DATED17thDAYOFAUGUST2009 Amongst UCMG L.L.C. (Vendor 1) and UNION CARBIDE CORPORATION (Vendor 2) and PETROLIAM NASIONAL BERHAD (Purchaser) _____________________________________________________ AGREEMENT FOR THE SALE & PURCHASE OF SHARES IN (1) OPTIMAL GLYCOLS (MALAYSIA) SDN. BHD.; (2) OPTIMAL OLEFINS (MALAYSIA) SDN. BHD.; AND (3) OPTIMAL CHEMICALS (MALAYSIA) SDN. BHD. ______________________________________________________ CONTENTS

 

“Agreements for

 

 

 

 

 

 

Agreements”

means the agreements to be entered into:

 

“Business Day”

means a day (excluding Saturdays, Sundays and gazetted public holidays in the Federal Territory of Kuala Lumpur, Malaysia and New York, the United States of America) on which banks generally are open in the Federal Territory of Kuala Lumpur, Malaysia and New York, the United States of America for the transaction of normal banking business with the general public;

 

“Completion”

means the completion of the sale and purchase of the Sale Shares in the manner specified in Clause 5.01;

 

“Completion

 

 

Statement”

means the statement to be prepared by the respective external auditor of OGM, OOM and OCM in substantially the form set out in Schedule 3;

 

“Conditions

 

 

Precedent”

means the conditions precedent to this Agreement as described in Clause 4.01;

 

“Consideration”

means the total consideration for the Sale Shares as may be adjusted in accordance with Clause 5.04 and Schedule 2, being the aggregate of Consideration 1, Consideration 2 and Consideration 3;

 

“Consideration 1”

means the consideration for Sale Shares 1, being the sum of United States Dollars Seventy Nine Million (USD79,000,000) ("Initial Consideration 1"), subject to any adjustment in accordance with Clause 5.04 and Schedule 2;

 

“Consideration 2”

means the consideration for Sale Shares 2, being the sum of United States Dollars Three Hundred and Eighty Three Million (USD383,000,000) ("Initial Consideration 2"), subject to any adjustment in accordance with Clause 5.04 and Schedule 2;

 

“Consideration 3”

means the consideration for Sale Shares 3, being the sum of United States Dollars One Hundred and Ninety Eight Million (USD198,000,000) ("Initial Consideration 3"), subject to any adjustment in accordance with Clause 5.04 and Schedule 2;

 

Agreements”

means:

 

 

(a)

the product off-take agreement to be entered into between the relevant Vendor Affiliate and OCM;

 

 

(b)

the technical services agreements to be entered into between the relevant Vendor Affiliate (and Vendor 2 in respect of the agreement with OCM), and each of OGM, OOM and OCM;

 

 

(c)

the supplemental agreements to the technology licence agreements to be entered into between Vendor 2 and each of OGM and OCM;

 

 

(d)

the trademark agreements to be entered into amongst the relevant Vendor Affiliates, Vendor 2 and OCM; and

 

 

(e)

the supplemental agreement to the licence of  complementary assets to be entered into between Vendor 2 and OCM,

 

each in the approved terms;

 

“RM”

means Ringgit Malaysia, the lawful currency of Malaysia;

 

“Sale Shares”

shall bear the meaning ascribed to it in Recital J, and which shares are to be bought and sold on the basis as set out in Clause 2;

 

“Sale Shares 1”

shall bear the meaning ascribed to it in Recital C;

 

“Sale Shares 2”

shall bear the meaning ascribed to it in Recital F;

 

“Sale Shares 3”

shall bear the meaning ascribed to it in Recital I;

 

Agreements”

shall bear the meaning ascribed to it in Clause 2.03;

 

Date”

means the date upon which the last of the Conditions Precedent is fulfilled or waived;

 

“USD”

means United States Dollars, the lawful currency of the United States of America;

 

Account”

means the bank account of Vendor 1, details of which are set out below:

Citibank N.A., New York

ABA [***]

BIC [***]

Account [***],

 

or such other bank account designated in writing by Vendor 1 prior to Completion;

 

Account”

means the bank account of Vendor 2, details of which are set out below:

 

Citibank N.A., New York

ABA [***]

BIC [***]

Account [***];

 

or such other bank account designated in writing by Vendor 2 prior to Completion; and

 

“Vendor Affiliate”

means an Affiliate of Vendor 1 or Vendor 2.

1.02

References herein to Clauses and Schedules are to clauses in and schedules to this Agreement unless the context requires otherwise and the Schedules to this Agreement shall be deemed to form part of this Agreement.

1.03

The expressions "the Vendors" and "the Purchaser" shall, where the context permits, include their respective successors and permitted assigns.

1.04

The headings are inserted for convenience only and shall not affect the construction of this Agreement.

1.05

Unless the context requires otherwise (i) words importing the singular include the plural and vice versa and words importing a gender include every gender; and (ii) references to “RM” or “sen” shall be taken as referring to amounts in the lawful currency of Malaysia, and (iii) references to “USD” or “cents” shall be taken as referring to amounts in the lawful currency of the United States of America.

1.06

A document expressed to be “in the approved terms” means a document the terms of which have been approved by or on behalf of the parties hereto and a copy of which has been signed for the purposes of identification by or on behalf of the parties.

2.01

In consideration of the premises herein:

(a)

Vendor 1 shall sell as legal and beneficial owner of Sale Shares 1; and

 

(b)

Vendor 2 shall sell as legal and beneficial owner of Sale Shares 2 and Sale Shares 3,

and the Purchaser shall purchase the Sale Shares free from all charges, liens and encumbrances whatsoever and with all rights, benefits and advantages attaching thereto as at Completion, for the Consideration. For the avoidance of doubt, the Purchaser shall not be obliged to complete the purchase of the Sale Shares unless the sale and purchase of all (and not some only) of the Sale Shares can be completed simultaneously in accordance with the provisions herein.

2.02

The Purchaser hereby waives all rights conferred on it by the OGM Shareholders’ Agreement, OOM Shareholders’ Agreement, OCM Shareholders’ Agreement, the memorandum and articles of association of each of OGM, OOM and OCM, and any other document, in respect of the sale and purchase of the Sale Shares and hereby permits the sale and purchase of the Sale Shares in accordance with the terms of this Agreement.

2.03

Simultaneous with the execution of this Agreement, the Vendors shall deliver, to the Purchaser, original undated copies of the New Operational Agreements and the Agreements for Termination of Operational Agreements (collectively, “SPA Execution Agreements”) duly executed by the Vendors and/or the relevant Vendor Affiliates (as the case may be) with the intent that these agreements shall only come into effect on Completion. The Purchaser agrees that in the event this Agreement is lawfully terminated or rescinded prior to Completion, it shall forthwith return all the SPA Execution Agreements to the Vendors.

4.01

The completion of the sale and purchase of the Sale Shares is subject to and conditional upon the fulfilment of the following Conditions Precedent, any one of which may be waived jointly by the Purchaser and the Vendors except for the Condition Precedent stated under Clause 4.01(b)(iii) which may be waived solely by the Vendors:

 

(a)

the written approval of MITI for the acquisition by the Purchaser of the Sale Shares; and

 

(b)

if required, the approvals, consents or agreements (as the case may be) of the Lenders pursuant to the relevant financing arrangement entered into by OGM, OOM and/or OCM with such Lenders for:

4.02

The Vendors shall use their reasonable endeavours to enable OGM, OOM and OCM to take all necessary action and/or submit all necessary applications towards the fulfilment of the Conditions Precedent, provided that the Purchaser shall provide reasonable assistance in connection with the fulfilment of the Conditions Precedent. The Vendors shall further procure (with the reasonable assistance of the Purchaser) that OGM, OOM and OCM prepare a list setting out all the Lenders whose approval, consent or agreement (as the case may be) was sought by OGM, OOM and OCM (as

 

(a)

within five (5) Business Days after the parties’ first meeting, notify the other parties in writing of its determination (on a reasonable basis) of whether such terms or conditions imposed are acceptable or unacceptable to it, in which  latter case, the relevant Approval shall be deemed not to have been obtained; and

 

(b)

in such latter case, provided that the Affected Party is of the reasonable opinion that such appeal will not, after taking into account the other parties’ views, be to the disadvantage of the Affected Party, OGM, OCM or OOM:

 

(i)

the Affected Party shall immediately appeal or cause the appeal against such terms or conditions imposed and in so doing, permit the other parties to jointly work and assist the Affected Party's appeal; and

 

(ii)

the Affected Party shall allow the other parties the opportunity to at any time satisfy such terms and conditions on behalf of the Affected Party.

 

(i)

to reject the term or condition, in which event the Approval shall be deemed not to have been obtained; or

 

(ii)

to accept the term or condition or such term or condition as modified by the approving authority or person on appeal, in which event the Approval shall be deemed to have been obtained.

4.04

The Completion of the sale and purchase of the Sale Shares shall be deemed to be unconditional on the date on which the notification of fulfilment or the waiver (granted in accordance with Clause 4.01) of the last of the Conditions Precedent is received or is given by all of the relevant parties or party (as the case may be), being the Unconditional Date. Notwithstanding any other provision herein, it is agreed that henceforth from the Unconditional Date, neither of the parties shall be entitled to terminate this Agreement except in accordance with any rights of rescission or termination set out expressly in this Agreement.

4.05

If the Conditions Precedent shall not have been fulfilled or waived (as the case may be) within sixty (60) days from the date of this Agreement, the parties agree that an automatic extension of thirty (30) days shall be granted to enable the fulfilment of the Conditions Precedent.

 

(b)

subject to the Purchaser’s receipt of all the documents listed in Clause 5.01(a) above, the Purchaser shall:

 

(i)

pay the Initial Consideration to the Vendors in accordance with Clause 3; and

 

(ii)

deliver to the Vendors a counterpart of the Letter of Undertaking and each of the Agreements for Termination of Operational Agreements duly executed by the Purchaser (where it is a party).

5.03

The Purchaser shall forthwith, and in any event no later than thirty (30) days, following the date of Completion, deliver to the Vendors a counterpart of each of the Agreements for Termination of Operational Agreements, New Operational Agreements, the Letter of Undertaking and the Letter of Comfort and Undertaking duly executed by OGM, OOM and OCM (as the case may be).

5.04

Following Completion, the parties agree that if the Completion Net Financial Position of OGM, OOM or OCM (as determined in accordance with Schedule 2) is different from the Benchmark Net Financial Position (as the term is defined in Schedule 2) of OGM, OOM and/or OCM (as stipulated in Schedule 2) respectively, then following Completion, Consideration 1, Consideration 2 and/or Consideration 3 shall be adjusted in accordance with the provisions of Schedule 2.

5.05

With effect from the date of Completion:

 

(a)

subject to Clause 5.05(b) and Clause 5.05(c), the Vendors and the Purchaser discharge and release each other (and their respective legal successors, shareholders, related corporations, employees, officers and directors) from the rights and obligations under the OCM Shareholders' Agreement, the OGM Shareholders’ Agreement and the OOM Shareholders' Agreement, and waive all claims that it has or may have against the other party (and/or its legal successors, shareholders, related corporations, employees, officers and/or directors) under or arising from the OCM Shareholders' Agreement, the OGM Shareholders’ Agreement and the OOM Shareholders' Agreement;

 

(b)

the OCM Shareholders' Agreement and the OGM Shareholders' Agreement shall be terminated but such termination shall be without prejudice to:

 

(i)

the survival of Articles 7.9 and 31 (Indemnification), Articles 22 (Confidentiality), Article 23.1 (Patents), Articles 24.3 (Termination of Ancillary Agreements), Article 27 (Arbitration) and Article 28 (Governing Law);

 

(ii)

the survival of Articles 12.4 (Location of and Access to Books/Records) and 12.8 (Other Financial Reports) only to the extent that they relate to books, records, documents, information and reports relating to the period up to Completion and are necessary for the Vendors to have access to for purposes of its reporting and regulatory requirements; and

 

(iii)

the rights (if any) of (A) Vendor 2 and/or the Purchaser and the consequent liability of any other party arising from any breach of the OCM Shareholders’ Agreement prior to the termination of the OCM Shareholders’ Agreement; and (B) Vendor 1 and/or the Purchaser and the consequent liability of any other party arising from any breach of the OGM Shareholders’ Agreement prior to the termination of the OGM Shareholders’ Agreement,

 

(c)

the OOM Shareholders' Agreement shall terminate as between the Purchaser and Vendor 2 but such termination shall be without prejudice to:

 

(i)

the survival of Articles 7.9 and 31 (Indemnification), Article 22 (Confidentiality), Article 23.1 (Patents), Article 24.3 (Termination of Ancillary Agreements), Article 27 (Arbitration) and Article 28 (Governing Law);

 

(ii)

the survival of Articles 12.4 (Location of and Access to Books/Records) and 12.8 (Other Financial Reports) only to the extent that they relate to books, records, documents, information and reports relating to the period up to Completion and are necessary for the Vendor 2 to have access to for purposes of its reporting and regulatory requirements; and

 

(iii)

unless otherwise agreed in writing between any of the parties to the OOM Shareholders’ Agreement to bind only the parties to such agreement in writing, the rights (if any) of any party to the OOM Shareholders’ Agreement and the consequent liability of the relevant party arising from any breach of the OOM Shareholders’ Agreement prior to the termination of the OOM Shareholders’ Agreement,

6.01

Vendor 1 hereby warrants to the Purchaser that:

 

(a)

Sale Shares 1 are legally and beneficially owned by Vendor 1 free from any claims, options, pledges, charges, liens, equities or encumbrances whatsoever (save for the rights of pre-emption or rights of first refusal set out in the OGM Shareholders' Agreement and memorandum and articles of association of OGM) and that each of the Sale Shares 1 is fully paid-up;

 

(b)

Vendor 1 has unrestricted rights (save for the rights of pre-emption or rights of first refusal set out in the OGM Shareholders' Agreement and the memorandum and articles of association of OGM) to transfer the Sale Shares 1 to Purchaser and to give good and unencumbered title thereto;

 

(c)

Vendor 1 has obtained all approvals, and has taken all such actions, as may be necessary to confer upon it full power and authority to enter into this Agreement and this Agreement, when executed by Vendor 1, will constitute valid and binding obligations on Vendor 1; and

 

(d)

no order has been made or petition presented or resolution passed for the winding-up of Vendor 1 nor has any distress, execution or other process been levied in respect of Vendor 1 or any of its assets or properties nor is there any unfulfilled or unsatisfied judgment or court order outstanding against Vendor 1 that may affect the performance of this Agreement.

6.02

Vendor 2 hereby warrants to the Purchaser that:

 

(a)

Sale Shares 2 and Sale Shares 3 are beneficially owned by Vendor 2 free from any claims, options, pledges, charges, liens, equities or encumbrances whatsoever (save for the rights of pre-emption or rights of first refusal set out in the OOM Shareholders' Agreement, OCM Shareholders’Agreement, and the memorandum and articles of association of each of OOM and OCM) and that each of Sale Shares 2 and Sale Shares 3 is fully paid-up;

 

(b)

Vendor 2 has unrestricted rights (save for the rights of pre-emption or rights of first refusal set out in the OOM Shareholders' Agreement, OCM Shareholders’ Agreement, and memoranda and articles of association of each of OOM and OCM) to transfer the Sale Shares 2 and Sales Share 3 to Purchaser and to give good and unencumbered title thereto;

 

(c)

Vendor 2 has obtained all approvals, and has taken all such actions, as may be necessary to confer upon it full power and authority to enter into this Agreement and this Agreement when executed will constitute valid and binding obligations on Vendor 2; and

 

(d)

no order has been made or petition presented or resolution passed for the winding-up of Vendor 2 nor has any distress, execution or other process been levied in respect of Vendor 2 or any of its assets or properties nor is there any unfulfilled or unsatisfied judgement or court order outstanding against Vendor 2 that may affect the performance of this Agreement.

6.03

The Purchaser hereby warrants to each of Vendor 1 and Vendor 2 that the Purchaser has full power and authority and save for the approvals of MITI and the Lenders under Clause 4.01, has obtained all other relevant approvals to enter into this Agreement and complete the transactions contemplated herein and that this Agreement when executed will constitute valid and binding obligations on the Purchaser.

6.04

Each of Vendor 1, Vendor 2 and the Purchaser hereby undertakes to each other that, as from the date of this Agreement until Completion each will continue to exercise their respective obligations and functions as shareholders to procure that the business of OGM, OOM and OCM is carried on in its usual and ordinary course to maintain its usual operating volumes and business practices consistent with its existing policies and procedures.

6.05

It is agreed that, save and except for the warranties expressly given by Vendor 1,  Vendor 2 and the Purchaser in Clause 6.01, Clause 6.02 and Clause 6.03 respectively, no other representations or warranties, whether implied by law or otherwise, are given

 

by the Vendors to the Purchaser and by the Purchaser to any of the Vendors in connection with or relating to the transactions in this Agreement. Each of the Vendors and the Purchaser hereby disclaims any and all liability for any warranty, representation or any implied term or obligation except for the warranties, terms and obligations expressly set out in this Agreement.

6.06

The warranties set forth in Clause 6.01, Clause 6.02 and Clause 6.03 shall be deemed to be repeated by each of Vendor 1, Vendor 2 and Purchaser respectively as at Completion as if the references therein to the date of this Agreement were references to the date of Completion.

6.07

Each of the Vendors undertakes with the Purchaser that it shall procure the directors it has nominated to the board of directors of OGM, OOM and OCM not to vote in favour of any resolution for the declaration of dividends or other distributions for the period between 31 March 2009 and the date of Completion.

7.01

This Agreement shall be governed by and construed in accordance with the laws of Malaysia.

7.02

Any dispute arising out of or in connection with this Agreement, including any question regarding its existence, validity or termination, shall be referred to and finally resolved by arbitration in Kuala Lumpur in accordance with the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules for the time being in force, which rules are deemed to be incorporated by reference in this clause. In the event of a dispute arising out of or in connection with this Agreement, the parties agree to extend the date for Completion as stipulated in Clauses 5.01 and 9.01(c) as may be necessary to permit sufficient time for the resolution of any such dispute and the completion of the sale and purchase of the Sale Shares thereafter.

 

7.03

The tribunal shall consist of three (3) arbitrators, one (1) to be appointed by the Vendors, one (1) by the Purchaser, and the third shall be appointed by the arbitrators appointed by the Vendors and the Purchaser. If the two (2) arbitrators so appointed cannot agree on the appointment of the third arbitrator, the parties agree that the appointing authority for the third arbitrator shall be the chairman of the Kuala Lumpur Regional Centre for Arbitration. The third arbitrator shall neither be (i) a citizen or resident of Malaysia; nor (ii) a citizen or resident of the United States of America. The third arbitrator shall act as the presiding arbitrator of the tribunal.

7.04

The seat of arbitration shall be Kuala Lumpur and the language for the arbitration shall be English.

7.05

The decision of the tribunal shall be final, binding and incontestable and may be used as a basis for judgments thereon in Malaysia, the United States of America and elsewhere.

9.01

If:

 

(a)

any party (“Defaulter”) shall materially breach any of its obligations under the terms of this Agreement and such breach is either incapable of remedy or if capable of remedy, has not been remedied within seven (7) days of the service of a written notice on the Defaulter requiring such breach to be remedied;

 

(b)

any of the Conditions Precedent is (unless waived) not fulfilled upon the expiry of a period of ninety (90) days from the date of this Agreement;

 

(c)

Completion does not occur within the One Hundred and Twenty (120) day-period as stipulated in Clause 5.01; or

 

(d)

any of the warranties in Clause 6 is untrue, misleading or incorrect in any material respect,

9.02

The provisions of Clauses 7, 9.02, 10, 11, 12.02, 12.03, 12.04, 12.06, and 12.07 shall survive the termination of this Agreement.

Each of the parties agrees and undertakes with the other parties to indemnify and hold the other parties harmless from and against any damage or loss suffered, incurred or sustained by any of the other parties, or to which any of the other parties becomes subject, resulting from, arising out of or relating to any misrepresentation, breach of warranty or non-fulfilment of or failure to perform any covenant or obligation contained in this Agreement by such party.

11.01

Save in respect of:

 

(a)

information which at the time of disclosure is within the public domain or otherwise available to the public;

 

(b)

information which after disclosure comes into the public domain or otherwise becomes available to the public, other than by reason of a breach of this Clause 11;

 

(c)

information which was already known to or otherwise in the possession of the recipient prior to disclosure to the recipient by the provider of the information;

 

(d)

information obtained from any third party or person; or

 

(e)

information which is required to be disclosed by law or by any securities exchange or any supervisory or regulatory body to whose rules the recipient (or its Affiliate) is subject;

any information, data and or contents of documents made available by any party hereto to the other pursuant to the terms of this Agreement shall not, without the prior written consent of such Party be disclosed to any person, firm or corporation not being a party hereto for any purpose other than the implementation of the provisions hereof. Such information data and/or contents of documents may be disclosed to officers, employees and consultants of the respective party but only to the extent required in each instance for the implementation of the terms herein contained.

11.02

Each of the parties to this Agreement undertakes that prior to Completion it will not (save as required by law or by any securities exchange or any supervisory or regulatory body to whose rules any party to this Agreement or its Affiliate is subject) make any announcement in connection with this Agreement unless the other parties have given their respective consent to such announcement.

12.01

Each party shall pay its own costs and disbursements of and incidental to the preparation of this Agreement. Stamp duty on this Agreement and the instrument(s) of transfer in respect of the Sale Shares shall be borne:

12.02

Each notice, demand or other communication given or made under this Agreement shall be in writing and delivered or sent to the relevant party at its address or fax number set out below (or such other address or fax number as the addressee has by five (5) days' prior written notice specified to the other parties):

12.03

This Agreement shall not be assignable.

12.04

This Agreement and the Letter of Undertaking (when signed, countersigned and delivered by all relevant parties to the Letter of Undertaking) constitute the whole agreement between the parties and it is expressly declared that no variations hereof shall be effective unless made in writing and signed by all parties. The Purchaser acknowledges that it has made its own independent evaluation of the business undertaken by OOM, OGM and OCM and except for the warranties in Clauses 6.01 and 6.02 only, it has not been induced to enter into this Agreement or any of the transactions contemplated hereby by any representation made or advice given by the Vendors. Each party further agrees that its only remedy for any of the other parties' breach of the terms of this Agreement shall be an action for breach of contract and hereby agrees that it will not bring any claim for damages in respect of tort in respect of any matter relating to or connected with this Agreement.

12.05

The provisions of this Agreement including the warranties herein contained, insofar as the same shall not have been fully performed at Completion, shall remain in full force and effect notwithstanding Completion.

12.06

Notwithstanding any provision to the contrary in this Agreement, no party shall be liable to any other party for any consequential losses or indirect losses as a result of a breach of this Agreement. The parties further acknowledge and agree that the only remedy available to it in respect of a breach of any provision of this Agreement shall be for damages for breach of contract and that each party shall have no claim or remedy in tort or any other causes of action in respect of such breach.

 

12.07

All warranties, undertakings, covenants, agreements and obligations given or entered into by the Vendors are given or entered into by each of Vendor 1 and Vendor 2 severally, and not jointly.

 

12.08

The Vendors and the Purchaser shall do and execute or procure to be done and executed all such further acts, deeds, things and documents as may be necessary to give effect to the terms of this Agreement.

12.09

Time for the performance of the obligations under this Agreement shall be of the essence.

12.10

This Agreement may be executed in several counterparts (whether original or facsimile counterparts) and upon due execution of all such counterparts by one or more parties (so that each party has executed at least one counterpart), each counterpart shall be deemed to be an original of this Agreement but all the counterparts shall together constitute one and the same instrument.

Signed by:     Patrick Gottschalk

)

)

/s/ Patrick Gottschalk

for and on behalf of

)

Chief Executive Officer

)

)

in the presence of :

)

Erin M. Royalty

Signed by

)

)

for and on behalf of

)

/s/ Datuk Nasarudin Md Idris

)

)

in the presence of :

)

Emran Othman