BETWEEN RAJA SAOR CORPORATION
This Memorandum of Understanding (hereinafter referred to as “MOU”) is made and entered into on this 26th day of October 2009 by and between the following parties:
Raja Saor Corporation, a company duly established and existing under the laws of Japan and having its registered office at 3-7-1 Nishishinjuku, Shinjuku-ku, Tokyo, (hereinafter referred to as the First Party) and;
ABC Corporation, a company duly established and existing under the laws of State of Delaware, United States of America, and having its registered office at 608 Fannin Street Houston , TX, 77002, United States of America, in this matter acting as the owner of 95% of all shares of PT. DEF, a limited liability company duly established and existing under the laws of the Republic of Indonesia, (hereinafter referred to as the Second Party)
The First Party and the Second Party are jointly hereinafter referred to as the “Parties”.
Whereas, the First Party is a Japan-based company and a giant chemical company in the region wishes to expand its business in Asia, and is interested to take over DEF from the Second Party, and use DEF as its vehicle in expanding such business in Asia because Indonesia with abundant natural resources is an ideal place for such expansion plan.
Whereas, the First Party will face chemical plants require massive supply of electricity, and it is imperative that DEF will have a problem in achieving the future plan of the First Party if a strategic plan to obtain sufficient supply of electricity is not made.
Whereas, Indonesia will have some constraints in providing massive supply of electricity in the next 10 years period.
Whereas, the Second Party is the chemical group corporation in United States which heavily affected by the global financial crisis and is obligated to repay its debts to its major lenders worldwide.
Whereas, the Second Party controls 95% (ninety percent) of all issued shares in PT DEF Chemicals Indonesia Tbk. (“DEF”), a holding company with 3 subsidiaries engaged in chemical manufacturing facilities, through direct equity participation of 20% (twenty percent) of issued shares in DEF, and through 75% (seventy five percent) of issued shares held by PT GHI (GHI), a company owned by Mr. JKL (50%) and his wife, Mrs. MNO (50%), by way of entering into a loan agreement with GHI, and a nominee agreement with Mr. JKL.
The Parties agrees to consummate acquisition of PT DEF Chemicals Indonesia Tbk. (“DEF”) after: (a) completion of satisfactory of due diligence process and results conducted by the First Party and Second Party and designated by the First Party (the due diligence must be included of Environmental aspects, Tax compliance and review, Management, Human resources, Insurances, Litigations and potential dispute, Subsidiaries and related transactions, Stock options, Community relations, History and track records of the company as a going concern: from establishment to existing condition, Capital structure and shares, History of ownership, Licenses, and legal and administrative compliance, Assets, Liabilities, Contracts and commitments, and Shares to be sold are free and clear from any claims and attachments); (b) all regulatory, corporate and other approvals being obtained by the First Party; (c) fulfillment of conditions precedent of this MOU and such other agreements executed by and between the Parties, and (d) all regulatory, corporate personal and other approvals being obtained by the parties, then: (1) the First Party has to finish a loan agreement with GHI owned by Mr. JKL (50%) and his wife, Mrs. MNO (50%), and a nominee agreement with Mr. JKL; (2) the First Party shall take over the effectively 20% (twenty percent) issued shares in DEF; (3) the First Party shall effectively own 95% (ninety percent) shares in DEF; (4) promptly after the effective data of the acquisition of shares in DEF or the First Party has take over DEF from the Second Party, the First Party has to do Tender Offer according to the Regulation No. IX H 1 about the Take Over the Public Company and No. IX F 1 about Tender Offer.
The parties agree that the transactions described in Article 1 above shall be prepared and executed by the parties on the fulfillment of the following conditions precedent___
a) The first party shall have received satisfactory due diligence report on DEF and the transaction;
b) The first party shall have received a valuation report from an independent valuation company designated by the first party on the value of each of the transaction;
c) The parties have agreed to use the valuation report state in paragraph (b) above as the only and binding basis for negotiating the term and conditions of the transactions including the value of each of the transactions;
d) The parties other than the first party shall have received a second opinion from another independent valuation company as to the fairness and reasonableness of the transactions;
e) All regulatory, corporate, contractual and other approvals to effectuate the transaction shall have been obtained;
f) The first party shall have received a legal opinion from independent lawyers designated by the first party that the transactions shall be valid, legal and binding;
3.1 The parties agree to sign, enter and effectuate the transaction no later than 60 (sixty) days after the date of this MOU in the form and substance acceptable to the parties; or a later date as agreed by the first party.
3.2 If closing is not effectuated on the date mentioned in paragraph 3.1, the first party shall have the option to deal with the Second Party to achieve the purposes and objectives of the parties.
The Parties agree that the First Party shall have the right, but not the obligation to enter into the Transactions, and only if all terms and conditions of this MOU shall have been fulfilled to the satisfaction of the First Party.
Cost and Expenses
5.1 All costs and expenses arising from this MOU shall be paid by each of the Parties.
5.2 All taxes, duties and other payments to the government associated with the Transactions shall be paid respectively by each Parties obligated to pay such taxes, duties and other payments.
Breach of MOU and Termination
6.1 The Parties agree to implement and close the Transactions on a good faith basis.
6.2 No withstanding anything stated in Article 4 and such other relevant provisions of this MOU, the First Party shall have no obligation to enter into the Transaction if any of the Parties breaches any of the provisions of the MOU.
6.3 In the event of any breach of any provisions of this MOU, the First Party may terminate this MOU with a 3-day notice, and for such purposes the Parties agree to waive this application of the Article 1266 of the Indonesia Civil Code.
6.4 In the event of termination of this MOU, no party shall be obligated to pay any compensation or other payments to the other party to claims, damages, loss of profits or opportunities and the like.
7.1. The Parties agree that this MOU shall be governed pursuant to and by virtue of the laws of the Republic of Indonesia.
7.2. The Parties agree that any dispute or conflict arising out of or in connection with this MOU shall be settled by the parties through an amicable settlement, and falling to do so the Parties agree that the dispute shall be settled by arbitration under the Arbitration Rules of the Singapore International Arbitration Centre (hereinafter referred to as the Rules).
7.3. The Arbitration shall be conducted in Singapore at the facilities of the Singapore International Arbitration Centre (SIAC) by a sole arbitrator appointed in accordance with the Rules. Any notice of arbitration, response or other communication given to or by a party to the arbitration shall be given and deemed received as provided in the Rules. The costs of the arbitration shall be determined and paid by the parties to the arbitration as provided in the Rules.
7.4. This MOU shall replace all communication, understanding and agreements between the Parties made in writing or otherwise prior to the date of this MOU.
Communications should be sent to:
Name: Mr. Hitori Ozuki
Position: First Director
Email: hitori@Raja Saor.com
Phone: +62544443276 Name: Mr. Dany Crane
Position: First Director
Any change of contact details should be notified in writing (including email).
Executed as a Memorandum of Understanding.
Signed on behalf of
Name : Mr. Natsuyama
Position: Vice President Director
Name : Mr. David Grandhald
Position: First President Director
Name : Mr. Takuji
Position : Head Manager of Raja Saor Indonesia
Name : Mr. Gerald Hanspenson
Position: Head Manager of ABC Indonesia
Date: 26th day of October 2009
Date: 26th day of October 2009