AMENDED AND RESTATED MASTER ALLIANCE AGREEMENT
MASTER ALLIANCE AGREEMENT, dated as of July 28, 2000, as amended and
restated September 8, 2000, between MITSUBISHI MOTORS CORPORATION, a Japanese
corporation ("MMC"), and DAIMLERCHRYSLER AKTIENGESELLSCHAFT, a German
corporation ("DaimlerChrysler").
WHEREAS, MMC and DaimlerChrysler (the "Parties") desire to
develop a global alliance pertaining to their respective passenger car and light
commercial vehicle operations subject to receipt of approvals from applicable
Governmental Authorities or the expiration of waiting periods under applicable
Law;
WHEREAS, in connection with the establishment of the Alliance
(as hereinafter defined), the Parties and DaimlerChrysler Japan Holding, Ltd., a
wholly-owned subsidiary of DaimlerChrysler ("DCJH"), have entered into a
Securities Subscription Agreement, as amended (the "Securities Subscription
Agreement"), pursuant to which (i) MMC has agreed to issue and sell to
DaimlerChrysler and DaimlerChrysler has agreed to subscribe for and purchase
499,856,000 shares (the "Initial Shares") of Common Stock, par value (Y)50 per
share, of MMC ("Common Stock") and (ii) MMC has agreed to issue and sell to DCJH
and DCJH has agreed to subscribe for and purchase unsecured convertible bonds of
MMC (the "Convertible Bonds") convertible, if and to the extent certain events
occur, into a maximum of 47,407,407 shares of Common Stock (the "Conversion
Shares" and together with the Initial Shares, the "DaimlerChrysler Shares");
WHEREAS, pursuant to the Securities Subscription Agreement
DaimlerChrysler anticipates entering into a Stockholders' Agreement with
Aktiebolaget Volvo (the "Volvo Stockholders' Agreement") effective as of the
Closing Date; and
WHEREAS, to document certain understandings of the Parties
concerning their relationship, the parties are entering into an Amended and
Restated Standstill Agreement (the "Standstill Agreement");
NOW, THEREFORE, the Parties hereto hereby agree as follows:
I.
DEFINITIONS
Section 1.01 DEFINITIONS. As used in this Agreement, the
following terms have the following respective meanings:
AFFILIATE means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries, controls or is
controlled by, or is under common control with such Person; provided that
neither Party nor their respective
Subsidiaries shall be deemed an Affiliate of the other Party or its
Subsidiaries. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlled by" and "under common control
with"), as used with respect to any Person, means the direct or indirect
possession of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
AGREEMENT means this Amended and Restated Master Alliance Agreement.
ALLIANCE has the meaning given to it in Section 2.01.
ALLIANCE COMMITTEE has the meaning given to it in Section 4.01.
ALLIANCE PROJECT has the meaning given to it in Section 3.01(b).
ANNUAL MEETING has the meaning given to it in Section 5.01(c).
BENEFICIAL OWNER (including, with correlative meanings, the terms
"Beneficially Own" and "Beneficial Ownership"), with respect to any securities,
means any Person which:
(a) has, or any of whose Affiliates has, directly or
indirectly, the right to acquire such securities (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange rights,
warrants or options, or otherwise; or
(b) has, or any of whose Affiliates has, directly or
indirectly, the right to vote or direct the voting of, or dispose or
direct the disposition of (whether such right is exercisable
immediately or only after the passage of time) such securities,
including pursuant to any agreement, arrangement or understanding
(whether or not in writing).
BOARD means the board of directors of MMC from time to time.
BOARD OF EXECUTIVE OFFICERS means the board of full-time directors and
senior executive officers (jokyu shikko yakuin) and executive officers (shikko
yakuin) of MMC from time to time, or any of its successors.
BOARD OF SENIOR EXECUTIVE OFFICERS means the board of full-time
directors and senior executive officers of MMC from time to time, or any of its
successors.
BUSINESS PLAN has the meaning given to it in Section 6.01.
CAR BUSINESS means the business of developing, designing,
manufacturing, assembling, selling or purchasing, exporting or importing and
otherwise dealing in Passenger Vehicles.
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CCE PARTY has the meaning given to it in Section 8.03(a).
CHANGE OF CONTROL EVENT means as to either Party (i) a third-party
manufacturer of Passenger Vehicles shall (A) acquire control (as such term is
defined in the last sentence of the definition of Affiliate) of such Party or
(B) be merged or consolidated with such Party such that the shareholders of such
third-party manufacturer immediately prior to such merger shall own a majority
of the equity of the surviving or resulting corporation immediately after such
merger or consolidation, or (ii) such Party shall dispose of substantially all
of its Car Business.
CHIEF OPERATING OFFICER has the meaning given to it in Section 5.02(a).
CLOSING DATE has the meaning given to it in the Securities Subscription
Agreement.
COMMERCIAL CODE means the Commercial Code of Japan (Law No. 48 of 1899,
as amended).
COMMON STOCK has the meaning given to it in the second recital.
CONFIDENTIAL INFORMATION has the meaning given to it in Section 9.01.
CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT means the Confidentiality
and Non-Disclosure Agreement, dated March 19, 2000, between MMC and
DaimlerChrysler.
CONSTITUENT AGREEMENTS has the meaning given to it in the Securities
Subscription Agreement.
CONVERSION SHARES has the meaning given to it in the second recital.
CONVERTIBLE BONDS has the meaning given to it in the second recital.
DAIMLERCHRYSLER SHARES has the meaning given to it in the second
recital.
DC DIRECTOR means any person designated by DaimlerChrysler and
nominated by MMC pursuant to Section 5.01 and elected to the Board by the
shareholders of MMC.
DC EXECUTIVE has the meaning given to it in Section 5.02.
DCJH has the meaning given to it in the second recital.
DEVELOPMENT AGREEMENTS has the meaning given to it in Section 6.02.
DIRECTOR means a member of the Board.
DUTCH GAAP has the meaning given to it in Section 6.03(a).
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FINANCIAL SERVICES ALLIANCE PROJECT has the meaning given to it in
Section 3.03(b).
FINANCIAL SERVICES AFFILIATES has the meaning given to it in Section
3.03(b).
GOVERNMENTAL AUTHORITY has the meaning given to it in the Securities
Subscription Agreement.
INITIAL ALLIANCE PROJECTS means the Financial Services Alliance Project
and the Small Car Alliance Project.
INITIAL DC DIRECTORS has the meaning given to it in Section 5.01(c).
INITIAL SHARES has the meaning given to it in the second recital.
INTERIM PERIOD has the meaning given to it in Section 6.04.
JOINT DEVELOPMENT COMPANY has the meaning given to it in Section
6.04(f).
LAW has the meaning given to it in the Securities Subscription
Agreement.
MFTBC means the subsidiary of MMC which is to be established for the
purpose of conducting the Truck and Bus Business and in which Volvo will acquire
an equity interest.
MITSUBISHI TRADEMARKS means the trademarks for the "Mitsubishi" name
and the "three diamonds" symbol (used separately or in conjunction with each
other and together with all translations and transliterations thereof).
NEDCAR has the meaning given to it in Section 6.01.
NEDCAR ACQUISITION AGREEMENT has the meaning given to it in Section
6.03(a).
NEDCAR SHAREHOLDERS AGREEMENT has the meaning given to it in Section
6.03(a).
NUMBER OF DESIGNATED DIRECTORS means, at the time of any general
meeting of the shareholders of MMC, the number of Directors necessary for
DaimlerChrysler to designate such that, after the election of the persons so
designated by DaimlerChrysler at such general meeting of the shareholders of
MMC, there shall be in office a number of DC Directors equal to the the product
(rounded up to the nearest whole number) of (i) the percentage of the
outstanding Common Stock owned of record by DaimlerChrysler and its Subsidiaries
on the record date for such meeting (but excluding any shares acquired or held
in breach of the Standstill Agreement) multiplied by (ii) the total number of
Directors to be holding office after such general meeting, PROVIDED, HOWEVER,
that the Number of Designated Directors shall mean three (3) until a fourth DC
Director shall be elected at the Special Meeting pursuant to Section 5.01(d).
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OPTION PARTY has the meaning given to it in Section 8.03(a).
PARTIES has the meaning given to it in the first recital.
PASSENGER VEHICLES means any passenger vehicle or any light commercial
vehicle below Xxxxxx class.
PERSON means any individual, corporation, partnership, trust,
association, limited liability company or any other entity or organization.
POST-CLOSING DC DIRECTOR has the meaning given to it in Section
5.01(d).
PROJECT STEERING COMMITTEE means any committee composed of members
designated by MMC and DaimlerChrysler which is formed pursuant to Section 4.02.
REIMBURSABLE DEVELOPMENT COSTS has the meaning given to it in Section
6.04(c ).
RECEIPT OF REGULATORY APPROVAL means the receipt of all approvals for
the issuance of Securities to DaimlerChrysler by MMC pursuant to the Securities
Subscription Agreement from applicable Governmental Authorities with
responsibility for competition Law matters under applicable Law or, where
applicable, the expiration of all waiting periods under applicable Law following
filings with such Governmental Authorities required under applicable Law with
respect to such issuance.
SECURITIES means the DaimlerChrysler Shares and the Convertible Bonds.
SECURITIES SUBSCRIPTION AGREEMENT has the meaning given to it in the
second recital.
SHORTFALL PARTY has the meaning given to it in Section 6.04(d).
SMALL CAR ALLIANCE PROJECT has the meaning given to it in Section 6.01.
SMALL CAR PROJECT STEERING COMMITTEE has the meaning given to it in
Section 6.01.
SPECIAL MEETING has the meaning given to it in Section 5.01(d).
SPIN-OFF means the formation of MFTBC and the contribution or transfer
thereto by MMC of assets, liabilities and operations related to the Truck and
Bus Business.
STANDSTILL AGREEMENT has the meaning given to it in the fourth recital.
SUBSIDIARY with respect to either Party means any corporation,
partnership or other entity or person of which such Party directly or indirectly
owns a majority of either the equity or the voting interests.
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SURPLUS PARTY has the meaning given to it in Section 6.04(d).
TRANSFER with respect to any security means any sale, gift,
endorsement, assignment (including an assignment of voting rights), transfer,
pledge, encumbrance or other disposition, whether voluntary, involuntary or by
operation of law.
TRUCK AND BUS BUSINESS means the business of developing, designing,
manufacturing, assembling, selling or purchasing, exporting or importing,
financing and otherwise dealing in trucks and buses of the Xxxxxx class and
above or components therefor.
US GAAP has the meaning given to it in Section 2.03(c).
VCC has the meaning given to it in Section 6.03(c).
VOLVO means Aktiebolaget Volvo, a Swedish corporation.
VOLVO STOCKHOLDERS' AGREEMENT has the meaning given to it in the third
recital.
(b) The foregoing definitions shall apply equally to both the singular
and plural forms of the terms defined. The word "including" shall in all cases
be deemed to be followed by the phrase "without limitation". All references
herein to Sections, Articles, Exhibits, Recitals and the Preamble shall be
deemed to be references to Sections, Articles, Exhibits, Recitals and the
Preamble of this Agreement unless the context otherwise requires.
II.
SCOPE OF THE ALLIANCE
Section 2.01 SCOPE OF THE ALLIANCE. The Parties are entering
into this Agreement in order to develop a global alliance with respect to the
development, design, manufacture, assembly, sale, purchase, export and import of
Passenger Vehicles (the "Alliance"). The Parties intend that the objectives of
the Alliance will be accomplished through cooperation in the joint development,
manufacture, distribution, marketing and sale of Passenger Vehicles throughout
the world, including but not limited to coordination of strategies and efforts
regarding products and technologies for the North American market and other
markets.
Section 2.02 STRUCTURE OF THE ALLIANCE. This Agreement sets
forth a basic structure through which the Parties' goals for the Alliance will
be accomplished as set forth herein. For the avoidance of doubt, none of the
provisions hereof precludes the Parties from implementing the Alliance through
other arrangements which may be made from time to time.
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Section 2.03 FINANCIAL STATEMENTS.
(a) Following the Closing Date, MMC shall prepare and deliver
to DaimlerChrysler unaudited consolidated and non-consolidated financial
statements of MMC for each fiscal quarter, including, without limitation, a
balance sheet, income statement and statement of cash flow, and appropriate
relevant footnote disclosure information, pursuant to the following schedule:
(i) for the first two complete fiscal quarters
following the Closing Date, within 45 days after the end of
each fiscal quarter;
(ii) for the subsequent two fiscal quarters, within
30 days after the end of each fiscal quarter;
(iii) thereafter, at such time as the Parties shall
reasonably agree but in no event later than 30 days after the
end of each fiscal quarter.
Upon the reasonable request of DaimlerChrysler, MMC shall instruct its outside
auditors to review and assist DaimlerChrysler's advisors in any review of the
quarterly financial statements to be delivered pursuant to this subsection (a).
(b) Following the Closing Date, MMC shall prepare and deliver
to DaimlerChrysler audited consolidated and non-consolidated financial
statements of MMC for each fiscal year of MMC, including, without limitation, a
balance sheet, income statement and statement of cash flow, and appropriate
relevant footnote disclosure information, pursuant to the following schedule:
(i) with respect to the fiscal year in which the
Closing Date occurs, within 45 days after the end of the
fiscal year;
(ii) with respect to each subsequent fiscal year, at
such time as the Parties shall reasonably agree, but in no
event later than 45 days after the end of each fiscal year.
(c) In addition to the foregoing, as soon as possible after
the end of each fiscal quarter following the Closing Date, MMC shall deliver to
DaimlerChrysler information regarding MMC's financial statements with respect to
such fiscal quarter to the extent as is required in order for DaimlerChrysler to
satisfy its public disclosure requirements under applicable law and the rules of
any stock exchange, provided that DaimlerChrysler shall consolidate MMC on an
equity basis under generally accepted accounting principles in the United States
("US GAAP"). The scope and timing of such information shall be agreed upon by
the Parties, taking into consideration all legal deadlines to which
DaimlerChrylser shall be subject.
(d) After the Closing Date MMC and Daimler Chrysler shall
cooperate to improve MMC's financial reporting, including improvements in the
scope
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and method for adjustment to US GAAP. MMC shall use its best efforts to
prepare the financial statements provided to DaimlerChrysler pursuant to
subsections (a) and (b) in accordance with US GAAP as soon as practicable
following the Closing Date, and in any event by no later than the first fiscal
quarter following the third anniversary of the Closing Date.
(e) In the event DaimlerChrysler intends to include any
specific references to the financial results of MMC as prepared in accordance
with US GAAP, including without limitation any summary financial results for MMC
prepared in accordance with US GAAP, in DaimlerChrysler's financial statements
or any other publicly disclosed documents, DaimlerChrysler shall provide MMC
advance notice of its intention to disclose such results and the Parties will
discuss in good faith if any reasonable alternative to such disclosure is
available under applicable law or the rules of such exchange.
(f) MMC shall permit DaimlerChrysler and its accounting and
financial reporting advisors reasonable access to the books and records,
facilities and personnel of MMC for the purpose of permitting DaimlerChrysler
and such advisors to make any adjustments to MMC's financial statements that are
required under US GAAP for the purpose of DaimlerChrysler's consolidated
reporting.
(g) MMC shall provide periodic business plans to
DaimlerChrysler on such terms and at such times as the Parties may from time to
time agree, and MMC shall use its best efforts to provide such information in
form and substance that will permit reconciliation to US GAAP.
III.
IMPLEMENTATION OF THE ALLIANCE
Section 3.01 ALLIANCE PROJECTS. (a) To the extent any aspect
of the Alliance (including any Alliance Project, as defined below) may not be
implemented under applicable Law prior to Receipt of Regulatory Approval, the
Parties agree that such aspect shall not be implemented pending such Receipt and
shall be implemented as soon as practicable upon such Receipt.
(b) The Parties may hereunder from time to time establish
joint projects between DaimlerChrysler and MMC, or any of their respective
Subsidiaries, for the development, manufacture and sale of Passenger Vehicles in
any part of the world (each such project an "Alliance Project"). Each Alliance
Project shall be managed by a Project Steering Committee established pursuant to
Section 4.02 and shall be implemented in accordance with Section 3.02.
(c) Subject to Receipt of Regulatory Approval, if required,
DaimlerChrysler and MMC agree to cooperate with each other in all matters
included
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within the scope of each Alliance Project and to provide reasonable
cooperative assistance and expertise on other matters of mutual interest.
Section 3.02 IMPLEMENTATION OF ALLIANCE PROJECTS. If the
Parties agree that any project should be undertaken as an Alliance Project, the
Parties and their respective Subsidiaries and Affiliates (to the extent
applicable) shall use their commercially reasonable best efforts to enter into
definitive agreements for, or other arrangements regarding, such Alliance
Project. Definitive agreements may include the respective contributions, rights
and obligations of the parties thereto with respect to technology, components
and financing to be provided to the Alliance Project, purchases to be made by,
through or from the Alliance Project, the geographical location of the Alliance
Project, the duration of the Alliance Project and such other matters as to which
the Parties may agree. If any specific Alliance Project involves the purchasing
of products or components from one Party (or its Affiliate) by the other Party
(or its Affiliate), information concerning the costs of the selling Party (or
its Affiliates) shall be made available to the buyer prior to negotiating the
price.
Section 3.03 INITIAL ALLIANCE PROJECTS.
(a) SMALL CAR ALLIANCE PROJECT. The Parties agree to implement
a Small Car Alliance Project on the terms set forth in Article VI.
(b) FINANCIAL SERVICES ALLIANCE PROJECT. The Parties agree to
implement a financial services alliance project as set forth herein (the
"Financial Services Alliance Project"). As part of the Financial Services
Alliance Project, DaimlerChrysler shall, to the extent requested by MMC, make
its Affiliates that are engaged in the business of sales financing and leasing
of Passenger Vehicles in the United States, Europe and such other regions as the
Parties may agree ("Financial Services Affiliates") available for sales
financing and leasing of MMC brand Passenger Vehicles on terms which, when taken
as a whole, are no less favorable than the terms made available to
DaimlerChrysler's independent distributors, dealers and customers, in light of
the geographic location of the sales financing or leasing, the type of Passenger
Vehicles subject to financing or leasing arrangements, and the creditworthiness
of the borrower or lessee. Notwithstanding the foregoing, (i) DaimlerChrysler
shall not be required to provide any financing subsidy (including any program or
terms that amount to a de facto subsidy) that DaimlerChrysler may now or
hereafter provide through its Financial Services Affiliates to DaimlerChrysler's
distributors, dealers or customers and (ii) DaimlerChrysler shall be under no
obligation to maintain any existing or future Financial Services Affiliates as
Affiliates of DaimlerChrysler. The Parties shall establish a Financial Services
Project Steering Committee to oversee the Financial Services Alliance Project
and shall use their commercially reasonable best efforts to enter into any
definitive agreements necessary and appropriate to implement the Financial
Services Alliance Project as expeditiously as possible.
Section 3.04 SHARING OF INFORMATION. In order to maximize the
benefits of the Alliance to both Parties, the Parties shall share information
openly as
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mutually agreed with respect to specific Alliance Projects, except when
constrained by legal considerations. Accordingly, unless so constrained, the
Parties will share (i) their knowledge of activities and trends in the Car
Business and relating to the Car Business and (ii) their commercial
information regarding the Car Business. Sharing of technical information
shall be subject to appropriate licenses to be negotiated between the Parties
provided that each Party agrees to make available to the other Party
information concerning the relevant Party's costs for developing or otherwise
obtaining such information.
Section 3.05 TRUCK AND BUS BUSINESS; SPIN-OFF. (a) The Parties
hereby agree that the Truck and Bus Business and the Spin-Off are not and will
not be (i) within the scope of the Alliance or (ii) an Alliance Project or part
of any Alliance Project.
(b) Unless and to the extent that any matter relating to the
Truck and Bus Business has a material impact on the financial condition or
business of MMC on a non-consolidated basis, DaimlerChrysler agrees not to (i)
interfere in the management and operation of MMC's Truck and Bus Business while
operated as a division of MMC and while operated through MFTBC, or (ii) object
to the implementation by MMC of the Master Alliance Agreement, dated December
13, 1999, as amended by Amendment No. 1 to Master Alliance Agreement dated July
27, 2000.
(c) DaimlerChrysler hereby agrees that as part of the Alliance
it will (i) vote for the Spin-Off at the meeting of MMC shareholders held to
approve the Spin-Off and (ii) not interfere with MMC's commercially reasonable
efforts to effect the Spin-Off. Commercially reasonable efforts to effect the
Spin-Off shall include the allocation between MMC and MFTBC of the costs and
expenses of any assets or liabilities which will be shared between MMC and
MFTBC, it being understood that MMC may allocate to MFTBC certain of its general
assets, liabilities, costs and expenses that are only indirectly related to the
Truck and Bus Business and that MMC and/or its subsidiaries may retain certain
assets, liabilities, costs and expenses relating to the Truck and Bus Business.
To the extent that such assets are retained, MMC will enter into agreements to
permit MFTBC to use such assets on reasonable commercial terms. The Spin-Off
will also include either (i) the sub-licensing to MFTBC on a royalty-free basis
of the exclusive right to use the Mitsubishi Trademarks for the Truck and Bus
Business or (ii) the consent of MMC to a direct exclusive license of the
Mitsubishi Trademarks from MMC's licensors to MFTBC for the Truck and Bus
Business, as the Parties may agree.
(d) MMC shall structure the Spin-Off so that the transactions
are fair and equitable to MMC and its shareholders. MMC shall retain an
internationally recognized independent investment bank or accounting firm to
deliver an opinion to the Board that the price paid by Volvo for the shares of
MFTBC purchased pursuant to the Spin-Off shall be fair and reasonable to the
shareholders of MMC.
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(e) The obligations of DaimlerChrysler or any DC Director or
DC Executive, and the restrictions on its, his or her actions, set forth in this
Agreement with respect to MFTBC shall cease to apply upon the earliest to occur
of the following events: (i) the principal business of MFTBC ceases to be the
Truck and Bus Business, (ii) Volvo ceases to be a shareholder of MFTBC, or (iii)
MFTBC engages in any material aspect of the Car Business.
IV.
ALLIANCE COMMITTEE; PROJECT STEERING COMMITTEES
Section 4.01 ALLIANCE COMMITTEE. (a) The Parties shall
establish a committee (the "Alliance Committee") which shall be responsible for
establishing Project Steering Committees for each Alliance Project, for
monitoring the progress of each Project Steering Committee and for coordinating
among the Project Steering Committees.
(b) The Alliance Committee shall be composed of an equal
number of representatives from DaimlerChrysler and MMC. The representatives of
each Party on the Alliance Committee shall be designated by the Parties from
time to time.
Section 4.02 PROJECT STEERING COMMITTEES. (a) The Alliance
Committee shall appoint any Project Steering Committee it may consider necessary
to further the Alliance and the purposes of this Agreement. Each Project
Steering Committee shall be responsible for (i) studying the feasibility of any
new Alliance Project, (ii) implementing any new Alliance Project and (iii)
overseeing any ongoing Alliance Project.
(b) Each Project Steering Committee shall be composed of a
substantially equal number of representatives of each Party. The representatives
of each Party on each Project Steering Committee shall be designated by the
Parties from time to time.
(c) The Alliance Committee shall appoint a Project Steering
Committee upon the agreement of both Parties. If the representatives of either
Party on any Project Steering Committee shall notify the representatives of the
other Party thereto that they believe that such Project Steering Committee and
the related Alliance Project should not continue to be an Alliance Project for
any reason, such Project Steering Committee shall notify the Alliance Committee
of such decision and, unless otherwise instructed by the Alliance Committee,
such Project Steering Committee shall be disbanded.
Section 4.03 MEETINGS. Meetings of the Alliance Committee and
each Project Steering Committee shall be held at such times and at such location
or locations as agreed by the members thereof and may be conducted by electronic
media, telephone
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conference call, personal attendance, or any combination of the foregoing,
and, unless otherwise agreed, shall be conducted in the English language. No
meeting of the Alliance Committee or any Project Steering Committee shall be
convened unless at least one of the members designated by MMC (excluding DC
Executives and DC Directors) and one of the members designated by
DaimlerChrysler is present at such meeting (in person, by telephone or by
electronic media).
Section 4.04 DECISION-MAKING. (a) All recommendations and
other actions of the Alliance Committee and each Project Steering Committee
shall require a written agreement signed by at least one member designated by
MMC (excluding DC Directors and DC Executives) and at least one member
designated by DaimlerChrysler. Such requirement may be satisfied through the
written minutes of any meeting thereof, if signed by one member designated by
MMC (excluding DC Directors and Executives) and one member designated by
DaimlerChrysler.
(b) Neither the Alliance Committee nor any Project Steering
Committee shall have the power or authority to bind either Party or any of their
respective Subsidiaries or Affiliates, and implementation of decisions of the
Alliance Committee and each Project Steering Committee shall be subject to such
approvals as may be required by applicable law and the corporate procedures of
each of the Parties.
Section 4.05 COSTS. All costs and expenses relating to the
operation of the Alliance Committee and of each Project Steering Committee shall
be borne by the Parties in the manner determined by the Alliance Committee or
such Project Steering Committee. Neither the Alliance Committee nor the Project
Steering Committees shall incur any costs, expenses or other liabilities, and
neither Party will incur any costs, expenses or liabilities on behalf of the
Alliance Committee or any Project Steering Committee, without the prior approval
of the representatives of both Parties on the Alliance Committee or such Project
Steering Committee.
V.
BOARD REPRESENTATIVES AND MANAGEMENT
REPRESENTATIVES
Section 5.01 BOARD. (a) At each meeting of the shareholders of
MMC, DaimlerChrysler shall have the right to designate the Number of Designated
Directors. MMC shall notify DaimlerChrysler in writing of each meeting of the
shareholders of MMC no less than ninety (90) days prior to such meeting.
DaimlerChrysler shall notify MMC of its designees to the Board in writing no
more than thirty (30) days after receipt of such notice from MMC, provided that
DaimlerChrysler will only designate such number of persons as is required so
that DaimlerChrysler will have the Number of Designated Directors. The persons
so designated by DaimlerChrysler shall be nominated and recommended by MMC for
election to the Board by the shareholders of
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MMC at such meeting. With respect to each such meeting, MMC shall use its
best efforts to cause the election of the persons designated by
DaimlerChrysler so that at all times the number of DC Directors plus any
incumbent directors previously designated by DaimlerChrysler shall equal the
Number of Designated Directors. Such best efforts shall include, without
limitation, (1) causing the Board to nominate and recommend for election by
the shareholders of MMC each person designated by DaimlerChrysler and (2)
taking all necessary actions to provide notice of the relevant shareholders
meeting which shall include providing the shareholders of MMC with notice of
the election of directors, the nomination of such designees and the
unqualified recommendation of the incumbent Board to elect such designees for
Board membership. Without the written consent of DaimlerChrysler, MMC shall
not cause or permit the number of directors on the Board to exceed eleven
(11) directors. No person nominated as a director by DaimlerChrysler shall be
a representative director of MMC without the approval of the Board.
Notwithstanding the foregoing, MMC shall have no obligation to nominate or
recommend any designee of DaimlerChrysler as a director if such person is not
eligible for such position for any reason under Japanese or other applicable
law.
(b) Each DC Director may participate in all matters within the
jurisdiction of the Board except (i) to the extent participation is prohibited
under the Commercial Code and (ii) that DC Directors shall refrain from voting
on any matter coming before the Board relating to MMC's Truck and Bus Business
and/or MFTBC unless such matter has a material impact upon the financial
condition or business of MMC on a non-consolidated basis.
(c) The first persons (the "Initial DC Directors") to be
designated by DaimlerChrysler and nominated by MMC for election to the Board
were elected to the Board at the general meeting of the shareholders of MMC held
on June 27, 2000 (the "Annual Meeting"). The Initial DC Directors will agree
that they will not take office until after Receipt of Regulatory Approval. If
the Securities Subscription Agreement shall terminate for any reason after such
persons designated by DaimlerChrysler are elected as members of the Board,
DaimlerChrysler shall cause each DC Director to immediately resign from the
Board.
(d) After the Closing Date, the remaining individual necessary
for DaimlerChrysler to have the Number of Designated Directors (the
"Post-Closing DC Director") will be designated by DaimlerChrysler and nominated
by MMC for election to the Board at an extraordinary meeting of the shareholders
of MMC (the "Special Meeting"). The Special Meeting shall be held as soon as
practicable after the Closing Date.
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Section 5.02. EXECUTIVE MANAGEMENT. (a) MMC agrees to appoint
persons designated by DaimlerChrysler to the position of chief operating officer
("Chief Operating Officer") with the responsibilities set forth in Exhibit A
hereto and to such other executive positions at MMC as shall be agreed upon from
time to time by the Parties (each a "DC Executive," which term shall include the
Chief Operating Officer and any other DC Director designated by DaimlerChrysler
for an executive position). The Chief Operating Officer shall be appointed as
soon after the Closing Date as DaimlerChrysler's designee as Chief Operating
Officer is available to assume such position. The other DC Executives who were
appointed immediately after the Annual Meeting shall not serve in such
capacities until after Receipt of Regulatory Approval. Each DC Executive shall
have the right to membership on and to attend any and all meetings of the Board
of Senior Executive Officers and/or the Board of Executive Officers to which
such executive would otherwise be entitled by reason of his or her position or
title within MMC, and in any event all DC Directors who are also DC Executives
and at least two (2) other such DC Executives shall be entitled to membership on
and to attend any and all meetings of the Board of Senior Executive Officers
regardless of position or title within MMC. The Board of Senior Executives
Officers and the Board of Executive Officers shall not be responsible for any
matters relating only to MMC's Truck and Bus Business, which shall be the
responsibility of the Management Committee of MMC's Truck and Bus Division, or
any sub-committee thereof, prior to the Spin-Off and of the Board of Directors
of MFTBC following the Spin-Off.
(b) Each DC Executive shall be entitled to salary, benefits
and other compensation in accordance with MMC's general policy for employees in
equivalent positions; PROVIDED, that each DC Executive may receive expatriate
benefits and other compensation or rights from DaimlerChrysler during his tenure
at MMC, at the cost of DaimlerChrysler. Each DC Executive and each DC Director
shall enter into a confidentiality agreement with respect to any information
received from MMC, the form of which is attached as Exhibit B hereto.
(c) MMC may terminate the employment of any DC Executive for
any reason consistent with MMC's employment practices and in accordance with
Japanese law, PROVIDED, that MMC will appoint a successor to such terminated DC
Executive promptly after such successor is designated by DaimlerChrysler.
(d) Each DC Executive may participate in all matters within
his or her areas of responsibility except to the extent participation therein
would be prohibited under the Commercial Code by such individual if he or she
were a DC Director, provided, however, that any such executive with
responsibilities for general areas of MMC that include the Truck and Bus
Business shall refrain from participating in any matter relating primarily to
the Truck and Bus Business unless such matter has a material impact on the
financial condition or business of MMC on a non-consolidated basis.
Section 5.03 NO REPRESENTATION IN MANAGEMENT OF MMC'S TRUCK
AND
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BUS BUSINESS. No DC Director, DC Executive, or other MMC employee designated
by DaimlerChrysler shall serve on the Management Committee of MMC's Truck and
Bus Business, the board of directors of MFTBC, the Joint Decision Committee
established by MMC and Volvo in connection with their alliance relating to
the Truck and Bus Business, or any steering committee established by such
Joint Decision Committee, and MMC will not designate any such DC Director, DC
Executive, or other employee to the board of directors of Volvo Truck
Corporation or Volvo Bus Corporation.
Section 5.04 DIRECTORS' LIABILITY INSURANCE. MMC shall include
the DC Directors under the Directors' liability insurance coverage arranged by
MMC for the Directors, on terms equivalent to those arranged for all other
Directors.
VI.
SMALL CAR ALLIANCE PROJECT
Section 6.01 SCOPE OF PROJECT. The Parties agree to implement
a small car alliance project (the "Small Car Alliance Project") for the
development and production of small passenger cars, including passenger cars
with a fuel efficiency of 3 liters per 100 kilometers or better, and components
therefor. The Small Car Alliance Project shall include (i) the joint development
of a small car platform, (ii) the joint production of small cars at the
Netherlands Car B.V. ("NedCar") production facility in Born, The Netherlands,
and (iii) such other matters regarding either small passenger cars or NedCar as
the Parties shall agree upon. The Parties shall establish a small car Project
Steering Committee (the "Small Car Project Steering Committee") to oversee the
small car platform for Europe and the NedCar production facilities. As soon as
practicable after Receipt of Regulatory Approval, the Parties shall agree upon a
business plan setting forth the commercial and technical requirements for the
Small Car Alliance Project (the "Business Plan"). Such Business Plan may be
revised at any time thereafter by the written agreement of the Parties.
Section 6.02 DEFINITIVE AGREEMENTS. Subject to Receipt of
Regulatory Approval, as soon as practicable after the date hereof but not later
than March 31, 2001, the Parties shall negotiate in good faith and enter into
the following definitive agreements, to the extent deemed necessary by the Small
Car Project Steering Committee: (a) one or more agreements setting forth the
principles of governance of any Persons other than NedCar that may be jointly
owned or operated by MMC and DaimlerChrysler (or their respective Subsidiaries)
in connection with the Small Car Alliance Project, and (b) one or more
development agreements (collectively, the "Development Agreements") setting
forth the engineering requirements for the small car platform and the components
therefor, the allocation of development responsibilities for such platform and
components between the Parties, and the principles for financing such
development, such Development Agreements to be consistent with the Business
Plan.
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Section 6.03 PURCHASE AND SALE OF SHARES OF NEDCAR. (a) Prior
to July 15, 2004, the Parties shall negotiate in good faith and enter into (i) a
NedCar Acquisition Agreement (the "NedCar Acquisition Agreement") pursuant to
which on July 15, 2004, or such other date as may be agreed upon by the Parties,
DaimlerChrysler shall purchase from MMC, and MMC shall sell to DaimlerChrysler,
50% of the then outstanding shares of NedCar at a price per share equal to the
net book value per share of NedCar as of the date of such purchase to be
determined on the basis of the books and records of NedCar and in accordance
with generally accepted accounting principles in The Netherlands ("Dutch GAAP"),
and (ii) a NedCar Shareholders' Agreement (the "NedCar Shareholders Agreement")
setting forth the principles for the management of NedCar following the purchase
of 50% of the equity thereof by DaimlerChrysler.
(b) Commencing at a time reasonably prior to the acquisition
of the Shares of NedCar pursuant to the NedCar Acquisition Agreement,
DaimlerChrysler and its representatives shall be provided sufficient opportunity
to conduct due diligence with respect to NedCar. The purposes of such due
diligence will be (i) to adjust the purchase price paid by DaimlerChrysler to
reflect any facts discovered in the course of such due diligence, including any
non-compliance with Dutch GAAP, which shall impact the net book value of NedCar
as determined in accordance with Dutch GAAP, (ii) to confirm or supplement
matters with respect to NedCar developed during its due diligence in connection
with the Constituent Agreements or disclosed in any schedule to the Securities
Subscription Agreement, (iii) to further the goals of the Alliance with respect
to NedCar, (iv) to confirm compliance with Section 6.03(c) hereof and the
accuracy of representations and warranties to be made pursuant thereto, and (v)
to investigate matters relating to corporate governance and management of NedCar
for purposes of negotiating the NedCar Shareholders' Agreement.
(c) The NedCar Acquisition Agreement shall contain
representations and warranties with respect to NedCar and MMC's ownership of the
shares of NedCar and indemnification provisions relating to breach of any
representation, warranty or covenant of MMC which are commercially reasonable
for a stock acquisition based upon net book value per share. Any indemnification
obligations under the NedCar Acquisition Agreement shall be reduced to reflect
the extent to which the fair value of the assets of NedCar exceed the book value
of such assets. Prior to such purchase, MMC shall not change the capital
structure of NedCar (other than the purchase of shares of NedCar capital stock
from Volvo Car Corporation ("VCC")) or make any material change in the financial
condition or business of NedCar not contemplated by this Agreement without the
prior written consent of DaimlerChrysler, which consent shall not be
unreasonably withheld.
(d) Notwithstanding Section 6.03(c), MMC may determine,
without the prior written consent of DaimlerChrysler, any and all matters
(collectively, the "MMC/VCC Business") relating to (i) the production of
vehicles for VCC and MMC produced at NedCar prior to July 15, 2004, or (ii) the
discharge of any continuing obligations of NedCar with respect to such vehicles.
The NedCar Acquisition Agreement will set forth appropriate mechanisms for
allocating all of the assets,
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liabilities, costs and revenues of the MMC/VCC Business.
Section 6.04 INTERIM DEVELOPMENT COSTS. In order to expedite
the Small Car Alliance Project, the Parties agree to commence development of the
small car platform for Europe and components therefor prior to the execution of
definitive Development Agreements but subject to Receipt of Regulatory Approval.
The Parties agree that the Small Car Project Steering Committee shall oversee
such development during the period beginning the date hereof and ending on the
dates to be specified in the respective definitive Development Agreements (the
"Interim Period") based on the following principles:
(a) The Small Car Project Steering Committee shall allocate
development work to be done during the Interim Period between the Parties in the
manner that the Small Car Project Steering Committee shall agree is most
productive and cost-effective.
(b) The Small Car Project Steering Committee shall establish
budgets for each Party for the development work allocated to such Party during
the Interim Period. After such budgets have been established, if either Party
concludes that such budget will be insufficient for the work allocated to such
Party, the Small Car Project Steering Committee shall consider in good faith any
reasonable adjustment to the budget. The initial budget for each Party shall
include costs for the development work done by such Party after January 1, 2000
and prior to the date of the establishment of the first budget pursuant to this
Section 6.04(b).
(c) At the end of each period covered by a budget established
pursuant to Section 6.04(b), the Parties shall submit their actual development
costs incurred during such period. Such development costs, to the extent
approved by the Small Car Project Steering Committee, shall be designated as
reimbursable development costs (the "Reimbursable Development Costs") of such
Party.
(d) If the Reimbursable Development Costs for one Party (the
"Surplus Party") is greater than the Reimbursable Development Costs for the
other Party (the "Shortfall Party"), the Shortfall Party shall pay 50% of the
excess to the Surplus Party within 30 days of determination by the Small Car
Project Steering Committee of the Reimbursable Development Costs for each Party.
(e) The budgeted costs and Reimbursable Development Costs
shall be calculated in Euros for DaimlerChrysler and in Japanese Yen for MMC.
For the purpose of calculating the amount of any payments owed pursuant to
Section 6.04(d) and any reimbursements pursuant to Section 6.04(f), the Parties
shall use the average daily Euro-Yen exchange rate during the period covered by
the relevant budget.
(f) The Parties currently anticipate that they shall establish
a jointly-owned corporation or other Person in The Netherlands (the "Joint
Development Company") that shall be responsible for financing the development of
the small car
-17-
platform for Europe and related components. If such Joint Development Company
is established, the Joint Development Company shall reimburse each of MMC and
DaimlerChrysler for all Reimbursable Development Costs incurred prior to the
establishment of the Joint Development Company, as adjusted to reflect all
amounts paid by either Party to the other pursuant to Section 6.04 (d).
Section 6.05 INTELLECTUAL PROPERTY. Each Company shall own all
intellectual property developed by it during the Interim Period pursuant to
Section 6.04 hereof for use in the Small Car Alliance Project. The definitive
Development Agreements, for the small car platform and components shall include
terms and conditions as shall be reasonably agreed upon by the Parties for the
use of the intellectual property for the Small Car Alliance Project.
VII.
TRANSFER OF SHARES
Section 7.01 RESTRICTION ON TRANSFERS. DaimlerChrysler agrees
that no Transfer of Beneficial Ownership in any of the Securities shall be made
to any third Person (other than DaimlerChrysler's Affiliates) prior to the third
anniversary of the Closing Date without the prior written consent of the Board;
PROVIDED, HOWEVER, that DaimlerChrysler shall not Transfer Beneficial Ownership
of any of the Shares to an Affiliate and DaimlerChrysler shall cause DCJH not to
Transfer Beneficial Ownership of any of the Convertible Bonds to any other
Affiliate of DaimlerChrysler unless such Affiliate shall have entered into an
agreement with MMC containing restrictions on Transfer substantially similar to
those set forth in this Section 7.01 and Section 7.02. The restrictions on
Transfer provided in this Section 7.01 shall not apply if the persons designated
by DaimlerChrysler in accordance with Section 5.01 are not elected to the Board.
Section 7.02 SALES TO COMPETITORS. DaimlerChrysler agrees not
to Transfer Beneficial Ownership of any DaimlerChrysler Shares to any competitor
of MMC without the prior written consent of the Board, and shall cause its
Subsidiaries and Affiliates to do the same.
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VIII.
TERM AND TERMINATION
Section 8.01 TERM. This Agreement shall terminate, unless
earlier terminated pursuant to Sections 8.02 or 8.03 hereof, on the tenth
anniversary of the Closing Date. No later than the ninth anniversary of the
Closing Date, the Parties will meet to determine whether or not to extend the
term of this Agreement.
Section 8.02 TERMINATION UPON BREACH. In the event that either
Party breaches one or more of its material obligations under this Agreement,
which breach is not cured within 60 days after written notice of such breach is
given by the non-breaching Party to the breaching Party, the non-breaching Party
may terminate this Agreement immediately upon written notice to the breaching
Party.
Section 8.03 CHANGE OF CONTROL.
(a) OCCURRENCE OF A CHANGE OF CONTROL EVENT. The Party as to
which a Change of Control Event occurs (hereinafter referred to as a "CCE
Party") shall promptly give written notice thereof to the other Party
(hereinafter referred to as an "Option Party"). If the CCE Party does not give
such notice to the Option Party, the Option Party may give notice to the CCE
Party of the Change of Control Event with respect to the CCE Party.
(b) The Chief Executive Officer of DaimlerChrysler (or a
member of the Board of Management of DaimlerChrysler nominated by him) and the
Chief Executive Officer of MMC (or a member of the Board nominated by him) shall
meet (i) within sixty (60) days after such written notice has been given by the
CCE Party or (ii), if the Option Party first gives notice, within sixty (60)
days after the Option Party has given notice to the CCE Party of a Change of
Control Event. If the Chief Executive Officers or their respective nominees do
not (x) in good faith reach an agreement to continue the Alliance,
notwithstanding such a Change of Control Event, and (y) enter into a memorandum
confirming such agreement within one hundred and twenty (120) days after a
notice of a Change of Control Event has been given, the Option Party may, if it
so elects, terminate this Agreement by giving sixty (60) days' written notice
which may be given at any time within twelve (12) months after a notice of
Change of Control Event is deemed to have been given.
Section 8.04 EFFECT OF TERMINATION. Neither Party shall be
liable to the other for consequential, indirect or special damages of any kind
on account of termination of this Agreement, whether such damages result from
loss through commitments or obligations, from loss of investments or of present
or prospective profits, from either party's inability to meet its obligations,
or from any other cause. The termination of this Agreement shall not affect the
agreements relating to specific Alliance Projects or otherwise relating to the
Alliance, except as may be provided in
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such agreements. Sections 6.03, 6.04, 6.05, 9.01, 9.04, 9.05 and 9.06 shall
survive any expiration or termination of this Agreement pursuant to this
Article VIII.
IX.
MISCELLANEOUS
Section 9.01 CONFIDENTIALITY. (a) Each Party agrees that
certain information furnished to the other Party or any of its Subsidiaries
(each, a "Recipient") pursuant to this Agreement or the Confidentiality and
Non-Disclosure Agreement, in connection with an Alliance Project or otherwise,
may include trade secrets and other commercial or technical information of a
proprietary and confidential nature of the furnishing Party or one or more of
its Subsidiaries (such information including any know-how and commercial or
technical information referred to in this Section 9.01 being called
"Confidential Information" of a Party (including its Subsidiaries)).
Accordingly, each Party shall ensure that each Recipient shall use all
Confidential Information of the other Party only for the purposes contemplated
hereby, which shall not include use for the Truck and Bus Business, and shall
treat as confidential, for the period ending five (5) years after the
termination of this Agreement or receipt thereof, whichever is later, all
Confidential Information which it receives, directly or indirectly from the
other Party, pursuant to this Agreement. Each Party shall also ensure that each
Recipient shall use that degree of care which such Party uses with respect to
its own proprietary and confidential information to prevent disclosure not
permitted hereby to be made to third parties of any and all Confidential
Information such Party has received. A Recipient may, for the purpose of any
Alliance Project, disclose technical information and other technical know-how
which is Confidential Information of the other Party (other than such technical
information and know-how relating to the Truck and Bus Business) to suppliers
and subcontractors for the sole purpose of, and to the extent necessary or
required for, purchasing tooling, equipment, parts and components. In no event
shall a Recipient disclose to a third party (other than an Affiliate) which is a
manufacturer of motor vehicles (whether or not a subcontractor or supplier) any
Confidential Information furnished by the other Party, without the written
consent of the furnishing Party.
(b) Each Recipient shall not disclose to any third party any
Confidential Information of the other Recipient that such Party or its
Subsidiary is otherwise permitted to disclose to third parties pursuant to this
Agreement unless such third party (hereinafter referred to as the "Third Party
Recipient") agrees with such Recipient in advance in writing to treat as
confidential in accordance with the terms of this Section 9.01 such Confidential
Information and to use it only for the purposes for which it is so disclosed and
to use at least that degree of care which it uses with respect to its own
proprietary and confidential information of a similar nature to prevent
disclosure to others to the extent that such party is bound. Such agreement by
the Third
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Party Recipient shall remain in effect for a period of five (5) years after
the termination of this Agreement or the receipt of such Confidential
Information, whichever is later.
(c) The term "Confidential Information" shall not include any
information which is not, or which ceases to be, proprietary, including
information which (i) is in the public domain at the time of its disclosure to
the Recipient or enters the public domain through no breach by the Recipient of
any confidentiality agreement contained herein or contemplated hereby, (ii) is
proven to be known by the Recipient at the time of the disclosure thereof to it,
(iii) is proven to be independently developed by the Recipient by a Person or
Persons who have not had access to the Confidential Information, or (iv) is made
available to the Recipient by any third Person having a right to disclose the
same, without similar restrictions on the disclosure or use thereof.
(d) Notwithstanding the foregoing, no Recipient will be
prevented, after giving written notice to the Party from which it received
certain specified Confidential Information, from disclosing such Confidential
Information to any Person or court if required by law or to governments and
government agencies (including the European Commission) pursuant to subpoenas
and other discovery or inquiry procedures or pursuant to reporting requirements
of such governments or government agencies; provided that such Recipient will
use reasonable efforts to have such person, court, governments or government
agencies treat such information as confidential.
(e) Each Party agrees to cause its Subsidiaries and to use its
best efforts to cause its Affiliates to be bound by the provisions of this
Section 9.01. Each Subsidiary of a Party receiving Confidential Information of
the other Party or any of its Subsidiaries, whether directly or through its
parent Party or other Recipient, shall be deemed to be a Recipient hereunder.
Section 9.02 EXISTING CONTRACTUAL RELATIONSHIPS. Without
prejudice to Section 2.4(c) of the Securities Subscription Agreement, neither
Party intends to interfere with the obligations or agreements of the other Party
or cause a breach by the other Party of any agreement that the other Party may
have with a third party.
Section 9.03 EXPENSES. Unless otherwise agreed, each Party
shall pay its own costs and expenses in relation to the negotiation, preparation
and execution of this Agreement.
Section 9.04 APPLICABLE LAW. This Agreement shall be governed
by and construed in accordance with the laws of Japan without reference to its
conflicts of law principles.
Section 9.05 ARBITRATION. All disputes, controversies or
differences which may arise between the Parties out of or in relation to or in
connection with this Agreement shall be finally settled by arbitration conducted
in Singapore in the English language in accordance with the Arbitration Rules of
the SIAC, which rules are deemed to be incorporated by reference into this
Section 9.05. The arbitral tribunal shall be composed of three (3) arbitrators.
In accordance with the relevant rules of the SIAC,
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each Party shall appoint one arbitrator and the Chairman of the SIAC shall
appoint the third arbitrator who shall not be a citizen of either Japan or
Germany. Any and all awards rendered in any arbitration under this Agreement
shall be final and binding upon the parties and judgment thereon may be
entered into in any court having jurisdiction over the enforcement of awards
rendered pursuant to such arbitration. No Party to this Agreement shall have
the right to appeal to any court any award rendered pursuant to any
arbitration under this Agreement. Any award rendered pursuant to any such
arbitration shall include the costs of arbitration, including the fees of
arbitrators. Nothing contained in this Section 9.05 shall be construed to
limit or preclude a Party from bringing any action or commencing any
proceeding in any court of competent jurisdiction for injunctive or other
provisional relief to compel the other Party to comply with its obligations
hereunder at any time.
Section 9.06 ENTIRE AGREEMENT OF THE PARTIES. This
Agreement and its Annexes, and any other document executed or delivered by
the parties as of the date hereof or as of the Closing Date constitute the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, between the parties with respect to the subject matter
hereof and thereof, including, without limitation, the Letter of Intent (as
defined in the Securities Subscription Agreement), but excluding the
Confidentiality and Non-Disclosure Agreement, which shall expire on the
Closing Date.
Section 9.07 AMENDMENT OR MODIFICATION. This Agreement may
not be modified or amended except by a writing duly signed by the authorized
representatives of each Party.
Section 9.08 FORCE MAJEURE. Neither Party shall be in
default hereunder by reason of its delay in performance of, or failure to
perform, any of its obligations hereunder, if such delay or failure is caused
by strikes, lockouts or other labor disturbances, or by circumstances beyond
such Party's reasonable control, including without limitation, acts of God,
riots or other civil disturbances, fire, flood, earthquake, interference by
civil or military authorities, compliance with governmental laws, rules or
regulations. Notwithstanding the foregoing, any law, decree or other
regulation or act made by the German or Japanese government that would render
null and void any of the obligations of the Parties hereunder shall not be
considered as force majeure for purposes of this Agreement unless such law,
decree, or other regulation or act actually applies to German or Japanese
companies in general, as the case may be, or to then existing and future
similar contract obligations in general.
Section 9.09 NO PARTNERSHIP, ETC. No provision of this
Agreement is to be construed as creating a partnership or fiduciary
relationship between the Parties. Neither Party shall have any authority to
act for, or to assume any obligation or responsibility on behalf of, the
other Party except by express agreement between the Parties.
Section 9.10 NOTICES. Any notice required or permitted to be
given pursuant to this Agreement shall be given in writing in the English
language and forwarded, charges prepaid, by first-class registered or certified
mail, or by facsimile
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confirmed by first-class registered or certified mail, addressed as follows:
if to MMC, to it at:
Mitsubishi Motors Corporation
0-00-0 Xxxxx
Xxxxxx-xx
Xxxxx 000-0000
Xxxxx
Attention: Team Leader, International Alliance Promotion Team
Telefax: x00-0-0000-0000
if to DaimlerChrysler, to it at:
DaimlerChrysler AG
HPC 0216
D-70546 Stuttgart
Germany
Attention: Director for Mergers & Acquisitions
Telefax: x00-000-0000000
All notices given hereunder shall be deemed given upon receipt. Either Party
may change its address for notices by notice given to the other party in the
manner described above.
Section 9.11 NO WAIVER. No failure or delay on the part of
either Party in exercising any right, power or remedy hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any such
right, power or remedy preclude any other or further exercise thereof or the
exercise of any other right, power or remedy hereunder.
Section 9.12 ASSIGNMENT, ETC. Neither Party may assign this
Agreement or any duty or right hereunder without the written consent of the
other Party. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors
and assigns of the Parties.
Section 9.13 EXECUTION OF COUNTERPARTS. This Agreement may
be executed and delivered in identical counterparts and, in such case, each
of which shall be an original and all of which counterparts of this Agreement
taken together shall constitute but one and the same instrument.
Section 9.14 BUSINESS LANGUAGE. All communications and
documentation between the Parties shall be in the English language.
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IN WITNESS WHEREOF, the Parties have caused this Amended and
Restated Master Alliance Agreement to be signed as of September 8, 2000.
MITSUBISHI MOTORS CORPORATION
By:
----------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
By:
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Member of the Board of Directors
DAIMLERCHRYSLER AKTIENGESELLSCHAFT
By:
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board of Management
By:
----------------------------------------
Name: Xx. Xxxxxxx Xxxxxx
Title: Member of the Board of Management
-24-
AMENDED AND RESTATED STANDSTILL AGREEMENT
THIS STANDSTILL AGREEMENT is made and entered into as of the
twenty-eighth (28th) day of July, 2000, as amended and restated as of September
8, 2000, by and between Mitsubishi Motors Corporation, a Japanese corporation
("ISSUER"), and DaimlerChrysler Aktiengesellschaft, a German corporation
("SUBSCRIBER").
W I T N E S S E T H :
WHEREAS, Issuer, Subscriber and DaimlerChrysler Japan Holding, Ltd., a
wholly-owned subsidiary of Subscriber ("DCJH"), are entering into a Securities
Subscription Agreement dated as of July 28, 2000, as amended as of September 8,
2000 (the "SECURITIES SUBSCRIPTION AGREEMENT"), pursuant to which (i) Subscriber
will subscribe to the New Shares and DCJH will subscribe to the Convertible
Bonds and (ii) Issuer will issue the New Shares to Subscriber and the
Convertible Bonds to DCJH (the "SUBSCRIPTION");
WHEREAS, Subscriber and Issuer are also entering into the Alliance
Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made herein and of the mutual benefits to be
derived herefrom, and as a condition to the Subscription and the performance by
the parties of their obligations under the Alliance Agreement, the parties
hereto hereby agree as follows.
ARTICLE I
DEFINITIONS
Capitalized terms used without definition herein have the respective
meanings set forth in the Securities Subscription Agreement.
ARTICLE II
STANDSTILL
2.1 SUBSCRIBER STANDSTILL OBLIGATION.
(a) For a period of three (3) years following the Closing Date as
defined in the Securities Subscription Agreement (the "STANDSTILL PERIOD"),
without the prior approval of the board of directors of the Issuer (the
"BOARD"), Subscriber shall not, and shall cause each of its Affiliates not to:
(i) acquire, announce an intention to acquire, offer to
acquire, or enter into any arrangement or agreement with any third
Person (other than a member of the Mitsubishi Group) pursuant to which
such Person will acquire, any Shares if such acquisition would result
in Subscriber, its Affiliates and any such third Persons in the
aggregate holding in excess of thirty-four percent (34%) of the then
total issued and outstanding Shares of Issuer (the "SHAREHOLDING
LIMIT"); or
(ii) except in accordance with and pursuant to Section 5.01 of
the Alliance Agreement, seek election to or seek to place a
Representative as a director on the Board.
(b) The Parties agree that the intention of this Agreement and the
other Constituent Agreements is that Subscriber will acquire a thirty-four
percent (34%) interest in Issuer as a part of their mutual desire to develop a
global alliance pertaining to their respective passenger car operations.
Subscriber will faithfully respect both the words and the spirit of Section
2.1(a) and will not deliberately breach the spirit of Section 2.1(a).
(c) Subscriber agrees that it will only undertake a Control Action (as
hereinafter defined) if it believes that such Control Action is in the interest
of all of Issuer's shareholders. Subscriber further agrees that at least sixty
(60) days prior to undertaking any Control Action it will provide written notice
to Issuer describing such proposed Control Action and explaining the reasons
that it wishes to undertake such Control Action. As soon as possible, but in any
event within thirty (30) days after the giving of such notice, the President of
Issuer, or any member of the Board he shall designate, and the Chairman of the
Board of Management of Subscriber, or any member of the Board of Management he
shall designate, will meet to discuss such reasons and address any suggestions
made by Subscriber. If the President of Issuer and the Chairman of the Board of
Management of Subscriber or such designees have not resolved the matters raised
by Subscriber by the expiration of such sixty (60) day period, Subscriber may
undertake such Control Action, subject to its obligations under Section 2.1(a)
and (b). For the purpose of this Section 2.1(c), the term "CONTROL ACTION" shall
mean (i) the solicitation of proxies to vote any Shares or the making of any
shareholder proposal to the shareholders or making any motion (other than any
procedural motion) at a meeting of shareholders, or (ii) calling any meeting of
shareholders. Nothing in this Subsection (c) shall prevent Subscriber from
taking any action during such sixty (60) day period permitted under applicable
Law or the Articles of Incorporation of Issuer in order to preserve Subscriber's
rights to take a Control Action on a timely basis following the expiration of
such sixty (60) day period.
(d) For the avoidance of doubt, if Subscriber (together or in
combination with such Affiliates or third Persons) comes to hold Shares in
excess of the Shareholding Limit without Subscriber (or such Affiliates or third
Persons) taking any affirmative action to cause such a result (each such event
to be hereinafter referred to as a "NON-TRIGGERING Event"), Subscriber shall not
be deemed to be in breach of the restrictions set forth in Section 2.1(a)(i). It
is understood that Non-Triggering Events shall include (i) increases in
proportional holdings due to reduction of share capital by Issuer, (ii)
repurchase or redemption of Shares by Issuer, and (iii) consolidation of Shares
and merger of Issuer with any third Persons.
(e) The term "MITSUBISHI GROUP" as used in this Agreement means the
companies listed on Attachment A hereto; their successors and assigns; any other
Person acting at or under the direction or control of any of the foregoing; and
any other companies that may subsequently be established by or at the direction
of any of the foregoing.
2.2 STANDSTILL NOTICE.
(a) If Issuer determines at any time that Subscriber or any of its
Affiliates has materially breached any provision of this Agreement, Issuer shall
promptly notify Subscriber of such determination and the basis for such
determination (the "STANDSTILL NOTICE"); provided that any failure or delay of
Issuer to notify Subscriber of any such determination shall not limit or
preclude any right or remedy of Issuer hereunder.
(b) Within ten (10) Business Days after the end of each calendar
quarter, (i) Issuer shall notify Subscriber of the number of Shares that are
outstanding at the end of such quarter (the "OUTSTANDING SHARE NOTICE") and (ii)
Subscriber shall notify Issuer of the number of Shares owned by Subscriber and
its Affiliates at the end of such quarter. The Outstanding Share Notice shall
specify the number of Shares issued upon exercise of options referred to in
Section 2.6(c) since the end of the quarter covered by the last Outstanding
Share Notice.
(c) In the case of any breach of Section 2.1(a)(i), Issuer shall
provide Subscriber ten (10) Business Days following receipt of the Standstill
Notice (the "DISPOSITION PERIOD") during which the Subscriber shall, or shall
cause any such Affiliate or third Person to, sell, transfer or otherwise dispose
of the number of Shares necessary to cure such breach, to rescind a breaching
offer, or to terminate a breaching arrangement or agreement referred to in
Section 2.1(a)(i), if applicable. Notwithstanding the foregoing, (i) if such
breach consists of the ownership of a percentage of outstanding Shares not
exceeding two percentage points in excess of the Shareholding Limit and
Subscriber shall notify Issuer within the Disposition Period that such breach
was inadvertent (an "INADVERTENT BREACH"), the Disposition Period shall be
extended to a period of ninety (90) days after the date of the Standstill
Notice; and (ii) if Issuer's Standstill Notice is based on an assertion that a
third Person (other than any direct or indirect subsidiary of Subscriber) is
either an Affiliate of Subscriber or has entered into an arrangement or
agreement with Subscriber in violation of Section 2.1(a)(i), and if within the
Disposition Period Subscriber initiates any Litigation in the Tokyo District
Court under Section 3.2(b) contesting the validity of such assertion, Subscriber
shall not be deemed to be in breach of Section 2.1(a)(i) until a final judgment
is rendered in such Litigation or any appeal with a finding that such assertion
is correct, and in the event of such judgment, Subscriber fails to cure such
breach in all material respects within forty-five (45) days of such final
judgment. Notwithstanding the preceding sentence, if following any such
extension of a Disposition Period Subscriber shall breach this Agreement through
any act or omission other than the act or omission referred to in the Standstill
Notice, then Issuer shall be entitled to pursue any rights and remedies
authorized under this Agreement or applicable law with respect to such further
alleged breach, subject to compliance with the terms and conditions of this
Agreement. For the avoidance of doubt, the applicable Disposition Period for
such further alleged breach shall be separately calculated and shall, if
applicable, be subject to extension as provided above, it being the intent of
the Parties that the rights or remedies of Issuer with respect to such further
alleged breach shall be determined independently of any previously alleged
breach.
2.3 ISSUER DILUTION REMEDY.
(a) Following delivery of a Standstill Notice and, in the case of a
breach of Section 2.1(a)(i), following the lapse of any Disposition Period,
Issuer may, in the sole discretion of the Board (but only during the Standstill
Period), commence an offer to issue to each of the shareholders of Issuer one
additional Share for each Share then held by such Shareholder (or for such
greater number of Shares then held by each Shareholder as the Board may
determine) at a subscription price of fifty yen ((Y)50) per Share (a "RIGHTS
OFFERING"), and Subscriber hereby irrevocably waives its rights and shall cause
each of its Affiliates to waive their rights to acquire any Shares in such
Rights Offering.
(b) Issuer agrees that it shall not reallocate to any third Person
(including any other shareholder of Issuer) pursuant to any Rights Offering any
Shares which Subscriber would have had the right to acquire pursuant to such
Rights Offering but for the foregoing waiver.
2.4 TERMINATION OR SUSPENSION OF STANDSTILL OBLIGATION.
Notwithstanding the foregoing provisions of this Article II, neither
the obligations of Subscriber under Section 2.1 nor the remedy of Issuer under
Section 2.3 shall apply if and so long as any of the following events occurs and
is continuing:
(a) any third Person (other than a member of the Mitsubishi Group
existing as of the date hereof or its successors or assigns) together with any
Affiliates of such third Person and/or any other Person acting in concert with
such third Person or its Affiliates acquires, makes known its intention to
acquire or offers to acquire more than twenty percent (20%) of the then total
issued and outstanding Shares of Issuer; provided that such third Person or
Persons and their respective Affiliates shall not have been affirmatively
solicited or induced to do so by Subscriber or its Affiliates;
(b) any individual designated by Subscriber in compliance with the
terms of the Alliance Agreement as a nominee as a director of Issuer fails for
any reason to be elected as a director at the relevant meeting of shareholders
of Issuer, unless Subscriber or any of its Affiliates shall not have voted in
favor of such nominee at such meeting of shareholders of Issuer;
(c) Issuer breaches any of its material obligations, covenants or
commitments set forth in this Agreement (whether or not such provision is
enforceable against Issuer); or
(d) Issuer, in any material respect, breaches or is in default of any
obligation, covenant, commitment or other provision of the Securities
Subscription Agreement or (subject to the final sentence of this subsection (d))
the Alliance Agreement (whether or not such provision is enforceable against
Issuer) and fails to cure such breach or default within sixty (60) days of
receipt of notice thereof from Subscriber; provided that, if a dispute with
respect to such breach (other than a dispute regarding only the enforceability
of such provision) is submitted to bona fide arbitration within thirty (30) days
of receipt of such notice, Issuer shall not be deemed to be in breach of the
Securities Subscription Agreement or the Alliance Agreement until (i) so
determined by the arbitrator(s), and, in the event of such determination and if
the breach is curable, Issuer fails to cure such breach in all
material respects within forty-five (45) days of the final resolution thereof
by the arbitrator(s) or (ii) the arbitrator(s) dismisses the claim of
Subscriber on the ground that such provision is unenforceable, as the case
may be. For the avoidance of doubt, if the result of a breach of Section
5.01(a) of the Alliance Agreement is the failure of Subscriber's designee to
be elected as a director of Issuer, the foregoing provisions of this
subsection (d) shall not apply and the provisions of subsection (b) of this
Section shall apply.
2.5 SUBSEQUENT DIVESTITURES.
(a) In the event Subscriber acquires any additional Shares while its
obligations under Section 2.1 are suspended pursuant to Section 2.4(a) or (b),
Subscriber shall not be required to divest any such Shares for any reason
regardless of whether or not such obligations are reinstated because the event
giving rise to such suspension ceases to be continuing.
(b) In the event that Subscriber acquires any additional Shares while
its obligations under Section 2.1 are suspended pursuant to Section 2.4 (c) or
(d), on the condition that the relevant breach of Issuer has been cured in all
material respects and Issuer has taken measures assuring, to the reasonable
satisfaction of Subscriber, that Issuer will not breach or be in default of any
of its obligations, covenants or commitments identical or similar to that
triggering the application of Section 2.4 (c) or (d), Subscriber shall sell or
otherwise dispose of such additional Shares within three (3) months after such
condition has been satisfied; provided that in no event shall Subscriber be
obligated to sell or dispose of such additional Shares at a price per share
below the acquisition cost per share of such additional Shares.
(c) In the event Subscriber acquires additional Shares at any time with
the consent of Issuer, in no event shall Subscriber be required to divest any
such Shares so acquired for any reason. In the event the Shareholding Limit is
exceeded as the result of the occurrence of a Non-Triggering Event(s), in no
event shall Subscriber be required to divest Shares exceeding the Shareholding
Limit that Subscriber then holds as a result of such Non-Triggering Event(s).
2.6 ISSUER STANDSTILL OBLIGATION.
(a) During the Standstill Period, Issuer shall not offer or issue any
Shares, other equity securities, convertible bonds, bonds with warrants,
warrants, other securities or interests similar to any of the foregoing, other
securities convertible into Shares, or other rights to require Issuer to issue
any of the foregoing ("NEW SECURITIES", and each offer thereof a "COVERED
OFFERING"), unless (i) Issuer has delivered written notice to Subscriber of its
intent to do so, including in such notice the number of New Securities proposed
to be offered in the Covered Offering and the terms and conditions on which such
New Securities shall be issued (the "OFFER NOTICE"), at least ninety (90) days
prior to the proposed date of issuance, (ii) Issuer offers to Subscriber in the
Offer Notice a quantity of securities of the same class as such New Securities
sufficient to permit Subscriber to maintain its Proportionate Percentage of
Shares on the date of the Offer Notice and otherwise on the same terms and
conditions as the terms of the Covered Offering. The Proportionate Percentage on
any date shall equal the result (expressed as a percentage) obtained by dividing
(i) the number of Shares owned of record by Subscriber on such date (not
including any Shares acquired in breach of this Agreement) by (ii) the number of
Shares issued and outstanding on such date. For the avoidance of doubt, any
Shares issued pursuant to a Rights Offering in accordance with Section 2.3, upon
conversion of the Outstanding Bonds, or upon conversion of the Convertible Bonds
shall not be considered New Securities, and the issuance thereof shall not be a
Covered Offering.
(b) For a period of forty-five (45) days following the date of the
Offer Notice (the "OFFER PERIOD"), Subscriber shall have the right to elect to
purchase all or any portion of the securities offered to it in the Offer Notice
(provided, however, that if two or more securities shall be proposed to be sold
as a "unit" in any Covered Offering, any such election must relate to such unit
of securities) on the same terms and conditions as those offered in the Covered
Offering. If Subscriber does not elect to purchase any such securities, Issuer
may conclude the Covered Offering, on terms no less favorable to the Issuer than
those set forth in the Offering Notice, within forty-five (45) days following
the end of the Offer Period. Subscriber shall not have the right to purchase
securities offered in an Offering Notice if the related Covered Offering is not
consummated.
(c) If Issuer issues any employees, officers or directors of Issuer or
its Affiliates options to subscribe for Shares pursuant to an incentive plan
approved by the Board, such issuance shall not be deemed to be a Covered
Offering, and, upon exercise of any such option, Subscriber may at any time
purchase Shares in the open market to retain its then-applicable Proportionate
Percentage of Shares.
(d) The failure of Subscriber to exercise any right to purchase New
Securities in a Covered Offering pursuant to this Section 2.6 shall have no
effect upon any right of Subscriber to purchase New Securities in any subsequent
Covered Offering.
(e) During the Standstill Period, Issuer shall not issue any New
Securities to, or enter to any arrangement that Issuer knows will result in the
acquisition of any New Securities by, any Person in the business of manufacture
or sale of passenger or commercial automotive vehicles, unless Issuer has
obtained the prior written consent of Subscriber.
2.7 THE CLOSING.
In the event that the Securities Subscription Agreement shall terminate
for any reason without the occurrence of the Closing, this Agreement shall
terminate and neither Party shall have any rights or responsibility with respect
to the other Party hereunder.
ARTICLE III
MISCELLANEOUS
3.1 NOTICES.
All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be delivered as set
forth in the Securities Subscription Agreement, and delivery shall be deemed
given as set forth therein.
3.2 GOVERNING LAW AND CONSENT TO JURISDICTION.
(a) THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS,
INCLUDING AS TO VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF JAPAN,
WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS RULES THEREOF.
(b) Each party irrevocably submits to the exclusive jurisdiction of the
Tokyo District Court (TOKYO CHIHO SAIBANSHO) as the first instance over any
suit, action or proceeding arising out of or relating to this Agreement. Each
party irrevocably waives, to the fullest extent permitted by law, any objection
which it may now have or hereafter acquire to the laying of venue of any such
suit, action or proceeding brought in an inconvenient forum. Each party agrees
that a final judgment which is not subject to appeal or review in any such suit,
action or proceeding brought in such court shall be conclusive and binding upon
it and may, to the fullest extent permitted by law, be enforced in the courts of
Japan, the Federal Republic of Germany and any other courts to the jurisdiction
of which such party is or may be subject by a suit upon such judgment or in any
other manner provided by law.
3.3 BINDING EFFECT.
This Agreement shall come into effect upon consummation of the Closing
as defined in the Securities Subscription Agreement. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
3.4 ASSIGNMENT.
This Agreement shall not be assignable or otherwise transferable by any
party hereto without the prior written consent of the other party hereto, and
any purported assignment or other transfer without such consent shall be void
and unenforceable.
3.5 THIRD PARTY BENEFICIARY.
Nothing in this Agreement shall confer any rights upon any person or
entity other than the parties hereto and each of their respective successors and
permitted assigns.
3.6 AMENDMENT, WAIVERS.
No amendment, modification or discharge of this Agreement, and no
waiver hereunder, shall be valid or binding unless set forth in writing and duly
executed by the party against whom enforcement of the amendment, modification,
discharge or waiver is sought. Any such waiver shall constitute a waiver only
with respect to the specific matter described in such writing and shall in no
way impair the rights of the party granting such waiver in any other respect or
at any other time. Neither the waiver by any of the parties hereto of a breach
of or a default under any of the provisions of this Agreement, nor the failure
by any of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder,
shall be construed as a waiver of any other breach or default of a similar
nature, or as a waiver of any of such provisions, rights, or privileges
hereunder. The rights and remedies herein provided are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have. The rights and remedies of any party based upon, arising out of
or otherwise in respect of any inaccuracy or breach of any representation,
warranty, covenant or agreement shall in no way be limited by the fact that the
act, omission, occurrence
or other state of facts upon which any claim of any such inaccuracy or breach
is based may also be the subject matter of any other representation,
warranty, covenant or agreement as to which there is no inaccuracy or breach.
3.7 ENTIRE AGREEMENT.
This Agreement, the Securities Subscription Agreement and the Alliance
Agreement constitute the entire agreement and supersede all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof.
3.8 SEVERABILITY.
If any provision, including any phrase, sentence, clause, section or
subsection, of this Agreement is invalid, inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering such provision
in question invalid, inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision herein contained invalid,
inoperative, or unenforceable to any extent whatsoever.
3.9 HEADINGS.
The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.
3.10 COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original and all of which shall together constitute one and
the same instrument.
3.11 LANGUAGE.
This Agreement is entered into in the English language. In the event of
any dispute concerning the construction or meaning of this Agreement, the text
of the Agreement as written in the English language shall prevail over any
translation of this Agreement that may have been made.
IN WITNESS WHEREOF, the parties hereto have duly executed this Amended
and Restated Standstill Agreement as of September 8, 2000.
MITSUBISHI MOTORS CORPORATION
By
----------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
By
----------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Member of the Board of Directors
DAIMLERCHRYSLER AKTIENGESELLSCHAFT
By
----------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board of Management
By
----------------------------------------
Name: Xx. Xxxxxxx Xxxxxx
Title: Member of the Board of Management
SECURITIES SUBSCRIPTION AGREEMENT
-------------------------------------------------------------------------------
SECURITIES SUBSCRIPTION AGREEMENT
by and between
MITSUBISHI MOTORS CORPORATION
and
DAIMLERCHRYSLER AKTIENGESELLSCHAFT
and
DAIMLERCHRYSLER JAPAN HOLDING, LTD.
dated
July 28, 2000
-------------------------------------------------------------------------------
SECURITIES SUBSCRIPTION AGREEMENT
Table of Contents
Articles and Sections Page
--------------------- ----
ARTICLE I SUBSCRIPTION OF SHARES AND CONVERTIBLE BONDS; CLOSING; ISSUANCE...................................1
1.1 Subscription....................................................................................1
1.2 Restrictions on Conversion and Transfer.........................................................2
1.3 Closing Date....................................................................................3
1.4 Closing Activities..............................................................................3
1.5 Issuance of Certificates for New Shares and Registration of
Convertible Bonds...............................................................................3
1.6 Registration Statement and Effectiveness of Issuance Obligations................................4
ARTICLE II REPRESENTATIONS AND WARRANTIES OF ISSUER.........................................................4
2.1 Authorization...................................................................................4
2.2 Capitalization; Listing; No Commitments.........................................................5
2.3 Corporate Status of Issuer Group................................................................6
2.4 No Conflicts....................................................................................6
2.5 Investments and NedCar..........................................................................6
2.6 Financial Statements............................................................................7
2.7 Absence of Undisclosed Liabilities..............................................................8
2.8 Absence of Changes..............................................................................8
2.9 Tax Matters.....................................................................................8
2.10 Land, Buildings, Fixed Assets and Intellectual Property.........................................9
2.11 Contracts......................................................................................10
2.12 Litigation and Orders..........................................................................10
2.13 Labor Matters..................................................................................10
2.14 Brokers, Finders...............................................................................11
2.15 Compliance with Laws...........................................................................11
2.16 Environmental Matters..........................................................................11
2.17 Organizational Documents.......................................................................11
2.18 Securities Reports.............................................................................11
2.19 Consents and Approval..........................................................................12
2.20 Full Disclosure................................................................................12
2.21 Foreign Exchange Law...........................................................................13
2.22 Annual General Shareholders' Meeting ..........................................................13
ARTICLE III REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND DCJH..........................................13
3.1 Representations and Warranties of Subscriber...................................................13
3.2 Representations and Warranties of DCJH.........................................................14
ARTICLE IV COVENANTS.......................................................................................16
4.1 Conduct of Business............................................................................16
4.2 Shareholders Meeting...........................................................................16
4.3 Other Actions to be Taken Prior to Closing.....................................................17
4.4 Post-Signing Board Meeting.....................................................................17
4.5 Covenant to Satisfy Conditions.................................................................17
4.6 Post Signing Due Diligence.....................................................................17
4.7 Security for Convertible Bonds.................................................................18
ARTICLE V CONDITIONS PRECEDENT TO OBLIGATIONS OF SUBSCRIBER................................................18
SECURITIES SUBSCRIPTION AGREEMENT
5.1 Accuracy of Representations and No Substantial Financial Dterioration..........................18
5.2 Performance of Covenants.......................................................................19
5.3 Board Approval and Shareholders Meetings.......................................................19
5.4 No Proceedings.................................................................................19
5.5 Governmental Approvals.........................................................................19
5.6 Listing........................................................................................20
5.7 Closing Documents..............................................................................20
5.8 Mitsubishi Vehicle Marks.......................................................................20
5.9 No Multiple Materiality Qualifiers.............................................................21
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS OF ISSUER...................................................21
6.1 Accuracy of Representations....................................................................21
6.2 Performance of Covenants.......................................................................21
6.3 No Proceedings.................................................................................22
6.4 Governmental Approvals.........................................................................22
6.5 Closing Documents..............................................................................22
6.6 Pre-Closing Bank Confirmation..................................................................23
6.7 No Multiple Materiality Qualifiers.............................................................23
ARTICLE VII TERMINATION AND INDEMNITY......................................................................23
7.1 Termination....................................................................................23
7.2 Effect of Termination..........................................................................24
7.3 Indemnity......................................................................................24
7.4 Limitations on Indemnification. ...............................................................26
7.5 Exclusive Remedies.............................................................................26
ARTICLE VIII DEFINITIONS...................................................................................27
ARTICLE IX MISCELLANEOUS...................................................................................32
9.1 Expenses.......................................................................................32
9.2 Notices........................................................................................32
9.3 Governing Law and Arbitration..................................................................33
9.4 Binding Effect.................................................................................34
9.5 Assignment.....................................................................................34
9.6 No Third Party Beneficiaries...................................................................34
9.7 Amendment, Waivers.............................................................................34
9.8 Entire Agreement...............................................................................34
9.9 Severability...................................................................................34
9.10 Headings.......................................................................................35
9.11 Counterparts...................................................................................34
9.12 Language.......................................................................................35
9.13 Publicity......................................................................................35
SCHEDULES:
1.1 CHARACTERISTICS OF CONVERTIBLE BONDS
2.2(B) CONVERTIBLE BONDS AND BONDS WITH WARRANTS OF ISSUER
2.5(A) SUBSIDIARIES
2.5(B) OTHER EQUITY INTERESTS
2.7 UNDISCLOSED LIABILITIES
2.11(A) CONTRACTS
2.12(A) LITIGATION AND THREATENED LITIGATION WHICH COULD HAVE
OR RESULT IN A MATERIAL ADVERSE EFFECT
SECURITIES SUBSCRIPTION AGREEMENT
2.12(B) MATERIAL LITIGATION
2.12(C) ORDERS
2.17 MINUTES
2.22 BOARD OF DIRECTORS
EXHIBITS:
A FORM OF ISSUER OFFICER CERTIFICATE
B-1 FORM OF MORI SOGO LEGAL OPINION
B-2 FORM OF LEGAL OPINION OF DUTCH COUNSEL TO ISSUER
C FORM OF SUBSCRIBER OFFICER CERTIFICATE
D FORM OF SUBSCRIBER LEGAL OPINION
E FORM OF NISHIMURA & PARTNERS LEGAL OPINION
F FINANCIAL STATEMENTS
G TSE SHARE UNDERTAKING
ATTACHMENTS:
A ALLIANCE AGREEMENT
B STANDSTILL AGREEMENT
C VOLVO STOCKHOLDERS' AGREEMENT
SECURITIES SUBSCRIPTION AGREEMENT
SECURITIES SUBSCRIPTION AGREEMENT
THIS SECURITIES SUBSCRIPTION AGREEMENT, made and entered into as of the
twenty-eighth (28th) day of July, 2000, by and among Mitsubishi Motors
Corporation, a Japanese corporation ("ISSUER"), DaimlerChrysler
Aktiengesellschaft, a German corporation ("SUBSCRIBER"), and DaimlerChrysler
Japan Holding, Ltd., a Japanese Corporation ("DCJH"),
W I T N E S S E T H :
WHEREAS, Issuer is engaged in the manufacture and sale of various motor
vehicles and other automotive products on a worldwide basis;
WHEREAS, Subscriber is engaged in the manufacture and sale of various
motor vehicles and other automotive products on a worldwide basis;
WHEREAS, DCJH is a wholly-owned subsidiary of Subscriber;
WHEREAS, Issuer desires to issue new shares of common stock of Issuer
in registered form to Subscriber and new convertible bonds of Issuer to DCJH;
and
WHEREAS, concurrently with the execution and delivery hereof,
Subscriber and Issuer are entering into the Master Alliance Agreement and the
Standstill Agreement;
NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties made herein and of the mutual benefits to be
derived herefrom, the parties hereto hereby agree as follows.
ARTICLE I
SUBSCRIPTION OF SHARES AND CONVERTIBLE BONDS; CLOSING; ISSUANCE
1.1 SUBSCRIPTION.
a. SUBSCRIPTION OF SHARES.
Subject to the terms and conditions set forth in this Agreement, Issuer
shall issue to Subscriber, and Subscriber shall subscribe for, four hundred
ninety-nine million eight hundred fifty-six thousand (499,856,000) new shares
(the "NEW SHARES"), which number of New Shares is equivalent to thirty-four
percent (34%) of the sum of the total issued and outstanding Shares as of the
date hereof plus the number of the New Shares, at a per share subscription price
of four hundred fifty Yen (Y450) (the "SHARE PRICE") and an aggregate
subscription price of two hundred twenty-four billion nine hundred thirty-five
million two hundred thousand Yen (Y224,935,200,000) (the "SHARE SUBSCRIPTION
PRICE").
SECURITIES SUBSCRIPTION AGREEMENT
b. SUBSCRIPTION OF CONVERTIBLE BONDS.
Subject to the terms and conditions set forth in this Agreement, Issuer
shall issue to DCJH, and DCJH shall subscribe for, unsecured convertible bonds
having the aggregate face value of twenty-one billion three hundred million Yen
(Y21,300,000,000) (the "CONVERTIBLE BONDS"), providing DCJH the right to
acquire upon conversion thereof between forty-seven million three hundred
thirty-three thousand two hundred eighty-six (47,333,286) and forty-seven
million three hundred thirty-three thousand three hundred thirty-three
(47,333,333) newly issued Shares and having the characteristics set forth in
Schedule 1.1. Although the terms of the Convertible Bonds provide for the
conversion into such amount of newly issued Shares, DCJH shall be entitled to
convert the Convertible Bonds only up to the amount necessary, together with any
Convertible Bonds converted by Subscriber or any other Affiliate of Subscriber,
to allow Subscriber, subject to the immediately following sentence, to prevent
dilution of the equity interest of Subscriber and its Affiliates in Issuer to
below thirty-four percent (34%) (or such greater amount corresponding to any
larger percentage of outstanding Shares which is then owned by Subscriber and
its Affiliates, provided such higher percentage is permissible under the terms
of the Standstill Agreement) upon conversion of any Outstanding Bonds. In the
event that Subscriber, DCJH and Subscriber's other Affiliates receive new Shares
in excess of such percentage as a result of conversion of integral denominations
of the Convertible Bonds, Subscriber and DCJH shall promptly divest such excess.
DCJH shall subscribe for the Convertible Bonds at an aggregate subscription
price equal to the principal amount thereof (the "CONVERTIBLE BOND SUBSCRIPTION
PRICE").
1.2 RESTRICTIONS ON CONVERSION AND TRANSFER OF CONVERTIBLE BONDS.
(a) The Convertible Bonds shall not be convertible unless and until any
holders of the Outstanding Bonds shall convert their Outstanding Bonds into
Shares. At any time following any such conversion by a holder of the Outstanding
Bonds, DCJH shall then be entitled to convert a principal amount of the
Convertible Bonds, together with any Convertible Bonds converted by Subscriber
or any other Affiliate of Subscriber, sufficient to receive a number of Shares
(the "ADDITIONAL SHARES") which will not exceed 34% (or such larger percentage
of outstanding Shares which is then owned by Subscriber and its Affiliates,
provided that such higher percentage is permissible under the terms of the
Standstill Agreement) of the sum of the Additional Shares and the number of
Shares issued on conversion of such Outstanding Bonds. To the extent not so
converted prior to April 28, 2003, the Convertible Bonds shall be due and
payable on April 30, 2003.
(b) Notwithstanding the conditions of the Convertible Bonds set forth
in Schedule 1.1, the Convertible Bonds shall not be redeemable by Issuer unless
Issuer shall have redeemed or shall have repurchased and cancelled any of the
Outstanding Bonds prior to the stated redemption date therefor, and in such case
only to the extent provided in this subsection 1.2(b). Following any such
redemption or any such repurchase and cancellation of Outstanding Bonds
(including any Outstanding Bonds redeemed or repurchased and cancelled after the
date hereof but prior to the Closing), Issuer and DCJH hereby agree that Issuer
may redeem a principal amount of the Convertible Bonds equal to the principal
amount which would result in DCJH, Subscriber and Subscriber's other Affiliates
continuing to hold after such redemption such amount of Convertible Bonds which,
upon conversion thereof, would entitle DCJH, Subscriber and such other
Affiliates to receive a number of Shares equal to 34% (or such larger percentage
of
SECURITIES SUBSCRIPTION AGREEMENT
outstanding Shares which is then owned by Subscriber and its Affiliates,
provided that such higher percentage is permissible under the terms of the
Standstill Agreement) of the sum of the Additional Shares and the number of
Shares issuable upon the conversion of the Outstanding Bonds that have not been
so redeemed or repurchased.
(c) DCJH agrees not to Transfer Beneficial Ownership of any Convertible
Bonds at any time without the prior written approval of Issuer, provided that
DCJH may Transfer Beneficial Ownership at any time to Subscriber or any other
Affiliate of Subscriber without the approval of Issuer. In the event that Issuer
agrees to any such Transfer, or DCJH proposes any such Transfer to Subscriber or
any other Affiliate of Subscriber that does not require approval of Issuer, the
transferee shall enter into an agreement with Issuer containing restrictions on
Transfer and conversion identical to those in this Section 1.1 and 1.2 of this
Agreement and Article VII of the Alliance Agreement.
1.3 CLOSING DATE.
Subject to the satisfaction or waiver of the conditions precedent to
the respective obligations of Subscriber, DCJH and Issuer, the Closing shall
take place at the office of Nishimura & Partners, ARK Xxxx Xxxxxxxx, 00xx Xxxxx
00-00, Xxxxxxx 0-xxxxx, Xxxxxx-xx, Xxxxx Xxxxx at 10 a.m. on such date as the
parties may mutually agree, which date shall be on or before February 28, 2001.
1.4 CLOSING ACTIVITIES.
At the Closing:
a. Subscriber shall execute and deliver to Issuer the Application
for New Shares and DCJH shall execute and deliver to Issuer
the Application for Convertible Bonds;
b. Issuer shall endorse and return to Subscriber a copy of the
Application for New Shares executed by Subscriber and shall
endorse and return to DCJH the Application for Convertible
Bonds executed by DCJH; and
c. Subscriber shall pay the Share Subscription Price and DCJH
shall pay the Convertible Bond Subscription Price, in
immediately available funds, to the special accounts (BETSUDAN
YOKIN) to be opened with a bank designated by the Issuer.
1.5 ISSUANCE OF CERTIFICATES FOR NEW SHARES AND REGISTRATION OF
CONVERTIBLE BONDS.
At the Closing, Issuer shall deliver to Subscriber and DCJH a
certificate, dated the Closing Date, signed by the President of Issuer, to the
effect that (i) the New Shares will be unconditionally issued in the name of
Subscriber as of the day immediately following the Closing Date and (ii) the
Convertible Bonds will be unconditionally issued in the name of DCJH as of the
Closing Date. Within three (3) Business Days from the Closing Date, Issuer shall
issue and deliver to Subscriber stock certificates representing the New Shares
in the Subscriber's name and in the following number and denominations:
SECURITIES SUBSCRIPTION AGREEMENT
499 share certificates each representing 1,000,000 shares
8 share certificates each representing 100,000 shares
5 share certificates each representing 10,000 shares
6 share certificates each representing 1,000 shares
----------------------------------------------------------------
Total = 518 share certificates representing in total 499,856,000 shares
DCJH has proposed to Issuer that, pursuant to Article 4 of the Law on Recording
Bonds of Japan, it does not desire to possess in its custody physical
certificates representing the Convertible Bonds and shall deliver to Issuer an
application for record in the form used by The Bank of Tokyo-Mitsubishi Ltd. as
recording agency with respect to the Convertible Bonds on or before the Closing
Date. Within three (3) Business Days of the Closing Date, Issuer shall deliver
to DCJH a certificate issued by The Bank of Tokyo-Mitsubishi Ltd. (as recording
agency with respect to the Convertible Bonds) representing that proper notation
was made in the record book maintained by The Bank of Tokyo-Mitsubishi Ltd. to
reflect the issuance of the Convertible Bonds to DCJH.
1.6 REGISTRATION STATEMENT AND EFFECTIVENESS OF ISSUANCE OBLIGATIONS.
Issuer shall file one or more securities registration statements
pursuant to the SEA with respect to the Securities no later than the Business
Day immediately following the date hereof. The obligations with regard to the
issuance of the Securities set forth in this Article I shall become effective
upon the effectiveness of such securities registration statements but in any
event no later than the eleventh day following the date hereof.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF ISSUER
Issuer represents and warrants to Subscriber and DCJH as set forth in
this Article II.
2.1 AUTHORIZATION.
Issuer is a corporation duly organized and validly existing under the
Laws of Japan and has full corporate power and authority under all of its
applicable Organizational Documents and applicable Law to execute and deliver
this Agreement and each of the other Constituent Agreements to which Issuer is
or is to become a party, to issue the New Shares and the Convertible Bonds and
to perform its other obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement and each of the other Constituent Agreements to which Issuer is a
party, the performance of Issuer's obligations hereunder and thereunder, and the
consummation by Issuer of the transactions contemplated hereby and thereby, has
been duly authorized by all requisite corporate action of Issuer, subject only
to approval at the Shareholders Meeting with respect to the issuance of the
Securities if necessary under applicable Law. Issuer has duly executed and
delivered this Agreement and each of the Other Constituent Agreements to which
Issuer is a party. Each of this Agreement and the other Constituent Agreements
to which
SECURITIES SUBSCRIPTION AGREEMENT
Issuer is a party constitutes the legal, valid and binding obligations
of Issuer, enforceable against Issuer in accordance with their respective terms
subject only to any additional approval by Issuer's Board of Directors with
respect to issuance of the Securities which may be necessary and which, if
necessary, will be obtained prior to the Closing.
2.2 CAPITALIZATION; LISTING; NO COMMITMENTS.
a. AUTHORIZED CAPITAL STOCK OF ISSUER.
The authorized capital stock of Issuer consists of three
billion two hundred twenty million (3,220,000,000) Shares, par
value Y50 per Share. As of the date hereof and as of
immediately prior to the issuance of the New Shares pursuant
hereto, 970,307,624 Shares are (and at such time will be)
issued and outstanding, subject only to the issuance of any
additional Shares by reason of conversion of any of the
Outstanding Bonds prior to the Closing. When issued pursuant
to this Agreement, the New Shares will constitute validly
issued, fully paid, non-assessable Shares free from any Lien,
ranking PARI PASSU with respect to dividends, voting rights
and in all other respects with all other Shares that will be
issued and outstanding on the date immediately following the
Closing Date.
b. OUTSTANDING CONVERTIBLE BONDS, ETC. OF ISSUER.
Schedule 2.2(B) contains a complete and correct description of
the convertible bonds, bonds with warrants or other interests
similar thereto that are authorized, or issued and outstanding
by Issuer. Except as set forth on Schedule 2.2(B), Issuer has
not issued or otherwise provided any outstanding options or
rights to any Person to acquire any Shares or other equity
interests in or voting rights with respect to Issuer.
c. LISTING.
All the issued and outstanding Shares have been duly listed on
the First Section (SHIJO DAI-ICHIBU) of the Tokyo Stock
Exchange and to the best of Issuer's knowledge no fact or
condition exists or is threatened to exist which will result
(or with notice or lapse of time or both, would result)
necessarily or upon the decision of the relevant governmental
authority or the Tokyo Stock Exchange, in the delisting of the
Shares from the Tokyo Stock Exchange or the transfer of the
Shares to the Second Section (SHIJO DAI-NIBU) of the Tokyo
Stock Exchange.
d. CONVERTIBLE BONDS.
When issued pursuant to this Agreement, (a) the Convertible
Bonds will have been duly and validly authorized and will
constitute validly issued bonds of Issuer; (b) when notice of
conversion is duly delivered to Issuer pursuant to the terms
of the Convertible Bonds and this Agreement, the holder
thereof will be entitled to acquire fully paid, non-assessable
Shares free of any Lien, ranking PARI PASSU with respect to
dividends, voting rights and in all other respects with the
Shares that are issued and outstanding at the date hereof and
the
SECURITIES SUBSCRIPTION AGREEMENT
New Shares; and (c) the Convertible Bonds will constitute
the legal, valid and binding obligation of Issuer, enforceable
against Issuer in accordance with their terms.
2.3 CORPORATE STATUS OF ISSUER GROUP.
Each member of the Issuer Group other than the Issuer is a corporation
duly organized and validly existing under the Laws of its respective state or
country of incorporation, and has full corporate power and authority to conduct
its business and to own or lease and to operate its properties in any material
respect as and in the places where such business is conducted and such
properties are owned, leased or operated. No member of the Issuer Group acts or
carries on business in partnership with any other Person nor is it a member
(otherwise than through the holding of share capital) of any corporate or
unincorporated body, undertaking or association except to the extent that such
activity or membership does not have a Material Adverse Effect.
2.4 NO CONFLICTS.
The execution and delivery of each Constituent Agreement to which
Issuer is or is to become a party by Issuer or the consummation of the
transactions contemplated herein or therein will not, or with or without notice
or lapse of time would not:
a. contravene, conflict with or result in a violation of any
provision of any applicable Organizational Documents of any
member of the Issuer Group, or violate any material provision
of Law or any material order of any court or other
Governmental Authority;
b. cause to arise or be enforceable any material obligation of
any member of the Issuer Group to make any payment, or perform
any obligation, to any third party (including without
limitation any director, Officer or Employee of any member of
the Issuer Group); or
c. contravene, conflict with, or result in a violation or breach
of any provision of, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the
maturity or performance of, or to cancel, terminate, or
modify, any terms or conditions of any material Contract.
2.5 INVESTMENTS AND NEDCAR.
a. Schedule 2.5(A) lists all shares of capital stock or other
equity or voting securities of, or interest in, Issuer's
Subsidiaries as of March 31, 2000, and Schedule 2.5(B) lists
all such shares or other such securities of publicly traded
companies held by the members of the Issuer Group that on a
consolidated basis as of March 31, 2000 exceed one percent
(1%) of the total number of the issued and outstanding shares
or such other securities, as the case may be, of any such
company. Each such schedule sets forth the name of the
relevant company the types of securities or interests held,
the members of the Issuer Group who hold the securities or
interests and the percentage interest held by the relevant
members of the Issuer Group as at March 31, 2000.
SECURITIES SUBSCRIPTION AGREEMENT
b. The authorized capital stock of NedCar consists of 500,000
class A shares, par value 1,000 Netherlands guilders per share
and 250,000 class B shares, par value 1,000 Netherlands
guilders per share. 367,302 class A shares are issued ("NEDCAR
CLASS A SHARES") and 183,653 class B shares are issued and
outstanding ("NEDCAR CLASS B SHARES", hereinafter, NedCar
Class A Shares and NedCar Class B Shares are collectively
referred to as "NEDCAR SHARES"). NedCar holds 2 NedCar Class A
Shares and 3 NedCar Class B Shares. Issuer owns 100,998 NedCar
Class A Shares and 91,825 NedCar Class B Shares which,
together with 82,642 NedCar Class A Shares which are owned by
MMC Investment Europe B.V. and the 10 MMC Escrow Shares (as
defined below), constitute 50% of the issued NedCar Shares
(not including the NedCar Shares owned by NedCar). All of the
NedCar Shares owned by Issuer and MMC Investment Europe B.V.
are validly issued, fully paid and non-assessable, and rank
pari passu with respect to dividends, voting rights and in all
other respects with all other NedCar Class A Shares and NedCar
Class B Shares respectively. All of the NedCar Shares owned by
Issuer and MMC Investment Europe B.V. are free from any Liens.
On November 29, 1991, Issuer transferred 10 NedCar Class A
Shares (the "MMC ESCROW SHARES") to the Stichting Escrow
Foundation NedCar (the "ESCROW FOUNDATION") in accordance with
the Escrow Agreement, dated November 29, 1991, among Issuer,
Volvo Car Corporation ("VCC"), the State of The Netherlands,
and the Escrow Foundation. The Escrow Foundation has granted a
power of attorney to Issuer to vote these 10 shares. Issuer
has duly and validly exercised its rights to purchase the
issued NedCar Shares currently held by Snede Holding B.V. (an
affiliate of VCC), which, together with 10 NedCar Class A
Shares transferred to the Escrow Foundation in respect of
which VCC has been granted a power of attorney, constitute the
remaining 50% of the issued NedCar Shares (not including the
NedCar Shares owned by NedCar). Upon payment of the purchase
price for the NedCar Shares held by Snede Holding B.V.,
transfer by Snede Holding B.V. to Issuer of the NedCar Shares
held by Snede Holding B.V. and retransfer of the 20 NedCar
Class A Shares held by the Escrow Foundation, Issuer and MMC
Investment Europe B.V. will be the sole owners of all issued
NedCar Shares (not including the NedCar Shares owned by
NedCar), free from any Liens.
2.6 FINANCIAL STATEMENTS.
a. Issuer has delivered to Subscriber true and correct copies of
the Financial Statements.
b. The balance sheets included in the Financial Statements
present fairly and accurately the financial position of Issuer
(on an unconsolidated basis) or Issuer Group (on a
consolidated basis), as the case may be, as of the respective
dates thereof in the manner required by GAAP, and the
statements of income included in the Financial Statements
present fairly and accurately the results of operations of
Issuer (on an unconsolidated basis) or Issuer Group (on a
consolidated basis), as the case may be, for the respective
periods indicated therein in the manner required by GAAP.
SECURITIES SUBSCRIPTION AGREEMENT
2.7 ABSENCE OF UNDISCLOSED LIABILITIES.
Except as set forth on Schedule 2.7 or to the extent otherwise
permitted under Section 2.8, there are no liabilities of Issuer or any of its
Subsidiaries of any kind whatsoever, whether contingent or otherwise, that are
material to Issuer and its Subsidiaries taken as a whole, other than (a)
liabilities disclosed or provided for in the Financial Statements (including any
related schedules and/or notes), (b) liabilities disclosed in the Securities
Reports of Issuer, (c) liabilities incurred on behalf of Issuer in connection
with this Agreement and the transactions contemplated hereby, (d) liabilities
incurred in the ordinary course of business consistent with past practice since
the date of the Financial Statements which, either individually or in the
aggregate, are not reasonably likely to have a Material Adverse Effect, and (e)
any liability that (i) is not required to be disclosed under GAAP AND (ii)
either (A) MMC is not aware of or, upon reasonable investigation could not have
been aware of or (B) has arisen in the ordinary course of business.
2.8 ABSENCE OF CHANGES.
a. Except as expressly contemplated or permitted in Section 4.1
or as otherwise permitted by the terms of this Agreement or
the Volvo Stockholders' Agreement or has been fully disclosed
to Subscriber in writing, since March 31, 2000 (a) each member
of the Issuer Group has conducted its business in the ordinary
course and (b) no member of the Issuer Group has disposed, or
agreed to dispose, of any of its material assets, other than
the disposition of its inventory of raw materials, components
or finished products in the ordinary course of business.
b. Except as has been fully disclosed to Subscriber in writing,
since March 31, 2000, there has not been any damage,
destruction or other loss with respect to any material asset
or property owned, leased or otherwise used by any member of
the Issuer Group that is not covered by insurance, except for
damage, destruction or loss that, either individually or in
the aggregate does not have a Material Adverse Effect.
c. Except and to the extent projected in Issuer's press release
dated May 25, 2000, a copy of which has been provided to
Subscriber, or as has been fully disclosed to Subscriber in
writing, since March 31, 2000, there has been no other
material change in the assets, liabilities (whether actual,
accrued, contingent or otherwise), properties, operations,
condition (financial or otherwise) or business (including,
without limitation, the loss of a significant customer,
distributor or supplier) of any member of the Issuer Group,
except for any such change that, either individually or in the
aggregate, does not have a Material Adverse Effect, and Issuer
is not aware of any fact or circumstance which would be likely
to give rise to any such change having such a Material Adverse
Effect.
2.9 TAX MATTERS.
In each case, with such exceptions as would not individually or in the
aggregate have a Material Adverse Effect:
SECURITIES SUBSCRIPTION AGREEMENT
a. All Tax Returns required to be filed by each member of the
Issuer Group with Tax authorities of all relevant
jurisdictions to which such member is subject to taxation,
have been filed and, no Tax Return is disputed in any material
respect by any Tax authority.
b. Each member of the Issuer Group has paid in full all Taxes
which it has become liable to pay.
c. There is no outstanding proceeding, audit, investigation or
dispute which relates to the Taxes of any member of the Issuer
Group.
2.10 LAND, BUILDINGS, FIXED ASSETS AND INTELLECTUAL PROPERTY.
In each case, with such exceptions as would not individually or in the
aggregate have a Material Adverse Effect:
a. The relevant member of the Issuer Group owns and has valid
title to all of the land, buildings (or space therein) and
fixed assets of such member that are reflected as assets on
the consolidated balance sheets included in Financial
Statements, free and clear of any Liens other than Liens to
secure borrowings that are reflected on such balance sheets,
except to the extent any such property may have been
transferred for value or otherwise disposed of in the ordinary
course of business. So long as the relevant member of the
Issuer Group complies with its contractual obligations with
respect to such borrowings, no Person is entitled to enforce
such Lien or take possession of any such property. Each such
parcel of land and each such building is duly registered in
the name of the relevant member of the Issuer Group in the
appropriate registration office of the competent Governmental
Authority.
b. All land, buildings (or space therein) and fixed assets other
than those referred to in subsection a. of this Section 2.10
which are currently used by the relevant member of the Issuer
Group are leased pursuant to a valid lease. All of such leases
are in full force and effect. The relevant member of the
Issuer Group is not in breach of, or default under, any of
such leases. So long as the relevant member of the Issuer
Group complies with its contractual obligations under such
leases, no Person is entitled to take possession of such
property.
c. No member of the Issuer Group is in breach of any license in
respect of any Intellectual Property Rights granted to it by a
third party, and, to the best knowledge of Issuer, no third
party is in breach of any license granted to it by any member
of the Issuer Group.
d. To the Issuer's best knowledge, the processes and methods
employed, the services provided, the business conducted and
the products manufactured, used or dealt in the Business do
not infringe the rights of any other person in any
Intellectual Property Rights.
e. Issuer or other members of the Issuer Group has or have the
right to use all Intellectual Property Rights necessary to
conduct the Business throughout the world in all material
respects, and will continue to
SECURITIES SUBSCRIPTION AGREEMENT
have such rights immediately after giving effect to the
transactions contemplated to occur at Closing.
2.11 CONTRACTS.
Schedule 2.11(A) contains a true and accurate list as of March 31, 2000
(or such later date specified therein) of (i) the outstanding Contracts under
which Issuer is subject to any material restriction on Issuer's ability to
develop, manufacture, market, sell or otherwise distribute its products
including all components therefor and (ii) each outstanding Contract which
Issuer has entered into with any of its competitors other than (a) Contracts
entered into in the ordinary course of business, or (b) Contracts with
Subscriber and any of its consolidated subsidiaries. To Issuer's knowledge,
between March 31, 2000 and the date of this Agreement, Issuer has not entered
into or otherwise become a party to any material Contracts which would be listed
on Schedule 2.11(A) had Issuer been a party thereto on March 31, 2000 other than
those listed on Schedule 2.11(A). Copies of all of the Contracts listed on
Schedule 2.11(A) have been made available to Subscriber.
2.12 LITIGATION AND ORDERS.
a. Except as set forth on Schedules 2.12(A), there is no
Litigation instituted by or pending or, to the best of
Issuer's knowledge, threatened against any member of the
Issuer Group or any of its properties or assets, that,
individually or in the aggregate, could reasonably be expected
to have or result in a Material Adverse Effect.
b. Without prejudice to the foregoing, Schedule 2.12(B) lists all
of the material Litigation pending or threatened as of March
31, 2000 (or as of April 14, 2000, with respect to U.S.
product liability Litigation), against any member of the
Issuer Group.
c. Except as set forth in Schedule 2.12(C), as of March 31, 2000,
no member of the Issuer Group is subject to any injunctive
order, judgment or decree, any material cease and desist
order, any material consent order, judgment or decree or any
similar material requirement or undertaking of or entered by
or in any court of competent jurisdiction or other
Governmental Authority arising out of or related to any
Litigation.
2.13 LABOR MATTERS.
a. Since January 1, 1997, neither the Issuer nor any Subsidiary
has experienced any strike, sabotage, work stoppage or other
labor dispute material to the Issuer Group.
b. All social security charges required to be withheld in respect
of compensation paid to the employees of any member of the
Issuer Group (collectively, the "EMPLOYEES") have been
withheld and paid to the relevant authority or social security
institution, except for compensation, withholdings or payments
which, if not made, would not have a Material Adverse Effect.
SECURITIES SUBSCRIPTION AGREEMENT
c. Each pension, deferred compensation and retirement allowance
of each member of the Issuer Group to Employees has been
administered in compliance with the applicable rules of
employment and the Law, and the amounts payable in connection
therewith are adequately reflected on the Financial Statements
in accordance with GAAP applied on a consistent basis except
to the extent failures to so administer or so reflect do not
have a Material Adverse Effect.
d. There is no dispute relating to Employees between the Issuer
or any Subsidiary and any labor union material to the Issuer
Group.
2.14 BROKERS, FINDERS.
The transactions contemplated hereby will not give rise to any valid
claim against Subscriber, DCJH, any of Subscriber's other Affiliates or any
member of the Issuer Group for any brokerage or finder's commission, fee or
similar compensation arising from any commitment made by Issuer, any member of
the Issuer Group or any of their respective Representatives except for the fees
to be paid by Issuer to Xxxxxx Xxxxxxx Xxxx Xxxxxx Japan Limited, the Bank of
Tokyo-Mitsubishi, Ltd., and Tokyo-Mitsubishi Securities Co., Ltd. in connection
with the transaction contemplated herein.
2.15 COMPLIANCE WITH LAWS.
Each member of the Issuer Group has complied with all legal
requirements applicable to the Business, with respect to which the failure to
comply would have a Material Adverse Effect.
2.16 ENVIRONMENTAL MATTERS.
Each member of the Issuer Group has obtained all Governmental Approvals
which are necessary under any Law relating to the environment for the purposes
of carrying on the Business immediately after the Closing in the same manner,
and to the same extent, and using the same substances as used in the Business at
any time during the twelve (12) months ending on the Closing Date except to the
extent as would not have a Material Adverse Effect. Each member of the Issuer
Group is in compliance in all material respects with all terms and conditions on
which any such Governmental Approvals have been given to it. To Issuer's best
knowledge, there are not above, on, in or under any of the land or buildings
used in the Business any pollutants, contaminants or hazardous or radioactive
substances which would cause such property to be designated as contaminated land
or receive any similar designation under any applicable Law or which would give
rise to any duty to require remediation of such property, except as would not
individually or in the aggregate have a Material Adverse Effect.
2.17 ORGANIZATIONAL DOCUMENTS.
Issuer has made available to Subscriber copies of its Articles of
Incorporation, Regulations of Board of Directors and all the minutes of each of
its shareholders' meetings and meetings of its Board of Directors which have
been held on or after April 1, 1998 and the dates of all such meetings are
listed in Schedule 2.17.
2.18 SECURITIES REPORTS.
SECURITIES SUBSCRIPTION AGREEMENT
The Securities Reports of Issuer for each of the Fiscal Years ended
March 31, 1999 and March 31, 2000 filed with the Minister of Finance of Japan
comply in all material respects with the requirements of the SEA and regulations
thereunder and do not contain any untrue statement of a material fact or omit to
state therein a material fact required by the SEA and regulations thereunder to
be stated therein or necessary to make the statements therein not misleading in
the circumstances in which they were made.
2.19 CONSENTS AND APPROVAL.
Except where the failure to make any filing with, or to obtain any
permit, authorization, consent or approval of, any Governmental Authority would
not prevent or materially delay the consummation of the transactions
contemplated hereby or otherwise prevent Issuer from performing in all material
respects its obligations under this Agreement, or would not individually or in
the aggregate have a Material Adverse Effect, no filing with, and no permit,
authorization, consent or approval of, any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by Issuer and the
consummation by Issuer of the transactions contemplated hereby, other than
filings with the applicable German and/or European Union Governmental
Authorities with responsibility over competition-Law matters.
2.20 FULL DISCLOSURE.
All documents and other papers delivered or made available by any
member of Issuer Group or any of its Representatives to Subscriber or any of its
Representatives in connection with this Agreement or any transactions
contemplated hereby are accurate and complete copies thereof unless otherwise
disclosed at the time such documents or other papers were provided to Subscriber
or its Representatives. No such document or other paper (i) contains an untrue
statement of a material fact as of the date when made or (ii) to the extent it
is a complete and self-contained treatment of a particular subject, omits to
state a material fact required to be stated therein to make the statements made
when viewed together with all other such material provided to Subscriber and its
Representatives, in the context in which made, not false or misleading. There is
no fact known to Issuer that Issuer has not disclosed to Subscriber that has had
or is likely to have a Material Adverse Effect.
2.21 FOREIGN EXCHANGE LAW.
Issuer is not engaged in any business which is subject to the
restrictions set forth in Article 27 of the Foreign Exchange Law.
2.22 ANNUAL GENERAL SHAREHOLDERS' MEETING.
At the annual general meeting of shareholders of Issuer held on June
27, 2000 ("ANNUAL MEETING"), the shareholders of Issuer elected three (3)
individuals designated by Subscriber to the Board of Directors of Issuer, in
accordance with the terms of the Alliance Agreement. As a result of such
election and the resignation of twenty-eight (28) directors effective as of the
date of such meeting, and the election at such meeting of two (2) additional
directors nominated by management of Issuer, there are currently a total of ten
(10) persons who have
SECURITIES SUBSCRIPTION AGREEMENT
been elected as directors of Issuer, three (3) of whom are Subscriber's
designees, and the constitution of the Board is as set forth on Schedule 2.22.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER AND DCJH
3.1 REPRESENTATIONS AND WARRANTIES OF SUBSCRIBER.
Subscriber represents and warrants to Issuer as follows, as of the date
hereof and as of the Closing Date:
a. CORPORATE STATUS, AUTHORIZATION.
Subscriber is a corporation duly organized and validly existing under
the Laws of the Federal Republic of Germany and has full corporate power and
authority under all of its applicable Organizational Documents and applicable
Law to execute and deliver this Agreement and each of the other Constituent
Agreements to which Subscriber is or is to become a party, to purchase the New
Shares and, to perform its obligations hereunder and thereunder and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of each of the Constituent Agreements to which Subscriber is expressed
to be a party, the performance of Subscriber's obligations hereunder and
thereunder, and the consummation by Subscriber of the transactions contemplated
hereby and thereby, have been duly authorized by all requisite corporate action
of Subscriber. Subscriber has duly executed and delivered each of the
Constituent Agreements to which Subscriber is expressed to be a party. This
Agreement, the Standstill Agreement and the Alliance Agreement constitute, and
upon execution and delivery of the Volvo Stockholders' Agreement by Volvo the
Volvo Stockholders' Agreement will constitute, the legal, valid and binding
obligations of Subscriber, enforceable against Subscriber in accordance with
their respective terms.
b. NO CONFLICTS.
The execution and delivery of this Agreement or any Constituent
Agreement by Subscriber or the consummation of the transactions contemplated
herein and therein will not, or with or without notice or lapse of time would
not (i) contravene, conflict with or result in a violation of any provision of
any applicable Organizational Documents of Subscriber, or (ii) violate any
material provision of Law or any order of any material court or other
Governmental Authority.
c. BROKERS, FINDERS.
The transactions contemplated hereby will not give rise to any valid
claim against any member of the Issuer Group or Issuer's Affiliates for any
brokerage or finder's commission, fee or similar compensation arising from any
commitment made by Subscriber, DCJH, or any of their respective Representatives.
d. CONSENTS AND APPROVALS.
Except where the failure to make any filing with, or to obtain any
permit, authorization, consent or approval of, any Governmental Authority would
not prevent or materially delay the consummation of the transactions
contemplated hereby or otherwise prevent Subscriber from performing in all
material respects its
SECURITIES SUBSCRIPTION AGREEMENT
obligations under this Agreement, or would not individually or in the
aggregate have a Material Adverse Effect, no filing with, and no permit,
authorization, consent or approval of, any Governmental Authority is
necessary for the execution, delivery and performance of this Agreement by
Subscriber and the consummation by Subscriber of the transactions
contemplated hereby, other than filings with the applicable German and/or
European Union Governmental Authorities with responsibility over
competition-Law matters.
e. SHARE OWNERSHIP.
After the acquisition of the Securities, Subscriber and its
subsidiaries will Beneficially Own no securities of Issuer other than the New
Shares and the Convertible Bonds.
f. NO ADDITIONAL REPRESENTATIONS.
Subscriber acknowledges that no member of the Issuer Group, nor any of
its Representatives, has made any representation or warranty, whether express or
implied, regarding any matter, other than the representations and warranties set
forth in this Agreement, in any other Constituent Agreement or any certificate
delivered pursuant hereto or thereto.
3.2 REPRESENTATIONS AND WARRANTIES OF DCJH.
Subscriber and DCJH jointly and severally represent and warrant to
Issuer as follows, as of the date hereof and as of the Closing Date:
a. CORPORATE STATUS, AUTHORIZATION.
DCJH is a corporation duly organized and validly existing under the
Laws of Japan and has full corporate power and authority under all of its
applicable Organizational Documents and applicable Law to execute and deliver
this Agreement, to purchase the Convertible Bonds, and to perform its
obligations hereunder and to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement, the performance of DCJH's
obligations hereunder, and the consummation by DCJH of the transactions
contemplated hereby, have been duly authorized by all requisite corporate action
of DCJH. DCJH has duly executed and delivered this Agreement. This Agreement
constitutes the legal, valid and binding obligations of DCJH, enforceable
against DCJH in accordance with its terms.
b. SUBSIDIARY OF SUBSCRIBER.
All of the issued and outstanding equity of DCJH is Beneficially Owned
by Subscriber and DCJH has not issued or otherwise provided for any outstanding
options or rights to any Person to acquire any other equity interests in or
voting rights with respect to DCJH.
c. NO CONFLICTS.
The execution and delivery of this Agreement by DCJH or the
consummation of the transactions contemplated herein will not, or with or
without notice or lapse of time would not (i) contravene, conflict with or
result in a violation of any provision of any applicable Organizational
Documents of DCJH, or (ii) violate any
SECURITIES SUBSCRIPTION AGREEMENT
material provision of Law or any order of any material court or other
Governmental Authority.
d. CONSENTS AND APPROVALS.
Except where the failure to make any filing with, or to obtain any
permit, authorization, consent or approval of, any Governmental Authority would
not prevent or materially delay the consummation of the transactions
contemplated hereby or otherwise prevent DCJH from performing in all material
respects its obligations under this Agreement, or would not individually or in
the aggregate have a Material Adverse Effect, no filing with, and no permit,
authorization, consent or approval of, any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by DCJH and the
consummation by DCJH of the transactions contemplated hereby, other than filings
with the applicable German and/or European Union Governmental Authorities with
responsibility over competition-Law matters.
e. NO ADDITIONAL REPRESENTATIONS.
DCJH acknowledges that no member of the Issuer Group, nor any of its
Representatives, has made any representation or warranty, whether express or
implied, regarding any matter, other than the representations and warranties set
forth in this Agreement, in any other Constituent Agreement or any certificate
delivered pursuant hereto or thereto.
ARTICLE IV
COVENANTS
4.1 CONDUCT OF BUSINESS.
Except (i) as set forth in the Constituent Agreements, (ii) as
contemplated in Issuer's "Heartbeat 21" restructuring plan announced in an
Issuer press release dated April 26, 2000, a copy of which has been provided to
the Subscriber, (iii) for the Spin-Off (as defined in the Alliance Agreement),
or (iv) as otherwise agreed between Issuer and Subscriber in writing, during the
period from the date hereof until the earlier of the Closing Date and the
termination of this Agreement in accordance with its terms, Issuer will, and
will cause each of its Subsidiaries to, (a) use its reasonable commercial
efforts consistent with past practice to carry on and preserve in all material
respects its Car Business and its relationships with the customers, suppliers
and employees of its Car Business, and to maintain all Governmental Approvals
necessary to conduct its Car Business and (b) maintain all of the books and
records of the Business in accordance with accounting principles generally
accepted in its jurisdiction or GAAP and in a manner consistent with past
practice, but only to the extent continuation of such business or relationship
or books and record keeping is, in Issuer's good-faith judgment, commercially
advantageous. Furthermore, during the same period, unless consented to by
Subscriber in writing, Issuer shall not and shall cause each of its Subsidiaries
(subject, in the case of Subsidiaries, to the exceptions set forth in the first
sentence of this Section 4.1 or as set forth in Schedule 2.5(A)) not to (i)
amend its Organizational Documents, (ii) merge or consolidate with or into any
other Person or (iii) enter into any material equity alliance involving a
material equity investment in Issuer or a successor entity to its Car Business
(other than such an equity alliance made solely in connection with the Truck and
Bus Business) with
SECURITIES SUBSCRIPTION AGREEMENT
any competitor of Subscriber or involving a material equity investment by
Issuer in any competitor of Subscriber.
4.2 SHAREHOLDERS MEETING.
a. CONSENT OF SUBSCRIBER'S DESIGNEES. As soon as permissible
under applicable competition Law, Subscriber shall cause each
of its three (3) designees elected as directors of Issuer at
the Annual Meeting to deliver his or her consent to the
assumption of the office of director of Issuer, and Issuer
shall cause the election to be duly registered with the
appropriate Legal Affairs Bureau.
b. EXTRAORDINARY MEETING. Prior to the Closing Date, unless the
Subscriber and Issuer agree otherwise, Issuer shall take all
corporate actions necessary or appropriate to convene and hold
an extraordinary meeting of shareholders of Issuer to approve
the measures set forth in below (the "SHAREHOLDERS MEETING").
At the Shareholders Meeting, Issuer shall use its best efforts
to obtain the approval by the shareholders of Issuer of the
following measures:
(i) the issuance of the New Shares to Subscriber at the Share
Price; and
(ii) the issuance of the Convertible Bonds to DCJH under the
terms set forth in Section 1.1 and Schedule 1.1 including the
conversion price per share being four hundred fifty Yen
((Y)450) per share.
4.3 OTHER ACTIONS TO BE TAKEN PRIOR TO CLOSING.
Prior to the Closing Date:
a. Issuer shall take all corporate actions necessary or
appropriate to validly issue the New Shares to Subscriber and
the Convertible Bonds to DCJH in accordance with the terms of
this Agreement, with the Closing Date to be the due date of
payment (HARAIKOMIKIJITSU) and otherwise as contemplated in
this Agreement.
b. Each of Issuer, Subscriber and DCJH shall use its best efforts
to obtain any and all Governmental Approvals as may be
necessary to ensure that the execution and delivery of this
Agreement by it or the consummation by it of the transactions
contemplated herein do not result in violation of any Law or
any order of any Governmental Authority applicable to it or,
in the case of Issuer, any member of the Issuer Group. Without
limiting the generality of the foregoing, Subscriber shall
make all necessary filings required pursuant to the Foreign
Exchange Law with respect to the consummation of the
transactions contemplated hereby, and Issuer shall fully
cooperate with Subscriber in connection with such filings.
c. Issuer shall file with the Tokyo Stock Exchange all the
applications and other documents necessary or appropriate to
list the New Shares on the First Section of the Tokyo Stock
Exchange.
d. So long as it is required under the Articles of Incorporation
of Issuer, Subscriber shall appoint a standing agent in
connection with the Shares (including the Shares issued upon
conversion of the Convertible Bonds) within Japan (JONIN
DAIRININ)
4.4 POST-SIGNING BOARD MEETING.
As soon as permissible under applicable competition Law, Issuer shall
convene a meeting of its Board of Directors to approve the appointment of
individuals designated by Subscriber as executive officers of Issuer as provided
in the Alliance Agreement.
4.5 COVENANT TO SATISFY CONDITIONS.
Each party shall use its reasonable efforts to ensure that the
conditions set forth in Articles V (in the case of Issuer) or VI (in the case of
Subscriber and DCJH) hereof are satisfied at or prior to the date provided for
in Section 1.3.
4.6 POST SIGNING DUE DILIGENCE.
Prior to the Closing, Issuer shall permit Subscriber and any of its
Representatives reasonable access during normal business hours throughout the
period prior to the Closing Date to all of the properties, books, contracts and
written records (including, but not limited to, tax returns) of the Issuer Group
or NedCar, and to make reasonably available its and NedCar's officers, employees
and advisors to answer questions; provided that such access shall not
unreasonably interfere with the normal business operations of the Issuer Group
or NedCar. Subscriber agrees that any such investigations shall be related to
(a) confirming or supplementing matters developed during its due diligence prior
to signing the Constituent Agreements or disclosed in any Schedule to this
Agreement and (b) furthering the goals of the Alliance (as defined in the
Alliance Agreement), and further agrees to provide Issuer with reasonable notice
prior to visiting any such property for the purpose of any such investigation.
Notwithstanding the foregoing, Subscriber agrees that Issuer may deny Subscriber
and any of its Representatives access to confidential commercial information,
trade secrets and technology relating to the Truck and Bus Business. Any
information provided to Subscriber or any of its Representatives shall be held
in accordance with, and shall be subject to, the terms of the Confidentiality
and Non-Disclosure Agreement, which is hereby incorporated in this Agreement as
though fully set forth herein.
4.7 SECURITY FOR CONVERTIBLE BONDS.
For so long as any of the Convertible Bonds remain outstanding, in the
event that Issuer creates any security interest in respect of (i) straight
bonds, (ii) bonds with warrants or (iii) convertible bonds other than
convertible bonds as to which a security interest may be created pursuant to
Paragraph (1) of Condition 16 of the conditions of bonds attached as Schedule
1.1 hereto, Issuer shall, after consultation with DCJH and Subscriber, create
pursuant to the Secured Debenture Trust Law of Japan, for the benefit of the
bondholders of the Convertible Bonds, security interests in such assets of
Issuer as Subscriber deems appropriate. In the case of creation of any security
interest pursuant to the foregoing sentence, Issuer shall immediately complete
the procedures for registration of such security interest or other necessary
procedures, if any, and give public notice of the completion of such procedures
in a manner analogous to that
set forth in Article 77 of the Secured Debenture Trust Law of Japan. If
Issuer fails to comply with any of its obligations pursuant to this Section
4.7, Issuer agrees that Subscriber, DCJH and any of either their Affiliates
to which Convertible Bonds may have been transferred in compliance with the
terms of this Agreement and the Standstill Agreement may require that Issuer
redeem the Convertible Bonds then held by it as stipulated pursuant to
Paragraph (3) of Condition 17 of the conditions set forth in Schedule 1.1
hereof (without prejudice to any other rights or remedies that Subscriber or
DCJH may have pursuant to this agreement or applicable Law).
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF SUBSCRIBER
AND DCJH
The respective obligations of Subscriber and DCJH under this Agreement
to consummate the Closing shall be subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any one or more of which may
be waived by Subscriber in whole or in part):
5.1 ACCURACY OF REPRESENTATIONS AND NO SUBSTANTIAL FINANCIAL DETERIORATION.
a. There shall have been no material inaccuracies in any of
Issuer's representations or warranties set forth in Section
2.1, 2.2, 2.3, 2.4, 2.11, 2.12.c, 2.19, 2.20, 2.21 or 2.22 as
of the date of this Agreement or as of the Closing Date.
b. The aggregate value of all the assets of Issuer, on a
consolidated basis, minus the sum of the aggregate value of
all the liabilities (including the fair value of contingent
liabilities) of Issuer and the minority shareholders'
interests on a consolidated basis as of the Closing Date shall
not be lower than the amount of the net assets appearing on
the consolidated balance sheet of Issuer as of March 31, 2000,
included in its 1999 annual public announcement dated May 25,
2000, by more than four hundred thirty-two billion three
hundred twenty-five million Yen ((Y)432,325,000,000). The
calculation of such value shall be made taking into account
appropriate adjustments including without limitation (a) an
appropriate deduction on account of unfunded pension
obligations, (b) an appropriate adjustment to reflect the fair
value of other contingent liabilities and (c) a revaluation of
real property, securities and other assets and liabilities to
their current fair market value.
5.2 PERFORMANCE OF COVENANTS.
All of the covenants and obligations that Issuer is required to perform
or comply with pursuant to this Agreement at or prior to the Closing Date
(considered collectively), and each of such covenants and obligations
(considered individually), shall have been duly performed and complied with in
all material respects.
5.3 BOARD APPROVAL AND SHAREHOLDERS MEETING.
The Board of Directors of Issuer shall have duly approved the issuance
of the New Shares to Subscriber and the Convertible Bonds to DCJH pursuant
hereto. If required pursuant to Section 4.2.b, the Shareholders Meeting shall
have occurred,
and all the shareholders' approval required pursuant to Section 4.2.b shall
have been obtained.
5.4 NO PROCEEDINGS.
Since the date of this Agreement, there shall not have been commenced
or threatened against Subscriber, DCJH or Issuer, or against any Affiliate of
Subscriber, DCJH or Issuer, any proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with any transaction contemplated
herein or in any other Constituent Agreement that would be reasonably likely to
have a Material Adverse Effect or (b) that would be reasonably likely to have
the effect of preventing, delaying, making illegal, or otherwise interfering in
any material respect with any transaction contemplated herein or therein,
including, without limitation, any injunction or other court order that
prohibits the issuance of or subscription for any of the Securities pursuant
hereto or the implementation of any of the arrangements or activities
contemplated in the Alliance Agreement or any bankruptcy, reorganization or
similar proceedings.
5.5 GOVERNMENTAL APPROVALS.
All Governmental Approvals shall have been issued as may be necessary
under applicable Law to permit the acquisition by Subscriber of the New Shares
and the acquisition by DCJH of the Convertible Bonds as contemplated in this
Agreement, and all waiting periods required under any applicable Law to have
expired prior to such acquisition shall have expired.
5.6 LISTING.
Issuer shall have duly completed all of the procedures necessary to be
completed prior to the Closing for the listing of the New Shares on the First
Section of the Tokyo Stock Exchange.
5.7 CLOSING DOCUMENTS.
Subscriber shall have received the following documents:
a. A certificate, dated the Closing Date, signed by the President
of Issuer, on behalf of Issuer, to the effect as and in the
form attached hereto as Exhibit A;
b. A written opinion of Mori Sogo Law Offices, counsel to Issuer,
dated the Closing Date, substantially in the form attached
hereto as Exhibit B-1;
c. A written opinion of Xxxxx Dutilh, Dutch counsel to Issuer,
dated the Closing Date, with respect to the representations
set forth in Section 2.5.b, substantiality in the form
attached hereto as Exhibit B-2;
d. A certified copy of the resolutions and minutes of the Board
of Directors of Issuer authorizing the execution and delivery
of and the consummation of the transactions contemplated by
this Agreement and including without limitation the approval
of the issuance of the Securities as contemplated in this
Agreement;
e. The Alliance Agreement and the Standstill Agreement, duly
executed on behalf of Issuer;
f. The Volvo Stockholders' Agreement, duly executed on behalf of
Volvo; and
g. Such other documents and evidence as Subscriber or its
Representatives may reasonably request on or prior to the
Closing Date in order to ascertain the fulfillment of the
conditions set forth in this Article V.
5.8 MITSUBISHI VEHICLE MARKS.
a. Issuer shall have entered into an agreement with each owner
(each a "TRADEMARK OWNER") of any trademarks, service marks,
trade dress and design marks in Japan and other jurisdictions
throughout the world for "Mitsubishi" and the "three diamonds"
symbol (used separately or in conjunction with each other and
together with all translations and transliterations thereof)
with respect to "Vehicles" (as defined below) and all
components, parts and accessories therefor, and (to the extent
covered by applicable trademark and service xxxx registrations
of the Trademark Owner) Vehicle brand-building merchandise and
events sponsorship rights with respect thereto, and financing,
leasing and servicing of such Vehicles (collectively, the
"THREE DIAMOND VEHICLE MARKS"), pursuant to which the existing
license agreement between Issuer and that Trademark Owner with
respect to those Three Diamond Vehicle Marks owned or
registered by that Trademark Owner shall be either amended or
replaced with a new license agreement.
b. As used in subsection (a), "Vehicles" means vehicles of all
types intended for use on public roads, whether for personal
or commercial purposes, including passenger cars, off-road
vehicles or commercial vehicles of all types but excluding
fork lifts and other construction and industrial vehicles and
equipment which may be manufactured by any member of the
Mitsubishi Group other than Issuer
c. Each such license amendment or new license agreement shall be
in form and substance mutually acceptable to Issuer,
Subscriber, the Mitsubishi Corporate Name and Trademark
Committee and the Trademark Owner.
5.9 NO MULTIPLE MATERIALITY QUALIFIERS.
To the extent any representation, warranty or covenant in this
Agreement is qualified by reference to materiality (including any qualification
related to a "Material Adverse Effect") or to a particular level or extent of
permissible deviation from a standard (including deviation from the absolute),
no corresponding reference to materiality or permissible deviation from a
standard in these conditions precedent (other than as set forth in Section 5.1)
or in Section 7.1 shall be of any effect.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF ISSUER
The obligations of Issuer under this Agreement to consummate the
Closing shall be subject to the fulfillment, at or prior to the Closing, of each
of the following conditions (any one or more of which may be waived by Issuer in
whole or in part).
6.1 ACCURACY OF REPRESENTATIONS.
All of Subscriber's and DCJH's representations and warranties in this
Agreement (considered collectively) and each of such representations and
warranties (considered individually), shall have been accurate in all material
respects as of the date of this Agreement, and shall be accurate in all material
respects as of the Closing Date as if made on the Closing Date.
6.2 PERFORMANCE OF COVENANTS.
All of the covenants and obligations that Subscriber and DCJH are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing Date (considered collectively), and each of these covenants and
obligations (considered individually), shall have been duly performed and
complied with in all material respects.
6.3 NO PROCEEDINGS.
Since the date of this Agreement, there shall not have been commenced
or threatened against Subscriber, DCJH or Issuer, or against any other Affiliate
of Subscriber, DCJH or Issuer, any proceeding (a) involving any challenge to, or
seeking damages or other relief in connection with transactions contemplated
herein or in any other Constituent Agreement that would be reasonably likely to
have a Material Adverse Effect or (b) that would be reasonably likely to have
the effect of preventing, delaying, making illegal, or otherwise interfering in
any material respect with any transactions contemplated herein or therein
including without limitation any injunction or other court order that prohibits
the implementation of any arrangements or activities contemplated in the
Alliance Agreement or any bankruptcy, reorganization or similar proceedings..
6.4 GOVERNMENTAL APPROVALS.
All Governmental Approvals shall have been issued as may be necessary
under applicable Law to permit the acquisition by Subscriber of the New Shares
and the acquisition by DCJH of the Convertible Bonds as contemplated in this
Agreement, and all waiting periods required under applicable Law to have expired
prior to such acquisition shall have expired.
6.5 CLOSING DOCUMENTS.
Issuer shall have received the following documents:
a. A certificate, dated the Closing Date, signed by a member of
the Board of Management of Subscriber, on behalf of
Subscriber, to the effect as and in the form attached hereto
as Exhibit C-1;
b. A certificate, dated the Closing Date, signed by the President
of DCJH, on behalf of DCJH, to the effect as and in the form
attached hereto as Exhibit C-2;
c. A written opinion of Xx. Xxxxx X. Waskonig, Vice President &
General Counsel DaimlerChrysler Europe, of Subscriber, dated
the Closing Date, in the form attached hereto as Exhibit D;
d. A written opinion of Nishimura & Partners, special Japanese
counsel to Subscriber, dated the Closing Date, in the form
attached hereto as Exhibit E; provided, however, that the
opinions with respect to DCJH in opinion paragraphs 2 and 3
therein may be provided by special Japanese counsel to DCJH
and the opinion of Nishimura & Partners required pursuant to
Exhibit E shall be revised accordingly;
e. A written undertaking with respect to the Shares pursuant to
the Rules of the Tokyo Stock Exchange, substantially in the
form attached hereto as Exhibit G;
f. The Alliance Agreement and the Standstill Agreement, duly
executed on behalf of Subscriber;
g. The Volvo Stockholders' Agreement, duly executed on behalf of
Subscriber; and
h. Such other documents and evidence as Issuer or its
Representatives may reasonably request on or prior to the
Closing Date in order to ascertain the fulfillment of the
conditions set forth in this Article VI.
6.6 PRE-CLOSING BANK CONFIRMATION.
Prior to the Closing Date, Subscriber and DCJH shall have delivered to
Issuer a written representation from an officer of the Head Office of the Bank
of Tokyo-Mitsubishi Ltd. or of the Tokyo branch of such other reputable bank as
may be designated by Subscriber and DCJH to the effect that such bank is
prepared to transfer to the bank accounts designated by Issuer pursuant to
Section 1.4.c the Share Subscription Price and the Convertible Bond Subscription
Price in immediately available funds on the Closing Date upon receipt of
instructions from Subscriber and DCJH to do so.
6.7 NO MULTIPLE MATERIALITY QUALIFIERS.
To the extent any representation, warranty or covenant in this
Agreement is qualified by reference to materiality (including any qualification
related to a "Material Adverse Effect") or to a particular level or extent of
permissible deviation from a standard (including deviation from the absolute),
no corresponding reference to materiality or permissible deviation from a
standard in these conditions precedent or in Section 7.1 shall be of any effect.
ARTICLE VII
TERMINATION AND INDEMNITY
7.1 TERMINATION.
This Agreement may not be terminated after the Closing for any reason
whatsoever. This Agreement may not be terminated prior to the Closing except:
a. by mutual written agreement of Issuer, Subscriber and DCJH;
b. by Issuer if a material breach of any convenant or agreement
of this Agreement has been committed by Subscriber or DCJH and
such breach has not been cured within fifteen (15) Business
Days of written notice in respect thereof;
c. by Subscriber if (i) Issuer has materially breached any
covenant set forth in this Agreement, (ii) Issuer has
materially breached any of the representations or warranties
set forth in any of Sections 2.1, 2.2, 2.3, 2.4, 2.11, 2.12.c,
2.19, 2.20, 2.21 or 2.22, or (iii) the condition precedent set
forth in Section 5.1.b has not been satisfied and, in each
case, such breach or failure is not rectified within fifteen
(15) Business Days of written notice in respect thereof; or
d. by any party if the Closing has not occurred (other than
through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this
Agreement) on or before February 28, 2001 or such later date
as the parties may mutually agree.
7.2 EFFECT OF TERMINATION.
a. If this Agreement is terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement will
terminate, except for Articles VII and Sections 9.2, 9.3 and
9.6, which shall survive the termination of this Agreement;
provided, however, that if this Agreement is terminated
pursuant to 7.1(b) or (c) by Subscriber or DCJH on the one
hand or Issuer on the other hand because of breach of the
Agreement by the other party or because one or more of the
conditions to the terminating party's obligations under this
Agreement is not satisfied as a result of the other party's
failure to comply with its obligations under this Agreement,
the terminating party's right to pursue all legal remedies
will survive such termination unimpaired.
b. Subscriber shall pay Issuer US$300,000,000 (the "TERMINATION
FEE") if (A) this Agreement is terminated prior to the Closing
for any reason other than (i) willful breach by Issuer, (ii)
failure of any of the conditions set forth in Article V to be
satisfied, or (iii) pursuant to Section 7.1.c and (B) Issuer
actually has exercised its rights to purchase and has
purchased an additional 50% of the shares of NedCar currently
owned by Volvo Car Corporation and its Affiliates from Volvo
Car Corporation and such Affiliates. In such event, Subscriber
shall pay the Termination Fee to Issuer within thirty (30)
days after the latest of (x) the date Issuer purchases such
50% of the shares of NedCar, (y) June 30, 2000, or (z) such
termination. If Subscriber has paid the Termination Fee and
Issuer has entered into
any material business alliance concerning the production of
vehicles at NedCar, or any material alliance involving a
material equity investment in Issuer or any successor
entity to its Car Business (other than such an equity
alliance made solely in connection with the Truck and Bus
Business), with any competitor of Subscriber within two (2)
years after the date hereof, Issuer shall immediately repay
back the full amount of the Termination Fee to Subscriber.
7.3 INDEMNITY.
a. BREACH OF COVENANTS. If Issuer breaches any of its covenants
or agreements contained herein, Issuer shall indemnify
Subscriber, its Affiliates and its Representatives
("INDEMNITEES") from, against and in respect of all losses,
damages, liabilities, costs and expenses (including any and
all attorneys' fees or charges incidental thereto) ("DAMAGES")
sustained or incurred by the Indemnitees arising out of or
related to any such breach, provided that claims of third
parties against any Indemnitee shall be subject to Section
7.3.c.
b. BREACH OF REPRESENTATIONS. If the cumulative effect of one or
more breaches by Issuer of any representation or warranty
contained in or made pursuant to this Agreement shall be to
subject Issuer to any Damages to which Issuer would not have
been subjected had the state of facts been as represented or
warranted, Issuer shall indemnify Subscriber for all Damages
incurred or experienced by Subscriber as a result of the acts,
events or circumstances giving rise to such breach, but only
to the extent that such Damages would not have been incurred
had such representation or warranty been true or had not been
breached. To the extent any Damages are originally incurred by
Issuer, Subscriber's Damages shall be deemed to be equal to
the Damages incurred by Issuer multiplied by the Indemnified
Percentage. The "INDEMNIFIED PERCENTAGE" is equal to a
fraction (i) the denominator of which is the number of total
issued and outstanding Shares as of the date hereof and (ii)
the numerator of which is the number of the New Shares.
c. THIRD PARTY CLAIMS.
(i) Subject to the terms of this Section 7.3.c, Issuer
shall indemnify the Indemnitees and hold the Indemnitees
harmless from, against and in respect of any Damages incurred
by any Indemnitee with respect to any claim asserted by a
third party against such Indemnitee (a "CLAIM") as a result of
a breach by Issuer of any representation, warranty or covenant
contained herein.
(ii) Within 20 days after receipt of notice of
commencement of any action or 60 days after any other written
assertion of any Claim, Subscriber shall give Issuer written
notice thereof, together with a copy of any claim, process or
other legal pleading associated with such Claim, and Issuer
shall have the right to undertake the defense thereof by
counsel of its own choosing by giving written notice thereof
to Subscriber.
(iii) In the event that Issuer, by the 30th day after
receipt of notice of any such Claim (or, if earlier, by the
tenth day preceding the day on which an answer or other
pleading must be served in order to prevent judgment by
default in favor of the person asserting such Claim), does not
elect to defend against such Claim, Subscriber will have the
right (but not the obligation) to undertake the defense,
compromise or settlement of such Claim on its own behalf but
for the account and risk of Issuer, subject to the right of
Issuer to assume the defense of such Claim at any time prior
to settlement, compromise or final determination thereof.
(iv) Except with the prior written consent of
Subscriber (such consent not to be unreasonably withheld),
Issuer shall not consent to entry of any judgment or order,
interim or otherwise, or enter into any settlement that
provides for injunctive or other nonmonetary relief affecting
Subscriber or that does not include as an unconditional term
thereof the giving by each claimant or plaintiff to Subscriber
of a release from all liability with respect to such Claim.
(v) In the event that Subscriber shall in good faith
determine that it may have available to it one or more
defenses or counterclaims that are inconsistent with one or
more of those that may be available to Issuer in respect of
such Claim or any litigation relating thereto, Subscriber
shall have the right at all times to take over and assume
control over the defense, settlement, negotiations or
litigation relating to such Claim at the sole cost of Issuer;
provided, however, that if Subscriber does so take over and
assume control, Subscriber shall not settle such claim or
litigation without the written consent of Issuer, such consent
not to be unreasonably withheld.
7.4 LIMITATIONS ON INDEMNIFICATION.
a. No Indemnitee may make a claim for indemnification under
Section 7.3.b unless written notice of the claim is delivered
to Issuer within two years of the Closing Date.
Notwithstanding the foregoing, Subscriber may make a claim for
indemnification (i) with respect to a breach of Section 2.16
at any time prior to the seventh anniversary of the Closing
Date and (ii) with respect to a breach of Section 2.9 at any
time prior to the fifth anniversary of the Closing Date.
b. Issuer shall have no liability to any Indemnitee with respect
to Damages pursuant to Section 7.3.b until the aggregate
Damages suffered by all Indemnitees exceeds two billion two
hundred fifty million Yen ((Y)2,250,000,000) (the
"THRESHOLD"), whereupon any Indemnitee shall be entitled to
receive indemnification payments solely for Damages in excess
of the Threshold. Issuer shall have no further liability to
any Indemnitee with respect to Damages pursuant to Section
7.3.b if the aggregate Damages paid to all Indemnitees
pursuant to such clause has exceeded an aggregate of
twenty-nine billion five hundred million Yen
((Y)29,500,000,000) (the "CAP"), provided that:
(i) for the purpose of determining whether or not the
Threshold has been satisfied, any language in any applicable
representation or warranty that limits the scope of a
representation or warranty by reference to materiality,
including without limitation any qualification relating to a
Material Adverse Effect, shall be disregarded and the amount
of Damages calculated as if no such language or qualification
exists, and
(ii) nothing in the foregoing subsection (i) shall be deemed
to remove any such materiality language or qualification in
determining whether or not any breach of or inaccuracy in any
representation or warranty has occurred so long as such
language or qualification is used to define the nature or
extent of disclosure required in such representation or
warranty (including without limitation the disclosures
required pursuant to Section 2.7, 2.11 or 2.12).
c. Any indemnification obligations hereunder shall be offset by
any applicable insurance or other reimbursement payments
received or tax benefits realized by the Indemnitee with
respect to such obligation.
7.5 EXCLUSIVE REMEDIES.
Subscriber and DCJH acknowledge that their sole and exclusive remedies
with respect to any and all claims relating to any breach of any representation
or warranty herein, shall, unless otherwise expressly provided to the contrary
in any Constituent Agreement, be the indemnification provisions set forth in
this Article VII, and neither Subscriber nor DCJH shall be entitled to pursue,
and Subscriber and DCJH hereby expressly waive, any and all rights that may
otherwise be available with respect thereto, except for rights with respect to
any fraudulent acts or intentional misrepresentations. For the avoidance of
doubt, nothing in this Section 7.5 shall preclude Subscriber or DCJH from
seeking specific performance of any covenant of Issuer herein.
ARTICLE VIII
DEFINITIONS
Whenever used in this Agreement (including in the Schedules and
Exhibits), the following terms shall have the respective meanings given to them
below or in the Sections indicated below:
"AFFILIATE" means, with respect to any Person, a Person that directly
or indirectly through one or more intermediaries, controls, is controlled by, or
is under common control with, the first Person. For the purpose of this
definition, the term "CONTROL" means the possession, directly or indirectly, of
the power to direct or cause the direction of the management policies of a
person, whether through the ownership of voting securities, by contract or
credit arrangement, as trustee or executor, or otherwise.
"ADDITIONAL SHARES" is defined in Section 1.2.
"ALLIANCE AGREEMENT" means the Master Alliance Agreement as of the date
hereof between Issuer and Subscriber in the form attached hereto as Attachment A
SECURITIES SUBSCRIPTION AGREEMENT
"ANNUAL MEETING" is defined in Section 2.22.
"APPLICATION FOR NEW SHARES" means the application for subscription
(KABUSHIKI MOSHIKOMISHO) for the New Shares, as prescribed in Section 280-6 of
the Commercial Code.
"APPLICATION FOR CONVERTIBLE BONDS" means the application for
subscription (SHASAI MOSHIKOMISHO) for Convertible Bonds as prescribed in
Section 301 and Section 341-3 of the Commercial Code.
"BENEFICIAL OWNER" (including, with correlative meanings the terms
"BENEFICIALLY OWN" and "BENEFICIAL OWNERSHIP"), with respect to any securities,
means any Person which:
(A) has, or any of whose Affiliates has, directly or indirectly,
the right to acquire (whether such right is exercisable
immediately or only after the passage of time) such securities
pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise; or
(B) has, or any of whose Affiliates has, directly or indirectly,
the right to vote or direct the voting of, or dispose or
direct the disposition of (whether such right is exercisable
immediately or only after the passage of time) such
securities, including pursuant to any agreement, arrangement
or understanding (whether or not in writing).
"BUSINESS" means the business and operations of the Issuer Group as
currently conducted by the Issuer Group.
"BUSINESS DAY" means a day on which ordinary commercial banks are open
for regular banking business in Tokyo, Japan.
"CAP" is defined in Section 7.4.
"CAR BUSINESS" means the business of developing, designing,
manufacturing, assembling, selling or purchasing, exporting or importing and
otherwise dealing in passenger cars and light commercial vehicles below Xxxxxx
class and components thereof and replacement parts and accessories therefor.
"CLAIM" is defined in Section 7.3.
"CLOSING" means the consummation of the transactions contemplated in
Section 1.4 of this Agreement.
"CLOSING DATE" means the date when the Closing takes place.
"COMMERCIAL CODE" means the Commercial Code of Japan (Law No.
48 of 1899, as amended).
SECURITIES SUBSCRIPTION AGREEMENT
"CONFIDENTIALITY AND NON-DISCLOSURE AGREEMENT" means the
Confidentiality and Non-Disclosure Agreement dated March 19, 2000, between
Issuer and Subscriber.
"CONSTITUENT AGREEMENTS" means this Agreement, the Standstill
Agreement, the Volvo Stockholders' Agreement and the Alliance Agreement.
"CONTRACT" means all loan agreements, indentures, letters of credit
(including related letter of credit applications and reimbursement obligations),
mortgages, security agreements, pledge agreements, deeds of trust, bonds, notes,
guarantees, surety obligations, warranties, licenses, franchises, permits,
powers of attorney, purchase orders, leases, and other agreements, contracts,
instruments, obligations, offers, commitment, arrangements and understandings,
written or oral, to which any member of the Issuer Group is a party or by which
it or any of its properties or assets may be bound or affected, in each case as
amended, supplemented, waived or otherwise modified.
"CONVERTIBLE BONDS" is defined in Section 1.1.
"CONVERTIBLE BOND SUBSCRIPTION PRICE" is defined in Section 1.1.
"DAMAGES" is defined in Section 7.3.
"DCJH" is defined in the recitals to this Agreement.
"EMPLOYEES" is defined in Section 2.13.
"ESCROW FOUNDATION" is defined in Section 2.5.
"FINANCIAL STATEMENTS" means the financial statements of Issuer (on an
unconsolidated basis) and of the Issuer Group (on a consolidated basis) as of
March 31, 2000 and for the twelve months ended March 31, 2000, all of which are
attached hereto as Exhibit F.
"FOREIGN EXCHANGE LAW" means the Foreign Exchange and Foreign
Trade Law of Japan (Law No. 228 of 1949, as amended).
"GAAP" means the generally accepted accounting principles applied in
Japan.
"GOVERNMENTAL APPROVAL" means any consent, approval, authorization,
waiver, permit, grant, franchise, concession, agreement, license, certificate,
exemption, order, registration, declaration, filing, report or notice of, with,
by or to any Governmental Authority.
"GOVERNMENTAL AUTHORITY" means any nation or government, any
international or transnational organ of which two or more nations or governments
are members or any state or other subdivision of any of the foregoing.
"INDEMNIFIED PERCENTAGE" is defined in Section 7.3.
"INDEMNITEES" is defined in Section 7.3.
SECURITIES SUBSCRIPTION AGREEMENT
"INTELLECTUAL PROPERTY RIGHTS" means (a) patents, utility models,
trademarks, service marks, rights in designs, trade or business names,
copyrights (including rights in computer software), and all rights or forms of
protection of a similar nature or having equivalent effect to any of the
foregoing which may subsist anywhere in the world, (b) applications for any of
the foregoing, and (c) know-how and technical and proprietary information.
"ISSUER" is defined in the recitals to this Agreement.
"ISSUER GROUP" means Issuer and its Subsidiaries.
"LAW" means all applicable provisions of all (a) constitutions,
treaties, statutes, laws (including the common law), codes, rules, regulations,
ordinances or orders of any Governmental Authority, (b) Governmental Approvals
and (c) orders, decisions, injunctions, judgments, awards and decrees of or
agreements with any Governmental Authority.
"LIEN" means any lease, loan, mortgage, pledge, right of usufruct or
any other form of security interest (TANPO-XXX) or any attachment (SASHIOSAE) or
provisional attachment (XXXX-SASHIOSAE) or any other encumbrance on property.
"LITIGATION" means any action, claim, demand, suit, proceeding,
citation, summons, subpoena, civil, criminal, regulatory or otherwise, in law or
in equity or pursuant to administrative authority, pending by or before any
court, tribunal, arbitrator or other Governmental Authority.
"LETTER OF INTENT" means the Letter of Intent dated March 26, 2000
between Issuer and Subscriber.
"MATERIAL ADVERSE EFFECT" with respect to any party means any event or
state of facts that is or would reasonably be expected to be materially adverse
to the business, assets, results of operations or financial condition of such
party and its subsidiaries, taken as a whole; provided that a Material Adverse
Effect shall not include any adverse effect resulting from (i) changes in the
automotive and automotive finance industry in general, and not relating
specifically to the business of Issuer, Subscriber or DCJH, as the case may be,
(ii) changes in the general economic conditions of the Japanese, German or world
economy and not relating specifically to the business of Issuer, Subscriber, or
DCJH, as the case may be, or (iii) changes arising as a result of the
announcement or implementation of the transactions contemplated in any
Constituent Agreement.
"MMC ESCROW SHARES" is defined in Section 2.5.
"NEDCAR" means the Netherlands Car B.V.
"NEDCAR CLASS A SHARES" is defined in Section 2.5.
"NEDCAR CLASS B SHARES" is defined in Section 2.5.
"NEDCAR SHARES" is defined in Section 2.5.
"NEW SHARES" is defined in Section 1.1.
SECURITIES SUBSCRIPTION AGREEMENT
"OFFICER" means, where applicable, any president, chairman, chief
executive officer, vice-president, general manager or chief financial officer,
or any employee with the title of BUCHO or higher, or the substantial equivalent
thereto, of the relevant entity.
"ORGANIZATIONAL DOCUMENTS" means, as to any Person, its certificate or
articles of incorporation, by-laws and other organizational documents.
"OUTSTANDING BONDS" means the convertible bonds of Issuer that are
currently outstanding as of the date hereof and that are due in March 2003.
"PERSON" means any natural person, firm, partnership, association,
corporation, company, trust, business trust, Governmental Authority or other
entity.
"PROTECTION ACTIONS" is defined in Section 5.8.
"REPRESENTATIVES" means, as to any Person, its accountants, counsel,
consultants (including actuarial, environmental and industry consultants),
Officers, directors, employees, agents and other advisors and representatives.
"SEA" means the Securities and Exchange Act of Japan (Law No. 25 of
1948, as amended).
"SECURITIES" means the New Shares and the Convertible Bonds.
"SHAREHOLDERS MEETING" is defined in Section 4.2.
"SHARES" means shares of common stock of Issuer.
"SHARE PRICE" is defined in Section 1.1.
"SHARE SUBSCRIPTION PRICE" is defined in Section 1.1.
"SIAC" means the Singapore International Arbitration Center, or any
successor entity.
"STANDSTILL AGREEMENT" means the Standstill Agreement between
Subscriber and Issuer, as of the date hereof, in the form attached hereto as
Attachment B.
"SUBSCRIBER" is defined in the recitals to this Agreement.
"SUBSIDIARY" or "SUBSIDIARIES" means any corporation, partnership or
other entity or Person which Issuer is required under GAAP to consolidate as a
consolidated subsidiary for purposes of its Financial Statements (but for
avoidance of doubt not including any Person consolidated under the equity
method).
"TAX" means any national, local or foreign income, alternative minimum,
accumulated earnings, personal holding company, franchise, capital stock,
profits, windfall profits, gross receipts, sales, use, value added, transfer,
registration, stamp, premium, consumption, transfer, excise, customs duties,
severance, environmental, real property, personal property, ad valorem,
occupancy, license, occupation, employment, payroll, social security,
disability, unemployment,
SECURITIES SUBSCRIPTION AGREEMENT
workers' compensation, withholding, estimated or other similar tax, duty,
fee, assessment or other governmental charge or deficiencies thereof
(including all interest and penalties thereon and additions thereto) imposed
by any Governmental Authority.
"TAX RETURN" means any return, report, declaration, form, claim for
refund or information return or statement relating to any Tax, including any
schedule or attachment thereto, and including any amendment thereof.
"TERMINATION FEE" is defined in Section 7.2.
"THREE DIAMOND VEHICLE MARKS" is defined in Section 5.8.
"THRESHOLD" is defined in Section 7.4.
"TRADEMARK OWNERS" is defined in Section 5.8.
"TRANSFER" with respect to any security means any sale, gift,
endorsement, assignment (including an assignment of voting rights), transfer,
pledge, encumbrance or other disposition, whether voluntary, involuntary or by
operation of law.
"TRUCK AND BUS BUSINESS" means the business of developing, designing,
manufacturing, assembling, selling or purchasing, exporting or importing and
otherwise dealing in trucks and buses of the Xxxxxx class and above and
components thereof and replacement parts and accessories therefor.
"VCC" is defined in Section 2.5.
"VOLVO" means Aktiebolaget Volvo, a Swedish corporation.
"VOLVO STOCKHOLDERS' AGREEMENT" means the Stockholders' Agreement
between Subscriber and Volvo, as of the date hereof, in the form attached hereto
as Attachment C.
"YEN" or "(Y)" means the lawful currency of Japan.
ARTICLE IX
MISCELLANEOUS
9.1 EXPENSES.
Except as set forth below or as otherwise specifically provided for in
this Agreement, Issuer, on the one hand, and Subscriber and DCJH, on the other
hand, shall bear their respective expenses, costs and fees (including
attorneys', auditors' and financing commitment fees) in connection with the
transactions contemplated hereby, including the preparation, execution and
delivery of this Agreement and compliance herewith, whether or not the
transactions contemplated hereby shall be consummated.
9.2 NOTICES.
SECURITIES SUBSCRIPTION AGREEMENT
All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally, (b) mailed
by certified or registered airmail with postage prepaid, (c) sent by next-day or
overnight mail or delivery or (d) sent by facsimile confirmed by certified or
registered mail, in each case, addressed as follows:
As to Issuer:
Mitsubishi Motors Corporation
0-00-0 Xxxxx
Xxxxxx-xx
Xxxxx 000-0000
Xxxxx
Attention: General Manager, Legal Department
Telefax: x00-0-0000-0000
As to Subscriber:
DaimlerChrysler AG
HPC 0216
D-70546 Stuttgart
Germany
Attention: Director for Mergers & Acquisitions
Telefax: x00-000-0000000
As to DCJH:
DaimlerChrysler Japan Holding, Ltd.
Roppongi First Building
0-0-0 Xxxxxxxx
Xxxxxx-xx, Xxxxx 000-0000
Xxxxx
Attention: President
Telefax: x00-0-0000-0000
with a copy to Subscriber
or, in each case, at such other address as may be specified in writing to the
other parties hereto.
All such notices, requests, demands, waivers and other communications
shall be deemed to have been given (w) if by personal delivery on the day of
such delivery, (x) if by certified or registered airmail, on the seventh day
after the mailing thereof, (y) if by next-day or overnight mail or delivery, on
the day delivered, (z) if by facsimile, upon receipt of electronic confirmation
thereof, provided that a copy is also sent by certified or registered airmail.
9.3 GOVERNING LAW AND ARBITRATION.
THIS AGREEMENT SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO
VALIDITY, INTERPRETATION AND EFFECT, BY THE LAWS OF JAPAN, WITHOUT GIVING EFFECT
TO THE CONFLICT OF LAWS RULES THEREOF. All
SECURITIES SUBSCRIPTION AGREEMENT
disputes, controversies or differences which may arise between the parties
hereto out of or in relation to or in connection with this Agreement shall be
finally settled by arbitration conducted in Singapore in the English language
in accordance with the Arbitration Rules of the SIAC, which rules are deemed
to be incorporated by reference into this Section 9.3. The arbitral tribunal
shall be composed of three (3) arbitrators. In accordance with the relevant
rules of the SIAC, Issuer and Subscriber shall each appoint one arbitrator
and the Chairman of the SIAC shall appoint the third arbitrator who shall not
be a citizen of either Japan or Germany. Any and all awards rendered in any
arbitration under this Agreement shall be final and binding upon the parties
and judgment thereon may be entered into in any court having jurisdiction
over the enforcement of awards rendered pursuant to such arbitration. No
party to this Agreement shall have the right to appeal to any court any award
rendered pursuant to any arbitration under this Agreement. Any award rendered
pursuant to any such arbitration shall include the costs of arbitration,
including the fees of arbitrators. Nothing contained in this Section 9.3
shall be construed to limit or preclude a party from bringing any action or
commencing any proceeding in any court of competent jurisdiction for
injunctive or other provisional relief to compel any other party to comply
with its obligations hereunder at any time.
9.4 BINDING EFFECT.
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns.
9.5 ASSIGNMENT.
This Agreement shall not be assignable or otherwise transferable by any
party hereto without the prior written consent of the other parties hereto, and
any purported assignment or other transfer without such consent shall be void
and unenforceable.
9.6 NO THIRD PARTY BENEFICIARIES.
Nothing in this Agreement shall confer any rights upon any person or
entity other than the parties hereto and their respective successors and
permitted assigns.
9.7 AMENDMENT, WAIVERS.
No amendment, modification or discharge of this Agreement, and no
waiver hereunder, shall be valid or binding unless set forth in writing and duly
executed by the party against whom enforcement of the amendment, modification,
discharge or waiver is sought. Any such waiver shall constitute a waiver only
with respect to the specific matter described in such writing and shall in no
way impair the rights of the party granting such waiver in any other respect or
at any other time. Neither the waiver by any of the parties hereto of a breach
of or a default under any of the provisions of this Agreement, nor the failure
by any of the parties, on one or more occasions, to enforce any of the
provisions of this Agreement or to exercise any right or privilege hereunder,
shall be construed as a waiver of any other breach or default of a similar
nature, or as a waiver of any of such provisions, rights, or privileges
hereunder. The rights and remedies herein provided are cumulative and none is
exclusive of any other, or of any rights or remedies that any party may
otherwise have. The rights and remedies of any party based upon, arising out of
or
SECURITIES SUBSCRIPTION AGREEMENT
otherwise in respect of any inaccuracy or breach of any representation,
warranty, covenant or agreement shall in no way be limited by the fact that
the act, omission, occurrence or other state of facts upon which any claim of
any such inaccuracy or breach is based may also be the subject matter of any
other representation, warranty, covenant or agreement as to which there is no
inaccuracy or breach.
9.8 ENTIRE AGREEMENT.
This Agreement and its Schedules and Exhibits, and any other document
executed or delivered by the parties as of the date hereof or as of the Closing
Date constitute the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between or among the parties with respect
to the subject matter hereof and thereof including without limitation the Letter
of Intent but excluding the Confidentiality and Non-Disclosure Agreement, which
shall expire upon the occurrence of the Closing.
9.9 SEVERABILITY.
If any provision, including any phrase, sentence, clause, section or
subsection, of this Agreement is invalid, inoperative or unenforceable for any
reason, such circumstances shall not have the effect of rendering such provision
in question invalid, inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision herein contained invalid,
inoperative, or unenforceable to any extent whatsoever.
9.10 HEADINGS.
The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.
9.11 COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which
shall be deemed an original and all of which shall together constitute one and
the same instrument.
9.12 LANGUAGE.
This Agreement is entered into in the English language (except for
certain Schedules which are in the Japanese language). In the event of any
dispute concerning the construction or meaning of this Agreement, the text of
the Agreement as written in the English language shall prevail over any
translation of this Agreement that may have been made (except with regard to
such Schedules which are in the Japanese language, in which case the Japanese
language text shall prevail).
9.13 PUBLICITY.
No party shall disclose or publicize the existence or contents of this
Agreement or any of the other Constituent Agreements without the prior written
consent of the other parties, except that Issuer may disclose or publicize any
such matter with the prior written consent of Subscriber. Issuer and Subscriber
shall mutually approve the content, timing and distribution of any press or
similar releases to be issued with respect to the subject matter of this
Agreement or any of
SECURITIES SUBSCRIPTION AGREEMENT
the Constituent Agreements. Notwithstanding the foregoing, no party shall be
prevented, after giving written notice to the other parties, from disclosing
the existence or contents of this Agreement or any of the other Constituent
Agreements to any Person if (but only to the extent) required by applicable
law or the rules of any securities exchange on which the securities of the
disclosing party are traded; provided that such disclosing party shall use
reasonable efforts to have such Person treat such information as confidential.
9.14 OBLIGATIONS OF DCJH.
Whenever this Agreement requires DCJH to take any action, including
without limitation the obligation of DCJH to purchase the Convertible Bonds
pursuant to the terms of Article I hereof, Subscriber agrees to cause DCJH to
take such action and Subscriber guarantees the performance thereof by DCJH.
DCJH's obligations to Issuer are limited to those specifically stated in this
Agreement, and DCJH is not a guarantor of, or otherwise liable with respect to,
the obligations of Subscriber under this Agreement or any other Constituent
Agreement.
SECURITIES SUBSCRIPTION AGREEMENT
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
MITSUBISHI MOTORS CORPORATION
By
-------------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
By
-------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Member of the Board of Directors
DAIMLERCHRYSLER AKTIENGESELLSCHAFT
By
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board of Management
By
--------------------------------------------
Name: Xx. Xxxxxxx Xxxxxx
Title: Member of the Board of Management
DAIMLERCHRYSLER JAPAN HOLDING, LTD.
By
--------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Representative Director, President and
CEO
AMENDMENT
TO THE
SECURITIES SUBSCRIPTION AGREEMENT
THIS AMENDMENT is entered into as of this the 8th day of
September, 2000 by and between MITSUBISHI MOTORS CORPORATION, a corporation
organized under the laws of Japan ("ISSUER"), DAIMLERCHRYSLER
AKTIENGESELLSCHAFT, a corporation organized under the laws of Germany
("SUBSCRIBER"), and DAIMLERCHRYSLER JAPAN HOLDING, LTD., a corporation organized
under the laws of Japan ("DCJH"), in order to amend the SECURITIES SUBSCRIPTION
AGREEMENT, dated July 28, 2000, by and among Issuer, Subscriber and DCJH (the
"SECURITIES SUBSCRIPTION AGREEMENT"). Terms used and not defined herein shall
have the meaning set forth therefor in the Securities Subscription Agreement.
WHEREAS, Issuer, Subscriber and DCJH entered into the
Securities Subscription Agreement in order, among other things, for (i)
Subscriber to subscribe for and purchase 499,856,000 Shares at a subscription
price of (Y)450 per Share and (ii) DCJH to subscribe for and purchase
Convertible Bonds in an aggregate principal amount of (Y)21,300,000,000;
WHEREAS, subsequent to the execution of the Securities
Subscription Agreement, Issuer, Subscriber and DCJH have agreed, among other
things, (i) to reduce the Share Subscription Price for the New Shares to (Y)405
per share and (ii) to revise the terms and principal amount of the Convertible
Bonds as set forth in this Amendment; and
WHEREAS, concurrently with the execution and delivery of this
Amendment, the Parties are entering into an Amended and Restated Master Alliance
Agreement and an Amended and Restated Standstill Agreement;
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, Issuer, Subscriber and DCJH
hereby agree as follows:
ARTICLE I
AMENDMENTS TO SECURITIES SUBSCRIPTION AGREEMENT
Section 1.1. AMENDMENT TO SECTION 1.1. Section 1.1 of the
Securities Subscription Agreement shall be amended by deleting the current
Section in its entirety and replacing it with the following:
1.1 SUBSCRIPTION.
a. SUBSCRIPTION OF SHARES.
Subject to the terms and conditions set forth in this
Agreement, Issuer shall issue to Subscriber, and Subscriber shall
subscribe for, four hundred ninety-nine million eight hundred
fifty-six thousand (499,856,000) new shares (the "NEW SHARES"), which
number of New Shares is equivalent to thirty-four percent (34%) of
the sum of the total issued and outstanding Shares as of the date
hereof plus the number of the New Shares, at a per share subscription
price of four hundred five Yen ((Y)405) (the "SHARE PRICE") and an
aggregate subscription price of two hundred two billion four hundred
forty-one million six hundred eighty thousand Yen
((Y)202,441,680,000) (the "SHARE SUBSCRIPTION PRICE").
b. SUBSCRIPTION OF CONVERTIBLE BONDS.
Subject to the terms and conditions set forth in this
Agreement, Issuer shall issue to DCJH, and DCJH shall subscribe for,
unsecured convertible bonds having the aggregate face value of
nineteen billion two hundred million Yen ((Y)19,200,000,000) (the
"CONVERTIBLE BONDS"), providing DCJH the right to acquire upon
conversion thereof between forty-seven million four hundred seven
thousand two hundred ninety-six (47,407,296) and forty-seven million
four hundred seven thousand four hundred seven (47,407,407) newly
issued Shares and having the characteristics set forth in Schedule
1.1. Although the terms of the Convertible Bonds provide for the
conversion into such amount of newly issued Shares, DCJH shall be
entitled to convert the Convertible Bonds only up to the amount
necessary, together with any Convertible Bonds converted by
Subscriber or any other Affiliate of Subscriber, to allow Subscriber,
subject to the immediately following sentence, to prevent dilution of
the equity interest of Subscriber and its Affiliates in Issuer to
below thirty-four percent (34%) (or such greater amount corresponding
to any larger percentage of outstanding Shares which is then owned by
Subscriber and its Affiliates, provided such higher percentage is
permissible under the terms of the Standstill Agreement) upon
conversion of any Outstanding Bonds. In the event that Subscriber,
DCJH and Subscriber's other Affiliates receive new Shares in excess
of such percentage as a result of conversion of integral
denominations of the Convertible Bonds, Subscriber and DCJH shall
promptly divest such excess. DCJH shall subscribe for the Convertible
Bonds at an aggregate subscription price equal to the principal
amount thereof (the "CONVERTIBLE BOND SUBSCRIPTION PRICE").
Section 1.2. AMENDMENT TO SECTION 1.6. Section 1.6 of the
Securities Subscription Agreement shall be amended by deleting the current
Section in its entirety and replacing it with the following:
1.6 REGISTRATION STATEMENT AND EFFECTIVENESS OF ISSUANCE
OBLIGATIONS.
Issuer shall file one or more securities registration
statements pursuant to the SEA with respect to the Securities no
later than the Business Day immediately following the date of the
Amendment to the Securities Subscription Agreement. The obligations
with regard to the issuance of the Securities set forth in this
Article I shall become effective upon the effectiveness of such
securities registration statements but in any event no later than the
eleventh day following the date of the Amendment to the Securities
Subscription Agreement.
Section 1.3. AMENDMENT TO SECTION 4.1. Section 4.1 of the
Securities Subscription Agreement shall be amended by adding the following two
additional sentences at the end thereof:
Subscriber hereby acknowledges that the resignation of Xx. Xxxxxxxxx
Xxxxxxx as President and Chief Executive Officer and the appointment
of Xx. Xxxxxxx Xxxxxx as President and Chief Executive Officer shall
not constitute a breach of this Section. Subscriber further agrees
that any remedial actions taken by Issuer with respect to its quality
assurance operations in order to remedy the problems described in the
Report shall not constitute a breach of this Agreement.
Section 1.4. AMENDMENT TO SECTION 4.2.b. Section 4.2.b of the
Securities Subscription Agreement shall be amended by replacing the words "four
hundred fifty Yen ((Y)450) per share" with "four hundred five Yen ((Y)405) per
share."
Section 1.5. AMENDMENT TO SECTION 4.8. Article IV of the
Securities Subscription Agreement shall be amended by adding the following as a
new Section 4.8:
4.8 DIVIDENDS.
In the event that Issuer declares and pays any dividends with
respect to the fiscal year ending March 31, 2001, Issuer shall pay to
Subscriber the same dividend per Share as it pays to any other
shareholder of record on the relevant record date.
Section 1.6. AMENDMENT TO SECTION 5.1.a. Section 5.1.a of the
Securities Subscription Agreement shall be amended by deleting the current
Section in its entirety and replacing it with the following:
a. There shall have been no material inaccuracies in any of
Issuer's representations or warranties set forth in Section
2.1, 2.2, 2.3, 2.4, 2.11, 2.12.c, 2.15, 2.19, 2.20, 2.21 or
2.22 or in the final sentence of Section 2.16 as of the date
of this Agreement or as of the Closing Date. For the purposes
of the foregoing sentence, the "Results of Internal
Investigations into Problems in Recall-related Tasks" and the
"Summary List of Recall & Campaign Vehicles Submitted to the
Ministry of Transport", a copy of each of which is attached as
Schedules 5.1.a-A and 5.1.a-B hereto, respectively
(collectively, the "Report"), shall have been deemed to have
been disclosed as of the date of this Agreement, but such
deemed disclosure shall not affect or be deemed to affect any
of the Indemnitees' indemnification rights under this
Agreement.
Section 1.7. AMENDMENT TO SECTION 7.1.c. Section 7.1.c of the
Securities Subscription Agreement shall be amended by deleting the current
Section in its entirety and replacing it with the following:
c. by Subscriber if (i) Issuer has materially breached any
covenant set forth in this Agreement, (ii) Issuer has
materially breached any of the representations or warranties
set forth in Section 2.1, 2.2, 2.3, 2.4, 2.11, 2.12.c, 2.15,
2.19, 2.20, 2.21 or 2.22 or in the final sentence of Section
2.16, or (iii) the condition precedent set forth in Section
5.1.b has not been satisfied and, in each case, such breach or
failure is not rectified within fifteen (15) Business Days of
written notice in respect thereof; provided, however, that for
the purposes of the foregoing clause (ii) the Report shall
have been deemed to have been disclosed as of the date of this
Agreement, but such deemed disclosure shall
not affect or be deemed to affect any of the Indemnitees'
indemnification rights under this Agreement.
Section 1.8. AMENDMENT TO THE ARTICLE VIII. Article VIII of
the Securities Subscription Agreement shall be amended as follows:
(a) The definition of Alliance Agreement shall be deleted
in its entirety and replaced with the following:
"ALLIANCE AGREEMENT" means the Amended and Restated Master Alliance
Agreement between Issuer and Subscriber and dated as of the date of
the Amendment to the Securities Subscription Agreement, in the form
attached hereto as Attachment A.
(b) The definition of Standstill Agreement shall be
deleted in its entirety and replaced with the following:
"STANDSTILL AGREEMENT" means the Amended and Restated Standstill
Agreement between Issuer and Subscriber and dated as of the date of
the Amendment to the Securities Subscription Agreement, in the form
attached hereto as Attachment B.
(c) The following two new definitions shall be added:
"AMENDMENT TO THE SECURITIES SUBSCRIPTION AGREEMENT" means the
Amendment to the Securities Subscription Agreement, dated as of
September 8, 2000, among Issuer, Subscriber and DCJH.
"REPORT" is defined in Section 5.1.a.
Section 1.9. AMENDMENT TO THE SCHEDULES. The Schedules to the
Securities Subscription Agreement shall be amended as follows:
(a) Schedule 1.1 to the Securities Subscription Agreement
(Characteristics of Convertible Bonds) shall be replaced in its
entirety with Schedule 1.1 hereto.
(b) New Schedules 5.1.a-A and 5.1.a-B to the Securities
Subscription Agreement ("Results of Internal Investigation into
Problems in Recall-related Tasks" and "Summary List of Recall &
Campaign Vehicles Submitted to the Ministry of Transport") are hereby
added in the forms of Schedules 5.1.a-A and 5.1.a-B hereto,
respectively.
Section 1.10. AMENDMENT TO THE ATTACHMENTS. The Attachments to
the Securities Subscription Agreement shall be amended as follows:
(a) Attachment A to the Securities Subscription Agreement
(Alliance Agreement) shall be replaced in its entirety by Attachment A
hereto.
(b) Attachment B to the Securities Subscription Agreement
(Standstill Agreement) shall be replaced in its entirety by Attachment
B hereto.
Section 1.11. AMENDMENT TO EXHIBIT A. Exhibit A shall be
replaced in its entirety by Exhibit A hereto.
ARTICLE II
MISCELLANEOUS
Section 2.1. EFFECTIVENESS. This Amendment shall come into
full force and effect pursuant to Section 9.7 of the Securities Subscription
Agreement upon execution by the duly authorized representatives of Issuer,
Subscriber and DCJH, and shall be effective as of the date hereof.
Section 2.2. EFFECT ON SECURITIES SUBSCRIPTION AGREEMENT.
Except as expressly amended hereby, the Securities Subscription Agreement
remains in full force and effect.
Section 2.3. GOVERNING LAW AND ARBITRATION. THIS AMENDMENT
SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION AND
EFFECT, BY THE LAWS OF JAPAN, WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS
RULES THEREOF. All disputes, controversies or differences which may arise
between the parties hereto out of or in relation to or in connection with this
Amendment shall be finally settled by arbitration conducted in Singapore in the
English language in accordance with the Arbitration Rules of the SIAC, which
rules are deemed to be incorporated by reference into this Section 2.3. The
arbitral tribunal shall be composed of three (3) arbitrators. In accordance with
the relevant rules of the SIAC, Issuer and Subscriber shall each appoint one
arbitrator and the Chairman of the SIAC shall appoint the third arbitrator who
shall not be a citizen of either Japan or Germany. Any and all awards rendered
in any arbitration under this Amendment shall be final and binding upon the
parties and judgment thereon may be entered into in any court having
jurisdiction over the enforcement of awards rendered pursuant to such
arbitration. No party to this Amendment shall have the right to appeal to any
court any award rendered pursuant to any arbitration under this Amendment. Any
award rendered pursuant to any such arbitration shall include the costs of
arbitration, including the fees of arbitrators. Nothing contained in this
Section 2.3 shall be construed to limit or preclude a party from bringing any
action or commencing any proceeding in any court of competent jurisdiction for
injunctive or other provisional relief to compel any other party to comply with
its obligations hereunder at any time.
Section 2.4. COUNTERPARTS. This Amendment may be executed in
several counterparts, each of which shall be deemed an original and all of which
shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment to the Securities Subscription Agreement as of the date first above
written.
MITSUBISHI MOTORS CORPORATION
By
------------------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
By
------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Member of the Board of Directors
DAIMLERCHRYSLER AKTIENGESELLSCHAFT
By
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board of Management
By
------------------------------------------------
Name: Xx. Xxxxxxx Xxxxxx
Title: Member of the Board of Management
DAIMLERCHRYSLER JAPAN HOLDING, LTD.
By
------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Representative Director, President and CEO
AMENDMENT No. 2
TO THE
SECURITIES SUBSCRIPTION AGREEMENT
THIS AMENDMENT NO. 2 TO THE SECURITIES SUBSCRIPTION
AGREEMENT is entered into as of this the 28th day of September, 2000 by and
between MITSUBISHI MOTORS CORPORATION, a corporation organized under the laws
of Japan ("ISSUER"), DAIMLERCHRYSLER AKTIENGESELLSCHAFT, a corporation
organized under the laws of Germany ("SUBSCRIBER"), and DAIMLERCHRYSLER JAPAN
HOLDING, LTD., a corporation organized under the laws of Japan ("DCJH"), in
order to amend the SECURITIES SUBSCRIPTION AGREEMENT, dated July 28, 2000, by
and among Issuer, Subscriber and DCJH, as amended on September 8, 2000 (the
"SECURITIES SUBSCRIPTION AGREEMENT"). Terms used and not defined herein shall
have the meaning set forth therefor in the Securities Subscription Agreement.
WHEREAS, Issuer, Subscriber and DCJH entered into the
Securities Subscription Agreement in order, among other things, for (i)
Subscriber to subscribe for and purchase certain New Shares and (ii) DCJH to
subscribe for and purchase Convertible Bonds; and
WHEREAS, Issuer, Subscriber and DCJH have agreed that
Subscriber shall subscribe for the Convertible Bonds;
NOW THEREFORE, in consideration of the foregoing and the
mutual covenants and agreements herein contained, Issuer, Subscriber and DCJH
hereby agree as follows:
ARTICLE I
AMENDMENTS TO SECURITIES SUBSCRIPTION AGREEMENT
Section 1.1 Subscriber shall and hereby does assume all of
the rights and all of the responsibilities of DCJH under the Securities
Subscription Agreement, including without limitation the obligations to
subscribe for the Convertible Bonds pursuant to Section 1.1.b and the
restriction on conversion and transfer thereof pursuant to Section 1.2 of the
Securities Subscription Agreement.
Section 1.2 Issuer hereby releases DCJH of any and all
responsibilities under the Securities Subscription Agreement and waives any
and all claims it may now or hereafter have against DCJH thereunder. Issuer
agrees that DCJH shall not be responsible for any closing activities or
conditions necessary to be satisfied under the Securities Subscription
Agreement, including without limitation the closing activities set forth in
Section 1.4 and the closing conditions set forth in Article 6 of the
Securities Subscription Agreement.
Section 1.3 Section 3.2 of the Securities Subscription
Agreement is hereby
deleted in its entirety.
Section 1.4 Issuer, Subscriber and DCJH agree that
following the execution of this Amendment by each party hereto, DCJH shall no
longer be a party to the Securities Subscription Agreement.
ARTICLE II
MISCELLANEOUS
Section 2.1. EFFECTIVENESS. This Amendment shall come into
full force and effect pursuant to Section 9.7 of the Securities Subscription
Agreement upon execution by the duly authorized representatives of Issuer,
Subscriber and DCJH, and shall be effective as of the date hereof.
Section 2.2. EFFECT ON SECURITIES SUBSCRIPTION AGREEMENT.
Except as expressly amended hereby, the Securities Subscription Agreement
remains in full force and effect.
Section 2.3. GOVERNING LAW AND ARBITRATION. THIS AMENDMENT
SHALL BE GOVERNED IN ALL RESPECTS, INCLUDING AS TO VALIDITY, INTERPRETATION
AND EFFECT, BY THE LAWS OF JAPAN, WITHOUT GIVING EFFECT TO THE CONFLICT OF
LAWS RULES THEREOF. All disputes, controversies or differences which may
arise between the parties hereto out of or in relation to or in connection
with this Amendment shall be finally settled by arbitration conducted in
Singapore in the English language in accordance with the Arbitration Rules of
the SIAC, which rules are deemed to be incorporated by reference into this
Section 2.3. The arbitral tribunal shall be composed of three (3)
arbitrators. In accordance with the relevant rules of the SIAC, Issuer and
Subscriber shall each appoint one arbitrator and the Chairman of the SIAC
shall appoint the third arbitrator who shall not be a citizen of either Japan
or Germany. Any and all awards rendered in any arbitration under this
Amendment shall be final and binding upon the parties and judgment thereon
may be entered into in any court having jurisdiction over the enforcement of
awards rendered pursuant to such arbitration. No party to this Amendment
shall have the right to appeal to any court any award rendered pursuant to
any arbitration under this Amendment. Any award rendered pursuant to any such
arbitration shall include the costs of arbitration, including the fees of
arbitrators. Nothing contained in this Section 2.3 shall be construed to
limit or preclude a party from bringing any action or commencing any
proceeding in any court of competent jurisdiction for injunctive or other
provisional relief to compel any other party to comply with its obligations
hereunder at any time.
Section 2.4. COUNTERPARTS. This Amendment may be executed
in several counterparts, each of which shall be deemed an original and all of
which shall together constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment No. 2 to the Securities Subscription Agreement as of September 28,
2000.
MITSUBISHI MOTORS CORPORATION
By
------------------------------------------------
Name: Xxxxxxxxx Xxxxxxx
Title: President
By
------------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Member of the Board of Directors
DAIMLERCHRYSLER AKTIENGESELLSCHAFT
By
------------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman of the Board of Management
By
------------------------------------------------
Name: Xx. Xxxxxxx Xxxxxx
Title: Member of the Board of Management
DAIMLERCHRYSLER JAPAN HOLDING, LTD.
By
------------------------------------------------
Name: Xxxxxx X. Xxxx
Title: Representative Director, President and CEO
3
