Page: 1 of 1
INTERNET HOLDINGS, INC
X.X. XXXXXX (GHANA) LTD
1. AGREEMENT FOR SALE OF PROPERTY & OTHER
ASSETS AT X.X. XXXXXX, ACCRA, GHANA
2. AGREEMENT TO FORM JOINT VENTURE TO EXPLOIT
INTERNET RELATED OPPORTUNITTIES IN WEST AFRICA
43
Date: 19th May 1997
Parties to this Agreement:
1. Internet Holdings, Inc of 00 Xxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, XX
00000, XXX ("INHI")
AND
2. X.X. Xxxxxx (Ghana) Limited of Xxxxxxx Xxxxx, 0 Xxxxxxxx Xxxx Xxxx,
Xxxxxxx Xxxx, Xxxxx, Xxxxx ("WFC")
Definitions:
1. "The Property" means those buildings and land owned by WFC in the Accra
industrial zone more particularly described in Appendix 1 hereto.
Whereas:
A. WFC is a long established Ghanaian company with operations and
infrastructure in many parts of Ghana;
B. INHI has expertise in technology related to the Internet and ISDN
(Integrated Services Digital Network);
C. WFC wishes to sell and INHI wishes to purchase The Property;
D. WFC and INHI wish to enter into a joint venture to market Internet
services in West Africa.
Now it is hereby agreed as follows:
1. Obligations of WFC
1.1. WFC hereby transfers to INHI the Property as more particularly defined in
Appendix 1.
1.2. WFC hereby warrants that it will take all necessary actions to transfer
good and marketable title to the Property to INHI.
Page 2 of 6
1.3. In the event that WFC does not fully transfer such title in a good and
timely fashion then INHI may at its sole option terminate this agreement.
1.4. WFC hereby undertakes to invest 50% (fifty percent) of the proceeds of
sale of the Property received by WFC into the proposed INHI/WFC joint
venture.
2. Obligations of INHI
2.1. In consideration of the matters set out in Clause 1 above INHI will pay
to WFC the sum of US$2,250,000 (two million two hundred and fifty
thousand United States dollars) within 120 (one hundred and twenty days)
of the date of this agreement.
2.2. In the event that the payment set out in this Clause 2 is not made in a
timely fashion then all rights granted under this agreement and any other
agreement entered into by INHI pursuant to or associated with this
agreement will lapse.
2.3. At the sole discretion of WFC payment of the sum set out in this Clause 2
may be made either in cash or shares or loan stock or in some combination
or variation of these and once any such payment or part of it is accepted
in a particular form by WFC then this shall constitute satisfaction of
that portion of INHI's pro-rata obligations under this Clause 2 of this
agreement.
2.4. Within 30 days of the date of this agreement INHI will enter into a lease
with WFC for the following portions of the Property as described on the
site plan:
2.4.1. Factory Area
2.4.2. Car Park 2
2.4.3. Car Park 4
2.4.4. Storage Area
2.4.5. Office Numbers 1 through 4 and 6
2.4.6. Access to the common parts of the site to reach the above premises
2.5. Pending the execution of the said lease WFC shall continue to have access
to the above mentioned premises on the current basis.
Page 3 of 6
3. Obligations of INHI and WFC to enter into Joint Venture
3.1. By the signing of this agreement INHI and WFC hereby signify their intent
to enter into a formal joint venture agreement within 120 days of the
date of this agreement setting out the parties obligations to exploit the
Internet in relation to Ghana and West Africa.
Confidentiality
4. The Parties acknowledge that the contents of this agreement are
confidential to them and are not to be disclosed to any other persons
save on a need to know basis so as to allow each party to carry out its
obligations under this agreement. This agreement is executed in duplicate
and is not to be copied or reproduced or shown to any other party except
as required by law other than with the permission of all the Parties.
Governing Law
5. The construction validity and performance of this agreement shall be
governed by the laws of the State of New York without giving effect to
the conflict of laws principles thereof. The parties hereby submit to the
jurisdiction of the courts of the State of New York, county of New York.
Notice
6. The addresses for service of documents for the Parties shall be as shown
under this agreement.
7. Each party shall give written notice to the other of any change in its
address for service under this agreement.
8. Any notice shall be deemed well served on the party to whom it is
addressed if it is served personally or sent by pre-paid recorded
delivery post addressed to such party at its address for service.
Warranties & Entire Agreement
9. The Parties hereby warrant that all necessary approvals and authorities
have been obtained by them to enable the completion of this agreement and
that the signatories hereto are authorised by their respective
organisations to sign this agreement and to bind the Parties.
10. This contract contains the complete and entire agreement o the parties as
to the subject matter herein. No modification or amendment shall be
effective except in writing signed by the parties hereto.
Signed for and on behalf of Internet Holdings, Inc
/S Xxxxxxxxxxx Xxxxxx
President
Witnessed
/S Xxxxx Xxxxxxxx Xxxx
Signed for and on behalf of X. X. Xxxxxx Limited
/S Xxxx N. D. Xxxxxxxxxx
Managing Director
Witnessed
/S Xxxxx Xxxxxxxx Xxxx
Appendix 1
That property situated at the Accra Industrial Area identified as owned by X. X.
Xxxxxx (Ghana) Limited by Title Number 74698.
All office and factory equipment and fixtures and fittings are included in the
sale except for corporate and business records of X. X. Xxxxxx Ltd, Agritech
(Ghana) Ltd and The Bristol Bond which are identified as being in Office 4.
As soon as practicable but in any event not later than thirty days after the
date of this agreement INHI and WFC will enter into a lease enabling WFC to
occupy those parts of the Property as set out in Clause 2.4 of this agreement
and such other parts of the Property and such equipment as INHI and WFC shall
jointly decide.
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
ACCOUNTS
21 DECEMBER 1996
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
ACCOUNTS
31 DECEMBER 1996
CONTENTS PAGE
General information 1
Statement of directors' responsibilities 2
Report of the accountants 3
Statement of accounting policies 4
Profit and loss account 5
Balance sheet 6
Notes to the accounts 7-8
GENERAL INFORMATION
Directors
Xxx X. Xxxxxxxxxx
Xxxxxxx X. Xxxxxxx
Company secretary and registered office
B R W Xxxxxxxxx, c/o Kidd Rapinet, 00 Xxxxxxx Xxxx, Xxxxxx XX0 0XX
Registered number
2801103
Principal activity
The principal activity of the company continued to be that of selling and
developing digital communications products.
Auditors
Blackborn & Co., Chartered Accountants, Xxxxxx Xxxxx, 000 Xxxx Xxxxxx, Xxxxxxxx
XX0 0XX
Reporting accountants
Xxxx Xxxxx + Co., Chartered Accountants, Little Red Court, 0 Xx. Xxxxxx Xxxxx,
Xxxxxx Xxxx, Xxxxx XX0 0XX
Solicitors
Xxxx Rapinet, 00 Xxxxxxx Xxxx, Xxxxxx XX0 0XX
Bankers
National Xxxxxxxxxxx Xxxx XXX, XX Xxx Xx 00, 00 Xxxxxx Xxxxx, Xxxxxxx, Xxxxx
XX0 0XX
1
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
Copmany law requires the directors to prepare accounts for each financial period
which give a true and fair view of the state of affairs of the company and of
the profit and loss of the company for that period. In preparing those accounts,
the directors are required to:
(bullet) select suitable accounting policies and then apply them consistently;
(bullet) make judgments and estimates that are reasonable and prudent;
(bullet) prepare the accounts on the going concern basis unless it is
inappropriate to presume that the company will continue in business.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
company and to enable them to ensure that the accounts comply with the Companies
Xxx 0000. They are also responsible for safeguarding the assets of the company
and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
2
Xxxx Xxxxx + Co. Little Red Court 7 St. Xxxxxx Xxxxx Xxxxxx
Chartered Accountants Wood Herts EN4 OJH
Telephone 0000 000 0000
(Symbol of chartered
accountants goes here)
ACCOUNTANTS REPORT TO THE DIRECTORS OF
INTERNET HOLDINGS INC. AND CHIRON SYSTEMS LIMITED
In accordance with your instructions, we have audited the accounts set out on
pages 4 to 8 which have been prepared under the historical cost convention and
on the basis of the accounting policies set out on page 4, including in
particular, those relating to the going concern basis and development
expenditure.
It should be noted that, in the absence of a directors' report, these accounts
are incomplete for UK statutory purposes and must not be filed with the
Registrar of Companies.
Respective responsibilities of directors adn auditors
As described on page 2, the directors of Chiron Systems Limited ("the company")
are responsible for the preparation of the accounts. It is our responsibility to
form an independent opinion, based on our audit, on those accounts and to report
our opinion to you.
Basis of opinion
We conducted our audit in accordance with Auditing Standards issued by the
Auditing Practices Board. An audit includes examination, on a test basis, of
evidence relevant to the amounts and disclosures in the accounts. It also
includes an assessment of the significant estimates and judgments made by the
directors of the company in the preparation of the accounts, and of whether the
accounting policies are appropriate to the company's circumstances, consistently
applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and
explanations which we considered necessary in order to provide us with
sufficient evidence to give reasonable assurance that the accounts are free from
material misstatement whether caused by fraud or other irregularity or error. In
forming our opinion we also evaluated the overall adequacy of presentation of
information in the accounts.
Opinion
In our opinion the accounts give a true and fair view of the state of affairs of
the company as at 31 December 1996 and of its profit for the nine months then
ended and have been properly prepared in accordance with the provisions of the
Companies Xxx 0000 applicable to small companies.
/s/ Xxxx Xxxxx
Xxxx Xxxxx + Co.
Chartered Accountants and Registered Auditors
24 February 1997
Xxxx Xxxxx FCA
Registered to carry on audit work and authorized to carry on investment business
by the Institute of Chartered Accountants in England & Wales
3
Xxxx Xxxxx + Co/
CHIRON SYSTEMS LIMITED
STATEMENT OF ACCOUNTING POLICIES
The principal accounting policies which have been adopted in the preparation of
these accounts are as follows:
Accounting convention
The accounts have been prepared under the historical cost convention.
The company meets its day-to-day working capital requirements through an
overdraft facility which, in common with all such facilities is repayable on
demand; the company also enjoys the use of invoice factoring facilities. In
addition to these short-term arrangements, the company has long-term loans (see
Note 9) of (pound sign)250000 which have been used in order to finance the
company's software development programme (see Note 4).
The directors consider that the above finance facilities will continue to be
available to the company; the directors therefore believe it is appropriate to
prepare the accounts on the going concern basis. If the company was unable to
continue trading, notwithstanding the belief and confidence of the directors,
adjustments would have to be made to reduce the value of the assets to their
realisable amounts, to provide for any further liabilities which may arise and
to reclassify fixed assets as current assets.
Development expenditure
Development expenditure relating to specific projects intended for commercial
exploitation is carried forward; it is amortised over the period expected to
benefit from it. Expenditure on pure and applied research is charged to the
profit and loss account in the period in which it is incurred.
Depreciation
All fixed assets are initially recorded at cost. Depreciation is provided on all
tangible fixed assets at the rate of 25% pa of cost in order to write off each
asset evenly over its expected useful life.
Stock
Stock, which comprises raw materials and finished products, is stated at the
lower of cost and net realisable value using the first-in-first-out principle.
Cost includes all direct expenditure and related overheads incurred to the
balance sheet date.
Deferred taxation
In the opinion of the directors, no provision for deferred taxation is
necessary because of the improbability of any liability in the foreseeable
future.
Cash flow statement
The company has taken advantage of the exemption in Financial Reporting
Standard No. 1 from producing a cash flow statement on the grounds that it is
a small company.
4
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE PERIOD FROM 1 APRIL 1996 TO 31 DECEMBER 1996
9 months ended Year ended
31 December 31 March
1996 1996
(pound sign) (pound sign)
TURNOVER 430,408 363,259
COST OF SALES 297,743 228,858
GROSS PROFIT 132,665 134,401
Administrative expenses 103,203 130,663
OPERATING PROFIT BEFORE AND AFTER TAXATION 29,372 3,738
RETAINED PROFIT (LOSS)
As at beginning of period -31,002 -34,740
As at end of period -1,630 -31,002
All income in the period was derived from the continuing activities.
5
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
BALANCE SHEET AS AT 31 DECEMBER 1996
31 December 31 March
1996 1996
(pound sign) (pound sign)
FIXED ASSETS
Intangible 392,556 263,124
Tangible 28,071 38,329
CURRENT ASSETS
Stock 97,440 101,173
Debtors 62,267 63,155
Cash at bank and in hand 334 0
CREDITORS: due within one year 280,208 210,783
NET CURRENT LIABILITIES -120,257 -40,455
TOTAL ASSETS LESS CURRENT LIABILITIES 300,370 260,998
CREDITORS: due after one year 260,000 250,000
CAPITAL AND RESERVES
Called up share capital 52,000 42,000
Profit and loss account -1,630 -31,002
EQUITY SHAREHOLDERS' FUNDS
The directors have taken advantage of special exemptions conferred by the
Companies Xxx 0000 applicable to small companies and have done so on the
grounds that, in their opinion, the company is entitled to those exemptions.
Approved by the Board of Directors on 7 February 1997
I Terdinnick X. Xxxxxx
Director Director
6
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
NOTES TO THE ACCOUNTS
FOR THE PERIOD FROM 1 APRIL 1996 TO 31 DECEMBER 1996
1. TURNOVER
Turnover, which is stated net of VAT, comprises amounts invoiced for sales.
2. OPERATING PROFIT
9 months ended Year ended
31 December 31 March
1996 1996
(pound sign) (pound sign)
The operating profit is stated after charging:
Directors' remuneration(a) 22,156 49,632
Depreciation 7,604 6,963
Auditor's remuneration 3,500 3,500
(a) The amount charged to profit and loss account
includes consultancy fees payable to a related
party (note 1)). Amounts have also been capitalised
as software development (note 4) as follows:
3. TAXATION
No liability to taxation is expected to arise in view of the availability of
losses brought forward.
4. INTANGIBLE FIXED ASSETS
Software
development
(pound sign)
Cost
As at 1 April 1996 163,124
Additions 129,432
As at 31 December 1996 392,556
Additions include capitalised interest of (pound sign) 28,607 (prior period
(pound sign)25,814). Amortisation of this asset is expected to commence in 1997.
In the opinion of the directors, the value of this asset is substantially
greater than its stated cost.
5. TANGIBLE FIXED ASSETS
Plant,
mahinery, etc.
(pound sign)
Cost
As at 1 April 1996 and 31 December 1996 54,443
Dpereciation
As at 1 April 1996 16,114
Charge for period 10,258
As at 31 December 1996 26,372
Net book values
As at 31 December 1996 28,071
As at 31 March 1996 38,329
The chareg for the period comprises (pound sign)7,604 (prior period:
(pound sign)6,963) recorded in the profit and loss account and
(pound sign)2,654 ((pound sign)3,428) capitalised in the additions to software
development (note 4).
7
Xxxx Xxxxx + Co.
CHIRON SYSTEMS LIMITED
NOTES TO THE ACCOUNTS
6. DEBTORS
31 December 31 March
1996 1996
(pound sign) (pound sign)
Trade 55,089 52,859
Other 7,178 10,296
62,267 63,155
7. CREDITORS
Due within one year
Bank and factoring loans and overdraft (secured) 60,324 65,800
Trade 95,202 105,329
Other taxes and special security costs 4,444 11,213
Other 120,328 28,441
280,208 210,783
Due after one year
Bank loans repayable within one adn five years
(secured) 260,000 250,000
8. CALLED UP SHARE CAPITAL
Authorized
90000 A Ordinary shares of (pound sign)1 each 90,000 90,000
10000 B Ordinary shares of (pound sign)1 each 10,000 10,000
100,000 100,000
Issued and fully paid
52000 A Ordinary shares of (pound sign)1 each 52,000 42,000
10000 A Ordinary shares of (pound sign)1 each were issued at par during
December 1996 in satisfaction of a director's loan account of (pound sign)10000.
The A and B Ordinary shares each rank pari passu.
9. DIRECTORS AND THEIR INTERESTS
The directors of the company throughout the period and their interests in the
issued (pound sign)1 Ordinary shares were:
31 December 31 March
1996 1996
IR Xxxxxxxxxx 37,000 27,000
XX Xxxxxxx 10,000 15,000
10. EQUITY SHAREHOLDERS' FUNDS
Profit for the period 29,372 3,738
New share capital subscribed 10,000 0
Equity shareholders' funds
Net increase 39,372 3,738
As at beginning of period 10,998 7,260
As at end of period 50,370 10,998
11. RELATED PARTY TRANSACTIONS
Mr. IR Xxxxxxxxxx is the sole proprietor of Strategic Technology Services
which has rendered consultancy services to the company at normal commercial
rates; the amount charged during the period was (pound sign)18,340 (prior
period: (pound sign)18,952)
12. POST BALANCE SHEET EVENTS
The directors and shareholders of the company have completed an agreement for
the acquisition of the company by way of a share exchanges into Internet
Holdings Inc., a US company quoted on the NASDAQ QTC system.
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