DATED 1999
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SVI HOLDINGS INC
- AND -
KIELDUFF INVESTMENTS LIMITED
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SHARE SALE AGREEMENT
RE: IBIS SYSTEMS LIMITED
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XXXXX AND COMPANY
XXXXXXX XXXXX
00-00 XXXX XXXXXX
XXXXXX XXXXXX
XXXXXX
XX0X 0XX
TEL: 0000 000 0000
FAX: 0000 000 0000
DX: 51632 COVENT GARDEN
E-MAIL XXXXX@XXXX.XXXXX.XXX
REF: MJA/VHT/B00434.1
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SHARE SALE AGREEMENT
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DATE:
PARTIES:
1. "The Vendor" : SVI Holdings Inc a Nevada corporation whose registered
office is at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxx, Xxxxxxxxxx,
00000 XXX
2. "The Purchaser" : Kielduff Investments Limited (registered no. 296820)
whose registered office is at Xxxxx X, Xxxx 0 Xxxxxxxxxx Xxxxxxxx Xxxx,
Xxxxxxxxx, Xxxxxx Xxxxxx, Xxxxxxx.
OPERATIVE PROVISIONS:
1. INTERPRETATION
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1.1 In this agreement, including the Schedules other than Schedule [4];
1.1.1 the following words and expressions have the following
meanings, unless they are inconsistent with the context:
"Agreed Form" the form agreed between the parties on or
prior to the date of this agreement and
initialled for the purpose of identification by
their respective solicitors
"CA" Companies Xxx 0000
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"CAA" Capital Xxxxxxxxxx Xxx 0000
"Companies Acts" CA, the former Companies Acts (within the
meaning of CA's 735(1)) and the Companies Xxx
0000
"Company" Ibis Systems Limited a company registered in
England with registered number 3410598 and
whose registered office is at 0 Xxxxxxx Xxxxx,
Xxxxxxxx Inn,
Cressex, Xxxx Xxxxxxx, Xxxxx XX00 0XX
"Company's Auditors" Xxxxx Xxxxxxxx
"Completion" completion of the purchase of the Shares in
accordance with this Agreement
"Deed of Indemnity" a deed in the form set out in Schedule [4]
"Disclosure Letter" the disclosure letter of the same date as this
agreement from the Vendor to the Purchaser
"FA" Finance Act
"FRS" a financial reporting standard issued by The
Accounting Standard Board Limited or an SSAP
"ICTA" Income and Corporation Taxes Act 1988
"Intellectual Property patents, patent applications, know-how, trade
Rights" marks, trade xxxx applications, trade names,
registered designs, copyright or other similar
intellectual or commercial right
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"ITA" Inheritance Tax Xxx 0000
"Last Accounts Date" 31st March 1998 (being the date to which the
Principal Accounts have been prepared)
"Loan Note" the promissory note, in Agreed Form, to be
delivered by the Vendor to the Purchaser
pursuant to Clause 3.1.3
"Planning Acts" as defined in the Town and Country Planning Xxx
0000, s336
"Pledge Agreement" the pledge agreement, in Agreed Form, under the
terms of which the Shares are pledged to secure
the Loan Note
"Principal Accounts" the audited balance sheet as at the Last
Accounts Date and audited profit and loss
account for the year ended on the Last Accounts
Date of the Company and the directors' report
and notes thereto
"Properties" the leasehold properties of the Company shortly
described in Schedule [5]
"Purchaser's Solicitors" Xxxxx and Company, Xxxxxxx Xxxxx, 00-00 Xxxx
Xxxxxx, Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX
ref: MJA
"Shares" the Two ordinary shares of (pound)1 each in the
capital of the Company comprising the whole of
its issued and allotted share capital
"Subsidiary" a subsidiary as defined in CA, s 736
"SVI Loan" The net inter-company balance owed by the
Company to the Vendor as at 31st December 1998
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"Taxation" the same meaning as in the Deed of Indemnity
"TCGA" Taxation of Chargeable Gains Xxx 0000
"TMA" Taxes Management Xxx 0000
"VATA" Value Added Tax Xxx 0000
"Vendor's Solicitors" Xxxxxxx Xxxx Seidenwurm & Xxxxx, LLP of 401B
Street, Suite 1200, Xxx Xxxxx, Xxxxxxxxxx 00000
"Warranties" the warranties and undertakings of the Vendors
contained in clause [5] and Schedule [3]
"Warranty Claim" any claim made by the Purchaser for breach of
any of the Warranties or any claim made by any
Group Company under the Deed of Indemnity;
1.1.2 all references to a statutory provision shall be construed as
including references to:
(a) any statutory modification, consolidation or re-enactment
(whether before or after the date of this agreement) for the
time being in force;
(b) all statutory instruments or orders made pursuant to a
statutory provision;
(c) any statutory provisions of which a statutory provision is a
modification, consolidation or re-enactment;
1.1.3 a reference to an SSAP is a reference to a statement of
standard accounting practice adopted by The Accounting
Standards Board Limited;
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1.1.4 except where the context otherwise requires words denoting the
singular include the plural and vice versa; words denoting any
one gender include all genders; words denoting persons include
firms and corporations and vice versa;
1.1.5 unless otherwise stated, a reference to a clause or sub-clause
or a Schedule is a reference to a clause or a sub-clause of or
a Schedule to this agreement.
1.2 Clause headings in this agreement and in the Schedules are for ease of
reference only and do not affect the construction of any provision.
2. AGREEMENT
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2.1 Subject to the terms and conditions of this agreement, the Vendor shall
sell (a) the Shares with full title guarantee and (b) the SVI Loan, and
the Purchaser shall purchase the Shares with all rights attaching to
them and the SVI Loan with effect from 31st December 1998.
3. PURCHASE CONSIDERATION
----------------------
3.1 The purchase consideration for the Shares shall be the sum of
22,500,000 U.S. Dollars payable as follows:
3.1.1 The sum of 2,250,000 U.S. Dollars which the Vendor
acknowledges having received:
3.1.2 The sum of 2,142,000 U.S. Dollars by Purchaser's delivery to
Vendor on Completion of the following:
(a) 52,000 shares in the Vendor having an agreed value of
U.S. Dollars 624,000:
(b) 89,000 shares in the Vendor having an agreed value of
U.S. Dollars 1,068,000; and
(c) 50,000 share options exercisable at 3 U.S. Dollars
each having an agreed value of U.S. Dollars 450,000.
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3.1.3 issue and delivery by the Purchaser of a secured Loan Note in
Agreed Form in favour of the Vendor or the Vendor's designee
or assignee under the terms of which the Purchaser agrees to
pay the sum of 18,108,000 U.S. Dollars on or before the
expiration of six (6) months from Completion with interest on
such sum at the rate of 2% above the base rate for the time
being for U.S. Dollar deposits of HSBC Plc payable from 1st
May 1999. The sum of 4,500,000 U.S. Dollars last payable under
Loan Note shall be payable by the Vendor to a third party
under the terms of that certain Settlement and Release
Agreement entered into concurrently with this agreement.
4. COMPLETION
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4.1 Completion shall take place at the offices of the Purchaser's
Solicitors immediately after the signing of this Agreement.
4.2 The Vendor shall deliver to the Purchaser:
4.2.1 duly completed and signed transfers in favour of the Purchaser
or as it may direct in respect of the Shares together with the
relative share certificates;
4.2.2 the Deed of Indemnity duly executed by the Vendor and the
Company;
4.2.3 the resignations of Mr B Xxxxxxxxx and Mr I Xxxxxxx as
directors of the Company with a written acknowledgement from
each of them executed as a deed in such form as the Purchaser
requires that he has no claim against the Company in respect
of breach of contract, compensation for loss of office,
redundancy or unfair dismissal or on any other grounds
whatsoever;
4.2.4 the resignation of the existing auditors of the Company
confirming that they have no outstanding claims of any kind
and containing a statement under CA s 394(1) that there are no
such circumstances as are mentioned in that section;
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4.2.5 the statutory books of the Company complete and up-to-date and
its certificates of incorporation and common seal;
4.2.6 the leases relating to each of the Properties;
4.2.7 the appropriate forms to amend the mandates given by the
Company to its bankers;
4.2.8 written confirmation from the Vendor that there are no
subsisting guarantees given by the Company in its favour and
that the Vendor will not be indebted to the Company nor vice
versa.
4.3 A Board meeting of the Company shall be held at which:
4.3.1 such persons as the Purchaser may nominate shall be appointed
additional directors;
4.3.2 the transfers referred to in clause 4.2.1 shall be approved
(subject to stamping); and
4.3.3 the resignations referred to in clause 4.2.3 shall be
submitted and accepted.
4.4 Upon completion of the matters referred to in clause 4.2 - 4.3:
4.4.1 the Purchaser shall deliver to the Vendor's Solicitors (a) the
duly executed Loan Note, (b) the duly executed Pledge
Agreement together with the Shares, (c) the shares and options
referred to in Clauses 3.1.2 representing 2,142,000 U.S.
Dollars of the purchase consideration referred to in clause
3.1.2 and (d) a Settlement and Release Agreement among Vendor,
Purchaser, Systems for Business Incorporated, and Ibis Systems
Limited.
4.5 The Purchaser and Vendor may in their absolute discretion waive any
requirement contained in clauses 4.2 to 4.3, and shall not be obliged
to complete, respectively, the purchase or sale of any of the Shares
unless the purchase of or sale of all the Shares is completed in
accordance with this agreement, but may instead rescind this agreement
without prejudice to any other remedy it may have.
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5. WARRANTIES
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5.1 The Vendor warrants to the Purchaser that:
5.1.1 the Vendor has and will have full power and authority to enter
into and perform this agreement and the Deed of Indemnity
which constitute or when executed will constitute binding
obligations in accordance with their respective terms;
5.1.2 the Shares constitute the whole of the issued and allotted
share capital of the Company;
5.1.3 except as provided by this Agreement and the Pledge Agreement,
there is and at Completion will be no pledge, lien or other
encumbrance on, over or affecting the Shares and there is and
at Completion will be no agreement or arrangement to give or
create any such encumbrance and no claim has been or will be
made by any person to be entitled to any of the foregoing;
5.1.4 the Vendor will be entitled to transfer the full legal and
beneficial ownership of the Shares to the Purchaser on the
terms of this agreement without the consent of any third
party;
5.1.5 the information in Schedule [2] relating to the Company is
true and accurate in all respects;
5.1.6 save as set out in the Disclosure Letter, the Warranties in
Schedule [3] are true and accurate in all respects; and,
except in respect of anything to which the Purchaser gives its
consent under clause [5.6], will continue to be so up to and
including Completion;
5.1.7 the contents of the Disclosure Letter and of all accompanying
documents are true and accurate in all respects and fully,
clearly and accurately disclose every matter to which they
relate.
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5.2 Each of the Warranties is without prejudice to any other Warranty and,
except where expressly stated otherwise, no clause of this agreement
shall govern or limit the extent or application of any other clause.
5.3 The Vendor shall promptly disclose in writing to the Purchaser any
event or circumstance which arises or becomes known to it prior to
Completion and is materially inconsistent with any of the Warranties or
the contents of the Disclosure Letter or might be material to be known
by a purchaser for value of the Shares.
5.4 Except for the Warranties set forth in Sections 5.1.1 through 5.1.5,
all Warranties and the information contained in the Disclosure Letter
is provided solely in reliance upon the information provided to Vendor
by the Company's managing director (the "Managing Director") and/or its
officers, agents, representatives or advisers (collectively "Agents").
The parties to this agreement acknowledge that: (a) Vendor did not own
or control the business of the Company prior to Xxxxxx 00, 0000, (x)
the Managing Director has exercised and maintained day-to-day
management and control over the Company's business, assets and
operations since its inception, and (c) the Managing Director has
comprehensive and extensive knowledge and familiarity with all aspects
of the Company including, without limitation, its business, assets and
operations. All Warranties and Indemnities (including without
limitation as set forth in the Deed of Indemnity) provided by Vendor
under this agreement are accordingly qualified as follows: (i) all such
Warranties and Indemnities exclude events, occurrences, acts, omissions
and conditions which occurred or existed prior to August 13, 1997 or
after December 31, 1998 or any Warranty Claim arising from the
foregoing, and (ii) all such Warranties and Indemnities exclude events,
occurrences, acts, omissions and conditions which the Purchaser or the
Managing Director had actual knowledge of prior to Completion or which
occurred or arose as a result of the conduct of the Managing Director
or any Agent acting under the direction of the Managing Director or any
Warranty Claims arising from the foregoing.
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5.5 The Vendor shall not make any claim against the Company or the Managing
Director, or the Agents in connection with the information supplied by
the Agents in connection with the Warranties and the Disclosure Letter
unless such Agent knew that the information delivered to Vendor
contains or will contain any untrue statement of a material fact or
deliberately omits or will omit any material fact necessary in order to
make the statements made in the Warranties, in the light of the
circumstances under which they are or were made, not misleading.
5.6 The Vendor shall procure that in so far as it is able and except so far
as may be necessary to give effect to this agreement, the Company shall
not before Completion without the prior written consent of the
Purchaser:
5.6.1 do, procure or allow anything which may cause, constitute or
result in a breach of the Warranties; or
5.6.2 in any way depart from the usual course of its business.
5.7 The Vendor shall procure that until Completion the Purchaser, its
agents, representatives and professional advisers are given promptly on
request whatever facilities and information regarding the business,
assets, liabilities, contracts and affairs of the Company, and of the
documents of title and other evidence of ownership of its assets, that
the Purchaser may require.
5.8 The Purchaser acknowledges that it has not been induced to enter into
this agreement by any representation or warranty other than the
Warranties.
6. LIMITATION OF LIABILITY CLAUSES
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6.1 The provisions of Schedule [6] shall apply.
7. VENDOR'S COVENANTS
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7.1 For the purpose of assuring to the Purchaser the full benefit of the
businesses and goodwill of the Company the Vendor undertakes by way of
further consideration for the obligations of the Purchaser under this
agreement as separate and independent agreements that it will not:
7.1.1 at any time after Completion disclose to any person, or itself
use for any purpose, and shall use his best endeavours to
prevent the publication or disclosure of, any information
concerning the business, accounts or finances of the Company
or any of its clients' or customers' transactions or affairs
of which it has knowledge except to the extent required by
applicable laws including the securities laws of the United
States of America;
7.1.2 for [2] years after Completion either on its own account or
for any other person directly or indirectly solicit, interfere
with or endeavour to entice away from the Company any person
who to its knowledge is, or has during the past [2] years
been, a client, customer or employee of, or in the habit of
dealing with the Company;
7.1.3 for [2] years after Completion, either alone or jointly with
or as manager, agent for or employee of any person, directly
or indirectly carry on or be engaged concerned or interested
in any business in the UK that is competitive with the main
business of the Company save as the result of making an
acquisition of a business in, or a company which has or whose
subsidiary has a business in, the United Kingdom a
non-material part of which is competitive with the business of
the Company. For the purpose of this sub-clause the expression
"main business of the Company" shall mean the supply,
installation, MAINTENANCE, and support of accounting and
business software to customers in the construction and plant
hire industry and its allied trades.
8. GENERAL
8.1 No announcement shall be made in respect of the subject matter of this
agreement unless specifically agreed between the parties or it is an
announcement required by law including the securities laws of the
United States of America.
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8.2 This agreement shall be binding upon each party's successors and
assigns and personal representatives (as the case may be).
8.3 All expenses incurred by or on behalf of the parties, including all
fees of agents, representatives, solicitors, accountants and actuaries
employed by any of them in connection with the negotiation, preparation
or execution of this agreement, shall be borne solely by the party who
incurred the liability and the Company shall have any liability in
respect of them.
8.4 Time shall be of the essence of this agreement, both as regards the
dates and periods specifically mentioned and as to any dates and
periods which may be substituted by agreement in writing between or on
behalf of the Vendor and the Purchaser.
8.5 Any notice required to be given by any of the parties under this
agreement may be sent by post to the address of the addressee as set
out in this agreement or to such other address as the addressee may
have notified for the purpose of this clause. Communications sent by
post shall be deemed to have been received forty-eight hours after
posting. In proving service by post it shall be necessary to prove only
that the communication was contained in an envelope which was duly
addressed and posted in accordance with this clause.
8.6 The Agreement shall be governed by English law.
8.7 In case of any controversy, claim or dispute arising out of or relating
to this agreement or the breach thereof:
8.7.1 both parties shall meet and exert their best efforts to find
an amicable settlement;
8.7.2 failing agreement within a period of thirty days (30) from the
date on which either party with reference to the present
Article requests an amicable settlement, the matter shall be
referred to arbitration adjudicated under English Law
conducted in English and held in New York, New York, USA in
accordance with Rules of Conciliation and Arbitration of the
International Chamber of Commerce;
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8.7.3 the Arbitration Board shall consist of three members. Each of
the parties shall appoint one arbitrator and the two so
nominated shall in turn choose a third. If the chosen
arbitrators cannot agree on the choice of the third
arbitrator, such arbitrator shall be appointed by the Court of
Arbitration of the International Chamber of Commerce;
8.7.4 the arbitration shall be conducted in accordance with the
Rules of the International Chamber of Commerce and it is
agreed that the decision shall be final and binding and there
shall be no appeal to the Courts from the decision of the
arbitrators;
8.7.5 either party shall be entitled to have any arbitration award
made an order of Court for the purposes of enforcement;
8.7.6 the obligation herein to arbitrate shall not be binding upon
either party with respect to requests for temporary
restraining orders, preliminary injunctions or other
procedures (or their functional equivalent) in a court of
competent jurisdiction to obtain interim relief when deemed
necessary by such court to (a) preserve the status quo or
prevent irreparable injury pending resolution by arbitration
of the actual dispute between the parties or (b) to order
specific performance.
8.8 This agreement shall be engrossed in two counterparts each showing the
signature of one party. Each party agrees to accept the signature of an
authorised representative of the other on a facsimile copy of the
counterpart as being valid and effective for the purposes of completing
this Agreement.
9. MISCELLANEOUS
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9.1 The Vendor agrees to the following additional terms with effect from
Completion:
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9.1.1 To comply with any existing obligation incurred by the Company
on behalf of the Vendor to issue to Todds of Lincoln Limited
55,000 Restricted Shares in the common stock of the Vendor and
to deliver a certificate for such shares to the Solicitors of
Todds of Lincoln Limited to be received by them on or before
31st May 1999; and
9.1.2 to waive the conditions precedent on the share options held by
Xxxxx Xxxxxx to enable him to exercise his options at 5 U.S.
Dollars per share in accordance with the option agreement and
the Vendor agrees to give its approval to the transfer of the
options to Xxxxx Xxxxxx'x relatives trusts or retirement plans
as envisaged by clause 3 of the Option Agreement.
IN WITNESS WHEREOF THE PARTIES HAVE BY THEIR AUTHORISED REPRESENTATIVES DULY
SIGNED THIS AGREEMENT THE DAY AND YEAR FIRST BEFORE WRITTEN
SIGNED BY ) /s/ Xxxxx X. Xxxxxxxxx
FOR AND ON BEHALF OF )
SVI HOLDINGS LIMITED
)
)
IN THE PRESENCE OF: ) /s/ Xxxxxx X. Xxxxx
SIGNED BY )
FOR AND ON BEHALF OF ) /s/ Xxxx Xxxxx, Director
KIELDUFF INVESTMENTS ) /s/ Xxxxx X. Xxxxxxxx, Director
LIMITED )
IN THE PRESENCE OF: ) /s/ X.X. Xxxxxxx
/s/ Xxxxxx Xxxxxxx
