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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 2 TO
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
MBf USA, Inc.
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(Name of Issuer)
Common Stock, $.01 par value
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(Title of Class of Securities)
025480 104
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(CUSIP Number)
Carol Chan
Plaza MBf
No. 8, Jalan Yap Kwon Seng
50450 Kuala Lumpur, Malaysia
(603) 267-8800
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 31, 1998
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(Date of Event which Requires of Filing 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 this statement: [ ]
Page 1 of 6 pages
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CUSIP NO. (025480 104) Page 2 of 6 pages
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1) Names of Reporting Persons S.S. or I.R.S. Identification Nos. of Above
Persons
MBf International Limited
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2) Check the Appropriate Box if a Member of a Group (See Instructions)
(a) [ ]
(b) [ ]
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3) SEC Use Only
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4) Source of Funds: Not applicable
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to
Items 2(d) or 2(e) [ ]
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6) Citizenship or Place of Organization: Hong Kong
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Number of Shares (7) Sole Voting Power 1,682,275
Beneficially Owned -----------------------------------------------------
by Each Reporting (8) Shared Voting Power 0
Person With -----------------------------------------------------
(9) Sole Dispositive Power 1,682,275
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(10) Shared Dispositive Power 0
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CUSIP NO. (025480 104) Page 3 of 6 pages
11) Aggregate Amount Beneficially Owned by Each Reporting Person:
1,682,275
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions): [ ]
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13) Percent of Class Represented by Amount in Row (11): 24.7%(1)
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14) Type of Reporting Person (See Instructions): CO
_____________________
(1)This percentage is based upon the conversion of all 1,252,538 shares
of Class A Common Stock into Common Stock and the issuance of an additional
2,500,000 shares of Common Stock by the Issuer in a transaction exempt from
registration under the Securities Act of 1933, as amended (the "Securities
Act"), pursuant to Regulation S promulgated thereunder.
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CUSIP NO. (025480 104) Page 4 of 6 pages
ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this statement
relates is shares of Common Stock, $.01 per Share par value, of MBf USA, Inc.
(the "Issuer").
The name and address of the principal executive offices of the Issuer are:
MBf USA, Inc.
500 Park Blvd., Suite 1260
Itasca, Illinois 60143
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name: MBf International Limited ("MBf International")
(b) Business and Principal 17th Floor, One Pacific Place
Office Address: 88, Queensway
Hong Kong
(c) MBf International is a subsidiary of MBf Holdings Sdn. Bhd., a
Malaysian publicly traded company. MBf International is an investment holding
company.
(d) During the last five years, MBf International was not convicted in a
criminal proceeding.
(e) During the last five years, MBf International was not a party to a
civil proceeding of any judicial or administrative body which resulted in a
judgment or order relating to a violation of any federal or state securities
laws.
(f) MBf International is a Hong Kong corporation.
ITEM 3. SOURCE AND AMOUNT OF FUNDS AND OTHER CONSIDERATION.
Not applicable; MBf International has disposed of all of its Class A
Common Stock of the Issuer. The Class A Common Stock is convertible into
Common Stock of the Issuer on a one-for-one basis.
ITEM 4. PURPOSE OF TRANSACTION.
On March 22, 1997, MBf International entered into a Sale and Purchase
Agreement (the "Agreement") with Wembley Rubber Products (M) Sdn. Bhd.
("Wembley"), a Malaysian company, providing for the sale by MBf International
to Wembley of 1,252,538 shares of Class A Common Stock (the "Series A Shares"),
which comprise all of the Issuer's outstanding Series A
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CUSIP NO. (025480 104) Page 5 of 6 pages
Shares. The Series A Shares are convertible into Common Stock on a one-for-one
basis. The purpose of these transactions is for MBf International
to sell all of its Class A Shares.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
1,682,275 shares of Common Stock or 24.7% of the Issuer's Common Stock
based upon the conversion of all 1,252,538 shares of Class A Common Stock into
Common Stock and the issuance of an additional 2,500,000 shares of Common Stock
by the Issuer in a transaction exempt from registration under the Securities
Act pursuant to Regulation S promulgated thereunder.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The Agreement requires that the Issuer appoint two representatives of
Wembley as Class A directors of the Issuer upon execution of the Agreement and
four additional Wembley representatives as additional Class A directors after
completion of all conditions under the Agreement. All then sitting Class A
directors of the Issuer, except Edward J. Martika, would resign their positions
with the Issuer upon completion of the Agreement. Loi Heng Sewn shall be
appointed a Class B director.
The Issuer entered into and closed a Stock Acquisition Agreement with MBf
International dated as of October 31, 1995, whereby MBf International
exchanged its beneficial interest in 1,365 shares of common stock (par value
equivalent to $1,000 US Dollars each) of PT MBf Buana Multicorpora ("PT
Buana"), which represents a 70% majority interest in the outstanding common
stock of PT Buana, and a non-interest bearing demand note in the principal
amount of $737,769 ("Note") for 255,072 shares of the Issuer's Common Stock
having an aggregate value of $1,219,563. The Note is guaranteed by MBf
Holdings, the parent of MBf International.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
a) Sale and Purchase Agreement dated as of March 22, 1997 between MBf
International Limited and Wembley Rubber Products (M) Sdn. Bhd.
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CUSIP NO. (025480 104) Page 6 of 6 pages
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
MBf International Limited
By: /s/ Tan Mong Sing
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Its: President
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April 9, 1998
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Exhibit - 7(c)
Dated this 20th day of May, 1997
MBf INTERNATIONAL LIMITED
AND
WEMBLEY RUBBER PRODUCTS (M) SDN. BHD.
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SALE AND PURCHASE AGREEMENT
(Shares in MBf USA Inc.)
==========================================
TENGKU MOHAMED & ALAN LIM
Advocates & Solicitors
Kuala Lumpur
Malaysia
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TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Article Subject Page
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<S> <C> <C>
I Recitals 1
II Definitions/Interpretation 2
III Sale and Purchase 7
IV Conditions Precedent 8
V Delivery of Documents 9
VI Completion 10
VII Non-Compliance 11
VIII Vendor's Covenants and Undertakings 12
IX Representations, Warranties and Undertakings 16
X Purchaser's Covenants and Undertakings 19
XI General Terms 21
Schedule
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Vendor's Warranties and Undertakings 25
Appendix
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A Audited Accounts 27
B Particulars of Existing Contracts 28
C Details of Loans, Debts and Securities 29
D List of the licenses given to the Company/Subsidiary(ies) 30
E List of the Subsidiary and Associates Company 31
F Disclosures Letter 32
</TABLE>
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THIS AGREEMENT is made on this 20th day of May, 1997.
BETWEEN
MBf INTERNATIONAL LIMITED, a company incorporated under the laws of Hongkong
and having its registered office at 17th Floor, One Pacific Place, 88 Queens
Way, Hongkong (hereinafter called "the Vendor") the one part;
AND
WEMBLEY RUBBER PRODUCTS (M) SDN. BHD. (147817-V), a company incorporated in
Malaysia and having its registered office at 29th Floor, Wisma Denmark, 86,
Jalan Ampang, 50450 Kuala Lumpur (hereinafter called "the Purchaser") of the
other part.
ARTICLE I
RECITALS
Section 1.1 The Company
1.1.1. MBf USA INC., is a company incorporated under the laws of the State
of Maryland of the United States of America and having its registered
office at 500, Park Boulevard, Suite 1260, Itasca, Illinois 60143-2639
United States of America (hereinafter referred to as "the Company")
with the following capital structure and with its common stock traded
on the National Association of Securities Dealers Automated Quotation
System (hereinafter referred to as "the NASDAQ") SmallCap Market under
the symbol "MBFA".
1.1.1.1 an authorised share capital of United States Dollars Twelve
Thousand Five Hundred Twenty Five and Cents Thirty Seven
(USD12,525.37) only divided into One Million Two Hundred
Fifty Two Thousand Five Hundred and Thirty Seven (1,252,537)
ordinary shares of USD0.01 per share all of which have
fully paid-up or credited as fully paid-up (hereinafter
referred to as "the Series A Common Stock");
1.1.1.2 an authorised share capital of United States Dollars One
Hundred Thousand (USD100,000.00) only divided into Ten
Million (10,000,000) ordinary shares of USD0.01 per share of
which Three Million Fifty Eight Thousand Three Hundred and
Thirty Three (3,058,333) have been issued and fully paid-up
or credited as fully paid-up (hereinafter referred to as
"the Common Stock").
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1.1.2 The principal businesses of the Company and its subsidiaries are in
the manufacturing and marketing of surgical and examination gloves.
Section 1.2 Shareholding of the Vendor
As at the date hereof, the Vendor is the registered holder and/or beneficial
owner of -
1.2.1 all the Series A Common Stock (hereinafter referred to as "the Sale
Shares"); and
1.2.2 One Million Six Hundred Eighty Two Thousand Two Hundred and Seventy
Five (1,682,275) of the Common Stock.
Section 1.3 Audited Accounts
The financial position of the Company as at the 31st day of December, 1996 is
shown in the audited accounts and balance sheet annexed hereto as Appendix A.
Section 1.4 Agreed Sale and Purchase
The Vendor has agreed to sell and the Purchaser has agreed to purchase the Sale
Shares at the price and upon the terms and conditions hereinafter contained.
ARTICLE II
DEFINITIONS/INTERPRETATION
Section 2.1 Definitions
In this Agreement unless there be something in the subject or context
inconsistent therewith the following expressions bear the following meanings
namely:
2.1.1 Accounts Date means the 31st day of December, 1996.
2.1.2 Audited Accounts means the audited accounts and balance sheet of the
Company as at the Accounts Date and annexed hereto as the Appendix A.
2.1.3 Balance Deposit means the sum of United States Dollars Three Hundred
Twenty Six Thousand Two Hundred Sixty Eight and Cent Fifty
(USD326,268.50) only.
2.1.4 Balance Sum means the sum of United States Dollars Five Million Six
Hundred Thirty Six Thousand Four Hundred Sixteen and Cent Fifty
(USD5,636,416.50) only.
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2.1.5 Bank Negara means the Central Bank of Malaysia established by the
Central Bank of Malaysia Ordinance, 1958.
2.1.6 Bank Negara Approval means the approval of Bank Negara to the
remittance of the Purchase Price to the Vendor.
2.1.7 Business Day means any day which is not a Saturday or Sunday or a
public holiday established by law in Malaysia or any part of Malaysia
and applicable to the Federal Territory of Kuala Lumpur.
2.1.8 Common Stock means the Three Million Fifty Eight Thousand Three
Hundred and Thirty Three (3,058,333) shares of the issued and
outstanding common stock of the Company which have been fully paid-up
or credited as fully paid-up.
2.1.9 Company means MBf USA INC., is a company incorporated under the laws
of the State of Maryland of the United States and having its
registered office at 500, Park Boulevard, Suite 1260, Itasca, Illinois
60143-2639 United States and shall, where the context so admits,
include its successors in title.
2.1.10 Completion Date means the day falling on or before the 9th day of
July, 1997 subject to an automatic extension of one (1) month if not
later than the 8th day of August, 1997.
2.1.11 Deposit Sum means the sum of United States Dollars Six Hundred Twenty
Six Thousand Two Hundred and Sixty Eight and Cent Fifty
(USD626,268.50) only comprising the Earnest Moneys and the Balance
Deposit.
2.1.12 Disclosure Letter means the letter from the Vendor to the Purchaser
qualifying the warranties, representations, statements, covenants and
undertakings of the Vendor set out in this Agreement and annexed
hereto as Appendix F.
2.1.13 Earnest Moneys means the sum of United States Dollars Three Hundred
Thousand (USD300,000.00) only paid by the Purchaser to the Vendor
prior to the execution of this Agreement.
2.1.14 Joint Venture Agreement means the written agreement dated the 8th day
of April, 1994 entered into between MBf Holdings Berhad, PT Ongko
Multicorpora and PT Prakarsa Bangun Mandiri in relation to their
relationship inter se as shareholders of MBf Buana and which
expression shall include all amendments thereof and additions thereto
pursuant to the
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written agreement dated the 17th day of October, 1994 entered into
between the parties thereto and the supplementary agreement dated the
21st day of August, 1995 made between MBf Holdings Berhad of the first
part, PT Sigmakarya Perdana Multicorpora of the second part and PT
Prakarsa Bangun Mandiri of the third part.
2.1.15 Knowledge means the knowledge - actual or constructive - of the
executive officers of the party to whom knowledge is represented or
imposed for the purposes of this Agreement.
2.1.16 Lenders' Approval means the consent of the lenders of the Company and
(if required) its Subsidiaries [but excluding MBf Bank (Tonga)] to the
proposed sale and purchase of the Sale Shares and in the case of MBf
Buana, the consent of its lenders to the transfer of the shareholding
in MBf Buana to the Company from its holding company, namely MBf
Holdings Berhad.
2.1.17 MBf Buana means P. T. MBf BUANA MULTICORPORA a company incorporated
under the laws of Indonesia and having its registered office at Al
Jermal, No. 20 B Kelurahan Sei Mati, Medan - Labuhan km 17, Indonesia
and shall, where the context so admits, include its successors in
title.
2.1.18 NASDAQ means the National Association of Securities Dealers Automated
Quotation System of the United States.
2.1.19 Option Period means the option period referred to in Section 4.4 hereof.
2.1.20 Purchase Price means the sum of United States Dollars Six Million Two
Hundred Sixty Two Thousand Six Hundred and Eighty Five (USD6,262,685.00)
only and referred to in Section 3.3 hereof.
2.1.21 Purchaser means WEMBLEY RUBBER PRODUCTS (M) SDN, BHD. (147817-V), a
company incorporated in Malaysia and having its registered office at
29th Floor, Wisma Denmark, 86, Jalan Ampang, 50450 Kuala Lumpur and
shall, where the context so admits, include its successors in title and
assigns.
2.1.22 Purchaser's Solicitors means Messrs Tengku Mohamed & Alan Lim of Suite
19.07-19.09, 19th Floor, Wisma Cyclecarri, 288, Jalan Raja Laut, 50350
Kuala Lumpur.
2.1.23 Relevant Approvals means the Bank Negara Approval and the Lenders,
Approval, collectively.
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2.1.24 Relevant Authorities means including without limitation the relevant
government ministries, agencies, statutory bodies, local and municipal
authorities of the United States and/or Hongkong, as the case may be.
2.1.25 said Documents means the certificates to the Sale Shares together with
the duly executed Memoranda of Transfer in respect thereof.
2.1.26 Sale Shares means all the Series A Common Stock which are beneficially
owned by the Vendor.
2.1.27 Series A Common Stock means the One Million Two Hundred Fifty Two
Thousand Five Hundred and Thirty Seven (1,252,537) ordinary shares of
the Company of USD0.01 per share which have the power to elect a
majority of the members of the board of directors of the Company all of
which have fully paid-up or credited as fully paid-up and referred to
in Section 1.1.1.1 hereof.
2.1.28 Subscription Agreement means the written agreement dated the day
of , 1997 entered into between the Company and the Purchaser
whereby the Purchaser shall be entitled to subscribe for Two Million
and Five Hundred Thousand (2,500,000) shares of the common stock of the
Company at a par value of USD0.01 per share from treasury at the price
of USD2.70 per share.
2.1.29 Subsidiary means a company or corporation in which the Company controls
more then fifty per centum (50%) of its issued capital and voting
rights and the expression "Subsidiaries" shall be construed
accordingly.
2.1.30 United States means the United States of America.
2.1.31 United States Dollars or USD means the lawful currency for the time
being and from time to time of the United States of America.
2.1.32 Vendor means MBf INTERNATIONAL LIMITED, a company incorporated under
the laws of Hongkong and having its registered office at 17th Floor,
One Pacific Place, 88 Queens Way, Hongkong and shall, where the context
so admits, include its successors in title and permitted assigns.
2.1.33 Vendor's Solicitors means Messrs K K Chong, Chai, Koo & Partners of
No. 24, Jalan Perumahan Gurney, 54000 Kuala Lumpur.
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Section 2.2 Interpretation
2.2.1 Any reference to a statutory provision shall include such provision and
any regulations made in pursuance thereof as may from time to time be
modified or re-enacted whether before or after the date of this
Agreement so far as such modification or re-enactment applies or is
capable of applying to any transactions entered into prior to
completion and (so far as liability thereunder may exist or can arise)
shall include also any past statutory provisions or regulations (as
from time to time modified or re-enacted) which such provisions or
regulations have directly or indirectly replaced.
2.2.2 Any reference to "Accounts" shall include the relevant balance sheets
and profit and loss accounts together with all documents which are or
would be required by the relevant law to be annexed to the Accounts of
the Company concerned to be laid before the Company in general meeting
for the accounting period in question.
2.2.3 Any reference to "Claim" shall include any notice, demand, assessment,
letter or other document issued or action taken by the tax authorities
or other statutory, body or official whosoever (whether of Malaysia,
Singapore or elsewhere in the world) whereby the Company is or may be
placed or sought to be placed under a liability to make a payment of
deprived of any relief, allowance, credit or repayment otherwise
available.
2.2.4 References to Recitals, Sections, Schedules and Appendices are to
Recitals, Sections, Schedules and Appendices of this Agreement.
2.2.5 References in this Agreement to "Ringgit Malaysia or RM" are references
to the lawful currency for the time being and from time to time of
Malaysia.
2.2.6 Words importing the masculine gender only shall include the feminine
and neuter genders and vice versa.
2.2.7 Words in the Singular number only shall include the plural number and
vice versa.
2.2.8 The headings of each of the provisions herein contained are inserted
merely for convenience of reference and shall be ignored in the
interpretations and construction of any of the provisions herein
contained. References to Articles are, except where the context
otherwise requires, references to Articles hereof.
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ARTICLE III
SALE AND PURCHASE
Section 3.1 Agreement to sell and purchase
The Vendor hereby agrees to sell and the Purchaser hereby agrees to purchase
the Sale Shares free from all claims, debentures, charges, liens, encumbrances
and equities whatsoever together with all rights attached thereto and all
dividends and distributions declared paid or made in respect thereof on and
after the date hereof at the Purchase Price and subject to the terms and
conditions herein contained.
Section 3.2 Purchase Price
The Purchaser shall pay to the vendor the Purchase Price at the times and in
the following manner:
3.2.1 the Balance Deposit to the Vendor's Solicitors as stakeholders upon
execution of this Agreement; and
3.2.2 the Balance Sum on the Completion Date.
Section 3.3 Stakeholders
3.3.1 The Vendor's Solicitors shall upon receipt of the Balance Deposit
place the same in an interest bearing account with a licensed financial
institution.
3.3.2 The Vendor's Solicitors shall deal with the Balance Deposit together
with the interest accrued thereon in the following manner:
3.3.2.1 release the same to the Vendor on the Completion Date; or
3.3.2.2 release the same to the Purchaser in the event that any of
the conditions precedent set out in Section 4.1 hereof is not
fulfilled by the Completion Date following written direction
from the Purchaser to deliver the same.
3.3.3 Notwithstanding anything to the contrary contained herein, should a
dispute arise between the Vendor and the Purchaser as to whether the
Balance Deposit should be returned to the Purchaser, the Vendor's
Solicitors shall be authorised to hold the same, without liability to
either party hereto, pending either their joint written directions as
to its disposition, or the directions of a court of competent
jurisdiction, and the Vendors Solicitors shall have no liability to
either party hereto for actions taken in good faith with respect to the
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foregoing and shall be authorized to file an interpleader action in the
courts at Kuala Lumpur for a determination as to whom the Balance
Deposit should be delivered, with the losing party to bear all costs of
such action.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions Precedent
This Agreement is conditional upon:
4.1.1 the following being obtained on or before the Completion Date:
4.1.1.1 the Bank Negara Approval; and
4.1.1.2 the Lenders' Approval; and
4.1.2 the terms of the supply agreement between American Health Products
Corporation and PIE Healthcare Sdn Bhd dated August 1, 1995 ("Supply
Agreement") being duly amended as follows:
4.1.2.1 the price of the Products (as defined in the Supply
Agreement) shall remain for the duration of the Supply
Agreement at United States Dollars Twenty Seven (USD27.00)
only per One Thousand (1,000) pieces with effect from May 1,
1997 or any increase or decrease in the price as may be
mutually agreed hereafter; and
4.1.2.2 the terms of payment shall be by open credit with sixty (60)
days term with effect from May 1, 1997;
4.1.3 the simultaneous completion of the Subscription Agreement.
Section 4.2 Application for Approval
4.2.1 The Purchaser shall submit to Bank Negara the necessary applications
within one (1) month from the date hereof. The Vendor shall exercise
its best endeavour to assist the Purchaser in making the aforesaid
applications.
4.2.2 The Vendor shall Use its best endeavours to satisfy the condition
precedent set out in Section 4.1 hereof.
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Section 4.3 Notification
In the event that any of the Relevant Approvals being refused or given or
granted upon the fulfillment of any conditions therein referred to, the party
being notified of such refusal or given such approval or granted such approval
subject to the fulfillment of any conditions shall immediately notify the other
party in writing and, where relevant or available, shall forward a copy thereof
to the other party.
Section 4.4 The Option period
In the event that a condition is imposed in respect of any of the Relevant
Approvals which materially and adversely affects any of the parties hereto,
that party or parties so affected shall have the option, to be exercised within
fourteen (14) days from the date on which the condition is made known to such
party or until the Completion Date, whichever is the earlier, ("the Option
Period") by written notice in writing to the other party, to reject such
condition, whereupon the such approval shall be deemed not to have been
obtained for the purpose hereof. If such option is not exercised within the
Option Period the such approval in respect of which the said condition is
imposed shall be deemed to have been obtained for the purpose hereof.
Section 4.5 Non fulfilment of conditions precedent
In the event that any of the conditions precedent mentioned in Section 4.1
hereof not being fulfilled by the Completion Date despite all reasonable
efforts by the parties hereto, the Vendor and the Vendor's Solicitors shall
respectively refund the Earnest Moneys free of interest and the Balance Deposit
together with all interest accrued thereon to the Purchaser and thereafter
neither parties hereto shall have any claims against each other and this
Agreement shall be deemed to have lapsed and be of no further force and effect.
ARTICLE V
DELIVERY OF DOCUMENTS
Section 5.1 DELIVERY OF DOCUMENTS TO VENDORS' SOLICITORS
The Vendor shall deliver and deposit with the Vendor's Solicitors as
stakeholders the said Documents on the date hereof. The Vendor's Solicitors
shall and are hereby expressly authorized to deal with the said Documents in
the following manner:
5.1.1 to release to the Purchaser the said Documents on the Completion Date;
or
5.1.2 to return the said Documents to the Vendor in the event that this
Agreement is terminated pursuant to the provisions of this Agreement.
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Section 5.2 Resignation letter
Upon execution of this Agreement and the appointment of two nominees of the
Purchaser as additional Class A Directors (as provided under the Company
Articles of Incorporation and Bylaws, as applicable) of the Company, the
Purchaser shall cause such nominees to execute and deposit with the Purchaser's
Solicitors the nominees' undated resignation letters as directors of the Company
to be dealt with in the following manner:
5.2.1 release such letters to the Purchaser on the Completion Date; or
5.2.2 release such letters to the Vendor's Solicitors forthwith in the event
that this Agreement is terminated pursuant to the provisions herein
contained.
ARTICLE VI
COMPLETION
Section 6.1 Completion of Sale and Purchase
Completion of the sale and purchase of the Sale Shares shall take place at
ll.OO a.m. on the Completion Date (or such other date as the parties hereto may
agree upon in writing) at the office of the Purchaser when the following
actions shall be taken by the parties hereto simultaneously:
6.1.1 The Vendor's Solicitors shall forward to the Purchaser the said
Documents;
6.1.2 The Vendor shall deliver to the Purchaser the following:
6.1.2.1 a circular resolution of the Board of Directors of the
Company approving the following:
6.1.2.1.1 appointment of four (4) nominees of the Purchaser
as additional Class A Directors of the Company;
and
6.1.2.1.2 the transfer of the Sale Shares in favour of the
Purchaser or its nominee(s) and for the transfers
to be registered in the Company's register
subject to stamping; and
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6.1.2.1.3 the resignation letters of all the present Class
A Directors except Edward J. Marteka and the
newly appointed Class A Directors pursuant to
Section 6.2.1.1 hereof without any claim
whatsoever for compensation for loss of office;
6.1.2.2 a certified copy of the certificate of incorporation of the
Company;
6.1.2.3 all the statutory books, books of account and documents of
record of the Company, complete and up to date and all
amendments thereto, and the original copies of all the
contracts entered into by the Company. However, for the
purpose of this sub-section, delivery shall be deemed made to
the extent that such books or documents are at the Company's
registered office and/or in the possession or control of the
Company or the Vendor on the Completion Date; and
6.1.2.4 the appropriate forms to amend the mandates given by the
Company to its bankers.
6.1.3 Subject to the Vendor observing and performing the covenants and
undertakings herein contained, the Purchaser shall deliver to the
Vendor a bank draft favouring the Vendor for the Balance Sum.
Section 6.2 Further Assurances
The Vendor shall execute and do all such further assurances and things for
vesting the Sale Shares in the Purchaser or its nominee or nominees and giving
the Purchaser or its nominee or nominees the full benefit of this Agreement as
the Purchaser shall reasonably require.
ARTICLE VII
NON-COMPLIANCE
Section 7.1 Default by Purchaser
Should the Purchaser commit a material breach of any of its covenants or
undertakings under this Agreement or fail to pay the Balance Sum in the manner
provided herein and/or to proceed with the purchase of the Sale Shares in the
manner herein set out after fulfilment of the conditions precedent set out in
Article IV hereof the Vendor shall be entitled to -
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7.1.1 terminate this Agreement and forfeit the Deposit Sum as agreed
liquidated damages for breach of contract by the Purchaser and
this Agreement shall be of no further force and effect and
the Vendor shall be at liberty thereafter to resell the Sale
Shares to such person or persons and upon such terms as the Vendor
shall deem fit and neither parties hereto shall have any claims
against each other; or
7.1.2 sue for specific performance and all reliefs flowing therefrom.
Section 7.2 Default by Vendor
Should the Vendor fail to perform any of its obligations under this Agreement
the Purchaser shall be entitled to -
7.2.1 terminate this Agreement whereupon the Vendor shall, within seven
(7) days from the date of such termination, (a) refund to the
Purchaser the Deposit Sum together with all interest accrued on
the Balance Deposit and (b) pay to the Purchaser a further sum of
United States Dollars Six Hundred Twenty Six Thousand Two Hundred
and Sixty Eight and Cent Fifty (USD626,268.50) as agreed
liquidated damages for breach of contract by the Vendor and
thereafter this Agreement shall be of no further force and effect
and neither parties hereto shall have any claims against each
other; or
7.2.2 sue for specific performance and all reliefs flowing therefrom.
ARTICLE VIII
VENDOR'S COVENANTS AND UNDERTAKINGS
Section 8.1 Company's assets and business
Pending the completion of the sale and purchase herein provided, the Vendor
shall take such steps as shall lie within their power to procure that the
Company will not, save in each case, with the Purchasers prior consent in
writing do or permit or cause to do or omit or neglect or refuse to do anything
otherwise than in the ordinary course of business which would or could result
in or give rise to or cause any diminution or depletion in the assets or the
financial position of the Company or any reduction in the value of the Sale
Shares or in their control in the share capital of the Company.
Section 8.2 Appointment of Purchaser's nominees as directors
8.2.1 The Vendor shall cause:
<PAGE> 15
13
8.2.1.1 two (2) Purchaser's nominees to be appointed as
additional Class A Directors of the Company within
ten (10) days following the date of execution of this
Agreement; and
8.2.1.2 four (4) Purchaser's nominees to be appointed as
additional Class A Directors of the Company on the
Completion Date provided the transaction contemplated
under this Agreement is completed on such date.
8.2.2 Subject to Section 5.2.2 hereof and other lawful terminations of
this Agreement, the Vendor shall not without the written consent
of the Purchaser, remove or cause to be removed the nominees of
the Purchaser as Class A Directors of the Company.
Section 8.3 Tax
The Vendor hereby undertakes to pay all taxes payable in connection with
any gains made by the Vendor (if any) in respect of the sale of the Sale Shares
and further covenants and undertakes to indemnify the Purchaser against any
claims, demands, actions or proceedings whatsoever resulting from the Vendor's
non-compliance with any relevant statutory provisions in respect of the
disposal of the Sale Shares.
Section 8.4 Indemnity for diminution of the Company assets
The Vendor shall indemnify the Purchaser twenty nine point zero five per
centum (29.05%) of any damages, deficiencies, losses, costs, liabilities and
expenses (including legal fees and disbursements) and in particular, but
without prejudice to the generality of the foregoing, from and against any
depletion or diminution of the assets of the Company, resulting directly or
indirectly from or arising out of any breach of any of the representations,
warranties, covenants and agreements made by the Vendor herein in relation to
the businesses of Company and the Subsidiaries.
Section 8.5 Indemnity regarding tax
The Vendor covenants with the Purchaser that it shall indemnify and at all
times keep the Purchaser and/or the Company indemnified up to twenty nine
point zero five per centum (29.05%) of any diminution of the net assets of the
Company which results from the Company being called upon to pay any tax or duty
other than as specifically provided for in the Audited Accounts and other than
sales tax and income tax on normal trading income arising from transactions
entered into in the ordinary Course of business having regard to past practices
after the Accounts Date.
<PAGE> 16
14
Section 8.6 MBf Buana
The vendor hereby covenants and undertakes with the Purchaser that it shall on
or before the Completion Date cause MBf Buana to increase its paid up capital
to United States Dollars Two Million and Five Hundred Thousand
(USD2,500,000.00) only as approved by the Investment Co-ordination Board of
Indonesia by way of capitalisation of the advances made by the shareholders of
MBf Buana without affecting the shareholding structure of MBf Buana as set out
in the Joint Venture Agreement i.e. the total shareholdings of the Indonesian
parties shall represent thirty per centum (30%) of the issued and paid up
capital of MBf Buana.
Section 8.7 Moratorium on shareholding
The Vendor hereby covenants and undertakes not to increase directly or
indirectly its stock capital in the Company, whether through reissue of the
treasury stock or any other means whatsoever prior to the Purchaser acquiring
more than fifty per centum (50%) of the issued stock and voting rights in the
Company.
Section 8.8 Restrictions pending completion
The Vendor hereby covenants and undertakes with the Purchaser that as from the
date hereof and pending completion of the sale and purchase of the Sale Shares,
unless with the prior written consent of the Purchaser first had and
obtained, the Vendor shall ensure that the Company will:
8 8.1 continue to conduct its present business until completion according to
its present practice and in usual course of business;
8.8.2 not sell, transfer, lease, let, encumber, dispose of or otherwise
howsoever deal or part with the possession of any of the Company's
fixed assets, properties and undertakings or any part or parts thereof
except in the ordinary course of business or by reason of commitments
entered into prior to this Agreement and disclosed to the Purchaser on
or before the date hereof;
8.8.3 not give indemnities or enter into any guarantees or sureties in
favour of any person body or corporation or on behalf of any
person body or corporation other than guarantees or sureties given in
the ordinary course of business;
8.8.4 not incur any borrowing or indebtedness except in the ordinary course
of business;
8.8.5 not create or issue or agree to create or issue any share or loan
capital or give or agree to give any option in respect of any share or
loan capital;
<PAGE> 17
15
8.8.6 not pass any resolution by the Company in general meeting except to (a)
give effect to this Agreement or (b) to consummate actions in the
ordinary course of business which are not expected to materially and/or
adversely affect the value of the Company or the Purchaser's interest
in the Company, and (c) not to make any alteration to the provisions of
the Company's Articles of Incorporation;
8.8.7 not in any way depart from the normal course of its day to day business
either as regards the nature, scope or manner of conducting the same;
8.8.8 not pay or agree to pay to any of the Directors or Officers of the
Company any remuneration or other emoluments or benefits
whatsoever other than those which have been disclosed to and agreed by
the Purchaser.
8.8.9 maintain its listing status on NASDAQ with its issue common stock
freely traded on NASDAQ; provided that:
8.8.9.1 should the company's stocks be delisted by NASDAQ due to
matters beyond the Company's control (e.g. due to decline in
stock price below USD1.00 or decline in net worth etc)
then such decline will not create any liability to the
Purchaser but will provide the Purchaser on or before the
Completion Date an option to elect not to move forward with the
purchase and in which event, the Vendor shall refund to the
Purchaser all moneys paid by the Purchaser under this
Agreement; and
8.8.9.2 there shall be no obligations to have the non-registered
stocks of the Company freely tradeable until such stocks are
registered pursuant to an appropriate registration statement.
SECTION 8.9 NO LASUE FROM TREASURY
The Vendor shall ensure that the shares held in the treasury of the company
shall not be issued by the Company up to the Completion Date unless otherwise
consented to by the Purchaser.
SECTION 8.10 NON-GLOVE BUSINESS LIABILITIES
In the event there are any liabilities, cost or expenses incurred by the
Company or any of its Subsidiaries arising from any claims or demands
(including goods returned) relating to or incidental to or arising from the
non-glove business of the Company (in particular, the Playboy Condom business),
whether now or hereafter; the Vendor shall within fourteen
<PAGE> 18
16
(14) days of being notified by the Purchaser of such liabilities, costs or
expenses remit directly to the Purchaser the sum equivalent to twenty nine
point zero five per centum (29.05%) of the amount of such liability, costs or
expenses subject to the following:
8.10.1 the Vendor's obligation in this Section 8.11 shall be limited to
claims or demands arising up to a period of One (1) year from the
Completion Date;
8.10.2 the Vendor shall have no liability unless notice from the Purchaser of
any claim or demand has been delivered to the vendor within One (1)
year following the Completion Date;
8.10.3 "liabilities" for the purposes of this Section 8.11 shall mean the net
liabilities of the Company or any of its Subsidiaries i.e less any
insurance claims (if any); and
8.10.4 the Vendor shall be entitled to retain twenty nine point zero five
per centum (29.05%) of the goods returned, if applicable.
ARTICLE IX
REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS
Section 9.1 Vendor's warranties and undertakings
The Vendor hereby warrants and undertakes to and with the Purchaser and
its successors in title in relation to the Company and its Subsidiaries in the
terms set out in the Schedule annexed hereto subject only to:
9.1.1 any exceptions expressly provided for under the terms of this
Agreement and as disclosed by the Vendor in the Disclosure Letter;
9.1.2 any matter or thing hereafter done or omitted to be done at the
request in writing or with the approval in writing of the Purchaser; and
9.1.3 all warranties are to the Vendors best knowledge after making due
enquiries.
Section 9.2 Warranties and undertakings on completion
The Vendor further warrants and undertakes to and with the Purchaser and its
successors in title that:
9.2.1 subject as aforesaid all warranties and undertakings on its part
herein contained will be fulfilled down to and will be substantially
and fundamentally true and correct on the Completion Date in all
respects as if they had been entered into fresh on the Completion
Date; and
<PAGE> 19
17
9.2.2 if after the signing hereof and before the Completion Date any event
shall occur which results or may result in any of the said warranties or
undertakings being unfulfilled, untrue or incorrect at completion, the
Vendor shall immediately notify the Purchaser thereof prior to the
Completion Date. The Vendor shall have no liability to the Purchaser as
a result of the foregoing, however the Purchaser shall have no
obligation to consummate the transaction contemplated herein with
respect to such event provided that the Purchaser provides written
notice to the Vendor within Fifteen (15) Business Days or such other
period as the parties hereto may mutually agree of learning of such
warranty being untrue or incorrect that it wishes to terminate this
Agreement or to renegotiate the terms of this Agreement.
Section 9.3 Warranties etc., to continue after completion
Notwithstanding the completion of the sale and purchase hereunder but with the
exception of paragraphs 25, 26 and 27 of the Schedule annexed hereto, all
warranties, undertakings and obligations given hereunder or undertaken herein
shall -
9.3.1 continue hereafter to have, full force and effect for a period of one
(1) year from the Completion Date; and
9.3.2 the Vendor shall have no liability unless notice from the Purchaser of
any claim or demand has been delivered to the Vendor within one (1)
year following the Completion Date.
Section 9.4 Right of Purchaser to rescind Agreement
If prior to the Completion Date it shall be found that any of the warranties
or undertakings on the part of the Vendor have not in all material respects been
carried out or complied with or are otherwise untrue or incorrect in any
material respect, the Purchaser shall be entitled by notice in writing to the
Vendor to rescind this Agreement which shall be the sole remedy of the Purchaser
if this Agreement is not completed. In the event of rescission of this
Agreement by the Purchaser under this Section, the Vendor shall refund to the
Purchaser the Earnest Moneys free of interest and the Balance Deposit together
with all interest accrued thereon within fourteen (14) days from the date or
receipt of the Purchaser's notification of rescission of this Agreement, failing
which, the Vendor shall pay to the Purchaser interest on the total amount
payable to the Purchaser at the rate of one per centum (1%) per month calculated
from the expiry of the fourteen (14) days to the date or actual refund thereof
to the Purchaser.
Section 9.5 Discrepancies
Notwithstanding anything to the contrary contained in this Agreement -
<PAGE> 20
18
9.5.1 the Vendors liability for breach of any representation or warranty
shall be credited dollar for-dollar to the extent that any of the
assets of the Company are understated or the liabilities of the Company
are overstated in the Audited Accounts;
9.5.2 should there be a breach of a representation or warranty, the Vendor
shall have no liability for the first United States Dollars Thirty
Thousand (USD30,000.00) only of diminution in the value of the net
assets of the Company as a result of such breach [subject always to a
maximum aggregate cumulative amount of United States Dollars One
Hundred Thousand (USDl00,000.00) only for all such breaches], and in
all events, if due to a breach the diminution in value of the net
assets of the Company is reduced beyond the aforesaid figure, the
Vendor's liability to the Purchaser shall be limited to twenty nine
point zero five per centum (29.05%) of such diminution subject to a
maximum sum equivalent to the Purchase Price;
9.5.3 to the extent any adjustment is made to the Audited Accounts to
conform or respond to any requirement imposed by the Securities
Exchange Commission, so long as the net tangible asset backing of the
Company is intact, such adjustment shall not result in a breach of any
representation or warranty of the Vendor or create any liability of the
Vendor to the Purchaser and shall not be deemed a default under
condition 3 of the Schedule annexed hereto;
9.5.4 the Vendor shell have no liability with respect to breaches of
representations or warranties for which notice by the Vendor of breach
has not been delivered to the Vendor within one (l) year following the
Completion Date; and
9.5.5 the Vendor may further disclose any matter on any of the
schedules or reference therein on the date of execution of this
Agreement or any supplement up to the Completion Date to the extent the
matter disclosed in the schedules or reference therein are inconsistent
with any of the representations or warranties contained in this
Agreement. Should the Purchaser objects to any of such supplemental
disclosures, it shall be entitled to -
9.5.5.1 complete this Agreement subject to such disclosure but upon
the Vendor's undertaking to indemnify the Purchaser up to
twenty nine point zero five per centum (29.05%) of any
liability arising from or as may be suffered by the Company;
or
<PAGE> 21
19
9.5.5.2 terminate this Agreement with its sole remedy being the
return of the Earnest Moneys and the Balance Deposit together
with interest accrued thereon.
ARTICLE X
PURCHASER'S COVENANTS AND UNDERTAKINGS
SECTION 10.1 Substitution of quarantee
The Purchaser shal1 procure - on or before the expiry of three (3) months from
the Completion Date or the date the Purchaser acquires more than fifty per
centum (50%) of the issued capital and voting rights of the Company, whichever
is the later - unconditional releases without liability all guarantees given by
the Vendor, its related corporations (as defined under Section 6 of the
Malaysian Companies Act 1965) or its ultimate holding company, namely MBf
Holdings Berhad to any third parties ("Third Parties") for the benefit of the
Company and/or its Subsidiaries in relation directly to the Company's and its
subsidiaries principal businesses as set out in Section 1.1.2 hereof
("Guarantees") to be discharged by offering its guarantee as substitution of
the Guarantees, failing which, the following consequences shall ensue:
10.1.1 in the event that any of the Third Parties shall refuse to grant such
releases, then the Purchaser shall endeavour within a further period
three (3) months procure such other financing or arrangement to repay
or otherwise satisfy the liabilities owing to such Third Party(ies)
to procure the releases of such guarantee (6) , failing which, the
Purchaser shall cause the Company to pay to the Vendor interest at the
rate of one point eight per centum (1.8%) per annum on the amount
guaranteed by the Vendor from the expiry of the aforesaid period of
six (6) months to the date of release of the Guarantees and, pending
such release, the Purchaser shall further indemnify the Vendor against
any claim arising from the Guarantees; and/or
10.1.2 in the event that a call is made on any of such Guarantees and the
Purchaser is given an opportunity to verify the authencity of
such call and the amount thereof, then the Purchaser shall within
fourteen (l4) days from the date of receipt of notification and
satisfactory documentary evidence that the Vendor has indeed made such
payment, indemnify the Vendor of any amount paid under such Guarantee
("Guaranteed Amount"), failing which, interest at the rate of fifteen
per centum (15%) per annum shall be paid on the Guaranteed Amount from
the due date to the date of actual payment thereof; provided that all
payment hereunder made by the Purchaser shall be deemed as advances to
the Company and shall be repayable by the Company on demand made by
the Purchaser.
<PAGE> 22
20
Section 10.2 Inter-company debts
The parties hereto hereby agree that all advances made by the Vendor and/or its
related corporations (but excluding MBf Bank (Tonga)) to the Company ("Inter-Co
Advances") shall be repaid by the Purchaser on behalf of the Company on the
Completion Date in exchange therefor, the Vendor and/or its related
Corporations, as the case may be, shall simultaneous with the repayment
thereof, assign to the Purchaser all its rights to such Inter-Co Advances. For
the avoidance of doubt, the Vendor hereby agrees that any amount owing by the
Vendor and/or its related corporations to the Purchaser and/or its related
corporations shall be set off against the Inter-co Advances and any shortfall
or excess, as the case may be, shall be paid on the Completion Date, failing
which, interest at the rate of fifteen per centum (15%) per annum shall be paid
on the shortfall or excess, as the case may be, from the due date to the date
of actual payment thereof, without prejudice to the other rights and remedies
of the party concerned.
Section 10.3 Chance of name
After the Completion Date, the Purchaser shall use its voting power in the
Company and cause its nominee directors to take all steps necessary to -
10.3.1 procure the change of name of the Company and its Subsidiaries by
dropping the word "MBf" within three (3) months from the Completion
Date; and
10.3.2 cease to use the MBf logo within one (1) month from the Completion
Date.
Section 10. 4 MBf director
The Purchaser shall within ten (10) days from the Completion Date cause a
nominee of the Vendor, namely Loi Heng Sewn to be appointed as class B
director of the Company, or failing which, a class A director of the Company.
Section 10.5 Joint Venture Agreement
After the Completion Date, the parties hereto shall use their respective
voting power in the Company and cause its nominee directors to take all steps
necessary to procure that the Company shall, upon the transfer of the shares in
MBf Buana from MBf Holdings Berhad to the Company, enter into such agreement(s)
as may be necessary to effect the substitution of the Company as a party to the
Joint Venture Agreement in place of MBf Holdings Berhad and until such time as
the substitution is effected, the Purchaser shall cause the Company to be
bound by the terms of the Joint Venture Agreement.
<PAGE> 23
21
Section 10.6 Glove Business
The Purchaser hereby agrees that in the event that the Vendor shall cause the
Company or its Subsidiaries to implement or carry out any activity in relation
to the glove business of the Company or its Subsidiaries with the prior written
consent of the Chief Executive Officer of the Purchaser or the person(s)
authorized in writing by the latter, the Purchaser shall not be entitled to any
indemnity from the Vendor in the event of any diminution of the assets of the
Company or its Subsidiaries arising out of such activity.
ARTICLE XI
GENERAL TERMS
Section 11.1 Costs
All stamp duty for and in respect of this Agreement and the subsequent
Transfer of the Sale Shares to the Purchaser and all transfer fees (if any)
shall be borne and paid by the Purchaser but each party hereto shall bear its
own solicitor's fees.
Section 11.2 Successors in Title and Assigns
This Agreement shall be binding upon the respective successors in title and
permitted assigns of the parties hereto.
Section 11.3 Governing Law
11.3.1 This Agreement shall be governed by and construed in all respects in
accordance with the laws of Malaysia and the parties hereto hereby
submit to the jurisdiction of the courts of Malaysia of competent
jurisdiction in all matters concerning with the obligations and
liabilities under this Agreement.
11.3.2 The Vendor hereby irrevocably agrees that any legal
action or proceedings against it with respect to this Agreement
may be brought in the Courts of Malaysia and the Vendor hereby
irrevocably appoints the Vendor's Solicitors as its agents to receive
service of process in Kuala Lumpur, Malaysia and such appointment shall
not be revoked without the consent in writing of the Purchaser.
11.3.3 the Vendor agrees that if a final judgment is entered into against it
in Malaysia (after the vendor has exhausted all avenues of appeal in
Malaysia which the Vendor is entitled to take and wishes to take) in
respect of any claim or action by the Purchaser against it then if in
order to enforce that judgment:
<PAGE> 24
22
11.3.3.1 the Purchaser wishes to register that judgment in
Hongkong and/or a State of the United States
selected by the Purchaser, the Vendor will consent to
that registration and not directly or indirectly seek
to defend or oppose it; and
11.3.3.2 if the Purchaser subsequently wishes to have that
registration recognised in another State in the
United States where assets of the Vendor are located
for the purposes of enforcing judgment against the
Vendor, then the Vendor will consent to that action
and not directly or indirectly seek to defend or
oppose it.
Section 11.4 Severability
Any terms, conditions, stipulation, provision, covenant or undertaking of
this Agreement which is illegal, prohibited or unenforceable in any
jurisdiction shall as to such jurisdiction be ineffective to the extend of such
illegality, voidness, prohibition or unenforceability without invalidating the
remaining provisions hereof and any such illegality, voidness, prohibition or
unenforceability in any such term condition stipulation provision covenant or
undertaking in any other jurisdiction.
Section 11.5 Time the essence
Time wherever mentioned herein shall be deemed to be of the essence of this
Agreement.
Section 11.6 Knowledge or acquiescence
Knowledge or acquiescence by one (1) party hereto of any breach of any of the
terms and conditions or undertakings herein contained shall not operate as or
to be deemed to be waiver of such terms and conditions or any of them and
notwithstanding such knowledge or acquiescence by such party hereto shall be
entitled to exercise its rights under this Agreement and to require strict
performance by the other party of the terms conditions and undertakings herein.
SECTION 11.7 Entire Agreement
Unless otherwise agreed to between the parties hereto the terms and
conditions herein contained constitute the sole and entire agreement and
understanding between the parties hereto and supersede all previous proposals,
negotiations, commitments and understandings which might have been made prior
to the execution of this Agreement between the parties hereto with respect to
the subject matter hereof, whether written or oral.
<PAGE> 25
23
Section 11.8 Schedule and Appendices
The Schedule and the Appendices annexed hereto shall be taken read and
construed as an essential parts of this Agreement.
Section 11.9 Confidentiality
Except as required by any governmental or other regulatory authority, or
any competent court having jurisdiction, no public announcement or press
release shall be made by or on behalf of any party hereto about the existence
or contents of this Agreement, or the negotiations hereunder, without the prior
written consent of the other Parties hereto.
Section 11.10 Variation of terms be mutual agreement
It is hereby expressly agreed and declared by the parties hereto that
notwithstanding any of the provisions of this Agreement to the contrary, the
provisions and terms of this Agreement may at any time and from time to time be
varied or amended by mutual consent of the parties hereto by means of a mutual
exchange of letters or such other means as the parties may agree upon from time
to time and thereupon such amendments and variations shall be deemed to become
effective and the relevant provisions of this Agreement shall be deemed to have
been amended or varied accordingly and shall be read and construed as if such
amendments and variations have been incorporated in and had formed part of this
Agreement at the time of execution hereof.
Section 11.11 No Assignment
This Agreement and all rights and obligations hereunder are personal to the
parties hereto and each party hereto shall not assign or attempt to assign any
such rights or obligations to any third party without the prior written consent
of the other party hereto, save and except that the Purchaser shall be entitled
to nominate a nominee or nominees to accept the transfer of some or the whole
of the Sale Shares as it shall deem fit.
Section 11.12 Notices
Any notice required to be given by one party hereto to the other party
hereto hereunder shall be in the English Language and shall be sufficient given
if forwarded by hand or prepaid registered post or by telefax or telegram or
cable to the address or addresses hereinbelow stated of the other parties and
shall be deemed to be duly served:
11.12.1 if delivered by courier, on delivery and acknowledged receipt thereof;
or
11.12.2 if it is sent by prepaid registered post, seven (7) days after
posting thereof; or
11.12.3 if it is sent by telegram or cable on the Business Day next after
the date of despatch; or
<PAGE> 26
24
11.12.4 if it is sent by telefax, immediately after transmission thereof
confirm by a transmission report stating the correct facsimile
number and the number of pages sent and that such transmission is
"OK", if the date of transmission is not a Business Day, then the
notice by telefax shall be deemed to be served on the immediately
following Business Day.
For the Vendor:
- ---------------
21st Floor, Plaza MBf,
Jalan Ampang,
50730 Kuala Lumpur.
Attn: Tan Mong Sing
- -------------------
Telefax: (603) 2613280
For the Purchaser:
- ------------------
29th Floor, Wisma Denmark,
86, Jalan Ampang,
50450 Kuala Lumpur.
Attn: Mr. Richard Wong
- ----------------------
Telefax: 603-8461437
<PAGE> 27
(1)
1. Information
The Recitals are true and all other information in writing including those
appended to this Agreement which has been given by the Vendor and/or the
Directors or officials or professional advisers of the Vendor or the
Company to any of the directors or officials or professional advisers of
the Purchaser in the course of the negotiations leading to this Agreement
was when given to the best of the knowledge and belief of the Vendor after
making due and careful enquiries true, complete and accurate in all
material respects and after making due and careful enquiries the Vendor is
not aware of any fact or matter not disclosed in writing to the Purchaser
which renders any such information untrue, inaccurate or misleading or the
disclosure of which might reasonably affect the willingness of the
Purchaser to purchase the Sale Shares or the price at or terms upon which
the Purchaser would be willing to purchase them to the extent that any
materials supplied or appended to this Agreement are of a later date than
prior materials and such later date materials contradicted or are
inconsistent with the prior materials, the later materials shall be deemed
to supersede the prior materials in all respects.
2. Copies of Accounts, Memorandum and Articles etc.
The copies of the Audited Accounts and other accounts, and of the
Articles of Incorporation of the Company and its Subsidiaries delivered to
the Purchaser are true copies and in the case of the Articles of
Incorporation have attached thereto copies of all such resolutions and
agreements as are required by laws to be delivered to the Relevant
Authorities for registration of the Articles with the State of Maryland.
3. Accounts
3.1 The Audited Accounts have been prepared in accordance with the
relevant law and on a consistent basis in accordance with
accounting principles, standards and practices generally accepted at
the date thereof in Malaysia and the United States so as to give a
true and fair view of the state of affairs of the Company and its
Subsidiaries at the Accounts Date and of the profits or losses for
the period concerned and as at the respective dates, the following
have been made in the Audited Accounts:
3.1.1 full provision for all actual liabilities;
3.1.2 proper provision (or note in accordance with good accountancy
practice) for all contingent liabilities; and
<PAGE> 28
(2)
3.1.3 provision reasonably regarded as adequate for all bad and
doubtful debts;
3.2 full provision or reserve have been made in the Audited Accounts for
all taxation liable to be assessed on the Company and its Subsidiaries
or for which it is or may become accountable in respect of -
3.2.1 profits, gains or income (as computed for taxation purposes)
arising or accruing or deemed to arise or accrue on or before
the Accounts Date;
3.2.2 any transactions affected or deemed to be effected on or before
the Accounts Date or provided for in the Audited Accounts; and
3.2.3 distributions or payments made or deemed to be made on or before
the Accounts Date or provided for in the Audited Accounts;
3.3 proper provision or reserve for deferred taxation in accordance with
accounting principles and standards generally accepted at the date
thereof has been made in the Audited Accounts.
4. Changes since Accounts Date
Since the Accounts Date as regards the Company and its Subsidiaries, each
to the best knowledge of the Vendor after making due and careful enquiries -
4.1 has carried on its business in its ordinary course and so as to
maintain the same as a going concern;
4.2 has not disposed of any assets or assumed or incurred any material
liabilities (including contingent liabilities) otherwise than in the
ordinary course of carrying on its business;
4.3 business has not been materially and adversely affected by the loss of
any important asset or customer or by any abnormal factor not
affecting similar businesses to a like extent and after making due and
careful enquiries the Vendor is not aware of any facts which are likely
to give rise to any such affects;
4.4 has not declared made or paid to its members any dividend or other
distribution except as provided for hereunder or in the relevant
balance sheet;
<PAGE> 29
(3)
4.5 has made no exceptional change in the basis of the emoluments or other
terms of employment of its directors or any of its employees having
regard to its past practice and the prevailing industry practice.
5. LITIGATION ETC.
5.1 Since the Accounts Date no claim for damages or product liability has
been made against the Company and/or any of its Subsidiaries.
5.2 Neither the Company nor any of its Subsidiaries is at present engaged
whether as plaintiff or defendant or otherwise in any legal action,
proceeding or arbitration (other than as plaintiff in the collection
of debts arising in the ordinary course of its business) or is being
prosecuted for any criminal offence.
5.3 There are no circumstances known to the Vendor after making due and
careful enquiries likely to lead to any such claim or legal action,
proceeding or arbitration (other than as aforesaid) or prosecution.
6. Taxation
6.1 To the best of the knowledge, information and belief; of the Vendor
after making due and careful enquiries there in no liability to
taxation in respect of the Company and/or any of its subsidiaries
(other than as specifically provided for in the Audited Accounts
and other than sales tax and income tax on ordinary trading income
arising from transactions entered into in the ordinary course of
business after the Accounts Date) and there are no circumstances
likely to give rise to such a liability and in particular (but
without limitation) there exist no grounds for -
6.1.1 assessment on the Company and/or any of its Subsidiaries of
additional liability to tax in respect of any transaction
between or involving the Company and/or any of its Subsidiaries
on the one hand and on the other hand any company deemed to be
related to the Company or any person in which the Vendor and/or
any Director of the Vendor or the Company and/or any of its
Subsidiaries and/or any person connected with any of them has
during the three (3) years immediately preceding the date of
the agreement been interested;
<PAGE> 30
(4)
6.1.2 any claim for tax against the Company and/or any of its
Subsidiaries under the provisions of any taxation statutes in
connection with the transfer of assets to or for the provision
of any benefit to any person or whereby, arising from any
circumstances, the Company and/or any of its Subsidiaries may
be held liable for any taxation primarily chargeable against
some other person or company.
6.2 Neither the Company nor any of its Subsidiaries has received any tax
concession, relief or other special tax treatment, whether in
relation to its assets or the business to bc carried on by it or
otherwise.
6.3 All documents in the possession or under the control of the Company and
its Subsidiaries or to the production of which the Company and its
Subsidiaries are entitled which are necessary to establish the title,
interest or benefit of the Company and item Subsidiaries, as the
case may be, to any asset or in any transaction have been duly stamped;
6.4 No relief or exemption has been obtained from stamp duty which has
become liable for forfeiture or which has been obtained in respect of
a transaction carried out within the period in which it may become
liable to forfeiture.
6.5 Neither the Company nor any of its Subsidiaries is involved in any
dispute with any revenue to affect in any way the its liability
(whether accrued, contingent or future) to taxation or other sums
imposed, charged, levied or payable under the provisions of any
taxation statute.
7. Tax returns
The Company and its Subsidiaries have duly made all returns and given or
delivered all notices, accounts and information which on or before the date
hereof ought to have been made, given or delivered for the purposes of
taxation and all such returns, notices, accounts and information (and all
other information supplied to the relevant revenue or other fiscal
authority concerned for any such purpose) have to the best of the knowledge
and belief of the Vendor after making due and careful enquiries been
correct and made on a proper basis and none of such returns, notices,
account or information is disputed in any material respect by the fiscal
authority concerned and there is no fact known to the Vendor after making
due and careful enquiries which might be the occasion of any such dispute
or of any claim for taxation in respect of any financial period down to and
including the Accounts Date not provided for in the Audited Accounts.
<PAGE> 31
(5)
8. Employees
8.1 To the best knowledge of the Vendor after making due and careful
enquiries, there are not in existence any contracts of service with
directors or employees of the Company and/or any of its Subsidiaries,
nor any consultancy agreements with the Company and/or any of its
Subsidiaries which cannot be terminated by three (3) months' notice
or less without giving rise to any claim for damages or compensation
for unfair dismissal).
8.2 Full particulars of all existing contracts of service with employees
of the Company and its Subsidiaries and of all material consultancy
agreements with the Company and its Subsidiaries are annexed hereto
as Appendix B.
8.3 There are no amounts owing to any present or former Directors or to
members of the Company and its Subsidiaries other than remuneration
accrued due or for reimbursement of business expenses.
8.4 Save to the extent (if any) to which provision or allowance has been
made in the Audited Accounts, neither the Company nor any of its
Subsidiaries has made or agreed to make any payment to or provided or
agreed to provide any benefit for any present or former director or
employee (if applicable) which is not allowable as a deduction for the
purposes of taxation.
8.5 Save to the extent (if any) to which provision or allowance has been
made in the Audited Accounts -
8.5.1 no liability has been incurred by the Company and/or any of its
Subsidiaries for breach of any contract of service or for
services, or for compensation for wrongful dismissal or unfair
dismissal; and
8.5.2 no gratuitous payment has been made or promised by the Company
and/or any of its Subsidiaries in connection with the actual
or proposed termination or suspension of employment of any
present or former director or employee.
<PAGE> 32
(6)
8.6 The Company and its Subsidiaries have in relation to each of their
employees (and so far as relevant to each of its former employees)
complied in all material respects with all obligations imposed on it
by all statutes, regulations and codes of conduct and practice relevant
to the relations between each of them and its employees and have
maintained current adequate and suitable records regarding the service
of each of their employees.
Neither the Company nor any of its Subsidiaries has in existence or
is proposing to introduce any share incentive scheme, share option
scheme or profit sharing scheme for all or any part of its directors
or employees.
8.8 All contributions due and payable by the Company and is Subsidiaries to
any employees provident fund or to any scheme or fund established by law
contribution to which by the Company and/or any of its Subsidiaries is
compulsory in respect of the employment of its employees have been paid.
9. Pensions
There are not in existence nor has any proposal been announced to establish
any retirement, death or disability benefit schemes for Directors or
employees nor are there any obligations to or in respect of present or
former Directors or employees with regard to retirement, death or
disability pursuant to which the Company and/or any of its Subsidiaries
is/are or may become liable to make payments and no pension or retirement
or sickness gratuity is currently being paid or has been promised by the
Company and/or any of its Subsidiaries to or in respect of any former
Director or former employee.
10. No Commission or additional remuneration scheme
There is not in existence any scheme, agreement or arrangement whereby a
Director or employee of the Company and/or any of its Subsidiaries is/are
remunerate or additionally remunerated by way of commission or additional
remuneration payable based on sales or turnover of the Company and/or such
Subsidiary, as the case may be.
11. Debts to, contracts with, etc. connected persons
11.1 With the exception of the loans, debts and securities more
particularly set out in Appendix C annexed thereto and which will
have been discharged prior to completion, to the best knowledge of
the Vendor after making due and careful enquiries there are -
<PAGE> 33
(7)
11.1.1 no loans made by the Company and/or any of its Subsidiaries
to the Vendor and/or any director of the Company or
Subsidiary and/or any person with any of them or to any
member of the Company or Subsidiary;
11.1.2 no debts owing to the Company and/or any of its Subsidiaries
by the Vendor and/or any Director of the Company or
Subsidiary and/or any such person as aforesaid or by any
member of the Company or Subsidiary;
11.1.3 no debts owing by the Company or any of its subsidiaries
other than debts which have arisen in the ordinary course
of business; and
11.1.4 no securities for any such loans or debts as aforesaid.
11.2 There are no existing contracts or engagements to which the Company
and/or any of its Subsidiaries is/are a party(ies) and in which any
Director of the Company or Subsidiary and/or any person connected
with any of them as mentioned in sub-paragraph 11.1 above are
interested.
12. Capital commitments, unusual contracts, guarantees etc.
Neither the Company nor any of its Subsidiaries -
12.1 have any material capital commitments;
12.2 is a party to any contract entered into otherwise than in the ordinary
and usual course of business or any contract of an onerous or long-term
nature having regard to past practice;
12.3 has delegated any powers under a power of attorney which remains in
effect;
12.4 has by reason of any default by it in any of its obligations become
bound or liable to be called upon to repay prematurely any loan
capital or borrowed moneys;
12.5 is a party to any agreement which is or may become terminable as a
result of the entry into or completion of this Agreement; or
12.6 has entered into or bound by any guarantee or indemnity under which
any liability or contingent liability is outstanding.
<PAGE> 34
(8)
13. Book debts
13.1 to the best knowledge of the vendor after making due and careful
enquiries, none of the book debts which are included in the Audited
Accounts has been released in terms that any debtor pays less than
the book value of his debt or has been written off.
13.2 None of the book debts which are included in the Audited Accounts or
which have subsequently arisen have been outstanding for more than nine
(9) months from their due dates for payment and all such debts have
realized or will realize in the normal course of collection their full
value as included in the Audited Accounts or in the books of the
Company and its Subsidiaries after taking into account the provision
for bad and doubtful debts made in the Audited Accounts.
14. Insurance
To the best knowledge of the Vendor after making due and careful enquiries,
all the assets of the Company and its Subsidiaries which are of an
insurable nature have at all material times been and are at the date
hereto insured in amounts reasonably regarded as adequate against fire and
other risks normally insured against by companies carrying on similar
businesses or owning property of a similar nature and the Company and its
Subsidiaries have at all material times been and is at the date hereof
adequately covered against accident, third party and other risks normally
covered by insurance by such companies. The particulars of the insurances of
the Company and its Subsidiaries which have been supplied to the Purchaser
are true and correct. In respect of all such insurances -
14.1 all premiums have been duly paid to date; and
14.2 all the policies are in force and are not voidable on account of any
act, omission or non-disclosure on the part of the insured party.
15 Title to assets
15.1 all assets of the company and its subsidiaries exceeding value of
United States dollars two Thousand (USD2,000.00) only and all debts due
to it which are included in the Audited Accounts or have otherwise been
represented as being the property of or due to the Company and/or its
Subsidiaries at the Accounts Date used or held for the purposes of its
business were at the Accounts Date the absolute property of the
Company and/or its Subsidiaries, as
<PAGE> 35
(9)
the case may be, and (save for those subsequently disposed of or
realized in the ordinary course of trading) all such assets and all
assets and debts which have subsequently been acquired or arisen are
now the absolute property of the company and/or any its subsidiaries
and none is the subject of any assignment, option, right or charge,
lien or hypothecation or other encumbrance whatsoever (excepting only
liens subject to any factoring arrangement, hire-purchase, conditional
sale or credit sale agreement and also those used for securing credit
facilities needed for its operations in its ordinary course of
business) and there are no circumstances under which by operation of
law or otherwise the company or its subsidiaries', as the case may be,
title, right or interest in and to such asset may be adversely affected
in any way whatsoever.
15.2 There are no outstanding notices served on the Company and/or any of
its Subsidiaries in respect of any of its assets and in particular and
without limitation any land , if any, owned by the Company and/or its"
Subsidiaries is not subject to any acquisition proceedings or notice
of intended acquisition.
15.3 All taxes and outgoings due and payable on the land (if any) owned by
the Company and/or any of its Subsidiaries have been duly paid and all
conditions affecting such land whether express or implied, have been
duly complied with by the Company or the Subsidiary, as the case may
be, and neither the Company nor any of its Subsidiaries has done or
suffered to be done or omitted any act, matter or thing in or
respecting its land which may render the same liable to forfeiture or
which shall contravene the provision of any legislation now or
hereafter in force affecting such land.
16. Compliance with leases and other agreements
To the best knowledge of the Vendor after making due and careful enquiries -
16.1 the terms of all leases, tenancies, licenses, concessions and
agreements of whatsoever nature to which the Company and/or any of its
Subsidiaries is/are a party(ies) have been duly complied with by all
the parties thereof; and
16.2 No such lease, tenancy, licence, concession or agreement will become
subject to avoidance, revocation or be otherwise affected upon or in
consequence of the making or implementation of this Agreement.
<PAGE> 36
(10)
17 Statutory, municipal and other requirements consents end licenses
to the best knowledge of the vendor after making due and careful enquiries,
all statutory, municipal and other requirements applicable to the carrying
on of the business of the company and its subsidiaries as now carried on,
and all conditions applicable to the ownership of its assets and any
licenses and consents involved in the ownership of its assets and the
carrying on of such business have been complied with and the vendor is not
aware of any breach thereof or of any intended or contemplated refusal or
revocation of any such licenses or consents and none of such licenses or
consents or any term thereof upon which it is held will otherwise affected
upon or in consequence of the making or implementation of this Agreement. A
list of the licenses given to the Company and its subsidiaries are annexed
hereto as Appendix D.
18. Books and records
To the best knowledge of the Vendor after making due and careful enquiries,
the records, statutory books and books of account of the Company and its
Subsidiaries are duly entered up and maintained in accordance with all legal
requirements applicable thereto and contain true, full and accurate records
of all matters required to be dealt with therein and all such books and all
records and documents (including documents of title) which are its property
are in its possession or under its control and all accounts, documents and
returns required to be delivered or made to the Relevant Authorities have
been duly and correctly delivered or made.
19. Share capital
19.1 Neither the Company nor any of its Subsidiaries has since the Accounts
Date issued or agreed to issue any shares.
19.2 Save for the options granted to employees of the Company and the
warrants issued by the Company and disclosed to the Purchaser prior to
the date hereof, no unissued share of the Company and its Subsidiaries
are under option or agreed conditionally or unconditionally to be
placed under option.
20. Subsidiary and associated company
All the Subsidiaries and associated companies of the Company are listed
in the Company's group structure annexed hereto as Appendix E.
<PAGE> 37
(11)
21. Sale shares free from encumbrances
The Sale Shares are beneficially owned by the Vendor free from any claims,
charges, liens, encumbrances or equities; the Vendor has and will until the
Completion Date continue to retain the unrestricted rights to transfer the
Sale Shares and there is not, nor will there be any option over or right to
acquire any of the Sale Shares
22. Sale Shares
The Sale Shares constitute one hundred per centum (100%) of the issued and
paid up series A common stock capital of the Company.
23. MBf Buana
MBf Holdings Berhad has received the approval of the relevant Indonesian
authorities for the transfer of all the shares presently held by it on trust
for the Company in MBf Buana ("Buana Shares") to the Company and the former
shall transfer the Buana Shares to the Company upon receipt of the consent
of the lenders of MBf Buana; accordingly, the Company is now the absolute
beneficial owner of the Buana Shares.
24. Liquidation of Subsidiaries
Save as disclosed in the Audited Accounts, the Company will not incur any
further liabilities (whether actual, contingent or otherwise) in respect of
the liquidation of its following Subsidiaries:
(a) Premier Latex Inc.; and
(b) Disposable Garments Inc.
25 Playboy condom business
The license agreement entered into between the Company and Playboy
Enterprise Inc. in respect of the distribution of the Playboy brand condoms
has been lawfully and properly terminated and save for the liabilities
disclosed in the Audited Accounts, the Company is not and will not be
exposed to any other liabilities (whether actual, contingent or otherwise)
in connection therewith.
<PAGE> 38
(12)
26. Consultancy Agreement with Dr. C. Everett Koop
The total liabilities of the Company to Dr. C. Everett Koop under the
Consultancy Agreement dated the 24th day of March, 1994 entered into
between the Company and Dr. C. Everett Koop is accurately set out in the
Autdited Accounts and the Company is not and will not be exposed to any
further liabilities (whether actual, contingent or otherwise) in
connection therewith.
27. Investment in Laboratory Specialist America Inc. ("LSAI")
27.1 The Company will be able to recover the principal amount under the
Note receivable from LSAI amounting to United States Dollars Three
Hundred Fifty Three Thousand One Hundred and Twenty Three
(USD353,123.00) only together with the interest accrued thereon on
the maturity date.
27.2 The Stock Exchange and Assignment Agreements dated the 23rd day of
February, 1994 entered into between the Company and Laboratory
Specialist Inc. has been lawfully and properly terminated and the
Company is not and will not be exposed to any further liabilities
(whether actual, contingent or otherwise) in connection therewith.
<PAGE> 39
26
IN WITNESS WHEREOF the parties hereto have hereunto caused this Agreement to be
excuted on this day and year first above written.
SIGNED by Tan Mong Sing )
for and on behalf of )
MBf INTERNATIONAL LIMITED ) /s/ Tan Mong Sing
in the presence of: ) ----------------------------------
/s/ Tan Mong Sing
- ------------------------------
SIGNED by Richard Wong Chin Mun )
for and on behalf of )
WEMBLEY RUBBER PRODUCTS )
(M) SDN. BHD. (147817-V) ) /s/ Richard Wong Chin Mun
in the presence of: ) ----------------------------------
/s/ Lim Meng Sue
- ------------------------------
LIM MENG SUE
Advocate & Solicator
Kuala Lumpur
