THIS AGREEMENT made the 24th day of March 1995.
PARTIES:
1. THE NUMBER ONE SOFTWARE COMPANY LIMITED a duly incorporated company
having its registered office at Auckland ("the vendor"); and
2. XXXXXXX INVESTMENTS (NZ) LIMITED a duly incorporated company having its
registered office at Whangarei ("the purchaser").
BACKGROUND:
A. The vendor carries on business in New Zealand as distributors of software
at wholesale, resellers of software, providers of computer software and
hardware support and resellers of computer hardware.
B. The vendor has agreed to sell and the purchaser has agreed to purchase
that part of the vendor's business comprising the wholesale distribution
of computer software in New Zealand under distribution agreements from
the following:
1. Lotus Development Pty Ltd ("Lotus")
2. Micrografx Inc ("Micrografx")
3. I.B.M. N.Z. Ltd ("IBM")
4. Logitech Inc ("Logitech")
NOW IT IS AGREED that the vendor sells and the purchaser purchases the
distribution arm of the vendor's business upon and subject to the terms of this
agreement:
1. DEFINITIONS:
The following words and terms shall have the definitions set out:
1. The distribution arm of the vendor's business - the Lotus
Distributorship and all or such of the Secondary Distributorships
as the vendor shall be able to arrange the assignment or transfer
or grant of to the purchaser together with all the vendor's stock
in relation to such of the distributorships as are assigned or
transferred or granted to the purchaser.
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2. The Lotus Distributorship: the distribution agreement with Lotus
Development Pty Limited for distribution in New Zealand of Lotus
Software.
3. The Secondary Distributorships: distribution agreements with
Micrografx, IBM and Logitech for distribution in New Zealand of
their computer software.
4. The Condition Date: 31 March 1995
5. The settlement date: 28 April 1995
6. The purchase price: The sums set out in Clause 4.2
7. Xxxxxxx: Xxxxxxx Investments Limited (Canada)
8. Interest rate for late settlement: 16% p.a.
2. LOTUS DISTRIBUTORSHIP:
2.1 This agreement is entirely conditional on the vendor arranging the
assignment of its existing agreement for distribution of Lotus computer
software in New Zealand to the purchaser, or on the vendor arranging for
Lotus to grant to the purchaser such a distributorship on terms and
conditions not less favourable to the purchaser than the terms and
conditions currently enjoyed by the vendor under its existing Lotus
Distributorship with effect from the settlement date.
2.2 The vendor and the purchaser agree that following satisfaction of the
conditions in clauses 12.1.1 and 12.1.3 that they will both use their
best endeavours to satisfy the condition set out in Clause 2.1 hereof.
The purchaser agrees that for the purposes of satisfaction of the
condition in Clause 2.1 the purchaser will provide to Lotus all financial
and other information required by Lotus in order to enable Lotus to
consider the assignment or grant of the Lotus distributorship to the
purchaser, and the purchaser will enter into such usual deed or agreement
with Lotus and will provide such guarantees as shall be required by Lotus
for such purpose.
2.3 Should the condition in Clause 2.1 not be fulfilled by the condition date
or such later date as may be agreed upon by the vendor and the purchaser
then this agreement shall be voidable by notice in writing given by
either party to this agreement and if so voided this agreement shall be
of no further force and effect and both parties shall be released from
their obligations hereunder
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and the deposit monies paid by the purchaser (if any) shall be refunded
in full.
3. SECONDARY DISTRIBUTORSHIPS:
3.1 Subject to satisfaction of the condition in Clause 2.1, the vendor will
use it best endeavours to arrange the assignment of its existing
agreements for distribution of Micrografx, IBM and Logitec computer
software in New Zealand to the purchaser, or alternatively for grant
direct to the purchaser of distributorships from Micrografx, IBM and
Logitec on terms and conditions no less favourable to the purchaser than
the terms and conditions currently enjoyed by the vendor under the
Secondary Distributorships.
3.2 The purchaser agrees that it will use its best endeavours to assist the
vendor in complying with the vendor's obligations under Clause 3.1 and
the purchaser will provide to each of the principals under the Secondary
Distributorships all financial and other information required by them in
order to enble them to consider the assignment or grant of the Secondary
Distributorships or any of them to the purchaser and the purchaser will
enter into such usual deeds or agreements with each of the principals
under the Secondary Distributorships as shall be required by the
principals under the Secondary Distributorships for such purpose.
3.3 In the event that notwithstanding compliance by the vendor with its
obligations under Clause 3.1 the vendor is not able to arrange assignment
or transfer of all or any of the Secondary Distributorships to the
purchaser by the Condition Date with effect from the settlement date then
and in such case:
3.3.1 The vendor shall be entitled to continue to act as distributor for such
of the principals in respect of the Secondary Distributorships as will
not agree to the assignment of their distributorships to the purchaser or
to grant of a distributorship to the purchaser; and
3.3.2 The purchase price payable hereunder shall be adjusted as set out in 4.2.
4. PURCHASE:
4.1 Subject to satisfaction of the condition in Clause 2.1 the vendor agrees
to assign or transfer its Lotus Distributorship to the purchaser, or to
arrange the grant of a
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Lotus Distributorship to the purchaser from Lotus Development Pty Limited
with effect from the settlement date and on terms no less favourable to
the Purchaser than those currently enjoyed by the Vendor.
4.2 In consideration of Clause 4.1 and Clause 3.2 the purchaser agrees to pay
to the vendor the sum of:
1. For transfer or grant of the Lotus
Distributorship $98,600 (plus GST)
2. For transfer or grant of the IBM
Distributorship $15,300 (plus GST)
3. For transfer or grant of the Micrografx
Distributorship $30,600 (plus GST)
4. For transfer or grant of the Logitech
Distributorship $25,500 (plus GST)
4.3 The purchase price shall be paid in one sum on the settlement date.
4.4 The purchase price shall be paid by the purchaser completing the transfer
to the vendor of such number of shares in Xxxxxxx as is required to
equate to a value of the purchase price assessed in accordance with
Clause 4.2 at 10 a.m. New Zealand time on the settlement date. For the
purposes of determining the value of the Xxxxxxx Shares the following
shall apply:
1. The exchange rate shall be the buy rate in New Zealand dollars for
Canadian dollars at 10 a.m. on the settlement date as determined
by the vendor's trading bank, and
2. The Xxxxxxx Shares shall have the listed value shown at 10 a.m. on
the settlement date in the Alberta Exchange, Canada.
4.5 The GST payable on the purchase price shall be paid in cash in one sum on
the settlement date.
4.6 The purchaser shall use its best endeavours to complete the transfer of
shares in terms of Clause 4.4 by the settlement date. In the event that
the purchaser has not completed the transfer of shares by the 31st July
1995 (time being of the essence) then the purchaser shall pay to the
vendor on that date the sum of $NZ17O,000
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cash in lieu of transfer of the Xxxxxxx shares.
5. STOCK:
5.1 In addition to the purchase price plus GST the purchaser shall purchase
from the vendor at the settlement date:
5.1.1 The stock relating to the Lotus Distributorship - being all Lotus stock
held by the vendor at the settlement date; and
5.1.2 The stock relating to such of the Secondary Distributorships as the
vendor has been able to assign or transfer or arrange the grant of to the
purchaser being all stock held by the vendor at the settlement date in
relation to those Secondary Distributorships.
5.2 The vendor and the purchaser and/or their respective appointees shall
carry out a joint stocktake on the evening prior to the settlement date.
The value of each unit of stock shall be as set out in the First Schedule
hereto (plus GST).
5.3 The purchaser shall pay the vendor the actual value of all stock assessed
in accordance with Clase 5.2 to be purchased by the purchaser pursuant to
this agreement plus GST:
1. By a payment of $50,000.00 on the date the conditions in clauses
2.1 and clauses 12.1.1 and 12.1.3 are satisfied (time being of the
essence) and
2. By payment for the balance in cash in one sum on the settlement
date.
6. RISK:
The distribution arm of the vendor's business and all stock in relation
thereto shall remain at the sole risk of the vendor until possession is
given and taken.
7. VENDOR'S WARRANTIES:
7.1 The vendor warrants and undertakes that
7.1.1 At the giving and taking of possession all assets included in the sale
are or will be the unencumbered property of the vendor.
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7.1.2 At the giving and taking of possession all stock included in the sale
will be on the vendor's current price list, will be undamaged and will
not be obsolete, and where applicable will be covered by RMA provisions
of the vendor's distributorship agreements relating to replacement of
stock liable to be replaced or withdrawn.
7.1.3 The vendor will pay and discharge all debts and liabilities incurred or
arising prior to the close of business on the settlement date in
connection with the distributorship arm of the vendor's business or in
respect of any contract dealing or occurrence relating to the
distributorship arm of the vendor's business and shall indemnify the
purchaser from and against all claims proceedings expenses and costs in
connection therewith.
7.1.4 Until possession has been given and taken the vendor will properly carry
on and conserve the distributorship arm of the vendor's business and use
all reasonable endeavours to maintain the turnover and preserve the
goodwill thereof.
7.1.5 The vendor gives no warranty as to turnover of the distributorship arm of
the vendor's business and the purchaser purchases the same solely in
reliance on the purchaser's own enquiries and not on the basis of any
representation or warranty given by the vendor.
7.1.6 The vendor warrants that in respect of the Lotus Distributorship and such
of the Secondary Distributorships as shall be transferred or assigned to
the purchaser or granted to the purchaser as provided in this agreement
as follows: That the vendor has complied (up to the settlement date) in
all material respects with its obligations under the Distribution
Agreements and has received no notification from the principal under the
Distribution Agreements of default on the part of the vendor herein or
cancellation of the agreement.
7.1.7 The vendor will provide the following assistance to the purchaser:
1. Once the agreement is unconditional and the deposit has been paid
the vendor will provide staff training to nominated members of the
purchaser's staff at two courses to be arranged by the vendor at a
time and place to suit the vendor; and
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2. Immediately following settlement date the vendor will advise its
re-sellers of the transaction and will encourage them to accept
the purchaser as distributor in lieu of the vendor.
7.1.8 The vendor warrants that the prices set out in clause 5.2 will be
wholesale cost to the vendor of the stock.
8. RESTRAINT OF TRADE:
8.1 In consideration of the purchase price the vendor hereby agrees with the
purchaser that the vendor will not during the period of two years from
the settlement date either directly or indirectly carry on or be
interested either alone or in partnership with or as manager agent
director shareholder or employee of any other person or entity as
distributors at wholesale of computer software for Lotus Development Pty
Limited and/or such of the principals in respect of the Secondary
Distributorships who agree to the assignment or transfer of such
Secondary Distributorships to the purchaser pursuant to the terms of this
agreement or to the grant of such Secondary Distributorships to the
purchaser pursuant to this agreement within New Zealand.
8.2 The vendor will on or before the possession date procure that its
director Xxxxx Xxxxxxxx enter into a Deed of Covenant with the purchaser
binding themselves to like effect, such Deed of Covenant to be prepared
by and at the expense of the purchaser and tendered to the vendor or the
vendor's solicitor for execution prior to the settlement date.
8.3 For the avoidance of doubt it is agreed that this restraint of trade does
not cover:
1. The vendor acting as a reseller (as opposed to wholesaler) of
computer software covered by the Lotus Distributorship and/or the
Secondary Distributorships or any of them; and
2. The vendor continuing to act as a distributor at wholesale only in
accordance with the terms of clause 3.3.1 hereof.
9. DEFAULT:
9.1 If from any cause whatever save default of the vendor any portion of the
purchase price, or GST thereon, or purchase price for the stock or GST
thereon is not paid upon the due date for payment the purchaser will pay
to the vendor interest at
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the interest rate for late settlement on the portion of the purchase
price GST or price for stock so unpaid from the due date for payment
until payment; but nevertheless this stipulation is without prejudice to
any of the vendor's rights or remedies including any right to claim for
additional expenses and damages. For the purposes of this subclause a
payment made on a day other than a working day or after the termination
of a working day shall be deemed to be made on the next following working
day and interest shall be computed accordingly.
9.2 If the sale is not settled on the settlement date either party may at any
time thereafter (unless the contract has first been cancelled or become
void) serve on the other party notice in writing (hereinafter called a
Settlement Notice) to settle in accordance with the clause; but the
notice shall be effective only if the party serving it is at the time of
service either in all material respects ready able and willing to proceed
to settle in accordance with the Notice or is not so ready able and
willing to settle only by reason of the default or omission of the other
party to the contract.
9.3 Upon service of a Settlement Notice the party on whom the Notice is
served shall settle within twelve (12) working days after the date of
service of the Notice (excluding the day of service) and in respect of
that period time shall be of the essence but without prejudice to any
intermediate right of cancellation by either party.
9.4 If the purchaser does not comply with the terms of the Settlement Notice
served by the vendor then:
9.4.1 Without prejudice to any other rights or remedies available to the vendor
at law or in equity the vendor may:
(a) Xxx the purchaser for specific performance, or
(b) Cancel the contract and pursue either or both of the following
remedies namely:
(i) Forfeit and retain for the vendor's own benefit the deposit
paid by the purchaser, but not exceeding in all 10% of the
purchase price and
(ii) Xxx the purchaser for damages.
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9.4.2 Where the vendor is entitled to cancel the contract the entry by the
vendor into a conditional or unconditional contract for the resale of the
business or any part thereof by the vendor shall take effect as a
cancellation of the contract by the vendor if the contract has not
previously been cancelled and such resale shall be deemed to have
occurred after cancellation.
9.4.3 The damages claimable by the vendor under Paragraph 9.4.1(b)(ii) shall
include all damages claimable at common law or in equity and shall also
include (but shall not be limited) any loss incurred by the vendor on any
bona fide resale of the business or assets contracted within six months
from the date by which the purchaser must settle in compliance with the
Settlement Notice. The amount of that loss may include:
(a) Interest on the unpaid portion of the purchase price at the
interest rate for late settlement from the settlement date to the
settlement of such resale,
(b) All costs and expenses reasonably incurred on any resale or
attempted resale,
(c) All losses incurred by the vendor in carrying on the business from
the settlement date to the settlement of such resale.
9.5 If the vendor does not comply with the terms of a Settlement Notice
served by the purchaser then:
9.5.1 Without prejudice to any other rights or remedies available to the
purchaser at law or in equity the purchaser may
(a) Xxx the vendor for specific performance or
(b) Cancel this contract and thereupon all monies paid by the
purchaser to the vendor pursuant to this agreement shall be
refunded to the purchaser.
9.5.2 The purchaser's rights herein are without prejudice to any other rights,
powers, authorities or remedies it may have at law or in equity.
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9.6 Nothing in this clause shall preclude a party from suing for specific
performance without giving a Settlement Notice.
10. GST:
The parties are contracting on the understanding that the supply made
pursuant to this agreement is a supply within the Goods and Services Tax
Xxx 0000 upon which GST shall be payable by the purchaser, provided that
if the purchaser shall on or before the settlement date obtain a binding
ruling in writing from the Commissioner of Inland Revenue declaring that
the sale is a supply within Section 11(1)(c) of the Act on which GST is
charged but at the rate of 0% then GST shall be charged at that rate
provided that if the Commissioner (before or after the settlement date)
determines that GST applies to this sale at a higher rate then the
purchaser shall pay to the vendor the GST which is so payable together
with all interest thereon and any default GST thereon.
11. PURCHASER'S WARRANTIES:
The purchaser warrants and undertakes:
11.1 That as at the settlement date the Xxxxxxx Shares to be transferred to
the vendor by the purchaser are the sole and unencumbered property of the
purchaser and will pass to the vendor free from any encumbrances liens or
adverse interests whatsoever, and that the purchaser will do all things,
pay all monies and comply with all requirements (if any) necessary or
desirable to complete registration of the shares in Xxxxxxx in the name
of the vendor.
11.2 That the purchaser will indemnify and keep indemnified the vendor from
and against all and any liability under any of the distribution
agreements transferred or assigned by the vendor to the purchaser
pursuant to this agreement and arising after the settlement date and/or
from acts or defaults of the purchaser.
11.3 In the event that the conditions contained in this agreement are not
satisfied the purchaser hereby agrees with the vendor that the purchaser
will not during the period of one year from the date of this agreement
either directly or indirectly carry on or be interested either alone or
in partnership with or as managers
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agents directors shareholders or employees of any other person as
distributors at wholesale of computer software for Lotus Development Pty
Limited or any related company or entity and/or such of the principals in
respect of the Secondary Distributorships within New Zealand. The vendor
will on or before the condition date procure that its directors and
shareholders enter into a Deed of Covenant with the vendor binding
themselves to like effect, such Deed of Covenant to be prepared by and at
the expense of the vendor and tendered to the purchaser or the
purchaser's solicitors for execution.
12. PURCHASER'S CONDITIONS:
12.1 This agreement is entirely conditional on:
1. Approval of the Board of Directors of Xxxxxxx Investments (NZ) Ltd
by 5 pm on the 19th March 1995 and
2. On the purchaser obtaining all the necessary statutory and
regulatory approvals both in New Zealand and Canada (if any) in
order to enable the purchaser to complete this agreement on the
terms set out in this agreement by 5 pm on the condition date.
3. Approval of the Board of Directors of Xxxxxxx by 5 pm on 19th
March 1995.
Should the conditions herein set out not be satisfied by 5 pm on the
dates set out then this agreement shall be voidable at the option of
either party and if voided neither party shall have any further right or
claim against the other.
13. GENERAL:
13.1 The agreement's obligations and warranties of the parties to this
contract and the agreement evidencing it shall not merge with settlement
or with the giving and taking of possession of the distribution arm of
the vendor's business.
13.2 Any notice or communication document or demand requiring to be made or
served herunder shall be in writing signed by the party giving the notice
or by any officer or solicitor of that party and served as follows:
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If to the vendor:
To: Xxxxxx Xxxxxxxxx Tedcastle & Xxxxxxxxxxx
Solicitors
12th floor
Gosling Xxxxxxx Building
63 Xxxxxx Street
Auckland
(Attention: X X Xxxxxxx)
If to the purchaser:
To: Xx Xxxxxxxx & Co.
Solicitors
Xxxxx 0
000 Xxxxx Xxxxx Xxxx
Xxxxxxxxx.
13.3 This agreement shall be governed and construed under the law of New
Zealand and the New Zealand courts shall be the forum for any actions or
proceedings under or arising out of this agreement.
IN WITNESS WHEREOF these presence were executed the day and year first herein
before written.
SIGNED for and on behalf of NUMBER ) /s/ [ILLEGIBLE]
ONE SOFTWARE COMPANY LIMITED ) Director
in the presence of: )
/s/ [ILLEGIBLE]
00 Xxxx Xxxxxx
[ILLEGIBLE]
Personal Assistant
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SIGNED for and on behalf of XXXXXXX ) /s/ [ILLEGIBLE]
INVESTMENTS (NZ) LiMITED ) C.E.O.
in the presence of: )
Xxx Xxxxxxxx
General Manager
00 Xxxxx Xxxxxxx
[ILLEGIBLE]
Auckland
2902S/1-13
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DATED 199
--------------------------------
BETWEEN: THE NUMBER ONE
SOFTWARE COMPANY
LIMITED
"the vendor"
AND: XXXXXXX INVESTMENTS
"the purchaser"
--------------------------------
AGREEMENT FOR SALE AND PURCHASE
OF THE DISTRIBUTION ARM OF THE
VENDOR'S BUSINESS
--------------------------------
--------------------------
XXXXXX XXXXXXXXX TEDCASTLE &
XXXXXXXXXXX
SOLICITORS
AUCKLAND
2902S
E-614
