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BETWEEN: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
("THE VENDOR")
AND: ▇▇▇▇▇▇▇ INVESTMENTS (NZ) LIMITED
("THE PURCHASER")
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AGREEMENT FOR SALE AND PURCHASE
OF SHARES
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▇▇ ▇▇▇▇▇▇▇▇ & CO
SOLICITORS
▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
PO BOX 21 850
WAITAKERE CITY
E-615
MEMORANDUM OF AGREEMENT made this 31st day of March, One thousand nine hundred
and ninety five
BETWEEN ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ both of
Christchurch, Company Directors (hereinafter called "the Vendor")
of the first part
AND ▇▇▇▇▇▇▇ INVESTMENTS (NZ) LIMITED at Auckland (hereinafter called
"the Purchaser") of the second part
AND ▇▇▇▇▇▇▇ INVESTMENTS LIMITED, a corporation incorporated pursuant
to the Laws of the Province of Alberta, Canada (hereinafter
called "▇▇▇▇▇▇▇ Investments Limited (Canada)") of the third part
AND SOLSTAT INDUSTRIES LIMITED a duly incorporated company carrying
on business at Auckland (hereinafter called the "Company") of the
fourth part
WHEREAS
A. THE Company carries on business at Auckland and other parts of New Zealand
and has a nominal share capital of ONE MILLION DOLLARS ($1,000,000.00)
divided into 1,000,000 fully paid up ordinary shares of ONE DOLLAR ($1.00)
each.
B. THE Vendor is the legal and beneficial owner of the shares in the capital
of the Company as set opposite their respective names in Schedule "A"
hereto (hereinafter called "the said shares") and the trade matrix,
"Solstat" and "Solstor".
[INIT.]
E-616
2
C. THE Vendor has agreed to sell to the Purchaser the respective shares in the
capital of the Company with all rights attaching thereto including the
trade marks "Solstat" and "Solstor" and the Purchaser has agreed to
purchase from the Vendor the said shares in the proportions nominated by
the Purchaser at and for the total purchase price equivalent to the net
asset value of the Company as at the 31st of October 1994 (determined in
accordance with Clause 3.3 herein) plus the sum of $500,000.00 plus G.S.T.
(if any) (see Clause 18) (hereinafter called "the Purchase Price").
D. THE Vendor and the Purchaser are now desirous of formalizing such verbal
arrangement in writing.
NOW IT IS MUTUALLY AGREED as follows:
1.1 INTERPRETATION
(a) ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ are herein collectively
referred to as the "Vendor" and are each individually referred to as
the "Vendor".
(b) THE headings herein (if any) contained are intended for convenience of
reference only and shall form no part hereof nor affect the
interpretation of this Agreement.
(c) IF any covenant, obligation or provision contained in this Agreement
or the application thereof to any person or circumstance shall to any
extent be found to be invalid or unenforceable, the remainder of this
Agreement or the application thereof to any person or circumstance
shall not be affected thereby and each covenant, obligation and
provision of this Agreement shall be separately valid and enforceable
to the fullest extent permitted by law.
[INIT.]
E-617
3
(d) THE words in all the covenants, provisos, conditions and agreements
herein contained which impart the singular number or the masculine
gender shall be read and construed as applying to the plural and each
and every corporate, male or female party hereto and to its and their
heirs, executors, administrators, personal representatives and
successors and assigns, as the case or context requires.
(e) THIS Agreement shall be governed by and interpreted in accordance with
the laws in force in New Zealand. The parties hereto irrevocably refer
to the jurisdiction of the Courts of New Zealand for the determination
of all matters arising hereunder.
(f) THIS Agreement constitutes the entire agreement between the parties
and supersedes all prior contracts, agreements and undertakings
between the parties. No modification or alteration of this Agreement
shall be binding unless executed in writing by these parties. There
are no representatives, warranties, collateral agreements or
conditions affecting this transaction other than as are expressed or
referred to herein in writing.
(g) THE terms, conditions, covenants, agreements, obligations and proviso
contained in this Agreement shall be binding upon and shall enure to
the benefit of the parties hereto and their respective heirs,
executors, administrators, personal representatives and successors and
assigns.
(h) TIME shall be of the essence hereof.
(i) UNLESS stated otherwise, all reference to "Dollars" or "$" shall mean
New Zealand funds.
2. SALE AND PURCHASE OF SHARES
[INIT.]
E-618
4
THE Vendor shall sell and the Purchaser shall purchase all the shares in the
Company with all rights attaching thereto together with the trade marks
"Solstat" and "Solstor".
3. PURCHASE PRICE
3.1 THE purchase price for the shares shall be that sum equivalent to the sum
total of the nett tangible asset value of the Company as at the 31st of
October 1994 (being a sum not less than $1,000,000.00), (as determined in
accordance with Clause 3.3) together with the sum of $5,000,000.00.
E-619
3.2 THE date of settlement shall be the 31st day of July 1995 (hereinafter
called "the Settlement Date").
3.3 IN order to determine the Purchase Price in accordance with the provisions
of the preceding sub-clause the parties agree that the firm of COOPERS &
▇▇▇▇▇▇▇, Chartered Accountants, Whangarei shall complete a review of the
financial information of the Company as at the 31st day of October 1994 in
order to confirm the nett tangible asset value of the Company as at the
31st day of October 1994 and shall undertake on the 31st day of March 1995,
or as soon as practicable thereafter, an audit of the Company's financial
position (including a stock-take in respect of the Company's
stock-in-trade). The audit shall exclude from the net asset value
calculation the following:
(a) any obsolete and unsaleable items of stock
(b) any unusable or unserviceable items of plant, fixtures and fittings
(c) all debtors having an age of one hundred & twenty (120) days or more
as at the date of the audit and any known bad debts existing at that
date.
The audit shall recognize the trade marks "Solstat" and "Solstor" PROVIDED
HOWEVER that for the purpose of the audit referred to herein no value shall
be
[INIT.]
E-620
5
attributed to the trade marks "Solstat" and "Solstor".
Otherwise, the audit shall be carried out in accordance with generally
accepted accounting principles applied on a consistent basis.
Any dispute in this regard shall be referred for determination to the
President of the NZ Society of Accountants for the time being or his
nominee, whose decision shall be final.
3.4 THE parties shall use their best endeavours to complete the audit referred
to herein as soon as practicable after the 31st day of March 1995.
3.5 THAT in the event that debtors and known bad debts existing at the 31st day
of March 1995 (whether included in the audit of Coopers and ▇▇▇▇▇▇▇ in
terms of Clause 3.3 as being part of the net tangible asset of the Company,
or otherwise) are not paid within one hundred & twenty (120) days or date
of invoice by the Company then such sum of debtors and known bad debts
(including G.S.T) (hereinafter called "Bad Debts") shall be deducted from
the Purchase Price on the Settlement Date, and such Bad Debts shall then
become the sole property of the Vendor.
The Purchaser hereby agrees after the Settlement Date to endeavour to
collect all outstanding debtors and those sums collected will be treated as
the property of the Vendor and forthwith be credited to their solicitor's
trust account or otherwise as directed by them.
3.7 THE Purchase Price excludes interest and the parties agree that where in
relation to this Agreement it is necessary to determine an acquisition
price for the
[INIT.]
E-621
6
purposes of Sections 64B and 64M of the Income Tax ▇▇▇ ▇▇▇▇ the consideration
payable under this Agreement is the lowest price the parties would have agreed
upon for the sale and purchase of the shares in terms of Paragraph (c)(1) of the
definition of a "core acquisition price" in Section 64B of that Act.
4 PAYMENT OF PURCHASE PRICE
4.1 THE Purchase Price shall be paid as follows:
(a) THE sum of FIFTY THOUSAND DOLLARS ($50,000.00) by way of deposit and
in part payment of the Purchase Price on the execution of this
Agreement. This sum shall not be refundable to the Purchaser unless
the Vendor shall default in settlement of this Agreement.
(b) THE balance of the Purchase Price (hereinafter called "the balance of
Purchase Price") shall be satisfied as follows:
(i) AS to the sum representing 60% of the Purchase Price, in cash in
one lump sum, including any payments already made.
(ii) AS to the balance of the Purchase Price by way of transfer to the
Vendor of fully paid ordinary shares in ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) equivalent in value to 40% of the Purchase Price
and otherwise in accordance with the provisions of Clause 21
herein.
The Purchase Price shall be allocated amongst the Vendors (and/or
their respective nominees) on a pro rata basis in accordance with the
number of the said shares that they hold.
The Vendor may elect to alter the proportions of consideration
referred to herein that are paid in cash or by way of shares in
▇▇▇▇▇▇▇ INVESTMENTS LIMITED (CANADA) PROVIDED HOWEVER that any
[INIT.]
E-622
7
such election shall not entitle the Vendor to require the Purchaser to pay
more than 60% of the Purchase Price in cash.
(c) ON the Settlement Date and as at the Settlement Date, the Purchaser
will forthwith arrange to repay, refinance or rearrange the Company
indebtedness with Wesptac Banking Corporation and shall arrange for
the Vendor to be unconditionally released from the Guarantees given in
respect of such indebtedness.
4.2 ALL parts of the Purchase Price not paid on the due date bear interest at
the rate of 5% above the Bank of New Zealand base lending rate (commercial)
such interest to be calculated on a daily basis and to be payable upon
demand.
5. NOTWITHSTANDING the transfer now made by the Vendor to the Purchaser of the
said shares so sold, such transfer of shares is hereby acknowledged by the
Purchaser to be without prejudice to the repayment of the said monies (if
any) still owing to the Vendor hereunder and to the Vendor's rights to
recover the same from the Purchaser.
6.1A ON the Settlement Date the Vendor will hand to the Purchaser at the office
of the Vendor's Solicitor or such other place as may be mutually agreed
upon:
(a) TRANSFERS of the said shares in the Company to the Purchaser executed
by the Vendor (and each of them) in registerable form.
(b) THE share certificates (if any) for the said shares.
(c) RESIGNATIONS in writing of the Vendor and all Officers of the Company
including Directors and Secretary (excluding the vendor, ▇▇▇▇
▇▇▇▇▇▇▇▇) and an acknowledgement by each of them, and by each and
every Shareholder of the Company, that no monies are owing to any of
them whatsoever whether by way of fees, salary or otherwise.
[INIT.]
E-623
8
(d) COMMON Seal, Certificate of Incorporation, Share Register, Mortgage
Register, Minute Book, Books of Account, Memorandum and Articles of
Association, Ownership documents of all descriptions (including
Certificates of Title of land (if the Company owns land) and motor
vehicle registration papers), all other books, papers and assets of
the Company together with any Leases including Leases of real estate
(subject to the provisions of paragraph 7(u)).
(e) A Certificate to the effect that all representations and warranties
provided by the Vendor and the Company in this Agreement are true and
correct on and as at the Settlement Date.
(f) CERTIFIED copies of Resolutions of the Company authorising the
transfer of the said shares to the Purchaser and the issue of share
certificates representing the said shares registered in the name of
the Purchaser.
(g) EXECUTED escrow agreement(s) that may be required or requested by The
▇▇▇▇▇▇ Stock Exchange.
6.1B ON the 31st day of march 1995, and only after payment of the deposit of
$50,000.00 referred to in Clause 4.1(a) hereof, the Vendor and the Company
shall accept appointment of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as a Director of the Company
6.2 THE Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS LIMITED (CANADA) represent and
warrant to the Vendor and acknowledge that the Vendor is relying upon such
representations and warranties as follows:
(a) THE Purchaser is a duly incorporated, validly subsisting company under
the Laws of New Zealand and has the requisite corporate power and
[INIT.]
E-624
9
authority to own its assets, to conduct its business as it is now
being conducted and is duly qualified to carry on business in each
jurisdiction in which the nature of its business makes such
qualification necessary;
(b) ▇▇▇▇▇▇▇ INVESTMENTS LIMITED (CANADA) is a duly incorporated validly
subsisting corporation under the laws of the Province of Alberta,
Canada, and has the requisite corporate power and authority to own its
assets, to conduct its business as it is now being conducted and is
duly qualified to carry on business in each jurisdiction in which the
nature of its business makes such qualification necessary;
(c) THIS Agreement has been properly authorised, executed and delivered
under the corporate seals of the Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) and constitutes a legal, valid and binding obligation
of the Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS LIMITED (CANADA) enforceable
in accordance with its terms;
(d) THE execution and delivery of the Agreement and the acquisition by the
Purchaser of the said shares in accordance with the terms of this
Agreement will not violate or result in a breach of or default under
any judgement, decree, order, statue, law, regulation, instrument or
Agreement to which the Purchaser is party, subject or bound;
(e) ALL necessary corporate action and procedures have been or will be
taken and all necessary consents and approvals have been or will be
obtained to enable the Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS LIMITED
(CANADA) to enter into this Agreement and consummate the transaction
contemplated hereby (subject to the conditions referred to in Clause
23 hereof);
(f) BROKER INVESTMENTS LIMITED (CANADA) is a "Reporting Issuer" as that
term is defined in the Securities Act (Alberta) and its common shares
are listed and posted for trading on The Alberta Stock Exchange.
6.3 THE representations and warranties of the Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) contained in Clause 6.2 hereof shall be
[INIT.]
E-625
10
for the benefit of the Vendor, and the Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) acknowledge and confirm that the Vendor is relying upon
such representations and warranties. The Purchaser and ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) shall give the Vendor written notice of any facts which
may give rise to a claim under Clause 6.2 hereof with reasonable diligence
after such facts come to their attention.
6.4 THE representations and warranties contained in Clause 6.2 hereof shall be
true and correct on the Settlement Date and shall survive the settlement of
the transaction contemplated by this Agreement and remain in full force and
effect for the benefit of the Vendor.
7. EXCEPT as otherwise specifically provided in this Agreement the Vendor, in
consideration of the Purchase Price, warrants to the Purchaser as follows:
(a) THAT the capital of the Company is as set out in the recitals to this
agreement and that all the said shares in the capital of the Company
are paid up in full and in the case of shares fully or partly paid up
otherwise than for cash, that all the provisions of Section 60 of the
Companies ▇▇▇ ▇▇▇▇ have been duly complied with.
(b) THAT subject to the existing indebtedness with Westpac Banking
Corporation the said shares are free from any lien, charge or other
encumbrance whatever and that no person other than the Vendor
respectively has any legal or equitable interest in the said shares.
(c) THAT there are no monies owing to the Vendor respectively by the
[INIT.]
E-626
11
Company in respect of the said shares.
(d) THAT the Vendor shall not permit to be passed before the Settlement
Date any resolution by the Company altering its share capital or
changing its name.
(e) THAT as shareholders of the Company the Vendor (and each of them) doth
hereby waive any pre-emptive rights which they may have in respect of
the said shares in the Company held by every other shareholder.
(f) THAT as at the Settlement Date the secured company liability to the
Vendor is to be off set against the Shareholder's loan accounts and
the nett balance thereof to be deducted from the Purchase Price.
The Vendor reserves the right to distribute shareholder's salaries out
of profit accumulated as at the 31st day of March 1995 from the 1st
day of November 1994.
(g) THAT no matters of substantial policy of the Company will be decided
prior to the Settlement Date without reference to the Purchaser and
the approval in writing of the Purchaser which approval shall not be
unreasonably or arbitrarily withheld.
(h) THAT they shall not declare, or pay, any distribution or profit or
capital to themselves or any other party in respect of income for the
year ended 31 March 1995 or the Settlement Date (whichever is the
later) or incur any expenditure up to the Settlement Date other than
in respect of salaries at the current rate, motor vehicle expenses,
telephone expenses, interest, entertainment expenses and usual
operating and trading expenses
[INIT.]
E-627
12
at levels already established.
(i) THAT from the date of this Agreement the Vendor being all the
Shareholders of the Company shall, if required by the Purchaser,
continue to provide services to the Company on the same terms and
conditions currently applying up to the Settlement Date and shall be
reimbursed by the Company for such services on the basis currently
existing.
(j) THAT they shall secure the passing of Directors' Resolutions approving
the share transfers transferring their holdings of the said shares in
the Company to the Purchaser and or its nominee.
(k) THAT there are no material contracts, contingent liabilities or
arrangements existing or contemplated relating to the Company
(including, but not limited to, agreements with staff, suppliers or
customers) other than as already disclosed to the Purchaser or those
which arise in the normal course of reasonable and prudent business
operation.
(l) THAT no legal proceedings of any kind are being taken against the
Company and that the Vendor (and each of them) is not aware of any
litigation or legal proceedings against the Company pending or
threatening, or circumstances which may give rise to the same.
(m) THAT they are not aware of any cause of action in respect of which the
Company is not fully indemnified against breach of contract, or other
matter which could or might be used for the purpose of commencing
proceedings either civil or criminal against the Company.
(n) THAT the Company has, as and when required by Law, rendered to the
Revenue authorities all necessary returns (including, but not limited
to, returns in respect of Goods and Services Tax, PAYF, Income Tax and
[INIT.]
E-628
13
Fringe Benefit Tax) and that such returns have been made on a proper
basis and that there is no dispute outstanding with the Revenue
authorities in respect of the same and that all tax for which the
Company is, or has been liable, has been paid for the period ending on
the Settlement Date.
(o) THAT all current licenses, authorities, permits and agreements
required to carry on the business of the Company are at the date
hereof and will at the Settlement Date be in full force and effect.
(p) THAT prior to the Settlement Date the Company shall have complied with
all the requirements of the Companies ▇▇▇ ▇▇▇▇ and any Act or Acts
amending the same in relation to the filing of annual returns and any
other documents required to be filed with the Registrar of Companies.
(q) THAT on Settlement Date there will be no pension, retiring allowance
or other benefit payable by the Company to any employee or Officer of
the said Company (either Director, Secretary or otherwise) on their
retirement or resignation from office or termination of their
employment with the said Company.
(r) THE Vendor shall indemnify and save harmless the Purchaser against any
costs and damages suffered by the Purchaser arising from any liability
that may exist in respect of Agreements and arrangements entered into
prior to the Settlement Date between the Vendor, or the Company and
third parties.
(s) THAT the Vendor shall complete at their own cost in all things any
audit of the Company for the period up to the Settlement Date if an
audit of the Company is required by the Revenue Authorities at any
time.
(t) THAT the net profit of the Company after tax is that which is recorded
as at the 31st day of October 1994 in the attached books of account of
the
[INIT.]
E-629
14
Company attached hereto and marked "Schedule B".
(u) THE Vendor warrants that it has complied in all respects with the
terms of all Leases between the Company and third parties in respect
of real estate, buildings or otherwise AND FUTHERMORE the Vendor
warrants that it shall not commit the Company to any new or renewals
of Leases in respect of real estate, buildings or otherwise without
the written consent of the Purchaser.
(v) THAT it is complied with all terms of agency agreements and
dealerships and that the same will at the Settlement Date be in full
force and effect and that the Vendor shall take all steps to ensure
the smooth and cooperative maintenance of agreements and dealerships
after the Settlement Date.
(w) THAT the Vendor has not provided to any third party any options in
respect of the shareholding referred to herein.
(x) THAT the Vendor warrants that he has not received any claim or
notification from any third party (including customers, purchasers or
otherwise) as to the failure of any product or service provided to
such third party by the Company and furthermore the Vendor hereby
indemnifies and saves harmless the Purchaser and the Company against
any claim which may arise at any time in connection with such failure
where such failure is shown to have occurred on or before the
Settlement Date.
(y) THERE are no outstanding warrants, options or rights to acquire the
said shares or other securities of the Company, or the business,
assets or undertaking of the Company, or any part thereof, and
furthermore, for clarity, but not so as to limit the generality of the
foregoing, no person, firm or corporation has any option or right
(whether at Law, pre-emptive,
[INIT.]
E-630
15
contractual, equitable or otherwise) capable of becoming an agreement
to purchase all or any portion of said Shares, or the business, assets
or undertaking of the Company or any shares or securities of the
Company.
(z) THAT the Vendor shall use its best endeavours to complete all filings
and other matters that may be required to comply with the applicable
securities laws and The Alberta Stock Exchange requirements in order
to give full force and effect to this Agreement.
(aa) THE said shares represent 100% of the issued and outstanding shares in
the capital of the Company and are legally and beneficially owned by
the Vendor herein.
(bb) THE execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby and the fulfilment of and compliance
with the terms and provisions hereof do not and will not:
(i) result in the breach of or violate any term or provision of the
charter, constitution, articles of association, by-laws,
governing documents or internal resolutions of the Company,
(ii) conflict with, result in a breach of, constitute a default under
or accelerate or permit the acceleration of the performance
required by any agreement, instrument lease, license, permit or
authority to which the Vendor or the Company are party or is
subject or by which the Vendor or the Company are bound,
(iii)result in the creation of any lien, charge or encumbrance
against the Company or upon the business, assets or undertaking
of the Company,
E-631
16
purchase, termination, cancellation or acceleration, or
(v) violate any provision of law, statue, rule or administrative
regulation or any judicial or administrative order, award,
judgment or degree binding on or applicable to the Vendor or the
Company,
(cc) THERE is not and will not be any action, claim, proceeding, suit
or governmental investigation contingent, in progress, pending or
threatened, which may affect the said shares, the Company or the
business, assets or undertaking of the Company in any manner
whatsoever or which may affect the ability of the Vendor to
consummate the transactions contemplated by this Agreement;
(dd) THERE are no court actions, charges, judgments, writs, decrees or
injunctions in existence, contemplated or threatened, against or
in respect of [ILLEGIBLE]
(ee) THE Vendor and the Company have done no act or thing whereby the
vendor's title to or interest in the said shares, may be
cancelled, determined or in any way diminished;
(ff) THE Vendor and the Company have done no act or thing whereby the
Company's title to or interest in its business, assets or
undertakings may be cancelled, determined or in any way
diminished;
(gg) ALL necessary consents, authorizations and approvals will be
obtained by the Vendor and the Company and all necessary laws,
regulations, rules and orders have been complied with by the
Vendor and the Company to enable the valid transfer of the said
shares to the Purchaser pursuant to the terms and conditions of
this Agreement;
[INIT.]
E-632
17
(hh) THIS Agreement has been properly authorised, executed and
delivered by the Vendor and the Company and constitutes legal,
valid and binding obligations of the Vendor and the Company;
(ii) THERE are no transfer or resale restrictions on or attached to
the said shares other than as have been disclosed to the
Purchaser and which have been satisfied;
(jj) NEITHER the Vendor nor the Company have entered into any
shareholder agreement or similar agreement with respect to or
affecting the said shares.
(kk) THE Vendor has not entered into any arrangement or agreement in
respect of brokerage or finders' fees or commissions for which
the Purchaser or the Company is or may become liable, except as
otherwise stated herein.
(ll) EACH and every Vendor is a resident of New Zealand.
(mm) THE Company
(i) is a duly incorporated company, validly subsisting under the
laws of New Zealand,
(ii) has the requisite company power and authority to own or
lease its properties and assets and to conduct its business
as it is now being conducted,
(iii) holds all requisite licences, registrations,
qualifications, permits and consents necessary to enable it
to conduct its business as it is now being conducted,
[INIT.]
E-633
18
(iv) is duly qualified to carry on business in each jurisdiction
in which the nature of its business makes such qualification
necessary;
(nn) THE Company has not mortgaged, pledged, charged, encumbered, sold
or alienated any of its properties, assets or businesses in any
manner whatsoever and the title in the Company to its respective
properties, assets or business is not otherwise subject to the
interest or right of any person claiming by, through or under the
Vendor or the Company except as otherwise as set forth and
described in Schedule "B" hereof.
(oo) THE Vendor and the Company are not aware of any material defects
in the title of the Company to its properties, assets, business
or undertaking;
(pp) THE Vendor and the Company are not obligated to obtain the
consent of any person or to provide notice to any person with
respect to the transactions contemplated by this Agreement, nor
do the transactions contemplated by this Agreement give rise to
any rights of first refusal or pre-emptive, preferential or
similar rights of purchase;
(qq) NO contractual commitments or authorisations for expenditures,
whether oral or written, in respect of the Company or the
properties, assets or business of the Company have been given,
entered into, made or effected the Vendor or the Company, except
those which have been disclosed to the Purchaser in writing by
the Vendor, those which have been entered into by the Company in
the ordinary course of its business to provide products and
services to its clients, and as disclosed in the Company's
accounts attached hereto as Schedule "B".
(rr) THE Vendor and the Company have made available to the Purchaser
all material information with respect to the business and affairs
of the Company and all material agreements, undertakings and
arrangements to
[INIT.]
E-634
19
which the Company is a party, subject or bound;
(ss) THE authorised and issued capital of the Company is as follows:
Capital Authorised Issued
------- ---------- ------
$1,000,000.00 $1,000,000.00 $1,000,000.00
(tt) THE said shares have been duly authorised and issued by the
Company as fully paid shares;
(uu) THE Company has no subsidiaries
(vv) THE Company is not a party to any agreement or commitment to
acquire any subsidiary, business, operation or assets;
(ww) THE Company has no liabilities or obligations, contingent or
otherwise, except as set forth and described in Schedule "B"
hereto, and except those which have been disclosed to the
Purchaser in writing by the Vendor;
(xx) THE Company has no benefit plan or profit sharing plan or similar
arrangement, except those which have been disclosed in writing to
the Purchaser by the Vendor;
(yy) THE Company is not a manager or partner in any partnership or
joint venture
(zz) THE Company has no leases or other arrangements for office space,
office equipment or other assets, except those which have been
disclosed in writing to the Purchaser by the Vendor and as
outlined in Schedule "D" hereof.
[INIT.]
E-635
20
(aaa) THE Company has not resolved or undertaken to:
(i) wind up its business or make any alterations to its Articles of
Association or Constitution or to change its name
(ii) make any guarantee, endorsement, accommodation or similar
arrangement
(iii)dispose of any of its properties or assets, except in the
ordinary course of business
(iv) write off, surrender or abandon any accounts receivable or any
right of claim
(v) pay dividends, bonuses or other distributions of any nature or
kind, except as provide for herein
(bbb) THE Vendor is not a creditor of the Company except as set out and
described herein or in Schedule "B"
(ccc) ALL of the acts of the directors, officers and shareholders of the
Company have been duly authorised by the necessary company
proceedings, and the Company is not in contravention of any law,
bylaw, statue, rule, regulation, order, award, judgment or decree;
(ddd) ALL income tax returns of the Company required by law to be filed for
period ending on or before the Settlement Date and all present and
contingent tax liability with respect to such returns has been duly
and properly paid in full by the Company, the Company has not received
a Notice of Reassessment and the Company and the Vendor has no reason
to believe the Company may be reassessed;
[INIT.]
E-636
(eee) THE Company's accounts attached hereto as Schedule "B" have been
prepared in accordance with generally accepted accounting principles
applied on a consistent basis, constitute a true, accurate and
complete statement of the affairs and financial position of the
Company for the period indicated including, without limitation,
provision for taxes,
(fff) THE Company has not made any employment contracts or other
arrangements with any officers, agents, servants or employees of the
Company (other than those which have been disclosed to the Purchaser)
which are terminable on more than one (1) month's notice or which
provide for any payment in excess of normal salaries or wages, and
there are no outstanding loans or guarantees for such persons;
(ggg) NO substantial adverse change has occurred to the financial position,
physical assets or affairs of the Company since the date of the
Company's accounts attached hereto as Schedule "B" and the business of
the Company has been and will be conducted in the usual and business
like manner in the period from the date of this Agreement to the
Settlement Date.
(hhh) THE financial and company records (including the minute book) of the
Company are substantially complete and correct in all material
respects;
(iii) THE Company is in compliance with all environmental and hazardous
chemicals and materials legislation
(jjj) THE Company has paid to date all amounts due or owing to any level of
government for taxes, including company taxes and fees, G.S.T.,
employee withholdings and remittances and licensing fees
(kkk) THE Company has insurance on all of its assets and properties with
financially sound and reputable insurance companies against such
perils as
[INIT.]
E-637
22
is usual with companies holding similar assets and properties and in
an amount not less than their full insurable value, and all premiums
on the same have been paid to the Settlement Date.
(lll) THAT the Vendor shall terminate the Company's superannuation scheme
and distribute the proceeds and benefits thereof to the beneficiaries
of the scheme as at the 31st of March 1995.
7.A NEITHER party shall, without the express consent of the other, make use of
(whether for its own purposes or otherwise), or divulge to any person,
firm, company or other entity whatsoever, any information or facts relating
to any aspect of this Agreement or matters whatsoever relating thereto
except in order to facilitate and advance the process of settlement of this
Agreement.
8. NO covenant or warranty on the part of the Vendor or of the Purchaser shall
be merged or become of no effect upon settlement hereof or any assurances
pursuant hereto but the same shall remain outstanding and binding upon the
Vendor and his respective Executors and Administrators and the Purchasers
according to the tenor thereof.
9. THE Purchaser shall procure by the Settlement Date the release of the
Vendor from all guarantees, indemnities, and other personal covenants,
undertaking, liability for the debts or liabilities of the Company (except
in relation to the Leases of the Company's premises) and shall indemnify
and save harmless the Vendor from and against all liabilities of the
Company, except to the extent that such may be the subject of indemnity by
the Vendor to the Purchaser or the Company by virtue of this Agreement.
The Purchaser shall use its best endeavours to obtain release of the
Vendor's guarantees given in respect of the Company's premises.
10. EACH of the parties undertakes to take all steps, sign all documents and
exercise all rights including voting rights necessary to carry this
agreement into effect.
[INIT.]
▇-▇▇▇
▇▇
▇▇. ALL differences of disputes which may arise between the parties hereto or
any of them touching or concerning this agreement or the construction
thereof or the rights or liabilities of any part hereunder shall be
determined by the arbitration of a single arbitrator if the parties can
agree on one or failing such agreement by two arbitrators (one to be
appointed by the Vendor and the other by the Purchaser) and their umpire in
accordance with the Arbitration ▇▇▇ ▇▇▇▇.
12. (i) IF the Purchaser shall make default in payment of any instalment of
the purchase monies hereby agreed to be paid or in the performance or
observance of any other stipulation or agreement on the part of the
Purchaser herein contained and such default shall be continued for the
space of fourteen (14) days, the time for such payments and
performances fixed by this agreement being strictly of the essence of
the contract, then and in such case the Vendor without prejudice to
their other remedies forthwith or at any time hereafter may at their
option exercise all or any of the following remedies, namely:
(a) ENFORCE specific performance of this Agreement including the
payment of all monies payable hereunder in which case the whole
of the unpaid purchase monies shall be deemed to have become due
and payable to the vendor notwithstanding that the due date of
payment thereof as aforesaid may not have arrived.
(b) RESCIND this contract of sale and thereupon all monies hereto
before paid shall be forfeited to the Vendor.
(c) RE-ENTER upon and take possession of the lands and properties of
the Company without the necessity of giving any notice or making
any form of demands.
(d) RESELL the said shares in the Company either by public auction
[INIT.]
E-639
24
or private contract subject to such stipulations as they may
think fit and any deficiency in price which may result on and all
expenses attending a resale or attempted resale shall be made
good by the purchaser and shall be recoverable by the Vendor as
liquidated damages the Purchaser receiving credit for any payment
in reduction of the Purchase Price. Any increase in price on
resale after reduction of expenses shall belong to the Purchaser.
(e) TO claim from the Purchaser interest on the unpaid portion of the
Purchase Price at that interest rate being 5% above the Bank of
New Zealand based lending rate (commercial) from the due date on
a daily basis and to be repayable upon demand.
(ii) IF the Vendor shall make default in the performance or observance of
any stipulation or agreement on the part of the Vendor herein
contained (hereinafter called "the Default") then the Purchaser
without prejudice to its other remedies, may forthwith, or at any time
hereafter at its option, exercise all or any of the following
remedies:
(a) ENFORCE specific performance of this Agreement
(b) RESCIND this Contract of sale and thereupon all monies hereto
before paid shall be refunded to the Purchaser forthwith as
liquidated damages together with interest on such sums at the
interest rate of 10% per annum from the date (or dates) of
payment by the Purchaser until repayment.
(c) CHARGE to the Vendor an amount representing 10% per annum of the
Purchase Price by way of damages (hereinafter called "penalty
interest") for the period from the Settlement Date (or the date
of default whichever is earlier) to the date upon which the
Vendor shall have performed or observed the said stipulations or
[INIT.]
E-640
25
agreements on the part of the Vendor herein contained or
otherwise remedied the default. The said sum of penalty interest
shall be deducted from the Purchase Price at the Purchaser's
option in the event that this Agreement is eventually performed.
(d) RECEIVE all profits and rents from the Company notwithstanding
that the Settlement Date has passed and the Purchase Price
remains unpaid.
13. IN consideration of the Purchaser entering into these presents at the
request of the Vendor and each of them being Officers of the Comapny
COVENANT with the Purchaser that they (and each of them) shall not for a
period of one (1) year from the Settlement Date, or termination of
employment with the Purchaser, Sealcorp Computer Products Limited or their
respective subsidiaries (whichever is the later) either directly or
indirectly carry on or be engaged or concerned or interested or in
partnership with or as manager, agent or servant in any business or
enterprise involved or associated with the sale at wholesale, retail or
otherwise of all products of the type and nature currently sold by the
Company (and its subsidiaries, if any), and the Purchaser (and its
subsidiaries, if any) and Sealcorp Computer Products Limited (or any of its
subsidiaries, if any). This restraint shall apply to the whole of New
Zealand. This provision shall be altered to the extent and in respect of
those shareholders and specifically referred to in Schedule "C" hereof.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ being Officers of the
Company shall each execute a Deed of Restraint of Trade providing for the
terms referred to herein which Deeds of Restraint of Trade shall be made
available to the Purchaser or its nominee, and any other party taking
benefit thereunder, on the Settlement Date, and shall be prepared at the
cost of the Purchaser.
14. THE Vendor (and each of them) warrant that all information provided and
divulged to the Purchaser in respect of all matters touching upon this
Agreement
[INIT.]
E-641
26
are true and correct and that no material omissions have been made in
respect of the same and furthermore the Vendor (and each of them) HEREBY
INDEMNIFY the Purchaser in respect of the full value of:
(i) UNDISCLOSED liabilities whether revealed before the Settlement Date or
after the Settlement Date, (whether contingent or otherwise,
including, but not limited to, Income Tax, Goods and Services Tax,
Fringe Benefit Tax and PAYE).
(ii) FIXED Assets forming part of this Agreement which are not either
available at the Settlement Date or are not in full operational order
at the Settlement Date and to this end the Vendor shall provide to the
Purchaser at the time of signing this Agreement a full and precise
list of fixed assets including a list of plant fixtures and fittings.
15.1 (a) THE parties acknowledge that the Vendor shall pay to the Company's
employees all monies due and owing to such employees up to the
Settlement Date including but not limited to salary, wages, holiday
pay, commissions, bonuses, and in respect of such payments where
appropriate shall pay the same to the Purchaser on the Settlement Date
in consideration for which the Purchaser on the Settlement Date in
consideration for which the Purchaser shall then assume full
responsibility for these payments on behalf of the Vendor to the
Vendor's employees. In this regard the Vendor shall also provide to
the Purchaser at the Settlement Date a full schedule of employees
together with details relating to the payments referred to herein in
respect of those employees.
(b) THE Vendor shall provide to the Purchaser on execution of this
Agreement the following:
(i) A full list of the Company's employees together with the personal
details of each employee.
[INIT.]
E-642
27
(ii) Current job descriptions of each employee
(iii) Details of each employee's service history and salary
information
(iv) Copies of each employee's Employment Contracts
(v) All such other information as the Purchaser shall reasonably
require.
15.2A THE purchaser shall provide to ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ an Employment
Contract with the Company on new terms and conditions which are
acceptable to both parties. The terms and conditions of the employment
contract shall include the following:
(a) Commnecement Date: 1 April 1995
(b) Income Package: $100,000.00 on target earnings which
shall include base salary of $75,000.00
and commissions. Commissions shall be
based on the budget performance by the
Company for the ensuing year being
equivalent to the gross profit of the
Company for that previous twelve (12)
months preceding the 31st of March 1995.
(c) Vehicle Allowance: An annual vehicle allowance of
$12,000.00
(d) Bonuses An annual bonus based on the performance
of the Company in relation to the
Company's target being 30% above the
gross profit for the previous twelve
(12) month period to a maximum of
$13,000.00 per annum payable in cash or
by way of shares in ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) (at the option of the
Vendor).
15.2B THE Purchaser shall employ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ for that period 1
April 1995 to the Settlement Date at an annual salary of $12,000.00
per annum.
16. (i) IN consideration of the Purchase Price the Vendor (and each of them)
give up the full right, interest and use of the name SOLSTAT
[INIT.]
E-643
28
INDUSTRIES LIMITED (or any part of that name as required by the
Purchaser) from the Settlement Date and the Vendor (and each of them)
shall execute all documents and do all things necessary to satisfy
this provision including, if required by the Purchaser, execution of
Transfer or assignment of Trade ▇▇▇▇ or otherwise in favour of the
Purchaser and/or its nominee.
(ii) THE Vendor shall transfer to the Purchaser all of its intellectual
property rights and interests (including all designs, logos, Trade
Marks, names, licences, permits, consents and other authorizations)
used by the Vendor and the Company in the conduct of the business of
the Company.
17. SUBJECT to earlier provisions herein the parties shall bear their own costs
in connection with preparation, execution and settlement of this Agreement
and all incidental attendances thereto PROVIDED HOWEVER that the Purchaser
shall meet the reasonable costs of the Vendor's solicitor in connection
with preparation, execution and registration of the mortgage of shares
referred to in paragraph 4.1(b) herein.
18. UNLESS otherwise expressly stated herein the parties are contracting on the
understanding that the supply made pursuant to this Agreement is a supply
within Section 11(1)(c) of the Goods and Services Tax ▇▇▇ ▇▇▇▇ on which
G.S.T. is chargeable at the rate of zero percent PROVIDED THAT if it
transpires that any G.S.T. is payable in respect of the supply then:
(a) THE Purchaser shall pay to the Vendor the G.S.T. which is so payable
in one sum on the Settlement Date or such later date that the parties
may agree upon.
(b) IF the supply under this Agreement is a taxable supply the Vendor
shall deliver a tax invoice to the Purchaser on or before the
Settlement Date or
[INIT.]
E-644
29
such earlier date as the Purchaser is entitled to delivery of an
invoice under the G.S.T. Act.
(c) WHERE G.S.T. is not paid to the Vendor by the Purchaser where such
payment is legally payable, then the Purchaser shall pay to the Vendor
(i) INTEREST at the rate of 10% per annum on the amount of G.S.T.
unpaid from the date referred to in paragraph 21(a) herein until
payment; and
(ii) ANY default G.S.T., being any additional G.S.T. penalty or any
other sum levied against the Vendor by reason of non payment
within the meaning of the G.S.T. Act other than any sum levied
against the Vendor by reason of a default by the Vendor after
payment of G.S.T. to the Vendor by the Purchaser.
19. THE Purchaser will not exploit (whether directly or indirectly) for the
Purchaser's own purposes any customer information or any other information
imparted to or acquired by the purchaser in the course of the Purchaser's
review of the business of the Company and in the course of all negotiations
and other matters incidental to the sale and purchase. The Purchaser
undertakes, that it will not, without prior written consent of the Vendor,:
(a) USE this information for any purpose other than to consider whether to
buy the said shares in the Company
(b) DISCLOSE to any other party any information provided by the Vendor
relating to the Company
(c) COPY in any form any of the customer information provided to the
Purchaser by the Vendor or acquired by the Purchaser, and, if required
by the Vendor, shall return such information immediately to the Vendor
and
[INIT.]
E-645
30
shall keep confidential such information.
(d) SOLICIT the Company's suppliers, distributors, clients or staff.
This provision shall apply only up to the date that this Agreement becomes
fully unconditional and is settled in full.
20. FOR the sake of clarity the parties acknowledge that the Company occupies
those premises referred to in Schedule "D" as tenants.
21. (a) NOTWITHSTANDING the provisions of Clause 4.1(b) herein the Purchaser
at its own unfettered and absolute discretion shall have the option of
satisfying that portion of the purchase price as recorded in Clause
4.1(b) herein in cash in one lump sum instead of transferring to the
Vendor shares in ▇▇▇▇▇▇▇ INVESTMENTS LIMITED (CANADA) as otherwise
provided for therein.
(b) FOR the sake of clarity the parties acknowledge that the number of
shares that shall be transferred to the Vendor (subject to the
provisions of Clause 21(a) herein) in satisfaction of the balance of
the Purchase Price in accordance with the provisions of Clause 4.1(b)
herein shall be based on the said shares in ▇▇▇▇▇▇▇ INVESTMENTS
LIMITED (CANADA) having a value equivalent to the listed value of such
shares on the Alberta Stock Exchange Canada at 10.00 a.m. (Canada
time) on the settlement date. The parties shall also take into account
the exchange rate between New Zealand dollar and the Canadian dollar
at that time to the intent that the exchange rate shall be the buy
rate in New Zealand dollars for Canadian dollars at 10.00 a.m. (Canada
time) on the day the transfer of the said shares shall take place.
(c) THE Vendor acknowledges that the shares in ▇▇▇▇▇▇▇ INVESTMENTS
[INIT.]
E-646
31
LIMITED (CANADA) shall be subject to such restrictions on transfer
provided for by the Securities Act (Alberta) or such other Laws that
may apply and that the shares in ▇▇▇▇▇▇▇ INVESTMENTS LIMITED (CANADA)
shall also be subject to such escrow conditions and other restrictions
that may be impacted by The Alberta Stock Exchange. The Vendor hereby
agrees to enter into such escrow agreement(s) that may be requested by
The Alberta Stock Exchange.
22. EXECUTION of the Agreement by all parties referred to herein shall bind
each of those parties to this Agreement as if they were contracting parties
to the same in respect of those provisions to which their obligations
[WORD?]
23. THIS Agreement is conditional upon the following:
(a) APPROVAL in all respects, and at the absolute and unfettered
discretion, of the Board of Directors of ▇▇▇▇▇▇▇ INVESTMENTS LIMITED
(CANADA) by the 31st day of March 1995.
(b) UPON the Purchaser, prior to the Settlement Date, obtaining from the
Lessors under the Leases of the Company's premises confirmations that
such Lessors consent to the transfer of the said shares without any
onerous conditions being imposed by the Lessors as a pre-requisite to
such consent being available to the Purchasers.
(c) APPROVAL in all respects, and at the absolute and unfettered
discretion, of the Securities Commission of Canada (or similar
regulatory body for the time being in Canada).
(d) APPROVAL in all respects, and at the absolute and unfettered
discretion, of The Alberta Stock Exchange any other regulatory body
(in addition to the body referred to in sub-paragraph (b) herein)
being a body whose consent and authority is necessary to the transfer
of shares in ▇▇▇▇▇▇▇
[INIT.]
E-647
32
INVESTMENTS LIMITED (CANADA) as proposed in terms of these presents.
The Vendor and the Company shall provide to the Purchaser and its
solicitors access to all its financial, company and other records and
information and shall provide to the Purchaser such other information that
The Alberta Stock Exchange may require or such other information as the
parties shall herein require in order to advance the approval of the
conditions herein.
24 (i) UPON payment of the deposit referred to in Clause 4.1(a) herein
the parties acknowledge that provided the Purchaser completes
settlement of this agreement in accordance with the terms herein
the parties agree that the Purchaser shall from the 31st day of
March 1995 be the sole beneficiary of the Company's undertaking
to which end the Vendor shall hold in trust for the Purchaser the
said shares.
(ii) THE outgoings and incomings of the Company shall be apportioned
between the parties on the 31st day of March 1995.
(iii) THIS provision is entirely conditional upon completion of
settlement by the Purchaser as aforesaid.
25. THIS Agreement may be signed in any number of counterparts, each of which
shall be signed by authorised signatories on behalf of the parties, which
together shall constitute one agreement binding on the parties
notwithstanding that the parties are not signatories to the original or
same counterpart.
26. THE parties may sign a counterpart copy of this Agreement by photocopying a
facsimile thereof and signing that photocopy. The transmission by facsimile
by a party to another party of a counterpart copy of this Agreement so
signed shall be proof of signature of the original and the signed facsimile
so transmitted shall be deemed an original.
[INIT.]
E-648
33
SCHEDULE A
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 555,560 shares
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 444,440 shares
SCHEDULE B
COMPANY'S ACCOUNTS
See Attached
SCHEDULE C
The Restraint of Trade provision referred to in paragraph 13 of the Agreement
shall, in respect of ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ apply from the time he ceases
employment with the Company, or ▇▇▇▇▇▇▇ INVESTMENTS (NZ) LIMITED or SEALCORP
COMPUTER PRODUCTS LIMITED (or any of their respective subsidiaries), whichever
is the later and in respect of ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, the restraint provision
referred to in paragraph 13 shall apply from the Settlement Date unless ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ enters into employment with the abovementioned companies (or any
of their respective subsidiaries) in which case the restraint provision referred
to in paragraph 13 shall apply from the time she ceases employment with the said
companies (or any of their respective subsidiaries).
SCHEDULE D
Those premises at:
1. ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇
2. ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇
[INIT.]
E-649
34
IN WITNESS WHEREOF this Agreement has been executed the day and year first
hereinbefore mentioned.
EXECUTED by the Vendor in the presence of: } [ILLEGIBLE]
} [ILLEGIBLE]
EXECUTED by the Purchaser } [ILLEGIBLE]
in the presence of } [ILLEGIBLE]
EXECUTED by ▇▇▇▇▇▇▇ }
Investments Ltd. } Per: [ILLEGIBLE]
[STAMP]
E-650
