law, regulation or regulatory requirement or any judgment,
order or direction of any court, tribunal or authority binding upon the
Lender and renders it unlawful for the Lender to make, fund or allow to
remain outstanding all or any part of the Loan hereunder, then the
Lender's obligation to make the Loan available shall cease and the
Lender shall promptly inform the Borrower in writing and require the
Borrower, on the earlier of the last Repayment Date and the last day
permitted under the relevant law, regulation, regulatory requirement,
judgment, order or direction, to repay the Loan (without premium or
penalty) together with accrued interest thereon and all other monies
owing hereunder.
<PAGE>
-17-
12.2 If by reason of (a) any change in law, regulations or regulatory
requirement or any judgment, order or direction of any court, tribunal
or authority binding upon the Lender or in its interpretation or
application after the date hereof or the introduction of any new law,
regulations or regulatory requirements to which the Lender may be
subject to and/or (b) compliance by the Lender with any direction,
request or requirement of any central bank or other fiscal, monetary or
other authority made or coming into force after the date hereof
(whether or not having the force of law) and/or (c) any change in
present market conditions, the Lender incurs as a result of its having
entered into and/or performing its obligations hereunder and/or as a
result of the Loan being outstanding hereunder, any increase in the
cost to the Lender of making, funding or maintaining the Loan or the
Lender becomes subject to any additional taxes, levies or payments (not
being a payment of profits tax on its overall net income) on or
calculated by reference to the Loan then (a) the Borrower shall
indemnify the Lender against such amount as may be certified by the
Lender in writing to be such increased cost (or such portion of such
increased cost as is, in the reasonable opinion of the Lender,
attributable to its making, funding or maintaining the Loan) or (b) the
Lender shall be able to exercise the right to alter the basis on which
interest is charged under the Facilities in respect of advances made.
The certificate of the Lender as to the amount of such increased cost
to be indemnified by the Borrower shall be conclusive and binding on
the Borrower save for manifest error.
12.3 When the Loan is prepaid by the Borrower pursuant to this Clause 12,
the Borrower shall, at the time of such prepayment, pay to the Lender
accrued interest thereon to the date of actual payment, any additional
amount payable under Clause 12.2 and all other sums payable by the
Borrower to the Lender pursuant to this Agreement, (including, without
limitation, any amounts payable under Clause 11) and pursuant to the
Security Documents or any of them.
13. Assignment
13.1 This Agreement shall be binding upon, and enure for the benefit of, the
Lender and the Borrower and their respective successors.
13.2 Neither the Borrower nor the Lender may assign or transfer any of its
rights or obligations under this Agreement.
14. Miscellaneous
14.1 Every notice under this Agreement shall be in writing and may be sent
by post or by fax to the Borrower or the Lender at their respective
addresses and fax numbers notified in writing by either party from time
to time. Except that any notice given by the Borrower to the Lender
will not be effective unless actually received by the Lender, every
notice given to the Borrower by the Lender shall be deemed to have been
received three Banking Days after its posting or one Banking Day after
its transmission by fax.
<PAGE>
-18-
14.2 No failure or delay by the Lender in exercising any right, power,
privilege or remedy under this Agreement shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power,
privilege or remedy preclude any other or further exercise thereof or
the exercise of any other right, power, privilege or remedy. The rights
and remedies provided under this Agreement are cumulative and not
exclusive of any rights and remedies provided by law.
14.3 This Agreement shall not be amended, modified, changed or waived except
by an instrument in writing, signed by the Lender and the Borrower.
14.4 Any provision of this Agreement prohibited by or unlawful or
unenforceable under any applicable law actually applied by any court of
competent jurisdiction shall, to the extent required by such law, be
severed from this Agreement and rendered ineffective so far as is
possible without modifying the remaining provisions of this Agreement.
Where however the provisions of any such applicable law may be waived,
they are hereby waived by the parties hereto to the full extent
permitted by such law to the end that this Agreement shall be a valid
and binding agreement enforceable in accordance with its terms.
15. Law and Jurisdiction
15.1 This Agreement shall be governed by and construed in accordance with
the laws of Hong Kong and the parties hereto hereby irrevocably submit
to the non-exclusive jurisdiction of the Hong Kong Courts.
15.2 The Borrower hereby irrevocably authorise and appoint Tapsec Limited,
5th Floor, TAL Building, 49, Austin Road, Kowloon, Hong Kong to accept
notice of all legal process arising out of or in connection with this
Agreement or any matters connected herewith and service on such agent
shall be deemed to be service on the Borrower.
15.3 The submission of the Borrower to the jurisdiction of the Hong Kong
Courts shall not restrict the right of the Lender to take proceedings
against the Borrower in any other courts having, claiming or accepting
jurisdiction over the Borrower or any of its assets, nor shall the
taking of proceedings in any one or more jurisdictions preclude the
taking of proceedings in any other jurisdiction whether concurrently or
not.
15.4 The Borrower irrevocably waives any objection which the Borrower may
now or hereafter have to the laying of venue of any legal action or
proceeding arising out of or in connection with this Agreement in any
court, and irrevocably waives any claim which the Borrower may now or
hereafter have that any such legal action or proceeding has been
brought in an inconvenient forum.
IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed on the day and year first above written.
<PAGE>
-19-
THE SCHEDULE
Form of Drawdown Notice
To: Chemical Bank,
Hong Kong Branch,
44th Floor, Edinburgh Tower,
15 Queen's Road Central,
Hong Kong
, 1995
US$28,000,000 Term Loan
Agreement dated 1995
----------------------------
We refer to the above Agreement and hereby give you irrevocable notice
that we wish to drawdown US$28,000,000.00 on 21 March 1995 and select a first
Interest Period in respect thereof of one month. The funds should be credited to
Chemical Bank, New York, N.Y., ABN no. 021000128, for the account of Coudert
Brothers account no. 611-121018;
We confirm that:-
(i) no Event of Default, or other event or circumstance which,
with the giving of notice and/or lapse of time might
constitute an Event of Default, has occurred or is continuing
that has not been properly waived or remedied;
(ii) the representations and warranties contained in Clause 7 of
the Agreement are true and correct at the date hereof as if
made with respect to the facts and circumstances existing at
such date;
(iii) the borrowing to be effected by the Loan will be within our
corporate powers, has been validly authorised by appropriate
corporate action and will not cause any limit on our
borrowings (whether imposed by statute, regulation, agreement
or otherwise to be exceeded:
(iv) we are not aware of any facts or circumstances which may
constitute a default on our part under any agreement binding
on us or which may have any adverse effect on our financial
position; and
(v) the undertakings contained in Clause 8 of the Agreement have
at all times been duly complied with, observed and performed.
<PAGE>
-20-
Words and expressions defined in the Agreement shall have the same
meanings when used herein.
For and on behalf of
South China (Jersey) Holdings Limited
By: RICHARD LEE
-----------------------
Name: Dr. Richard Lee
Title: Director
SIGNED by Dr. Richard Lee
for and on behalf of SOUTH CHINA
(JERSEY) HOLDINGS LIMITED
in the presence of:- Richard Lee
TONG GEE FIT
TRAINEE SOLICITOR
JOHNSON STOKES & MASTER
SIGNED by Paul C. Li, Vice
President, for and on behalf of
CHEMICAL BANK Hong Kong Branch
in the presence of.-- Paul C. Li
<PAGE>
CHARGE OVER SECURITIES
TO: Chemical Bank
Hong Kong Branch
44th Floor, Edinburgh Tower
15, Queen's Road Central
Hong Kong
1. Definitions
"Bank" means Chemical Bank and its successors and assigns;
"Banking Facilities" means such facilities as the Bank may make or
continue to make available to the Borrower pursuant to the Loan Agreement;
"Borrower" means South China (Jersey) Holdings Limited, a company
incorporated in the Channel Islands whose registered office is at Le Gallais
Chambers, 54 Bath Street, St. Helier, Channel Islands;
"Chargor" means Vaneton International Inc., a company incorporated in
the British Virgin Islands whose registered office is at P.O. Box 3340, Road
Town, Tortola, British Virgin Islands;
"Event of Default" has the meaning ascribed to the term in the Loan
Agreement;
"Exchange Rate" means the rate for converting one currency into another
currency which the Bank determines to be prevailing in the relevant foreign
exchange market at the relevant time, such determination to be conclusive and
binding on the Chargor;
"Loan Agreement" means the loan agreement dated 17th March 1995 and
signed between the Borrower and the Bank;
"person" includes an individual, firm, company, corporation and an
unincorporated body of persons;
"Process Agent" means Tapsec Limited, 5th Floor, TAL Building, 49,
Austin Road, Kowloon, Hong Kong;
"Secured Moneys" means (i) all moneys in any currency owing by the
Borrower to the Bank at any time, pursuant to the Loan Agreement, (ii) interest
on such moneys (both before and after any demand or judgment) to the date on
which the Bank receives payment, at the rates payable by the Borrower or which
would have been payable but for any circumstance which restricts payment, (iii)
any expense of the Bank in making payment in respect of the Securities
<PAGE>
on behalf of the Chargor (but without the Bank being under any obligation to do
so) as a result of failure by the Chargor to make such payment when due and (iv)
all expenses of the Bank in enforcing this Charge on a full indemnity basis;
"Securities" means (i) 2,800,000 Shares which are owned by the Chargor,
(ii) all future Shares which will be owned by the Chargor, (iii) all dividends,
interest, distributions and other moneys derived therefrom and (iv) all
accretions, allotments, and other benefits accruing or arising in respect
thereof; and
"Shares" means the common stocks of US$1.00 each in Phillips-Van
Heusen, a US company.
2. Charge
2.1 In consideration of the Banking Facilities, the Chargor, as
beneficial owner, charges,m by way of first fixed charge, to the Bank all the
right, title and interest of the Chargor in and to the Securities as a
continuing security for the obligations of the Borrower in respect of the
Secured Moneys.
2.2 A certificate of balance signed by any duly authorised officer of
the Bank shall be conclusive evidence against the Chargor of the amount of the
Secured Moneys owing at any time.
2.3 The Bank shall be entitled to retain this Charge for such period as
the Bank may certify to the Chargor to be appropriate in order to protect the
interests of the Bank in respect of the Secured Moneys.
3. Continuing and Additional Charge
This Charge is a continuing security and is in addition to, shall not
be affected by and may be enforced despite the existence of any other security
held by the Bank. Any restriction on the right of consolidating securities shall
not apply to this Charge.
4. Undertaking
The Chargor undertakes:
(a) that the Securities are and shall be in the sole beneficial
ownership of the Chargor, free from encumbrances and claims,
except pursuant to this Charge:
(b) to pay all calls and make all other payments in respect of the
Securities when due;
2
<PAGE>
(c) not to or attempt to encumber, transfer, sell, dispose of or
otherwise deal with any of the Securities except as directed
by or with the consent of the Bank in writing (which consent
shall not be unreasonably withheld); and
(d) not to take any action which might prejudice the value of the
Securities and/or the effectiveness of this Charge.
5. Authorisation
The Chargor authorises the Bank:
(a) to appoint any other person as its nominee or agent to hold
and to keep possession and control of the Securities;
(b) without prejudice to its rights hereunder as a chargee of the
Securities and upon the occurrence of an Event of Default , to
register the Securities, at the discretion of the Bank, in the
name of the Bank and/or its nominee;
(c) to exercise or procure the exercise of the voting rights
attaching to the Securities, so far as legally permissible, as
if the Bank were the sole legal and beneficial owner and,
otherwise, the Chargor shall not vote in a manner which may
adversely affect the value of the Securities;
(d) until an Event of Default occurs, to pay over to the Chargor
any dividends, interest or other payments paid in respect of
the Securities;
(e) after consultation with the Chargor, to determine whether or
not to take any action which may be called for in respect of
the Securities as to offers, redemptions or any other matter;
and
(f) to return to the Chargor securities which may not have the
same serial number or identification as those originally
deposited with or received by the Bank, or any nominee or
agent of the Bank.
6. Enforcement of Charge
If the Borrower has failed to pay any of the Secured Moneys when due or
the Chargor is in default under any of the terms of this Charge or if either the
Borrower or the Chargor is unable or admits to being unable to pay its debts, as
they become due, or is subject to any proceedings in or analogous to insolvency,
bankruptcy or liquidation or if legal process is applied for, levied or enforced
against the Securities or any other assets of the Borrower or the Chargor, the
Bank shall be entitled to enforce this Charge and may, without demand, notice,
legal process or any other action with respect to the Borrower or the Chargor,
realise, sell or otherwise dispose of all or some of the Securities, at any time
and in any way it deems
3
<PAGE>
expedient, free from any restrictions and claims and the Bank shall not be
liable for any loss arising out of such realisation, sale or disposal.
7. Power of Attorney and Further Assurance
7.1 The Chargor hereby irrevocably appoints the Bank to be the attorney
for the Chargor and in the name and on behalf and as the act or deed of the
Chargor or otherwise, without any reference to or consent from the Chargor, to
execute all documents and to do all things as may be required for the full
exercise of all or any of the powers hereby conferred on the Bank and its rights
under this Charge as it may consider expedient in connection with the exercise
of such powers and rights.
7.2 At the request of the Bank, the Chargor shall execute such
documents and perform such acts as the Bank may consider expedient in connection
with the exercise of its powers and rights under this Charge.
8. Limitation on Liability and Indemnity
8.1 The Bank shall not be liable to the Chargor or any other person for
any act, delay or failure to act, on the part of the Bank or any other person,
in respect of the Securities unless due to the negligence or wilful default of
the Bank, its nominees or any of their respective officers or employees.
8.2 The Chargor shall indemnify the Bank, its nominees and their
respective officers and employees against all liabilities, claims, costs and
damages of any kind which may be incurred by any of them and all actions or
proceedings which may be brought by or against them in connection with the
Securities and the exercise of the powers and rights of the Bank under this
Charge, unless due to the negligence or wilful default of the Bank, its nominees
or any of their respective officers or employees.
9. Set-off
The Bank may, at any time and without notice, apply any credit balance
to which the Chargor is entitled on any account with the Bank in or towards
satisfaction of the Secured Moneys. For this purpose, the Bank is authorised to
purchase, at the Exchange Rate, such other currencies as may be necessary to
effect such application with the moneys standing to the credit of such account.
10. Lien
The Bank is authorised to exercise a lien over all property of the
Chargor coming into the possession or control of the Bank, for custody or any
other reason and whether or not in the ordinary course of banking business, with
power for the Bank to sell such property to satisfy the Secured Moneys.
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11. Chargor as Principal Obligor
The liability of the Chargor under this Charge shall not be discharged
or otherwise affected by reason of the Bank entering into any agreement or
arrangement with the Borrower or any other person or by reason of any legal
limitation, disability or incapacity or any other act, omission or circumstance
which, but for this provision, would discharge the Chargor to any extent.
12. Chargor as Trustee
12.1 The Chargor shall not, until the whole of the Secured Moneys have
been received by the Bank, exercise any rights of subrogation, indemnity,
set-off or counterclaim against the Borrower or any rights to participate in any
security the Bank has in respect of the Secured Moneys or, unless required by
the Bank to do so, to prove in the bankruptcy or liquidation of the Borrower.
The Chargor shall hold any amount recovered, as a result of the exercise of any
of such rights, on trust for the Bank and shall pay the same to the Bank
immediately on receipt.
12.2 The Chargor has not taken any security from the Borrower and
agrees not to do so until the Bank has received the whole of the Secured Moneys.
Any security taken by the Chargor in breach of this provision and all moneys at
any time received in respect thereof shall be paid to the Bank immediately on
receipt.
13. Chargor's Accounts
The Bank may, at any time, continue any existing account and open any
new account in the name of the Chargor and no subsequent transactions, receipts
or payments involving such new accounts shall affect the liability of the
Chargor.
14. Payments
14.1 No payment to the Bank under this Charge pursuant to any judgment,
court order or otherwise shall discharge the obligation of the Chargor in
respect of which it was made unless and until payment in full has been received
in the currency in which it is payable under this Charge and, to the extent that
the amount of any such payment shall, on actual conversion into such currency,
at the Exchange Rate, fall short of the amount of the obligation, expressed in
this currency, the Chargor shall be liable for the shortfall.
14.2 Any moneys paid to the Bank in respect of the Secured Moneys may
be applied in or towards satisfaction of the same or placed to the credit of
such account as the Bank may determine with a view to preserving its rights to
prove for the whole of the Secured Moneys.
14.3 If any moneys paid to the Bank in respect of the Secured Moneys
are required to be repaid by virtue of any law relating to insolvency,
bankruptcy or liquidation or for any other reason, the Bank shall be entitled to
enforce this Charge as if such moneys had not been paid.
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15. No Waiver
No act or omission by the Bank pursuant to this Charge shall affect its
rights, powers and remedies hereunder or any further or other exercise of such
rights, powers or remedies.
16. Assignment
The Chargor may not assign or transfer any rights or obligations of the
Chargor hereunder. The Bank may assign any of its rights hereunder to a person
in whose favour it has made an assignment of all or any of the Banking
Facilities.
17. Communications
Any notice, demand or other communication under this Charge shall be in
writing addressed to the Chargor at the last address registered with the Bank
and addressed to the Bank at its Hong Kong branch or such other address as the
Bank may notify to the Chargor for this purpose an may be delivered personally,
by leaving it at such address, by post, facsimile transmission or telex and
shall be deemed to have been delivered to the Chargor at the time of personal
delivery or on leaving it at such address or on the next day following the day
of posting or on the day of despatch, if sent by facsimile transmission or
telex, and to the Bank on the day of actual receipt.
18. Severability
Each of the provisions of this Charge is severable and distinct from
the others and, if one or more of such provisions is or becomes illegal, invalid
or unenforceable,l the remaining provisions shall not be affected in any way.
19. Governing Law and Jurisdiction
19.1 This Charge is governed by and shall be construed in accordance
with the laws of Hong Kong.
19.2 The Chargor submits to the non-exclusive jurisdiction of the Hong
Kong Courts but this Charge may be enforced in the Courts of any competent
jurisdiction.
20. Process Agent
Service of any legal process on the Process Agent shall constitute
service on the Chargor.
21. Execution
This Charge has been entered into by the Chargor under seal on 17
March, 1995.
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EXECUTED and SEAL by the ) Richard Lee
Chargor in the presence: )
TONG GEE FIT
TRAINEE SOLICITOR
JOHNSON STOKES &
MASTER
[COMMON SEAL OF VANETON INTERNATIONAL INC.]
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