A. SCHULMAN, INC.
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Delaware
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0-7459
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34-0514850
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(State or other jurisdiction of incorporation)
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(Commission File Number)
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(IRS Employer Identification No.)
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3550 West Market Street, Akron, Ohio
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44333
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(Address of principal executive offices)
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(Zip Code)
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(330) 666-3751
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Exhibit Number
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Description
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99.1
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Agreement between A. Schulman, Inc. and National Petrochemical Industrial Company of Jeddah, Saudi Arabia dated June 9, 2012
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99.2
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Press Release dated June 11, 2012
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Exhibit 99.1
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Dated 9 June 2012
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A. SCHULMAN EUROPE INTERNATIONAL B.V.
and
NATIONAL PETROCHEMICAL INDUSTRIAL COMPANY
and
A. SCHULMAN, INC.
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SHAREHOLDERS’ AGREEMENT
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Linklaters LLP
Ninth Floor Currency House Dubai International Financial Centre PO Box 506516 Dubai United Arab Emirates |
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Telephone: (+971) 4 369 5800
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Facsimile: (+971) 4 369 5801
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Ref S Mewawalla/B Davies (L-198969)
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Clause
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Page
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PART A - INTERPRETATION
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2
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1 Interpretation
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2
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PART B - STEERING COMMITTEE, INCORPORATION AND COMPLETION
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12
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2 Steering Committee
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12
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3 Incorporation
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16
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4 Pre-Completion Steps
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16
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5 Completion
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18
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PART C - BUSINESS, CONDUCT AND OPERATIONS OF THE COMPANY
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19
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6 The Business
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19
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7 Budgets and financial information
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20
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8 Tax
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21
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PART D - GOVERNANCE
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21
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9 Powers and duties of the Board of Directors
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21
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10 Appointment of Directors
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22
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11 Removal of Directors
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22
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12 Chairman
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23
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13 Board meetings
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23
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14 Committees
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24
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15 Shareholder Reserved Matters
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25
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16 Management team
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25
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PART E - COMPANY FINANCE
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26
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17 Distributions
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26
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18 Additional finance for the Company
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26
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PART F - EXIT
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27
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19 Transfers
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27
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20 Default
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29
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21 Deadlock
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32
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22 Terms and consequences of transfers of Shares
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34
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23 Duration, termination and survival
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37
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PART G - PROTECTION OF THE BUSINESS AND SHAREHOLDERS
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37
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24 Protections
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37
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25 Confidentiality
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38
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PART H - PARENT GUARANTEE
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41
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26 Schulman Parent Guarantee
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41
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PART I - GENERAL
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42
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27 General
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42
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Schedule 1 Deed of Adherence
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49
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Schedule 2 Shareholder Reserved Matters
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51
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Schedule 3 Notices
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55
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Description
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Clause/Schedule
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1.
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Articles
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Clauses 2.5, 4.1 and 4.4.2
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2.
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First Budget
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Clauses 2.5, 4.4.3 and 5.2
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3.
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First Business Plan
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Clauses 2.5, 4.4.3 and 5.2
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4.
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Funding Schedule
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Clauses 2.5.5 and 6.2.2
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5.
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Resin Supply Agreement
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Clause 5.2.1
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6.
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SC Budget and Business Plan
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Clauses 2.4 and 2.5
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7.
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Technology Transfer Agreement
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Clause 5.2.1
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8.
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Marketing and Offtake Agreement
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Clause 5.2.1
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9.
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Schulman Trademark License
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Clause 5.2.1
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10.
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Natpet Trademark License
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Clause 5.2.1
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(1)
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A. SCHULMAN EUROPE INTERNATIONAL B.V.
, a private limited liability company incorporated in The Netherlands with Chamber of Commerce Number 24272445 and whose registered office is at Mijlweg 7, 3295KG 's-Gravendeel, The Netherlands (“
Schulman
”);
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(2)
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NATIONAL PETROCHEMICAL INDUSTRIAL COMPANY
, a joint stock company incorporated in the Kingdom of Saudi Arabia with registration number 4030126641 and whose office is at P.O. Box 4459, 8th Floor, Future Business Center, Al Amanah Street, Al Rowais District, Jeddah-21491, Kingdom of Saudi Arabia (“
Natpet
”); and
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(3)
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A. SCHULMAN, INC.
, a public corporation organised under the laws of the State of Delaware, United States of America with file number 0724926 and whose head office is at 3550 West Market Street, Akron, Ohio 44333, United States of America (“
Schulman Parent
”).
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(A)
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Schulman and Natpet have agreed to establish a joint venture company in the Kingdom of Saudi Arabia to carry on the Business (the “
Company
”).
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(B)
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Schulman is an Associated Company of Schulman Parent, being a wholly-owned subsidiary of ICO Holdings, LLC (Texas), USA, itself a wholly-owned indirect subsidiary of Schulman Parent.
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(C)
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Schulman and Natpet have agreed to subscribe for and to hold Shares, and to regulate their respective rights in the Company, on the terms and conditions of this Agreement. Schulman Parent has agreed to enter into this Agreement for the purposes of guaranteeing Schulman’s obligations hereunder.
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(D)
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Schulman will provide know-how, grant certain rights and provide certain services to the Company on the terms and conditions of the Technology Transfer Agreement.
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(E)
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Schulman Parent will purchase and market the Products manufactured by the Company at the Production Facility on the terms and conditions of the Marketing and Offtake Agreement.
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(F)
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Natpet owns and operates production facilities for the manufacture of polypropylene resins, and is willing to sell PP Resin to the Company on the terms and conditions of the Resin Supply Agreement.
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(G)
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A. Schulman Plastics BVBA (an Associated Company of Schulman Parent) will distribute polypropylene resins manufactured by Natpet on the terms and conditions of the Resin Distribution Agreement.
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(H)
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Natpet and Schulman Parent will each grant certain rights to the Company on the terms and conditions of the Natpet Trademark Licence and the Schulman Trademark Licence (respectively).
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(I)
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The Parties have agreed that the Company shall construct, own and operate the Production Facility as a new facility at a site adjacent or in close proximity to the Natpet polypropylene site in Yanbu, the Kingdom of Saudi Arabia.
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1
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Interpretation
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1.1
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Definitions
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(a)
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the ownership or control (directly or indirectly) of more than 50 per cent. of the voting share capital of the relevant undertaking; or
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(b)
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the ability to direct the casting of more than 50 per cent. of the votes exercisable at general meetings of the relevant undertaking on all, or substantially all, matters; or
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(c)
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the right to appoint or remove directors of the relevant undertaking holding a majority of the voting rights at meetings of the board on all, or substantially all, matters,
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(a)
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in the case of an Event of Default occurring pursuant to Clause 20.1.1 (
Event of Default
), a price equal to 90 per cent. of the Open Market Value of the Sale Shares; and
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(b)
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in the case of an Event of Default occurring pursuant to Clauses 20.1.2 to 20.1.3 (
Event of Default
) a price equal to 100 per cent. of the Open Market Value of the Sale Shares;
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(a)
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in the case of an Event of Default occurring pursuant to Clause 20.1.1 (
Event of Default
), a price equal to 110 per cent. of the Open Market Value of the Sale Shares; and
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(b)
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in the case of an Event of Default occurring pursuant to Clauses 20.1.2 to 20.1.3 (
Event of Default
), a price equal to 100 per cent. of the Open Market Value of the Sale Shares;
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(a)
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that entity entering into or resolving to enter into any arrangement, composition or compromise with or assignment for the benefit of its creditors or any class of them in any relevant jurisdiction;
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(b)
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that entity being unable to pay its debts when they are due or being deemed under any statutory provision of any relevant jurisdiction to be insolvent;
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(c)
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a liquidator or provisional liquidator being appointed to that entity or a receiver, receiver and manager, trustee or similar official being appointed over any of the assets or undertakings of that entity, or an event analogous with any such event occurring in any relevant jurisdiction; or
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(d)
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an application or order being made or a resolution being passed for the winding up of that entity (except for the purposes of a
bona fide
reconstruction or amalgamation), or an event analogous with any such event occurring in any relevant jurisdiction,
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(a)
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the applicable Screen Rate; or
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(b)
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if no Screen Rate is available for the relevant currency or period, the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Shareholder making an election in accordance with Clause 22.3.1 at its request quoted by The Royal Bank of Scotland plc to leading banks in the London interbank market,
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1.2
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Singular, plural, gender
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1.3
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References to persons and companies
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1.3.1
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a person include any company, partnership or unincorporated association (whether or not having separate legal personality); and
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1.3.2
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a company include any company, corporation or any body corporate, wherever incorporated.
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1.4
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References to subsidiaries and holding companies
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1.4.1
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holds a majority of the voting rights in it;
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1.4.2
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is a member or shareholder of it and has the right to appoint or remove a majority of its board of directors or equivalent managing body; or
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1.4.3
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is a member or shareholder of it and controls alone, pursuant to an agreement with other members or shareholders, a majority of the voting rights in it.
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1.5
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Schedules etc.
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1.6
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Information
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1.7
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Legal terms
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1.8
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Headings
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1.9
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Winding-up
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1.10
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Documents
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1.11
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Dates
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1.12
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Business Days
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1.13
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Execution
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1.13.1
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The Parties have entered into, and agreed to be bound by, this Agreement on the date first above written.
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1.13.2
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Natpet and Schulman undertake to one another to procure the entry by the Company into a Deed of Adherence at Completion, by which the Company shall undertake to be bound by this Agreement with effect from Completion, whereupon the Company shall be deemed to be a Party.
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2
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Steering Committee
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2.1
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Appointment to the Steering Committee
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2.1.1
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Natpet and Schulman acknowledge and agree that a steering committee (the “
Steering Committee
”) shall be appointed having two representatives from each of Natpet and Schulman (the “
Representatives
”). Natpet and Schulman shall each appoint its respective Representatives by written notice to the other Party within 15 days from the date of this Agreement. In acting as a Representative, each Representative shall be doing so as an agent of the respective Party appointing him, and shall not be acting in any capacity as a fiduciary of or agent for the Company (pending its incorporation) and/or the other Parties.
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2.1.2
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Natpet and Schulman shall take reasonable steps to ensure that each of its Representatives is able to perform his duties competently.
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2.1.3
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A Representative may be removed from the Steering Committee at any time by notice in writing to the Steering Committee by the Party who appointed him, in which case the Party removing such Representative shall notify the other Party of the name, qualifications, experience and intended date of appointment of the person it proposes to nominate as a replacement Representative.
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2.1.4
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No Party shall have the right to object to the appointment of a Representative by another
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2.2
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Proceedings of the Steering Committee
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2.2.1
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The Steering Committee shall decide how often Steering Committee meetings shall take place, provided that they are held at least once each month unless a majority of the Representatives agrees otherwise. Meetings of the Steering Committee may be held by telephone or video conference, or by any other means as a majority of the Representatives shall agree.
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2.2.2
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At least seven days’ written notice by email, courier or fax shall be given to each of the Representatives of all Steering Committee meetings, together with a proposed agenda, in each case to the fax number, email address or premises set out in Schedule 3 (
Notices
) (or such other fax number, email address or premises as may be notified by a Representative to the other members of the Steering Committee for these purposes from time to time). Within three days of the date of receipt of such notice, any Representative may propose additional items for inclusion in the agenda together with a related resolution to be proposed at such Steering Committee meeting. At least three days prior to a meeting, a reasonably detailed agenda shall be given to each of the Representatives by email, courier or fax, which shall be accompanied by any relevant papers. The Steering Committee may appoint a secretary to, amongst other things, prepare any such notices, agendas and papers.
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2.2.3
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The quorum at a Steering Committee meeting shall be one Representative appointed by each of Natpet and Schulman. If a quorum is not present within 45 minutes of the time appointed for the meeting or ceases to be present, the Representative(s) present shall adjourn the Steering Committee meeting to a specified place and time not less than three days after the original date, and at that adjourned meeting the quorum for transacting business shall be one Representative appointed by each of Natpet and Schulman. Notice of an adjourned Steering Committee meeting shall be given to all the Representatives in writing by email, courier or fax.
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2.3
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Decisions taken by the Steering Committee
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2.3.1
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The Steering Committee shall operate on a consensual basis and require that any decisions which result in any expenditure in excess of US$10,000 (ten thousand US Dollars) be approved by the prior written consent of a Representative of each of Natpet and Schulman.
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2.3.2
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The Steering Committee shall not take any action in respect of the matters listed in Schedule 2 (
Shareholder Reserved Matters
) without the prior written consent of both Natpet and Schulman. In particular, the Steering Committee shall have no authority to (i) commit the Company to, or (ii) execute and/or enter into on behalf of the Company, in each case pending its incorporation, any material contract without the prior written consent of both Natpet and Schulman.
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2.3.3
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The Steering Committee shall provide Natpet and Schulman with sufficient information
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2.3.4
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A series of related transactions shall be construed as a single transaction, and any amounts involved in the related transactions shall be aggregated, to determine whether a matter is a Shareholder Reserved Matter or requires the prior written consent of a Representative of each of Natpet and Schulman pursuant to Clause 2.3.1 (
Decisions taken by the Steering Committee
) above.
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2.4
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Costs
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2.4.1
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The Steering Committee shall not incur expenditure in excess of the amounts set out, or exceed the terms of reference provided, in the SC Budget and Business Plan without the prior written consent of both Natpet and Schulman. Natpet and Schulman each acknowledges and agrees that the SC Budget and Business Plan shall reflect the estimated cost of planning and developing the Project in the period between the date of this Agreement and Completion.
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2.4.2
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Each of Natpet and Schulman shall, as soon as reasonably practicable following execution of this Agreement, initially deposit US$50,000 (fifty thousand US Dollars) into a designated bank account in the name of Natpet to be allocated at the direction of the Steering Committee in accordance with the terms of Clauses 2.1 (
Appointment to the Steering Committee
) to 2.3 (
Decisions taken by the Steering Committee
). Natpet and Schulman agree that Natpet alone shall be entitled to operate such bank account subject to the terms of this Agreement.
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2.4.3
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The Steering Committee shall keep receipts and invoices for all costs incurred by Natpet (or any of its Associated Companies) and Schulman (or any of its Associated Companies) on behalf of the Company (pending its incorporation), including all government fees payable in connection with the filings with SAGIA and MOCI as required under Clause 3 (
Incorporation
), and shall provide to each of Natpet and Schulman, on a monthly basis (and with a final breakdown to be provided within 30 days of the Completion Date), a breakdown of all such costs incurred, with a reasonable level of detail as to the nature of the costs so incurred.
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2.4.4
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Third party costs and incremental cash costs (the “
Development Costs
”) incurred in accordance with the SC Budget and Business Plan by Natpet or Schulman (or any of their respective Associated companies) on behalf of the Company (pending its incorporation) and at the direction of the Steering Committee shall be shared between Natpet and Schulman equally, and shall promptly, and in any event within 30 days, following the Completion Date, together with any unspent contributions of Natpet and Schulman to the amounts provided for in the SC Budget and Business Plan, be reimbursed by the Company to Natpet and Schulman in proportion to their respective contributions to the amounts provided for in the SC Budget and Business Plan. Internal costs (such as the time spent by employees of any Party in relation to the Steering Committee) shall be for the account of the Party incurring the costs, and shall not be so reimbursed following Completion.
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2.4.5
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If Completion does not occur and this Agreement is terminated in accordance with its terms, the Development Costs already incurred shall not be refundable and shall be borne equally by Natpet and Schulman each at their own respective risk, provided that any unspent contributions of Natpet and Schulman to the amounts provided for in the SC Budget and
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2.5
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Powers and duties of the Steering Committee
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2.5.1
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finalising construction and equipment supply arrangements for the Production Facility;
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2.5.2
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proposing and negotiating third party financing for the Project (including from banks or government investment bodies and other soft loan institutions);
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2.5.3
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finalising drafts of the First Budget and the First Business Plan for approval by the Shareholders and adoption by the Company at Completion;
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2.5.4
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finalising a draft of the Articles for approval by the Shareholders in accordance with Clause 4.4.2 (
Pre-Completion undertakings
);
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2.5.5
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proposing for agreement by the Parties such amendments to the Funding Schedule as may be reasonably required:
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(i)
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to reflect the First Budget and First Business Plan to be adopted by the Company at Completion; and
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(ii)
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from time to time by any third party finance provider (including banks or government investment bodies and other soft loan institutions);
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2.5.6
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finalising land and utilities arrangements for the Production Facility for approval by the Shareholders and adoption by the Company on or following Completion;
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2.5.7
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agreeing the job specifications and duties of the General Manager, the Finance Manager, the Sales and Marketing Manager and the Operations Manager, and their respective reporting lines and authorisations;
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2.5.8
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agreeing the identity of the authorised signatories and limits of relevant bank mandates of the Company’s bank account with effect from incorporation of the Company; and
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2.5.9
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agreeing the key performance indicators required to be reported pursuant to Clause 7.2.1(i) (
Information
) (the “
KPIs
”).
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2.6
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Delegation
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2.7
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Duration of Steering Committee
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3
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Incorporation
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3.1
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Incorporation of the Company
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3.1.1
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As soon as reasonably practicable following execution of this Agreement, Schulman and Natpet shall incorporate the Company as a limited liability company in accordance with the Laws of KSA and the terms of this Agreement, with the name “Natpet-Schulman Engineering Plastic Compounds” or such other name as may be agreed in writing by Natpet and Schulman and approved by the competent authorities in KSA, and with its registered office and its head office in Jeddah, KSA. For these purposes, each of Natpet and Schulman agrees that it shall:
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(i)
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as soon as reasonably practicable following execution of this Agreement, take such steps as are necessary to incorporate the Company in accordance with this Agreement; and
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(ii)
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take all such actions and give all such cooperation and assistance as may be required in connection with the performance of the obligations under Clause 3.1.1(i) and Clause 3.1.2 (
Incorporation of the Company
), including assisting with the requirements of any Governmental Entity in KSA (including, without limitation, SAGIA and MOCI) in order to incorporate the Company and obtain all Regulatory Consents.
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3.1.2
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In complying with this Clause 3 (
Incorporation
) and with Clause 4 (
Pre-Completion Steps
):
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(i)
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Schulman shall take the lead regarding the application for a Foreign Investment Licence and its submission to SAGIA. The Parties shall cooperate in good faith in the preparation of the Articles and their submission to MOCI (and to agree any modifications of the draft Articles as may be lawfully required by MOCI) and otherwise in taking all such other steps as may be required to satisfy Clause 3.1.1 (
Incorporation of the Company
) and, to the extent practicable, shall keep each other fully and promptly updated as to the status of incorporation; and
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(ii)
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each of Natpet and Schulman shall provide the other with copies of all documents submitted to or received from any Governmental Entity in connection therewith.
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3.2
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Share capital of the Company
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4
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Pre-Completion Steps
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4.1
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Steps
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4.1.1
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submission to SAGIA by Schulman of an application for a Foreign Investment Licence (together with all required supporting documents);
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4.1.2
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submission of draft Articles (in the Agreed Terms) to MOCI for their review;
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4.1.3
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submission of final Articles (in the Agreed Terms) to MOCI, reflecting any changes agreed between MOCI and the Parties, for attestation by MOCI;
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4.1.4
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notarisation of the Articles (in the Agreed Terms and as approved by MOCI) by a duly authorised notary in KSA, for subsequent publication by MOCI in the Official Gazette of KSA;
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4.1.5
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payment by each of Natpet and Schulman of 50 per cent. of the total subscription amount of SAR 106,000,000 (one hundred and six million Saudi Arabian Riyals) (each Shareholder’s respective portion, its “
Subscription Amount
”) in advance of and in consideration for the allotment and issue of the Shares to Natpet and Schulman by the Company as required by the Laws, such amounts to be paid by electronic transfer into a bank account of the Company in KSA;
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4.1.6
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obtaining of a bank certificate confirming the payment by Natpet and Schulman of their Subscription Amounts, and submission of such certificate to MOCI;
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4.1.7
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together with submission of the bank certificate described above, submission of any further documents, including passport details of proposed Directors, as may be requested by MOCI;
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4.1.8
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the appointment of the Chairman in accordance with Clause 12 (
Chairman
) and the Directors in accordance with Clause 10 (
Appointment of Directors
), with each such appointment to take effect from the date on which a certificate of registration with respect to the Company is issued by MOCI (the date on which such certificate of registration is issued being the “
Registration Date
”); and
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4.1.9
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taking any other actions and giving all such cooperation and assistance as may be requested or required in connection with any of the Steps and/or by any Governmental Entity in KSA in order to incorporate the Company.
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4.2
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Endeavours to complete Steps
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4.3
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Non-completion
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4.4
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Pre-Completion undertakings
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4.4.1
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Prior to Completion, the Parties undertake to inform one another as soon as reasonably practicable upon the occurrence of an event that could reasonably be expected to have a material adverse effect on the Business, or on their abilities to perform their respective obligations to pay the Subscription Amount as set out in Clause 4.1.5 (
Steps
).
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4.4.2
|
The Parties shall use their best efforts to agree and finalise the draft Articles for submission to MOCI in accordance with Clause 4.1 (
Steps
) as soon as possible, and in any event before the date which is one
month after the date of this Agreement.
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4.4.3
|
The Parties shall use their best efforts to agree and finalise the First Budget and the First Business Plan (so that they are each in the Agreed Terms) as soon as possible after the date of this Agreement, and in any event on or prior to the Completion Date.
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5
|
Completion
|
5.1
|
Completion shall take place at the offices of Natpet in Jeddah (or at such other location as Natpet and Schulman may agree) as soon as reasonably practicable following the Registration Date, and in any event no later than the date that is 10 Business Days following the Registration Date (the “
Completion Date
”). The events set out in Clause 5.2 (
Completion
) shall take place on the Completion Date in such order as Natpet and Schulman may agree.
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5.2
|
On the Completion Date, the Parties shall cause, and shall procure that the Directors appointed by them shall cause:
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5.2.1
|
the following documents to be entered into, together with any other ancillary agreements in the Agreed Terms to the extent not entered into on the date of execution of this Agreement:
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(i)
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the Marketing and Offtake Agreement;
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(ii)
|
the Technology Transfer Agreement;
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(iii)
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the Schulman Trademark Licence;
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(iv)
|
the Natpet Trademark Licence; and
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(v)
|
the Resin Supply Agreement;
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5.2.2
|
the Company to:
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(i)
|
adopt 31 December as the Company’s accounting reference date;
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(ii)
|
appoint the Auditors;
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(iii)
|
enter into the Transaction Documents, to which it is, or is to be, a party (including, for the avoidance of doubt, this Agreement); and
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(iv)
|
approve and adopt the First Budget and the First Business Plan,
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5.3
|
If either Shareholder (the first party) fails or is unable to comply with any of its obligations under Clauses 4.1.5 (
Steps
) and 5.2 (
Completion
), the other Shareholder need not perform any of its obligations under those Clauses until the first party complies with its obligations and may by written notice to the first party require the first party to comply with its obligations under those Clauses as soon as possible. Immediately following the delivery of such a notice, the Shareholders shall refer the matter to the President of Natpet (in the case of Natpet) and the regional chief operating officer for Europe of Schulman Parent (in the case of Schulman) for a period of 30 days in which such persons shall seek to resolve the matter in order to carry out the intended purpose of this Agreement.
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6
|
The Business
|
6.1
|
General
|
6.1.1
|
The Shareholders agree that their respective rights and obligations in relation to the Company shall be regulated by this Agreement and the Articles. The Shareholders agree to comply with the provisions of this Agreement and all provisions of the Articles which relate to them and that such provisions of the Agreement and Articles shall be enforceable by the Shareholders between themselves in whatever capacity.
|
6.1.2
|
The Shareholders shall (so far as they are lawfully able) use reasonable endeavours to procure that the Company (and any of its Group Companies):
|
(i)
|
complies with all of its obligations under this Agreement and the Articles; and
|
(ii)
|
assumes and is able to enjoy the benefit of the rights under this Agreement which are expressed to apply to the Company (and any Group Companies).
|
6.2
|
Operations
|
6.2.1
|
As long as Natpet and Schulman (or their respective Associated Companies) hold Shares, the operating name of the Company shall include the words “Natpet” and “Schulman” and shall be otherwise as agreed by the Parties. The Company shall have the right to use the names “Natpet” and “Schulman” on the terms set out in the Natpet Trademark Licence and the Schulman Trademark Licence (respectively).
|
6.2.2
|
The Parties agree and acknowledge their intention that, subject to the provisions of this Clause 6.2.2, the Company’s financial results will be partially consolidated with Natpet and Schulman (and/or their respective Associated Companies). The Parties agree to take such steps as may be reasonably necessary to assist in effecting such partial consolidation, including a Transfer of Shares by Schulman (or an Associated Company of Schulman) in accordance with Clause 19.2 (
Transfer to Associated Companies permitted at any time
), at all times subject to the Parties’ proper protection of their interests in the Company.
|
6.2.3
|
The initial funding of the Company shall be as set out in the Funding Schedule.
|
6.3
|
Business
|
6.3.1
|
The business of the Group shall be to manufacture and sell the Products and to perform all
|
6.3.2
|
The Parties agree that the business of the Group shall be confined to the Business, except as may be otherwise agreed by the Shareholders in accordance with this Agreement.
|
7
|
Budgets and financial information
|
7.1
|
Accounting Principles
|
7.2
|
Information
|
7.2.1
|
The Shareholders agree and shall procure that the Company shall prepare and shall supply each of them with:
|
(i)
|
monthly management accounts which shall include a report on performance against the KPIs, a consolidated profit and loss account, a balance sheet and a cash flow statement (including a statement of progress against the relevant Budget, a statement of any variation from the Budget and up-to-date forecasts for the remainder of the relevant Financial Year and itemising all capital transactions referred to in the Budget entered into by each principal division of the Company during that period);
|
(ii)
|
quarterly forecasts of financial performance for the relevant financial year;
|
(iii)
|
a monthly sales report;
|
(iv)
|
a monthly cash report (including a cash forecast report for the following three months);
|
(v)
|
a weekly production and productivity report; and
|
(vi)
|
such other information as a Shareholder may reasonably require relating to the Business or financial condition of the Company or of any Group Company within a reasonable period.
|
7.2.2
|
Subject to Clause 25 (
Confidentiality
), a Shareholder may, at its own expense, at all reasonable times, inspect and make copies of any books, records, accounts and documents relating to the Business and the affairs of the Group, and the Company and each Group Company, as applicable, shall provide such Shareholder with all reasonable assistance in connection therewith.
|
7.3
|
Approval of Budgets and Business Plans
|
7.3.1
|
Except for the First Budget and the First Business Plan which shall be agreed in accordance with Clause 4.4.3 (
Pre-Completion Undertakings
) and approved and adopted on Completion Date, each annual draft Budget and Business Plan shall be submitted to the Shareholders for approval as a Shareholder Reserved Matter. The Shareholders shall have 30 days from the date they receive such Budget and Business Plan respectively to decide whether or not
|
7.3.2
|
If in any year a draft Budget or Business Plan is not approved, the prior year’s Budget or Business Plan, as appropriate, adjusted for inflation, shall continue to apply unless and until a new Budget or Business Plan, as appropriate, is approved by the Shareholders, save that no capital expenditure referred to in any prior Budget or Business Plan shall apply and any items of capital expenditure must be approved as a Shareholder Reserved Matter. For the purposes of this Clause 7.3.2, “capital expenditure” shall not include expenditure in connection with maintenance of the Production Facility incurred in the ordinary course of business.
|
8
|
Tax
|
8.1
|
Subject to Clause 8.2 below, each Shareholder (and any of its Associated Companies) shall be liable for its own Tax with respect to its share of the Company’s profits, distributions, dividends and any other payments received by it from the Company and, to the extent required by the Laws, any such Tax shall be paid by the Company to the relevant Tax Authority and recovered or deducted, as the case may be, from any payments to the relevant Shareholder (or Associated Company).
|
8.2
|
For the purposes of this Clause 8 (
Tax
) each Shareholder's respective "share of the Company's profits" shall be proportional to its holding of Shares and:
|
8.2.1
|
in the case of a Shareholder who is not a KSA national (for the purposes of the Laws of KSA and in the opinion of the relevant Tax Authority), such pre-Tax share of the Company's profits shall be subject to Tax at the rate applicable to Shareholders who are non-KSA nationals, for which the Company shall make payment to the relevant Tax Authority on that Shareholder’s account; and
|
8.2.2
|
in the case of a Shareholder who is a KSA national (for the purposes of the Laws of KSA and in the opinion of the relevant Tax Authority), such pre-Tax share of the Company's profits shall be subject to Tax at the rate applicable to Shareholders who are KSA nationals, for which the Company shall make payment to the relevant Tax Authority on that Shareholder’s account,
|
9
|
Powers and duties of the Board of Directors
|
9.1
|
The Board shall be responsible for overseeing the overall day to day management of the Business of the Group:
|
9.1.1
|
in accordance with the Business Plan and the Budget from time to time in force; and
|
9.1.2
|
in the interests of the Shareholders collectively so as to maximise the Company’s equity value, without regard to the individual interests of either of the Shareholders,
|
9.2
|
The Board shall be responsible for:
|
9.2.1
|
submitting the Business Plan and the Budget to the Shareholders for approval; and
|
9.2.2
|
those matters for which it is required to assume responsibility pursuant to Clause 2.7 (
Duration of Steering Committee
).
|
9.3
|
Without limiting Clause 9.1 (
Powers and duties of the Board of Directors
), the Board shall (among other things) ensure that:
|
9.3.1
|
the Company is managed as an autonomous and competitive business entity;
|
9.3.2
|
the Production Facility is constructed and operated in conformity with efficient and safe practices and generally accepted international standards (including, for the avoidance of doubt, applicable local and international insurance standards and requirements); and
|
9.3.3
|
the Company maintains its accounts, books and records in English, save where otherwise required by the Laws of KSA (in which case the Company shall maintain such accounts, books and records in Arabic, and a Shareholder shall have the right to require that such accounts, books and records be translated, at the Company’s expense, into English).
|
10
|
Appointment of Directors
|
10.1
|
Number of appointees
|
10.2
|
Competency of proposed Directors
|
10.2.1
|
Where a Shareholder is entitled to appoint a new Director in accordance with this Agreement or the Articles it shall:
|
(i)
|
take reasonable steps to ensure that its nominee is able to perform their duties competently; and
|
(ii)
|
at least 14 days prior to the intended date of an appointment (to the extent reasonably practicable), notify the other Shareholder of the name, qualifications, experience and intended date of appointment of the person it intends to nominate as a Director.
|
10.2.2
|
Save in respect of an Unsuitable Director, neither Shareholder shall have the right to object to the appointment of a Director by the other Shareholder.
|
11
|
Removal of Directors
|
11.1
|
A Director:
|
11.1.1
|
may be removed as a director of the Company at any time by notice in writing to the Company by the Shareholder who appointed him; or
|
11.1.2
|
shall be promptly removed as a director of the Company where such a Director is or becomes an Unsuitable Director, by notice in writing to the Company from the Shareholder who appointed him,
|
11.2
|
To ensure compliance with the terms of Clause 10 (
Appointment of Directors
) and this Clause 11 (
Removal of Directors
), each Shareholder agrees to vote its Shares in the Company, and ensure, so far as it is lawfully able, that its respective appointed Directors shall exercise their voting rights, in such a manner as shall result in the appointment or removal of the appointees of the other Shareholder to the Board in accordance with such Clauses.
|
11.3
|
A Shareholder whose appointee has either been removed or has resigned as a Director shall fully indemnify and hold harmless the other Shareholder and the Group against all Losses incurred by the other Shareholder and/or the Group in respect of any claim made by the Director as a direct result of the removal or resignation of such Director.
|
12
|
Chairman
|
12.1
|
The Chairman shall chair all meetings of the Board but shall not have a casting vote. The Chairman shall ensure that all relevant papers for any Board meeting are properly circulated in advance and that all such Board meetings are quorate.
|
12.2
|
Natpet shall nominate the Chairman (and his successors) from one of its appointed Directors.
|
12.3
|
Board meetings shall be chaired by the Chairman. If the Chairman is not present at any Board meeting, the Directors appointed by Natpet who are present at the meeting may appoint any one of their number to act as Chairman for the purpose of the meeting.
|
13
|
Board meetings
|
13.1
|
Frequency
|
13.1.1
|
they are held at least four times a year and at not more than three-monthly intervals unless a majority of the Directors agree otherwise; and
|
13.1.2
|
any Director may convene a Board meeting at any time in accordance with Clause 13.2 (
Notice/agenda
).
|
13.2
|
Notice/agenda
|
13.2.1
|
At least 21 days’ written notice by email, courier or fax shall be given to each of the Directors of all Board meetings, except where a Board meeting is adjourned under Clause 13.3 (
Quorum
).
|
13.2.2
|
Within 10 days of the date of receipt of such notice, any Shareholder or Director may, by written notice to each of the (other) Directors, propose an item for inclusion in the agenda
|
13.2.3
|
At least five days prior to a meeting, a reasonably detailed agenda shall be given to each of the Directors by email, courier or fax, which shall be accompanied by any relevant papers.
|
13.3
|
Quorum
|
13.4
|
Voting
|
13.5
|
Place
|
13.6
|
Disclosure by Directors
|
14
|
Committees
|
14.1
|
The Board may constitute committees, whose membership may include, by invitation, representatives of the Shareholders and other professional advisers.
|
14.2
|
The voting and quorum for Board committee meetings shall be the same as for Board meetings, except as determined otherwise by the Board.
|
15
|
Shareholder Reserved Matters
|
15.1
|
Shareholders’ meetings shall be governed by this Agreement, the Articles and the Laws of KSA.
|
15.2
|
The Shareholders shall procure, as far as they are lawfully able, that no action is taken or resolution passed by the Company or any Group Company, and the Company shall not take, and shall procure that no Group Company shall take, any action in respect of the matters listed in Schedule 2 (
Shareholder Reserved Matters
), without the prior written consent of both the Shareholders. Unless required by the Laws of KSA, such matters do not need to be approved by the Shareholders in a general meeting.
|
15.3
|
The Board shall provide the Shareholders with sufficient information (including voting recommendations) to enable them to make a reasonably informed decision in respect of any Shareholder Reserved Matter requiring their consent.
|
15.4
|
A series of related transactions shall be construed as a single transaction, and any amounts involved in the related transactions shall be aggregated, to determine whether a matter is a Shareholder Reserved Matter.
|
15.5
|
The Shareholders acknowledge and agree that should either Shareholder (the “
Enforcing Shareholder
”) wish the Company to enforce any of its rights under a Transaction Document to which neither the Enforcing Shareholder nor any of its Associated Companies is party, against the other Shareholder or any of its Associated Companies (the “
Defaulting Shareholder
”):
|
15.5.1
|
the Enforcing Shareholder shall be entitled to require the Company to take any action required to enforce such rights, including by commencing proceedings against the Defaulting Shareholder (or its relevant Associated Company);
|
15.5.2
|
Board approval of such action by the Company shall not require the affirmative vote of any Director appointed by the Defaulting Shareholder; and
|
15.5.3
|
each of the Shareholders shall use its respective powers, including voting Shares owned by it and instructing the Directors appointed by it to vote in such a way as, to ensure, so far as it is legally able, that (notwithstanding any other provision of this Agreement) the Company takes any such action required of it by the Enforcing Shareholder.
|
16
|
Management team
|
16.1
|
Appointment of Managers
|
16.2
|
Competency of proposed nominees
|
16.2.1
|
take reasonable steps to ensure that each Manager is able to perform their duties competently; and
|
16.2.2
|
if proposing a new Manager for appointment by the Shareholders jointly in accordance with this Clause 16 (
Management team
), at least 30 days prior to the intended date of appointment of such person (to the extent reasonably practicable), notify the other Shareholder and the Board of the name, qualifications and experience of the person it intends to propose.
|
16.3
|
Manager Development
|
16.3.1
|
The Company shall seek to develop talent locally in KSA to ultimately occupy key positions of the Company’s management (including as Managers) within five years following Completion provided, however, that the Company shall not be prevented from conducting an external international recruitment search to fill any positions in the Company (including for Managers).
|
16.3.2
|
The Parties hereby acknowledge and agree their joint intention that the Company shall, as far as reasonably possible, comply with the requirements of the Nitaqat Program.
|
16.4
|
Employment relationship
|
16.4.1
|
Each Manager shall be an employee of the Group and may also be an employee or officer of other members of the Group.
|
16.4.2
|
Before a Manager commences his appointment, the Company shall enter into a service contract with him which shall include provisions on remuneration, confidentiality, non-competition and termination.
|
16.4.3
|
Each Manager shall devote the whole of his professional time, attention and abilities to the Business.
|
17
|
Distributions
|
17.1
|
The Auditors shall be instructed to report to the Board at the expense of the Company the amount of profits available for distribution by the Company at the same time as they sign their report on the Audited Accounts.
|
17.2
|
Subject to any requirements under the Laws, application of profits for the Group’s debt-service obligations, any applicable lender restrictions, Tax (as calculated in accordance with Clause 8 (
Tax
)), the business and working capital needs of the Company as per the then current Business Plan, and to the prior approval of the Shareholders in accordance with Clause 15 (
Shareholder Reserved Matters
), the Company shall distribute to the Shareholders all of the Company’s profits lawfully available for distribution in each Financial Year, provided that each Shareholder’s respective share of the Company’s post-Tax profits shall have been calculated in accordance with Clause 8 (
Tax
) and distributed accordingly.
|
18
|
Additional finance for the Company
|
18.1
|
External finance
|
18.1.1
|
The Shareholders agree and acknowledge that it is their understanding, as at the date of
|
18.1.2
|
Subject to Clause 18.1.1 above, unless otherwise mutually agreed, the Shareholders shall not be obliged to provide any further capital to the Company either by way of subscription for Shares or loan notes or by advancing loans, or otherwise. In the event that the Shareholders agree to provide any further capital, it is envisaged that the amount to be contributed by each Shareholder shall be pro rata to each Shareholder’s then holding of Shares.
|
18.1.3
|
If the Board determines that the Company requires additional finance, it shall borrow the amount required from such third parties as it considers suitable (which may include arranging a facility with a bank, with the remainder from soft loans provided by government investment bodies and/or other soft loan institutions) on the best terms reasonably available on the open market (the “
Third Party Finance
”). The Third Party Finance shall not confer any right on the lender to participate in the share capital of the Company unless the Shareholders agree otherwise in accordance with Clause 15 (
Shareholder Reserved Matters
).
|
19
|
Transfers
|
19.1
|
General prohibition on disposal of Shares
|
19.2
|
Transfer to Associated Companies permitted at any time
|
19.2.1
|
the Transferor (but not a subsequent transferor in a series of transfers to Associated Companies) shall, at its option, either (i) remain a Party, in which case it shall (in consideration of the entry by the other Parties into this Agreement) unconditionally and irrevocably guarantee to the other Shareholder the due and punctual performance by the Transferee of all its obligations, commitments and undertakings under or pursuant to this Agreement, or (ii) procure its substitution as a Party by its Ultimate Parent Company, provided that the
|
19.2.2
|
the Transferee shall, and the Transferor shall procure that the Transferee shall, retransfer its Shares to the Transferor or another Associated Company of that Transferor prior to ceasing to be an Associated Company of the Transferor or the Transferor’s Ultimate Parent Company, as the case may be.
|
19.3
|
Transfer to a third party
|
19.3.1
|
Unless approved in writing by all other Shareholders, a Shareholder may not at any time transfer a part of its Shares or a part of its Interest in Shares. A Shareholder (the “
Transferring
Shareholder
”) may Transfer all of its Shares and all of its Interest in Shares (the “
Transfer Shares
”) only if it receives an offer for such Transfer Shares (the “
Third Party Offer
”) from a
bona fide
third party which is not a Restricted Transferee (the “
Offeror
”) which:
|
(i)
|
is for all (and not just a part) of the Shares of the Transferring Shareholder;
|
(ii)
|
is irrevocable for a period of 60 days and unconditional (other than in respect of the rights of the Remaining Shareholder pursuant to this Clause 19 and any consent or approval from a Governmental Entity or, with respect to a Shareholder (or its Ultimate Parent Company) which is listed on a recognised stock exchange, any approval from its shareholders, in each case which may be required);
|
(iii)
|
states the price of the Third Party Offer which shall be for cash consideration (the “
Third Party Offer Price
”); and
|
(iv)
|
contains all material terms and conditions (including the intended completion date) of the offer.
|
19.3.2
|
Within 14 days of receiving a Third Party Offer which it wishes to accept, a Transferring Shareholder shall issue a written notice (the “
Transfer Notice
”) to the other Shareholder (the “
Remaining Shareholder
”), copied to the Company, containing notification of the Third Party Offer (including the name of the Offeror, the price offered for the Transfer Shares and all material terms and conditions of the Third Party Offer) and:
|
(i)
|
an offer to sell the Transfer Shares to the Remaining Shareholder (the “
Offer
”) at the same cash price and on no less favourable terms than those set out in the Third Party Offer; and
|
(ii)
|
confirmation that:
|
(a)
|
the Board shall be the agent of the Transferring Shareholder for the sale of the Transfer Shares; and
|
(b)
|
the Remaining Shareholder may elect to proceed in accordance with one of the options in Clause 19.3.3 below.
|
19.3.3
|
A Remaining Shareholder that receives a Transfer Notice shall do one of the following:
|
(i)
|
accept the offer to buy the Transfer Shares at the Third Party Offer Price, in which case:
|
(a)
|
before the expiry of the Acceptance Period (the “
Expiry Date
”), it shall send a written notice to the Transferring Shareholder accepting the Offer (the “
Acceptance Notice
”). An Acceptance Notice once issued by the Remaining Shareholder to acquire the Transfer Shares shall, save in respect of failure to obtain the waiver or satisfaction of any consent or approval from a Governmental Entity or, with respect to a Shareholder (or its Ultimate Parent Company) which is listed on a recognised stock exchange, any approval from its shareholders, in each case which may be required, be irrevocable; and
|
(b)
|
the transfer of the Transfer Shares to the Remaining Shareholder shall be completed in accordance with Clause 22 (
Terms and consequences of transfers of Shares
); or
|
(ii)
|
elect not to take up the Offer, in which case:
|
(a)
|
it may either send a written notice to the Transferring Shareholder within the Acceptance Period declining the Offer, or do nothing in which case it shall be deemed to have declined the Offer after expiry of the Acceptance Period; and
|
(b)
|
the Transferring Shareholder shall then be free to accept the Third Party Offer and sell the Transfer Shares to the Offeror within one month of the Expiry Date at no less than the Third Party Offer Price and on terms being no more favourable than those in the Transfer Notice, provided that the Offeror agrees to enter into a Deed of Adherence in the form required by this Agreement, a copy of which shall be provided to him prior to the transfer and, if so requested by the Remaining Shareholder, provide a parent company guarantee in respect of its obligations under this Agreement.
|
19.3.4
|
If a Transferring Shareholder or the Remaining Shareholder does not comply with its sale or purchase obligations in this Clause 19, then the provisions of Clause 22 (
Terms and consequences of transfers of Shares
) shall apply.
|
19.3.5
|
If the Offeror fails to acquire the Transfer Shares in accordance with this Clause 19.3 then the procedures set out in this Clause 19 shall be complied with in full in respect of each new or revised offer, whether by the same Offeror or not.
|
20
|
Default
|
20.1
|
Event of Default
|
20.1.1
|
a Shareholder or any Associated Company of such Shareholder or its Ultimate Parent
|
20.1.2
|
a Shareholder or any direct or indirect holding company of such Shareholder (which for the avoidance of doubt includes its Ultimate Parent Company), as the case may be, is subject to an Insolvency Event; or
|
20.1.3
|
a Shareholder or any direct or indirect holding company of such Shareholder (excluding its Ultimate Parent Company) is subject to any Change of Control, save where the Ultimate Parent Company of such Shareholder continues to exercise Control of the relevant Shareholder following such Change of Control,
|
20.2
|
Notice of Default
|
20.3
|
Default Notice (put/call option)
|
20.3.1
|
with respect to an Event of Default arising due to a Material Breach, provided that such Material Breach is either not capable of remedy or, if it is capable of remedy, remains unremedied as at the date the Non-defaulting Shareholder seeks to exercise its rights under this Clause 20.3.1, give written notice within 21 days following expiry of the 15 day period referred to in Clause 27.4 (
Resolution of Material Breach
); or
|
20.3.2
|
with respect to a Change of Control or Insolvency Event, give written notice within 60 days of receiving notification of a Change of Control or Insolvency Event or of it becoming aware of the Change of Control or Insolvency Event,
|
(i)
|
to sell all of the Shares held by the Defaulting Shareholder (the “
Sale Shares
”) to the Non-defaulting Shareholder at the Default Call Price; or
|
(ii)
|
to purchase all of the Sale Shares held by the Non-defaulting Shareholder at a price equal to the Default Put Price.
|
20.4
|
Completion of transfer
|
20.5
|
Other breaches of the Agreement
|
20.6
|
Determination of Open Market Value
|
20.6.1
|
Where the value of Shares is to be determined in accordance with this Clause 20 (
Default
), the Shareholders shall have 30 days from the date of the Default Notice to come to an agreement on the value of such Shares based on the method set out in Clause 20.7 (
Method of determining the Open Market Value
) (the “
Open Market Value
”).
|
20.6.2
|
If the Shareholders are unable to reach an agreement on the Open Market Value of the Shares within the time specified in Clause 20.6.1 above, then they shall have 30 days (the “
Appointment Period
”) to appoint the corporate finance team of an internationally recognised firm of accountants (which may be the Company’s Auditors) or an independent investment bank (the “
Valuers
”) to value the Shares. If the Shareholders cannot agree on an internationally recognised firm of accountants or independent investment bank within the Appointment Period, then the Valuers shall be appointed by the President of the Institute of Chartered Accountants of England and Wales at the request of any Shareholder, provided that the Valuers shall be an internationally recognised firm of accountants or independent investment bank.
|
20.6.3
|
The Valuers shall determine the Open Market Value within 60 days of their appointment and shall notify the Shareholders of their determination within two days of the same. The fees of the Valuers shall be borne by the Defaulting Shareholder.
|
20.6.4
|
The Valuers shall act as experts and not as arbitrators and their determination shall be final and binding on the Parties (in the absence of manifest error in which case the determination shall be void and shall be remitted to the Valuers for correction).
|
20.6.5
|
The Shareholders shall procure that the Valuers have such access to the accounting records and other relevant documents of the Company and any Group Company as they may reasonably require, subject to such confidentiality obligations as the Shareholders may consider appropriate.
|
20.7
|
Method of determining the Open Market Value
|
20.7.1
|
The Open Market Value of the Shares to be sold as at the date of the Default Notice, as
|
(i)
|
valuing the Shares to be sold on an arm’s length sale between a willing seller and a willing buyer who are acting knowledgeably, prudently and without compulsion;
|
(ii)
|
if the Group is then carrying on business as a going concern, on the assumption that it shall continue to do so;
|
(iii)
|
that the Shares to be sold are capable of being transferred without restriction;
|
(iv)
|
valuing the Shares to be sold as a rateable proportion of the total value of all the issued shares of the Company without any premium or discount being attributable to the class of the Shares to be sold or the percentage of the issued share capital of the Company which they represent; and
|
(v)
|
to the extent the Open Market Value of the Shares is to be determined following the occurrence of a Material Breach, on the basis that no such Material Breach has in fact arisen and by reference to the Open Market Value of the Shares prior to such Material Breach arising.
|
20.7.2
|
The Valuers shall be entitled to make the following adjustments:
|
(i)
|
without prejudice to Clause 20.7.1 (
Method of determining the Open Market Value
) above, they may determine the Open Market Value to reflect any other factors which they reasonably believe should be taken into account; and
|
(ii)
|
if they encounter any difficulty in applying any of the assumptions or bases set out in this Clause 20.7 (
Method of determining the Open Market Value
), then they shall resolve that difficulty in such manner as they shall in their absolute discretion think fit.
|
21
|
Deadlock
|
21.1
|
Referral to chief executive officers of Ultimate Parent Companies for resolution
|
21.1.1
|
If:
|
(i)
|
the Board cannot pass a resolution which has been put to it three or more times in accordance with the Articles because the requisite majority has not voted in favour of it; or
|
(ii)
|
three or more consecutive Board meetings have been adjourned because a quorum is not present,
|
21.1.2
|
If:
|
(i)
|
the Shareholders cannot reach agreement on any matter referred to them under Clause 21.1.1 (
Referral to chief executive officers of Ultimate Parent Companies for resolution
) above within 30 days of that matter being referred to them; or
|
(ii)
|
the Shareholders cannot pass a resolution which has been put to them three or more times in accordance with the Articles or agree on a Shareholder Reserved Matter which has been put to them three or more times in accordance with this Agreement because the requisite majority has not voted in favour of it or if three or more consecutive Shareholders’ meetings have been adjourned because a quorum is not present,
|
21.2
|
Deadlock Procedure
|
21.2.1
|
If the Deadlock Matter is not resolved unanimously by the Resolution Appointees within 30 days of the matter being referred to them, then either Shareholder may give notice (a “
Warning Notice
”) that it intends to implement the deadlock procedure set out in this Clause 21.2 (
Deadlock Procedure
).
|
21.2.2
|
If the Deadlock Matter cannot be resolved within 14 days of the Warning Notice, either Shareholder may within a further 14 days notify the other (a “
Deadlock Option Notice
”) specifying the price at which the Party which is giving a Deadlock Option Notice (the “
Disaffected Party
”) offers to sell to the other Shareholder all (but not a part) of the Shares held by the Disaffected Party or its Associated Companies. A Deadlock Option Notice once issued shall be irrevocable.
|
21.2.3
|
Within a period of 30 days after receiving a Deadlock Option Notice, the other Shareholder shall at its sole option elect either to:
|
(i)
|
buy, or procure the purchase of, all (but not a part) of the Disaffected Party’s Shares at the price stated in the Deadlock Option Notice; or
|
(ii)
|
require the Disaffected Party to buy, or procure the purchase of, all (but not just a part) of the Shares of that other Shareholder at the same price per Share as would have applied to a purchase under option (i) above.
|
21.2.4
|
If that other Shareholder does not make any election in writing within 30 days of receiving a Deadlock Option Notice, then it shall be deemed to have elected for the option set out in Clause 21.2.3(ii) (
Deadlock Procedure
), namely to sell its Shares.
|
21.2.5
|
The Shareholders shall use all reasonable endeavours (subject only to any Regulatory Consents) to complete the sale and purchase of the relevant Shares under an election duly made under Clause 21.2.3(i) or Clause 21.2.3(ii) (
Deadlock Procedure
), or deemed to be made under Clause 21.2.4 (
Deadlock Procedure
), from the selling party to the purchasing party at the relevant price (the “
Deadlock Price
”) within 21 days after the election or deemed election or, if later, when all Regulatory Consents are obtained (the “
Deadlock Date
”). Any sale of Shares pursuant to this Clause 21.2.5 shall otherwise proceed in accordance with the terms of Clause 22 (
Terms and consequences of transfers of Shares
) and, for the purposes of Clause 22 (
Terms and consequences of transfers of Shares
), the selling shareholder shall be referred to as the “
Transferring Shareholder
” and the buying shareholder shall be referred
|
21.2.6
|
In no circumstances shall either Shareholder create an Artificial Deadlock. An “
Artificial Deadlock
” is a Deadlock Matter caused by either Shareholder (or any Director) voting against an issue or proposal in circumstances where approval of the issue or proposal is required to enable the Company to carry on the Business properly and efficiently in accordance with the then current approved Business Plan and Budget.
|
22
|
Terms and consequences of transfers of Shares
|
22.1
|
Definitions
|
(a)
|
Clause 19 (
Transfers
), the Remaining Shareholder buying Transfer Shares;
|
(b)
|
Clause 20 (
Default
), a Shareholder electing or required to buy Shares; and
|
(c)
|
Clause 21 (
Deadlock
), the Remaining Shareholder;
|
(a)
|
Clause 19 (
Transfers
), the Transfer Notice;
|
(b)
|
Clause 20 (
Default
), the Default Notice; and
|
(c)
|
Clause 21 (
Deadlock
), the Deadlock Option Notice;
|
(a)
|
Clause 19 (
Transfers
), the Transfer Shares;
|
(b)
|
Clause 20 (
Default
), the Sale Shares; and
|
(c)
|
Clause 21 (
Deadlock
), the Shares held by the Transferring Shareholder;
|
(a)
|
Clause 19 (
Transfers
), the date of the Acceptance Notice;
|
(b)
|
Clause 20 (
Default
), the date of the notice of determination of the Open Market Value pursuant to Clause 20.6 (
Determination of Open Market Value
); and
|
(c)
|
Clause 21 (
Deadlock
), the Deadlock Date.
|
22.2
|
Completion of transfer
|
22.2.1
|
Any transfer of shares made under the provisions of Clauses 19 (
Transfers
), 20 (
Default
) or 21 (
Deadlock
) (except by a Transferring Shareholder to an Offeror under Clause 19.3.3(i) (
Transfer to a third party
) which shall be made as agreed with the Offeror) shall be made in accordance with the terms set out in this Clause 22.
|
22.2.2
|
The completion of any sale and transfer of Relevant Shares shall be made on the following terms:
|
(i)
|
The Buyer and the Transferring Shareholder shall do all such things (including applying for and obtaining any necessary regulatory and legal approvals) as are required to ensure that completion of the transfer of the Relevant Shares shall take place as soon as reasonably possible after the Relevant Time. The transfer of the Relevant Shares shall occur when the amended Articles reflecting the change in ownership of the Relevant Shares have been executed and notarised by a duly authorised notary in KSA (the “
Transfer Date
”).
|
(ii)
|
Prior to or on the Transfer Date, the Buyer shall pay the total consideration due for the Relevant Shares to the Transferring Shareholder.
|
22.3
|
Failure to transfer
|
22.3.1
|
Subject to Clause 22.3.2 (
Failure to transfer
) below, if a Transferring Shareholder, Defaulting Shareholder or Remaining Shareholder (as the case may be) fails or refuses to comply with its obligations to transfer Relevant Shares under Clauses 19 (
Transfers
), 20 (
Default
) or 21 (
Deadlock
) inclusive on or before the Transfer Date then, at the other Shareholder’s election (provided at all times that such other Shareholder is in compliance with its obligations under Clauses 19 (
Transfers
), 20 (
Default
) or 21 (
Deadlock
) (as the case may be)) the price payable in respect of the Relevant Shares shall be increased, where the Shareholder failing or refusing to comply with its obligations is the Buyer, or decreased, in all other cases, at the rate of four per cent. (4%) over LIBOR calculated on a daily basis from the appropriate completion date until the Relevant Shares are transferred in accordance with this Agreement.
|
22.3.2
|
The Shareholders acknowledge and agree that there shall be no increase or decrease (as the case may be) to the price payable in respect of the Relevant Shares where a Transferring Shareholder, Defaulting Shareholder or Remaining Shareholder (as the case may be) fails or is otherwise unable to comply with its obligations to transfer Relevant Shares under Clauses 19 (
Transfers
), 20 (
Default
) or 21 (
Deadlock
) on or before the Transfer Date as a result of that Shareholder, having used all reasonable endeavours, failing to obtain any necessary consent or approval from a Governmental Entity or, with respect to a Shareholder (or its Ultimate Parent Company) which is listed on a recognised stock exchange, from its shareholders.
|
22.4
|
Company to be informed of notices
|
22.5
|
Waiver of rights of first refusal
|
22.6
|
Business to be run as going concern
|
22.7
|
Transfer terms
|
22.7.1
|
are transferred free from all Encumbrances; and
|
22.7.2
|
are transferred with the benefit of all rights attaching to them as at the Transfer Date or any other date the Shareholders and the Buyer may agree.
|
22.8
|
Registration
|
22.9
|
Further assurance
|
22.9.1
|
Each of the Shareholders shall, and shall procure that the Company shall, use all reasonable endeavours to effect a transfer of Shares in accordance with the terms of this Agreement within a reasonable period of time.
|
22.9.2
|
To the extent that a Shareholder is prevented from exercising its rights to purchase the other Shareholder’s Shares pursuant to:
|
(i)
|
a Transfer Notice issued in accordance Clause 19 (
Transfers
);
|
(ii)
|
a Default Notice issued in accordance with Clause 20 (
Default
); or
|
(iii)
|
a Deadlock Option Notice issued in accordance with Clause 21.2.4 (
Deadlock
),
|
22.10
|
Deed of Adherence
|
22.11
|
Removal of appointees
|
22.12
|
Right to receive distributions
|
23
|
Duration, termination and survival
|
23.1
|
Duration and termination
|
23.1.1
|
the Shareholders agreeing in writing to terminate it (in which case the Shareholders shall use their reasonable efforts to agree any actions which may be required following termination);
|
23.1.2
|
the date on which all of the Shares, to the extent remaining in issue, are owned by one Shareholder and/or its Associated Companies; or
|
23.1.3
|
an effective resolution is passed or a binding order is made for the winding-up of the Company (in which case the Shareholders shall use their reasonable efforts to agree any actions which may be required in connection with such winding-up),
|
23.2
|
Termination
|
24
|
Protections
|
24.1
|
Merger or acquisition
|
24.2
|
Intellectual property rights
|
24.2.1
|
The Parties agree to use the Intellectual Property Rights granted to the Company pursuant to the Schulman Trademark Licence and the Natpet Trademark Licence for any products and/or customers of the Company in respect of which such use is in the best interests of the Company as a whole (and in particular in cases where such Intellectual Property Rights have already been qualified by the relevant customer).
|
24.2.2
|
Subject to the Clause 24.2.1 and to the provisions of the Natpet Trademark Licence and the Schulman Trademark Licence, the Parties agree to use their reasonable efforts to enable the Company to develop new Intellectual Property Rights where it is commercially viable and in the Company’s best interests to do so. Any Intellectual Property Rights which are so developed or which arise in the course of the Group’s activities shall belong to the Company.
|
24.3
|
Warranties
|
24.3.1
|
Each Party warrants to the others as follows:
|
(i)
|
it is a body corporate duly incorporated and organised and validly existing under the laws of its jurisdiction of incorporation;
|
(ii)
|
it has the legal right and full power and authority to enter into this Agreement and to perform its obligations under this Agreement;
|
(iii)
|
save as set out in Clause 4 (
Pre-Completion Steps
), it has obtained all applicable governmental, statutory, and other regulatory consents, clearances, approvals, licences, waivers or exemptions required to empower it to enter into and to perform its obligations under this Agreement and for this Agreement to be duly and validly authorised, executed and delivered by it;
|
(iv)
|
this Agreement and the obligations expressed to be assumed by it under this Agreement are legal and valid, binding upon it and enforceable against it in accordance with their terms; and
|
(v)
|
entry into and performance by it of its obligations under this Agreement will not (i) contravene any existing law, statute, order, treaty, rule or regulation applicable to it or (ii) breach any provision of its articles, by laws or other constitutional documents.
|
24.3.2
|
Schulman Parent warrants to Natpet that, as at the date of this Agreement, Schulman is a wholly-owned indirect subsidiary of Schulman Parent, owned as to 100 per cent. by ICO
|
25
|
Confidentiality
|
25.1
|
Announcements
|
25.2
|
Confidential Information
|
25.2.1
|
all communications between them and the Group;
|
25.2.2
|
all information and other materials supplied to or received by any of them from the Group which are either marked “confidential” or are by their nature intended to be for the knowledge of the recipient alone; and
|
25.2.3
|
any information relating to this Agreement, the Business and the customers, assets or affairs of the Group, all information concerning the business transactions and/or financial arrangements of the Group; and
|
25.2.4
|
any information relating to the customers, business, assets or affairs of a Shareholder or its Associated Companies and all information concerning the business transactions and/or financial arrangements of a Shareholder or its Associated Companies,
|
25.3
|
Exclusions
|
25.3.1
|
information which the Parties have agreed in writing is not confidential;
|
25.3.2
|
information which is or becomes publicly available (otherwise than as a result of a breach of
|
25.3.3
|
information which is independently developed (as can be demonstrated by its written records) by a Shareholder that uses or discloses the same;
|
25.3.4
|
the disclosure of information by a Shareholder or its Associated Companies to its Associated Companies, directors, employees or professional advisers on a need to know basis and on terms that such parties undertake to comply with the provisions of this Clause 25 (
Confidentiality
) as if they were a Party;
|
25.3.5
|
the disclosure of information on a confidential basis to a
bona fide
third party (not being a Restricted Transferee) or professional advisers or financiers of such third party wishing to acquire Shares from a Shareholder in accordance with the terms of this Agreement to the extent that any such persons need to know the information for the purposes of considering, evaluating, advising on or furthering the potential purchase provided that no such disclosure shall be made unless:
|
(i)
|
such person has agreed to be bound to observe the restrictions under this Clause 25 (
Confidentiality
); and
|
(ii)
|
the package of information being disclosed has been approved by the non-transferring Shareholder (such approval not to be unreasonably withheld or delayed);
|
25.3.6
|
the disclosure of information to the extent required by Law, any court of competent jurisdiction, any regulatory body or any recognised stock exchange; or
|
25.3.7
|
the disclosure of information to any Tax Authority to the extent such disclosure is reasonably required for the purposes of the tax affairs of the Shareholder concerned or any of its Associated Companies.
|
25.4
|
Return of Confidential Information
|
25.4.1
|
return all written Confidential Information provided to it or its Associated Companies or its or their officers, employees, agents or advisors without keeping any copies thereof;
|
25.4.2
|
destroy all analyses, compilations, notes, studies, memoranda or other documents prepared by it or its Associated Companies or its or their officers, employees, agents or advisers to the extent the same contain, reflect or derive from Confidential Information relating to the other Shareholder or its Associated Companies or the Company or the Business;
|
25.4.3
|
expunge any Confidential Information relating to the other Shareholders or its Associated Companies or the Group or the Business from any computer, word processor or other device in its possession or under its control,
|
25.5
|
Damages not an adequate remedy
|
25.6
|
Duration of confidentiality obligations
|
26
|
Schulman Parent Guarantee
|
26.1
|
In consideration of Natpet entering into this Agreement, Schulman Parent agrees that it shall:
|
26.1.1
|
guarantee to Natpet (and any of its Associated Companies holding Shares from time to time) the proper and punctual performance by Schulman (and any of its Associated Companies holding Shares from time to time) of the Schulman Guaranteed Obligations; and
|
26.1.2
|
undertake to Natpet (and any of its Associated Companies holding Shares from time to time) that whenever Schulman (and any of its Associated Companies holding Shares from time to time) does not pay any amount when due under or in connection with this Agreement, it shall immediately pay on demand that amount as if it were the principal debtor.
|
26.2
|
The obligations of Schulman Parent under this Clause 26 (
Schulman Parent Guarantee
) constitute continuing obligations which will extend until Schulman (or any of its Associated Companies) ceases to hold Shares, regardless of any intermediate payment or discharge in whole or in part.
|
26.3
|
Schulman Parent’s liability under this Clause 26 (
Schulman Parent Guarantee
) shall not be discharged or impaired by:
|
26.3.1
|
any amendment, variation or assignment of this Agreement or any waiver of its terms;
|
26.3.2
|
any release of, or granting of time or other indulgence to, Schulman or any third party;
|
26.3.3
|
any winding up, dissolution, reconstruction, legal limitation, incapacity or lack of corporate power or authority or other circumstances affecting Schulman (or any act taken by Natpet in relation to any such event); or
|
26.3.4
|
any other fact or circumstance (whether or not known to any of Schulman, Natpet or Schulman Parent) which would or might (but for this Clause 26 (
Schulman Parent Guarantee
)) operate to impair or discharge Schulman Parent’s liability or afford Schulman Parent or Schulman any legal or equitable defence.
|
26.4
|
For the avoidance of doubt, the liability of Schulman Parent under this Clause 26 (
Schulman Parent Guarantee
) shall not exceed the liability of Schulman (and any of its Associated Companies holding Shares from time to time).
|
27
|
General
|
27.1
|
Dispute resolution
|
27.1.1
|
The Parties undertake to one another to procure that all disputes arising out of or in connection with a Transaction Document other than this Agreement shall first be submitted for resolution in accordance with the terms of the Transaction Document in respect of which that dispute first arises, provided that where such dispute is alleged to constitute a Material Breach:
|
(i)
|
that dispute shall not be submitted to arbitration under the relevant Transaction Document; and
|
(ii)
|
if such dispute is not otherwise resolved pursuant to such Transaction Document, it shall instead be referred to the Resolution Appointees in accordance with Clause 27.1.2 below.
|
27.1.2
|
If the Parties are unable to resolve a dispute arising out of or in connection with this Agreement (including a dispute as to the validity or existence of this Agreement, whether a Material Breach has occurred or resolution of the same) within 30 days of the dispute arising, or a dispute arising out of or in connection with a Transaction Document (other than this Agreement) is to be referred to the Resolution Appointees pursuant to Clause 27.1.1 above (each a “
Dispute
”), the Dispute shall be referred immediately to the Resolution Appointees. Any Resolution Appointee involved may nominate an independent third party acceptable to the other Resolution Appointee to act as mediator to assist them to resolve the Dispute.
|
27.1.3
|
With respect to any Dispute which is alleged to constitute a Material Breach, the Resolution Appointees shall be requested (i) to determine whether a Material Breach has occurred, and (ii) to seek to resolve such Dispute (irrespective of whether it constitutes a Material Breach or not).
|
27.2
|
Arbitration Notice
|
27.2.1
|
If the Dispute cannot be resolved by the Resolution Appointees within 30 days of the Dispute being referred to them, any relevant Party may serve a written notice (“
Arbitration Notice
”) on the other stating that it wishes to refer the Dispute to arbitration.
|
27.2.2
|
Any referral to arbitration shall be made in accordance with (i) Clause 27.5 (
Arbitration
), and (ii) if the relevant Dispute alleges a Material Breach, Clause 27.3 (
Arbitration on Material Breach
).
|
27.3
|
Arbitration on Material Breach
|
27.3.1
|
In the event of the commencement of arbitration proceedings under Clause 27.2 (
Arbitration Notice
) alleging a Material Breach, each Shareholder undertakes to include the following requests in its request for arbitration:
|
(i)
|
a request that the arbitrators consider whether the Material Breach so alleged and referred is in fact a Material Breach;
|
(ii)
|
a request that, in rendering an award, it gives effect to the provisions of Clause 20.3 (
Default Notice (put/call option)
); and
|
(iii)
|
a request that the arbitrators render their determination within 60 days of the date of the first arbitration hearing, with the arbitration hearing to take place as soon as reasonably practicable following the request for arbitration.
|
27.3.2
|
Each Party acknowledges and agrees that, in the event of a Material Breach by a Party or any of its Associated Companies, the Non-defaulting Shareholder shall not, and shall procure that its Associated Companies and/or the Company shall not, seek, in relation to the Material Breach, both:
|
(i)
|
an award of damages under the Transaction Document in relation to which the Material Breach has arisen; and
|
(ii)
|
to exercise any rights it may have pursuant to Clause 20.1 (
Event of Default
) to Clause 20.4 (
Completion of transfer
),
|
27.4
|
Resolution of Material Breach
|
27.5
|
Arbitration
|
27.5.1
|
The arbitration shall be governed by the arbitration rules of the London Court of International Arbitration (the "
Rules
"), which Rules are deemed to be incorporated by reference into this Clause 27.5, and the following provisions shall apply to the arbitration:
|
(i)
|
the tribunal shall consist of three arbitrators, with each Party to the Dispute being entitled to nominate one arbitrator, the third arbitrator being appointed by agreement of the Parties to the Dispute;
|
(ii)
|
the place of arbitration shall be London, United Kingdom; and
|
(iii)
|
the language to be used in the arbitration shall be English.
|
27.5.2
|
The Parties hereby agree that any restriction in the Rules upon the nomination or appointment of an arbitrator by reason of nationality shall not apply to any arbitration commenced pursuant to Clause 27.2 (
Arbitration Notice
).
|
27.5.3
|
The arbitrators shall have the power to grant any remedy or relief available by law, including injunctive relief (whether interim and/or final) and specific performance and any measures ordered by the arbitrators may be enforced by any court of competent jurisdiction. Without prejudice to the tribunal’s powers, and notwithstanding anything to the contrary in Article 25.3 of the Rules and Sections 44(4) and 44(5) of the UK Arbitration Act 1996, each Party retains the right to seek, at any time, interim or provisional measures, including pre-arbitral attachments or injunctions, from any court of competent jurisdiction and any such request shall not be deemed incompatible with the agreement to arbitrate or a waiver of the right to arbitrate. For the avoidance of doubt, this Clause 27.5.3 is not intended to limit the powers of the court exercisable in support of arbitration proceedings pursuant to Section 44 of the UK Arbitration Act 1996.
|
27.5.4
|
Any arbitral award made pursuant to the arbitration shall be final and binding on the Parties and the Parties hereby waive their respective right to claim the revision of the arbitral award, except as otherwise permitted under the Rules.
|
27.5.5
|
The arbitrators' decision shall be rendered in writing and shall state the basis thereof and the allocation between the Parties of the Parties' costs and the costs of the arbitration.
|
27.6
|
Governing law
|
27.7
|
Notices
|
27.8
|
Whole agreement and remedies
|
27.8.1
|
Whole agreement
|
27.8.2
|
No inducement
|
27.8.3
|
Remedies
|
27.8.4
|
Legal advice and reasonableness
|
27.9
|
Conflict with the Articles
|
27.10
|
Undertaking to give effect to the Proposed Transaction
|
27.11
|
No Partnership
|
27.12
|
Release etc.
|
27.13
|
Survival of Rights, Duties and Obligations
|
27.13.1
|
Termination of this Agreement for any cause shall not release a Party from any liability which at the time of termination has already accrued to another Party or which thereafter may accrue in respect of any act or omission prior to such termination.
|
27.13.2
|
If a Party ceases to be a Party to this Agreement for any cause, such Party shall not be released from any liability which at the time of the cessation has already accrued to another Party or which thereafter may accrue in respect of any act or omission prior to such cessation.
|
27.14
|
Waiver
|
27.15
|
Variation
|
27.16
|
No Assignment
|
27.16.1
|
Except as otherwise expressly provided in this Agreement, none of the Parties may, without the prior written consent of the others, such consent not to be unreasonably withheld or delayed, assign, grant any security interest over, hold on trust or otherwise transfer to any person any benefit or obligation under this Agreement, in whole or in part, absolutely or conditionally.
|
27.16.2
|
This Agreement shall be binding on the Parties and their respective successors and assigns.
|
27.17
|
Further Assurance
|
27.18
|
Invalidity/severance
|
27.18.1
|
If any provision in this Agreement shall be held to be illegal, invalid or unenforceable, in whole
|
27.18.2
|
To the extent it is not possible to delete or modify the provision, in whole or in part, under Clause 27.18.1 above, then such provision or part of it shall, to the extent that it is illegal, invalid or unenforceable, be deemed not to form part of this Agreement and the legality, validity and enforceability of the remainder of this Agreement shall, subject to any deletion or modification made under Clause 27.18.1 above, not be affected.
|
27.19
|
Counterparts
|
27.20
|
Costs
|
27.21
|
Time of the essence
|
27.22
|
Third Party Rights
|
27.23
|
Service of Process
|
27.23.1
|
Schulman Parent and Schulman each hereby irrevocably appoint A. Schulman, Inc. and its successors (now of Croespenmaen Industrial Estate, Crumlin, Newport, Gwent NP11 3AG) as its agent to accept service of process in England in any legal action or proceedings arising out of or in connection with this Agreement.
|
27.23.2
|
Natpet hereby irrevocably appoints Xpert Management Services Limited and its successors (now of Stanhope House, 47 Park Lane, London W1K 1PR) as its agent to accept service of process in England in any legal action or proceedings arising out of or in connection with this Agreement.
|
27.23.3
|
Service of process on the relevant process agent shall be deemed valid service upon the relevant Party whether or not it is forwarded to and received by such Party.
|
27.23.4
|
Each Party shall inform the other Party in writing of any change in its process agent's address within 14 days of such change.
|
27.23.5
|
If for any reason a process agent ceases to be able to act as such or no longer has an address in England, the relevant Party irrevocably agrees to appoint a substitute process agent in England reasonably acceptable to the other Party and to deliver to them copies of the substitute agent’s written acceptance of that appointment, within 14 days. If the relevant Party fails to appoint such substitute process agent, the other Party shall be entitled to appoint one on behalf of the relevant Party at the relevant Party’s expense.
|
27.23.6
|
The Parties irrevocably consent to any process in any proceedings anywhere being served by mailing a copy by registered post or courier to it in accordance with Clause 27.7
(Notices)
. However, nothing in this Clause 27.23.6 shall affect the right to serve process in any other manner permitted by law.
|
SIGNED by Khalid A. Alireza
on behalf of National Petrochemical Industrial Company |
|
/s/ Khalid A. Alireza
|
|
|
|
SIGNED by Joseph M. Gingo and Bernard Rzepka
on behalf of A. Schulman Europe International B.V. |
|
/s/ Joseph M. Gingo
|
|
/s/ Bernard Rzepka
|
|
|
|
|
For the purposes of Clause 26 (
Schulman Parent Guarantee
):
SIGNED by Joseph M. Gingo
on behalf of A. Schulman, Inc. |
|
/s/ Joseph M. Gingo
|
|
|
|
(A)
|
[
The Company wishes to adhere to, and become bound by the terms of, a shareholders’ agreement made on
[
date
]
between (1) A. Schulman Europe International B.V., (2) National Petrochemical Industrial Company and (3) A. Schulman, Inc. as such agreement has been or may be amended, supplemented or novated from time to time (the “
Agreement
”).
|
(B)
|
This Deed of Adherence is entered into in compliance with Clause 1.13.2 (
Execution
) of the Agreement.
]
|
(A)
|
[[
]
(the “
Transferor
”) is proposing to transfer to the New Shareholder
[
number/
all of its
]
[
ordinary
]
shares of
[
]
each in the capital of
[
]
(the “
Company
”).
|
(B)
|
This Deed of Adherence is entered into in compliance with Clause 22.10 (
Deed of Adherence
) of a shareholders’ agreement made on
[
date
]
between (1) A. Schulman Europe International B.V., (2) National Petrochemical Industrial Company and (3) A. Schulman, Inc.
[
and (4) the Company
]
as such agreement has been or may be amended, supplemented or novated from time to time (the “
Agreement
”).
]
|
1
|
The
[
New Shareholder/Company
]
confirms that it has been supplied with and has read a copy of the Agreement.
|
2
|
The
[
New Shareholder/Company
]
agrees (i) to assume the benefit of the rights of the
[
Transferor/Company
]
under the Agreement, and (ii) to observe, perform and be bound by all the obligations and terms of the Agreement capable of applying to the
[
New Shareholder/Company
]
and which are to be performed on or after the date of this Deed, to the intent and effect that the
[
New Shareholder/Company
]
shall be deemed with effect from the date
[
on which the New Shareholder is registered as a member of the Company/of execution of this Deed
]
to be a party to the Agreement (as if named as a party to that Agreement).
|
3
|
This Deed is made for the benefit of (i) the original parties to the Agreement, and (ii) any other person or persons who after the date of the Agreement (and whether or not prior to or after the date of this Deed) adhere to the Agreement.
|
4
|
The address and fax number of the
[
New Shareholder/Company
]
for the purposes of Clause 27.7 (
Notices
) of the Agreement are as follows:
[
insert address and fax numbers
]
.
|
5
|
Clause 27.1 (
Dispute resolution
)
of the Agreement shall apply to this Deed as if set out in full herein.
|
6
|
[
The
[
New Shareholder/Company
]
hereby appoints
[
●
]
as its agent for service of all process in any proceedings in respect of the Agreement.
]
|
SIGNED as a DEED by
[
●
]
acting by
[
name of director
]
a Director and
[
name of director/secretary
]
[
a Director/the Secretary
]
in the presence of:
|
|
|
Witness’s signature
|
|
|
Name
|
|
|
Address
Occupation
|
|
|
1
|
Strategic decisions
|
1.1
|
Approving any Business Plan or Budget, any amendments thereto, and the approval or ratification of any departure from the same.
|
1.2
|
Any material change to the scope, nature or geographical area of the Business or carrying on any business other than the Business by the Company or any Group Company (including, for the avoidance of doubt, as envisaged in Clause 6.3 (
Business
)), including commencing any new business which is not ancillary or incidental to the Business.
|
1.3
|
Any suspension, cessation or abandonment of any activity which exceeds in value US$1,000,000 (one million United States Dollars).
|
1.4
|
Any change of name or registered office of the Company or any Group Company.
|
1.5
|
Registering or permitting the registration of any person (other than the Parties and any of their permitted transferees under this Agreement) as a Shareholder.
|
2
|
Acquisitions, disposals, joint ventures etc.
|
2.1
|
Any acquisition or disposal of:
|
2.1.1
|
any undertaking, business, company or securities of a company; or
|
2.1.2
|
any assets or property (other than in the ordinary course of business).
|
2.2
|
Any entry into any joint venture, partnership, profit sharing agreement, consolidation, amalgamation, collaboration, merger or major project (not included in the Business Plan).
|
2.3
|
The incorporation of any new Group Company, or any Group Company increasing or reducing its shareholding in a company, or the establishment of any new branch, agency, trading establishment, business or outlet.
|
3
|
Corporate structure
|
3.1
|
Any actual or proposed reorganisation or liquidation or similar, of any member of the Group or the closing of any branch, agency, trading establishment, business or outlet of any member of the Group.
|
3.2
|
The entry into, termination, variation, waiver or breach of any arrangement or contract with any officer or consultant to the Company or any Group Company earning total annual compensation (in salary and in-kind) or being paid an annual fee of more than US$75,000 (seventy five thousand United States Dollars), or any connected person of such person, including the amendment or variation of remuneration or other benefits under such arrangement or contract.
|
3.3
|
The adoption, termination or variation of any bonus or profit-sharing scheme, any share option or
|
4
|
Financial framework
|
4.1
|
Other than in the ordinary course of business (as provided for in the Business Plan) or in relation to ordinary course working capital arrangement, the obtaining of any Third Party Finance by the Company or any Group Company.
|
4.2
|
The obtaining of Third Party Finance which gives the lender the right to participate in the share capital of the Company.
|
4.3
|
The creation of any Encumbrance over any assets or property of the Group.
|
4.4
|
The making of any loan or advance to any person, firm, body corporate or other business, other than (i) to a Group Company, (ii) in the normal course of business and on an arm’s length basis, (iii) to an employee in an amount not exceeding the maximum amount stipulated in the Company’s personnel policies, or (iv) in all other cases, in an amount not exceeding SAR 50,000 (fifty thousand Saudi Arabian Riyals).
|
4.5
|
The giving of any guarantee or indemnity other than in the normal course of its business by any Company or Group Company.
|
4.6
|
Any change in the authorised or issued share capital or the creation or issue of any shares or of any other security of the Company or any Group Company or the grant of any option or rights to subscribe for or to convert any instrument into such shares or securities.
|
4.7
|
Any reduction of the share capital or variation of the rights attaching to any class of shares or any redemption, purchase or other acquisition by the Company or any Group Company of any shares or other securities of that Company or Group Company.
|
4.8
|
Any application by way of capitalisation of any sum in or towards paying up any Shares or of any other security or of any amount standing to the credit of the share premium account or capital redemption reserve for any purpose.
|
4.9
|
The incurring of any capital expenditure (including obligations under hire-purchase and leasing arrangements) of any item or project which is not provided for in the Budget or Business Plan. The incurring of any capital expenditure (including obligations under hire-purchase and leasing arrangements) of any item or project in an amount of more than SAR 1,000,000 (one million Saudi Arabian Riyals), even if such expenditure is provided for in the Budget or Business Plan.
|
4.10
|
The incurring of any other expenditure (other than (i) as described in paragraph 4.9 above, or (ii) in respect of raw materials) in an amount of more than SAR 1,000,000 (one million Saudi Arabian Riyals), even if such expenditure is provided for in the Budget or Business Plan.
|
4.11
|
The payment of any dividends or other distributions (or the carrying forward or retention of any profits to the next Financial Year except as may be required by the Laws of KSA) by any member of the Group, and any changes to the dividend policy.
|
5
|
Other protections
|
5.1
|
Any amendment to, or revision of, the memorandum of association of the Company or the Articles, or any memorandum or articles of association, of any Group Company.
|
5.2
|
Any change to the accounting reference date or any material change to the accounting policies and principles adopted by the Company or any Group Company.
|
5.3
|
Any material change to the Company’s internal policies.
|
5.4
|
Any change to the KPIs required to be reported pursuant to Clause 7.2.1(i) (
Information
).
|
5.5
|
The adoption of the audited annual accounts of any member of the Group.
|
5.6
|
The adoption of any trade name or application for registration of any other Intellectual Property Right by any member of the Group.
|
5.7
|
The appointment or removal of the auditors of any member of the Group (provided that the Auditors shall at all times be an internationally recognised firm which is independent from the Shareholders and their respective Ultimate Parent Companies).
|
5.8
|
Any revaluation of the Group’s assets other than in accordance with the Laws and any applicable accounting requirements.
|
5.9
|
The entry into or continuation of any transaction or the amendment to or termination of any contract in relation to any transaction between (on the one hand) the Company or any Group Company, and (on the other hand) a Shareholder or any of its Associated Companies or any Director or officer of the Company or any Group Company (including, for the avoidance of doubt, the Resin Supply Agreement).
|
5.10
|
The entry into, amendment, or waiver under or in respect of any contract or commitment not provided for in the Budget or Business Plan (whether by renewal or otherwise) by any member of the Group not in the ordinary course of business or otherwise than on arm’s length terms.
|
5.11
|
The termination (or giving of notice to terminate) or material amendment of any arrangements, transactions or contracts which are material in the context of the Business.
|
5.12
|
Any change to the Company’s bankers or the terms of the mandate given to its bankers in relation to its account(s) other than by the substitution of any person nominated as a signatory by the person entitled to make such nomination.
|
5.13
|
The commencement or settlement of any litigation, arbitration or other proceedings (other than debt recovery proceedings in the ordinary course of business) to which the Company or any Group Company is a party or prospective party and which are material in the context of the Business or submitting to arbitration or alternative dispute resolution any dispute involving the Company.
|
5.14
|
The voluntary bankruptcy, winding up or liquidation of the Company or any Group Company, including:
|
5.14.1
|
any admission by the Company or a Group Company of its inability to pay its debts as they fall due, or the suspension of payment on any of its debts;
|
5.14.2
|
any step by the Company or a Group Company with a view to a composition, moratorium, assignment or similar arrangement with any of its creditors;
|
5.14.3
|
any convening of a meeting for the purpose of considering its winding-up, administration or dissolution or any such resolution being passed;
|
5.14.4
|
presentation of, or any failure to oppose in a timely manner, a petition for the winding-up, administration or dissolution of the Company or a Group Company;
|
5.14.5
|
appointing a liquidator, trustee in bankruptcy, judicial custodian, compulsory director, receiver, administrative receiver, administrator or similar officer;
|
5.14.6
|
any other voluntary action by the Company or a Group Company in furtherance of its liquidation, administration, reorganisation, dissolution or termination of its corporate status; or
|
5.14.7
|
the occurrence of any other action analogous with any such event (as described in this paragraph 5.14) in any relevant jurisdiction in relation to the Company or a Group Company.
|
5.15
|
The making of an application for admission to listing or trading of any Shares or other securities of the Company or any Group Company on any stock exchange or market.
|
|
Contact Details
|
|
National Petrochemical Industrial Company
|
Address:
|
P.O.Box 4459,
|
|
|
8th Floor,
|
|
|
Future Business Center,
|
|
|
Al Amanah Street,
|
|
|
Al Rowais District,
|
|
|
Jeddah-21491,
|
|
|
Kingdom of Saudi Arabia
|
|
Fax No:
|
+966 2 652 9469
|
|
Email:
|
hkutbi@natpetpp.com
|
|
For the attention of: Mr. Helmi Kutbi
|
|
|
With a copy to:
|
|
|
National Petrochemical Industrial Company
|
|
|
Address:
|
P.O.Box 4459,
|
|
|
8th Floor,
|
|
|
Future Business Center,
|
|
|
Al Amanah Street,
|
|
|
Al Rowais District,
|
|
|
Jeddah-21491,
|
|
|
Kingdom of Saudi Arabia
|
|
Fax No:
|
+966 2 6529380
|
|
Email:
|
jmalaikah@natpetpp.com
|
|
For the attention of: Mr. Jamal J. Malaikah
|
|
A. Schulman, Inc.
|
Address:
|
3550 West Market Street,
|
|
|
Akron, Ohio 44333,
|
|
|
United States of America
|
|
Fax No:
|
+1 330 666 3751
|
|
Email:
|
info@aschulman.com
|
|
For the attention of: Chief Legal Officer
|
|
A. Schulman Europe International B.V.
|
Address:
|
P.O. Box 5187,
|
|
|
3295ZH 's Gravendeel,
|
|
|
The Netherlands
|
|
Fax No:
|
+31 78 673 2625
|
|
Email:
|
Patrick_Speek@us.aschulman.com
|
|
For the attention of: Mr. Patrick Speek
|
|
|
With a copy to:
|
|
|
A. Schulman, Inc.
|
|
|
Address:
|
3550 West Market Street,
|
|
|
Akron, Ohio 44333,
|
•
|
worldwide and regional economic, business and political conditions, including continuing economic uncertainties in some or all of the Company’s major product markets or countries where the Company has operations;
|
•
|
the effectiveness of the Company’s efforts to improve operating margins through sales growth, price increases, productivity gains, and improved purchasing techniques;
|
•
|
competitive factors, including intense price competition;
|
•
|
fluctuations in the value of currencies in major areas where the Company operates;
|
•
|
volatility of prices and availability of the supply of energy and raw materials that are critical to the manufacture of the Company’s products, particularly plastic resins derived from oil and natural gas;
|
•
|
changes in customer demand and requirements;
|
•
|
effectiveness of the Company to achieve the level of cost savings, productivity improvements, growth and other benefits anticipated from acquisitions, joint ventures and restructuring initiatives;
|
•
|
escalation in the cost of providing employee health care;
|
•
|
uncertainties regarding the resolution of pending and future litigation and other claims;
|
•
|
the performance of the global automotive market; and
|
•
|
further adverse changes in economic or industry conditions, including global supply and demand conditions and prices for products.
|