BETWEEN:
TRADE WIND COMMUNICATIONS LIMITED
AND:
TRADE WIND GROUP PTY LIMITED
AND:
XXXXX VENTURES, INC.
AND:
ATLANTIC INTERNATIONAL CAPITAL HOLDINGS, LTD
MERGER AGREEMENT
XXXXXX MANGIONI
Corporate and Commercial Lawyers
Xxxxx 00
00 Xxxxxxxxxxx Xxxxxx
Xxxxxx XXX 0000
Telephone: 0000 0000
Fax: 0000 0000
DX 000 Xxxxxx
Ref: PAV 98 246
THIS MERGER AGREEMENT is made on January 1 999
BETWEEN: TRADE WIND COMMUNICATIONS LIMITED (ARBN 076 753 083) of
Xxxxx 00, Xxxxxxxxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx
Xxxxx, 0000, Xxxxxxxxx ("TWC");
AND: TRADE WIND GROUP PTYLIMITED (ACN 003 607 074) of Xxxxx 00,
Xxxxxxxxx Xxxxx, 000 Xxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx, 0000
("TWG");
AND: XXXXX VENTURE, INC. of XX Xxx 000, Xxxxxxxxxxxx, Xxxxx 00000
Xxxxxx Xxxxxx of America ("SVI");
AND: ATLANTIC INTERNATIONAL CAPITAL HOLDINGS, LTD of Xxxx House
00 Xxxxxx Xxxxxx Xxxxxxxx Xxxxxxx ("XXXX").
RECITALS
A. TWC is the legal and beneficial owner of all of the issued share
capital of TWG.
B. TWC and SVI have agreed to complete a merger of SVI with TWG by TWC
selling and SVI buying all of the issued share capital of TWG and in
turn issuing shares to TWC on the terms and conditions of this
Agreement.
1. DEFINITIONS & INTERPRETATION
1.1 Definitions
In this Agreement:
"Accretions" means all accretions, rights or benefits of whatever kind attaching
to or arising from shares directly or indirectly including, without limitation,
all dividends or other distributions and all rights to receive any dividends or
other distributions or to receive or subscribe for shares, stock units, notes,
bonds, options or other securities;
"Affiliate" means an "affiliate" within the meaning of Rule 144 of the 1933 Act;
"XXXX Agreement" means the agreement between "XXXX and SVI in substantially the
form of Schedule 4;
"XXXX Warranties" means the warranties given by "XXXX under Clause 8.2;
"Announcement" means the announcement referred to in Clause 9.1(a);
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"Associate" has the meaning given to it in Part 1.2, Division 2 of the
Corporations Law;
"Auditor" means the auditor of TWG at the date of this Agreement;
"BCSC" means the British Columbia Securities Commission;
"Business Day" means any day (other than a Saturday or a Sunday) on which banks
are open for general banking business in Vancouver, Canada;
"Claim" against any person, means any claim, action, proceeding, demand,
judgment, damage, loss, cost, expense or liability whatever incurred or suffered
by or brought or made or recovered against the person and however arising
(whether or not presently ascertained, immediate, future or contingent);
"Completion" means:
(a) completion of the buyback of TWG Shares in accordance with Clause 3.1;
(b) the sale of 1 TWG Share by TWC to SVI and the subscription for TWG
Shares by SVI in accordance with Clause 4.1;
(c) the issue of the Merger Securities in accordance with Clause 5;
(d) entry into the Transaction Documents in accordance with Clause 7;
"Completion Date" means the date Completion takes place;
"Conditions" means the conditions specified in Clause 11;
"Confidential Information" means all trade secrets, all financial, marketing and
technical information, ideas, concepts, know-how, technology, processes and
knowledge which is confidential or of a sensitive nature, but excludes that
which is in the public domain;
"Corporations Law" means the Corporations Law (NSW);
"Dictaphone Business" means the business of distribution, service and support of
products of Dictaphone Corporation US in Australia conducted by TWC;
"Distribution" means:
(a) a dividend (which includes, without limitation, an issue of shares in
lieu of a cash dividend and credited as fully or partly paid out of
profits or reserves); and
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(b) any other distribution (which, without limitation, includes a capital
distribution, a cash distribution, a distribution of property or rights
or any other benefit whatsoever),
given or made available to any holder of SVI Shares in its capacity as such by
SVI or any other person and made, paid or credited in respect of any SVI Shares;
"Employment Agreements" means employment agreements between SVI and each of:
(a) Xxxx Xxxx;
(b) Xxxxx Xxxxxx;
(c) Xxxxx Xxxxxxxx; and
(d) Xxxxx Xxxxxxxx,
with such remuneration and on such terms as may be recommended by the
Remuneration Committee;
"Encumbrance" means a mortgage, charge, pledge, lien, encumbrance, equity,
adverse interest, option or other third party claim;
"Exchange" means the American Stock Exchange, The NASDAQ Stock Market, Inc.
Small-Cap Market or such other exchange agreed by the Parties after the date of
this Agreement;
"Governmental Agency" means any government or any governmental, semigovernmental
or judicial entity or authority (domestic or foreign). It also includes any
self-regulatory organisation established under statute or any securities
exchange;
"Insolvency Event" means in relation to a Party:
(a) an order is made or an application is made for the winding up of the
Party and that order or application is not withdrawn or set aside by
the Completion Date;
(b) a liquidator or provisional liquidator of the Party is made or
appointed or an application is made for the appointment of a liquidator
or provisional liquidator and that application is not withdrawn or set
aside by the Completion Date;
(c) an effective resolution is passed for the winding up of the Party or a
meeting is convened for the purpose of considering any such resolutions
and that meeting has not been held by the Completion Date;
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(d) the Party is placed under any formal or informal kind of insolvency
administration or a meeting is convened for the purpose of considering
the appointment of an insolvency administrator;
(e) a receiver of the main undertaking, property or material assets of the
Party is appointed or any step is taken for the appointment of such a
receiver or execution or distress or any other process is levied or
attempted or imposed against any of the main undertaking, property or
material assets of the Party;
(f) the Party stops payment or in the opinion of the other Party stops
payment or ceases to carry on the whole or any material part of its
business or threatens to do so;
(g) an order for payment is made or judgement is entered or signed against
the Party in an amount of not less than $50,000 and is not satisfied,
stayed or set aside within 5 Business Days;
(h) the Party becomes insolvent or unable to pay its debts or (if the
Corporations Law applies in determining the matter) would be deemed to
be unable to pay its debts as and when they fall due; or
(i) a compromise or arrangement is proposed with or becomes effective in
relation to the creditors or any class of creditors of the Party or the
Party proposes a reorganization, moratorium or other administration
involving its creditors or any class of its creditors;
"Issuer Bid" means the issuer bid and share buyback referred to in Clause 14.2;
"Listing Rules" means the listing rules of VSE;
"Management Agreement" means the management agreement between TWC and TWG in
substantially the form set out in Schedule 5;
"Merger" means the transactions contemplated by this Agreement including without
limitation:
(a) the sale and purchase of TWG;
(b) the execution of the Transaction Documents; and
(c) the issue of the Merger Securities;
"Merger Information" means all information released publicly or to shareholders
of TWC in relation to the Merger;
"Merger Securities" means SVI Shares to be issued pursuant to Clause 5.2;
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"1933 Act" means the Securities Act of 1933 (USA);
"1934 Act" means the Securities Exchange Act of 1934 (USA);
"Placement" means the private placement of up to 1,000,000 SVI Shares to
subscribers reasonably acceptable to TWC and "XXXX to be completed within 60
days of Completion to raise gross proceeds (after deduction of all finder's
fees, agent costs and fees payable to "XXXX under the "XXXX Agreement) of not
less than US$3,660,000;
"Promissory Note" means a promissory note in substantially the form set out in
Schedule 6;
"Purchase Price" means the amount determined by the Auditor to be the fair
market value of the ordinary shares in the capital of TWG held by TWC
immediately prior to completion of the share buyback under Clause 3.1;
"Recipient" means a Party to which a Warranty is given.
"Related Body Corporate" of a body corporate means another body corporate which
is related to the first within the meaning of Section 50 of the Corporations
Law;
"Remuneration Committee" means the remuneration committee established by the
directors of TWC in 1998 to review the remuneration and terms of employment of
executives of the TWC Group;
"SEC" means the Securities and Exchange Commission;
"Securities Act" means the Securities Xxx 0000 (British Columbia);
"Security" has the meaning given in Section 92 of the Corporations Law;
"Subsidiary" has the same meaning as in Section 46 of the Corporations Law;
"SVI Shares" means shares of common stock of $0.001 par value in the capital of
SVI;
"SVI Warranties" means the warranties given by SVI under Clause 8.3;
"Tax" means any tax, levy, impost, deduction, assessment, contribution, charge,
rate, duty, withholding or other duty which is assessed or imposed under the Tax
Act and any related interest, penalty, fine, charge, fee, additional tax or
other amount assessed or imposed in relation thereto;
Transaction Documents" means:
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(a) the Employment Agreements;
(b) the "XXXX Agreement; and
(c) the Management Agreement;
"TWC Group" means TWC and its Subsidiaries;
"TWC Shares" means ordinary shares of $0.01 par value in the capital of TWC;
"TWC Warranties" means the warranties given by TWC under Clause 8.1;
"TWG Shares" means ordinary shares in the capital of TWG;
"VSE" means the Vancouver Stock Exchange;
"Warranting Party" means a Party who gives a Warranty; and
"Warranty" means a representation or warranty under this Agreement including,
without limitation, under Clause 8.
1.2 Interpretation
In this Agreement unless the contrary intention appears:
(a) reference to a Clause, Schedule, Annexure or Appendix is a reference to
clause of or schedule, annexure or appendix to this Agreement and
references to this Agreement include any Recital, Schedule, Annexure or
Appendix;
(b) a reference to this Agreement or another instrument includes any
variation or replacement of either of them;
(c) a reference to a statute, ordinance, code or other law includes,
without limitation, regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of
them;
(d) the singular includes the plural and vice versa;
(e) the word person includes a firm, a body corporate, an unincorporated
association or an authority;
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(f) a reference to a person includes a reference to the person's executors,
administrators, successors, substitutes (including, without limitation,
persons taking by novation) and assigns;
(g) an agreement, representation or warranty in favour of 2 or more persons
is for the benefit of them jointly and severally;
(h) an agreement, representation or warranty on the part of 2 or more
persons binds them jointly and severally;
(i) a reference to "$~, "US$", "dollars" means the lawful currency of the
United States of America;
(j) a reference to "A$" means the lawful currency of the Commonwealth of
Australia;
(k) a reference to a day is to be interpreted as the period of time
commencing at midnight and ending 24 hours later;
(l) a reference to time is Vancouver time;
(m) if an act prescribed under this Agreement to be done by a Party on or
by a given day is done after 5.00pm on that day, it is taken to be done
on the next day;
(n) if an event must occur on a stipulated day which is not a Business Day
then the stipulated day will be taken to be the next Business Day;
(o) "include" (in any form) when introducing a list of items does not limit
the meaning of the words to which the list relates to those items or to
items of a similar kind;
(p) a reference to "the best of the knowledge and belief" of any person
means "the best of the knowledge and belief after due inquiry where
knowledge or suspicion of a fact would prompt enquiry by a reasonable
person" of such person; and
(q) a reference to a breach of any of the Warranties includes any
representation under this Agreement by any Party being untrue.
2. OBJECTIVES
2.1 Objectives
The Parties agree that the primary objectives of the Parties in entering this
Agreement are that:
(a) SVI will acquire all the issued TWG Shares from TWC;
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(b) SVI will issue the Merger Securities to TWC;
(c) the Parties will enter into the Transaction Documents; and
(d) SVI will complete the Placement and will apply for listing and
quotation of SVI Shares on an Exchange as soon as possible after
Completion.
2.2 Timing
For the avoidance of doubt, the transactions set out in Clauses 3-5 take place
in the same order as the transactions steps are set out in Clauses 3-5.
3. TWG BUYBACK AND SHARE ISSUE
3.1 Buyback
Before Completion, TWC must sell to TWG and TWG must purchase all but one issued
TWG Share held by TWC for the Purchase Price.
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3.2 Payment of Purchase Price
On Completion, TWG must endorse the Promissory Note issued in accordance with
Clause 3.5 to TWC in full satisfaction of its obligation to pay the Purchase
Price under Clause 3.1.
3.3 SVI Application
(a) SVI applies for the issue of the number of TWG Shares determined in
Accordance with Clause 3.3(b) for the Purchase Price, agrees to be
bound by the constitution of TWG and replaceable rules applicable to
TWG and consents to the entry of its name in the register of members of
TWG.
(b) The number of TWG Shares to be issued to SVI will be equal to the
Purchase Price divided by $1.00.
3.4 Issue
TWG must allot and issue to SVI the TWG Shares in accordance with Clause 3.3 on
Completion.
3.5 Payment of Subscription Monies
SVI must satisfy its obligations to pay the subscription monies for the TWG
Shares on Completion by issuing the Promissory Note in favour of TWG.
3.6 Ranking
The TWG Shares to be allotted pursuant to this Clause 4 must rank pari passu
with all TWG Shares on issue and must be allotted free from all Encumbrances.
4. TWG SHARE SALE
4.1 Sale to SVI
On Completion, TWC must sell to SVI and SVI must purchase one TWG Share for the
fair market value of the TWG Share on the Completion Date as determined by the
Auditor.
4.2 No Encumbrances
The TWG Share must be transferred free from any Encumbrance and with all
Accretions, rights and benefits of whatever kind.
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5. SVI SHARE AND OPTION ISSUE
5.1 TWC Application
TWC applies for the issue of the 8,800,000 SVI Shares for the Purchase Price,
agrees to be bound by the articles of incorporation and bylaws of SVI and
consents to the entry of its name in the shareholder registry of SVI.
5.2 Issue
SVI must allot and issue the 8,800,000 SVI Shares in accordance with this Clause
5 on Completion.
5.3 Payment of Subscription Monies
TWC must satisfy its obligations to pay the Purchase Price on Completion by
endorsing the Promissory Note received under Clause 3.2 in favour of SVI.
5.4 Ranking
The Merger Securities to be allotted pursuant to this Clause 5 must rank pari
passu with . all SVI Shares on issue and must be allotted free from all
Encumbrances.
5.5 Option Issue
On Completion, SVI must grant options to acquire SVI Shares to the nominees of
TWC on the following terms:
(a) the maximum number of options to be granted under this Clause 5.5 is
the number determined in accordance with the following formula:
WO = 2,000,000 + TO x 8,800,000
TC
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Where:
WO is the number of options to acquire SVI Shares to be issued under
this Clause 5.5;
TO is the greater of the number of options to acquire TWC Shares on
issue as at Completion and the value of options which the Securities
Act and the Listing Rules permit TWC to issue as at Completion; and
TC is the number of TWC Shares on issue on Completion;
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(b) the exercise price for an option to acquire SVI Shares will be the
equivalent in US$ of C$1.99 on the date of exercise; and
(c) in all other respects are on identical terms to the terms of options to
acquire TWC Shares granted to beneficiaries of the TWC Incentive Stock
Option Trust, amended as necessary to reflect the requirements of
United States Federal law or such other terms as may be agreed by TWC
and SVI.
5.6 Dictaphone Sale
(a) TWC agrees to sell and TWG agrees to buy all right, title and interest
of TWC in the Dictaphone Business for consideration of A$1.00;
(b) On Completion, TWC must assign to TWG and TWG must accept the
assignment of all right, title and interest of TWC in any contract or
other asset relating in any way to the Dictaphone Business including,
without limitation, the contract between TWC and Dictaphone Corporation
US dated 15 August 1997 and employment agreements with all current TWC
employees;
6. COMPLETION
6.1 Place
Completion will take place at 2 pm on the date 1 Business Day after the date the
last of the Conditions is satisfied or waived, at the offices of Xxxxx Xxxxxxxxx
Esq. 0000 Xxxxxxxxx Xxxxxxxxx, Xxxxx 000, Xxxx Xxxxx, Xxxxxxx, 00000, Xxxxxx
Xxxxxx of America, or as the Parties may otherwise agree.
6.2 SVI Obligations
On Completion, SVI must:
(a) deliver the Promissory Note to TWG in accordance with Clause 3.5;
(b) issue and allot the Merger Securities to TWC;
(c) deliver a share certificate in respect of the Merger Securities to TWC;
(d) enter TWC in the shareholder registry of SVI;
(e) procure that the directors of SVI on Completion comprise:
a. 3 nominees of TWC being Xxxx Xxxx, Xxxxx Xxxxxxxx and Xxxxx
Xxxxxxxx;
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b. 1 nominee of "XXXX and
c. 1 independent director acceptable to TWC and "XXXX
(f) deliver to TWC an officers certificate in a form acceptable to TWC
confirming that immediately prior to Completion the total number of
outstanding shares of SV is not more than 500,000; and
(g) execute and deliver any other document reasonably required by a Party
which is necessary or desirable to give effect to the transactions
contemplated by Clauses #7.
6.3 TWG Obligations
On Completion TWG must:
(a) issue and allot the TWG Shares to SVI in accordance with Clause 3.4;
(b) deliver a share certificate in respect of the T W G Shares to be issued
under Clause 3.4 to SVI;
(c) enter SVI in the register of members of TWG;
(d) deliver the Promissory Note to TWC, endorsed in favour of TWC in
accordance with Clause 3.2; and
(e) execute and deliver any other document reasonably required by a Party
which is necessary or desirable to give effect to the transactions
contemplated by Clauses 3-7.
6.4 TWC Obligations
(a) On Completion, TWC must give to TWG the following documents:
a. share certificates for all TWG Shares to be transferred under Clause
3.1;
b. completed transfers of all TWG Shares to be transferred under Clause
3.1;
c. a copy of all business records maintained by TWC in respect of the
Dictaphone Business;
d. a duly executed assignment of all contracts relating to the
Dictaphone Business in favour of TWG; and
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e. any other document reasonably required by SVI which is necessary or
desirable to give effect to the transaction contemplated by Clauses
3-7.
(b) On Completion, TWC must give or make available to SVI:
a. all share certificates for the T W G Share to be transferred under
Clause 4.1;
b. an instrument of transfer in registrable form duly executed by TWC
in favour of SVI;
c. if required by SVI, the minute books, share certificate books, share
transfer ledgers and corporate seals of TWG;
d. if required by SVI, resignations in a form reasonably acceptable to
SVI of all directors and secretaries of TWG and its Subsidiaries;
e. a copy of the certificate of incorporation of TWG certified by a
secretary as being true, complete and correct;
f. a copy of the constitution of TWG, certified by a secretary as being
true, complete and correct;
g. the Promissory Note endorsed in favour of SVI in accordance with
Clause 5.3; and
h. any other document reasonably required by SVI which is necessary or
desirable to give effect to the transactions contemplated by Clauses
3-7.
(c) On or before Completion, TWC must ensure that resolutions are passed by
the board of TWG to approve the registration of the transfer of the TWG
Shares to TWG and SVI as contemplated by Clauses 3 and 4 subject to
delivery up to TWG of duly executed transfers of the TWG Shares and the
share certificates in respect of the TWG Shares and, on Completion,
must deliver to SVI a copy of that resolution certified by an officer
of TWG.
7. COMMITMENT TO ENTER INTO TRANSACTION DOCUMENTS
7.1 Employment Agreements
Completion is subject to execution of the Employment Agreements.
7.2 XXXX Agreement
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Completion is subject to execution of the "XXXX Agreement by SVI and "XXXX.
7.3 Management Agreement
Completion is subject to execution of the Management Agreement.
7.4 Commitment
Each Party must itself enter into the Transaction Documents on Completion in
which it is named as a party and TWC must procure the execution of the
Employment Agreements by all persons named as a party other than SVI.
8. WARRANTIES, REPRESENTATIONS & INDEMNITIES
8.1 TWC Warranties
TWC gives the representations and warranties set out in Schedule 1 to each of
SVI and "XXXX
8.2 XXXX Warranties
"XXXX gives the representations and warranties set out in Schedule 2 to TWC and
SVI.
8.3 SVI Warranties
SVI gives the representations and warranties set out in Schedule 3 to each of
TWC and "XXXX I
8.4 Limitation for Knowledge
A Warranting Party is not liable to a Recipient for any Claim suffered or
incurred by it, whether directly or indirectly, in relation to any inaccuracy in
or breach of any of the Warranties if, before the date of this Agreement, that
Recipient was aware (as a result of its due diligence enquiries or disclosures
made in writing to the Recipient) of a matter and that such matter has given
rise or may thereafter give rise to the Claim.
8.5 Reliance
Each Warranting Party acknowledges that it has made and given the Warranties
with the intention of inducing the Recipient to enter into this Agreement and
that the Recipients have entered into this Agreement in full reliance on the
Warranties given by that Warranting Party.
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8.6 Timing
Each Warranting Party gives its respective Warranties on the date of this
Agreement and on the Completion Date.
8.7 Indemnity
(a) Each Warranting Party unconditionally and irrevocably undertakes to
indemnify and keep indemnified the Recipients and to hold it harmless
from and against and in an amount equal to all Claims suffered or
incurred by it whether directly or indirectly in relation to any
inaccuracy in or breach of any of the Warranties given by it.
(b) No Party is obliged to indemnify the Recipients under Clause 8.7(a) to
the extent that the Recipient of that Warranty recovers any amount of a
Claim under an insurance policy from third parties or otherwise
receives a Tax deduction, rebate or other benefit.
8.8 Threshold
(a) No Warranting Party will have any liability in respect of any Claim in
respect of a Warranty it has given unless the aggregate amount of all
Claims by a Recipient in respect of all breaches of Warranties that
Warranting Party has given in favour of that Recipient finally
adjudicated or agreed as being payable in respect of the Claims exceeds
$100,000.
(b) Once that threshold is exceeded, a Recipient of the Warranties given by
that Warranting Party will be entitled to recover the amount of any
liability to it. In determining if the threshold is exceeded, prior
Claims made against that Warranting Party under this Agreement by that
Recipient will be aggregated with the relevant Claim in question.
8.9 A Warranting Party is not liable to any Recipient for any Claim unless:
(a) written notice has been given to the Warranting Party setting out
specific details of the Claim within 12 months from the Completion
Date; and the Claim is agreed,
(b) the Claim is agreed, compromised or settled or the Recipient has issued
and served legal proceedings against the Warranting Party in respect of
the Claim within 6 months of giving notice in respect of the Claim
under Clause 8.9(a).
9. ANNOUNCEMENTS
9.1 Public Announcement & Disclosure
(a) The Parties acknowledge that, as soon as reasonably practicable after
execution of this Agreement, and in any event not later than 1 Business
Day after execution of this
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Agreement, TWC will release an announcement regarding the Merger and
the terms of the Agreement in order to satisfy its disclosure
obligations under the Listing Rules and the Securities Act.
(b) All Parties must provide to TWC and permit the disclosure of such
information relating to the business conducted by that Party which TWC
may reasonably require for the purpose of satisfying its obligations
under the Listing Rules and the Securities Act from time to time.
(c) TWC must consult with "XXXX and SVI with respect to the preparation of
the Announcement and must in good faith have regard to the reasonable
requests of "XXXX and SVI regarding the Announcement.
(d) In the event of dispute between TWC and "XXXX and SVI regarding the
form or content of the Announcement or the requirements of the Listing
Rules and/or the Securities Act the determination of TWC regarding
disclosure will be final.
9.2 Responsibility for Merger Information
(a) The provisions of this Clause 9.2 apply where a third party makes a
Claire against a Party or their respective officers and advisers in
relation to a matter disclosed or omitted to be disclosed in the Merger
Information.
(b) TWC will be responsible for and will indemnify and hold harmless "XXXX
and SVI and the directors, officers, employees, agents, representatives
and advisers of each of them from all Claims suffered or incurred to
third parties for information provided or omitted to be provided by or
on behalf of TWC for the purposes of preparing and distributing the
Merger Information.
(c) SVI will be responsible for and will indemnify and hold harmless each
of TWC and "XXXX and the directors, officers, employees, agents,
representatives and advisers of TWC and "XXXX from all Claims suffered
or incurred to third parties for information provided or omitted to be
provided by or on behalf of SVI for the purposes of preparing and
distributing the Merger Information.
(d) "XXXX will be responsible for and will indemnify and hold harmless each
of TWC and SVI and the directors, officers, employees, agents,
representatives and advisers of TWC and SVI from all Claims suffered or
incurred to third parties for information provided or omitted to be
provided by or on behalf of "XXXX for the purposes of preparing and
distributing the Merger Information.
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(e) Each Party holds the benefit of the indemnities under Clauses 9.4(b) to
9.4(d) for itself and for the benefit of its respective directors,
officers, employees, agents, representatives and advisers.
10. CONDUCT OF BUSINESS PENDING COMPLETION
10.1 General Conduct of TWC Business
Until Completion unless SVI otherwise approves (such approval not to be
unreasonably withheld or delayed), TWC must procure that the TWC Group (other
than TWC) carries on its business in the ordinary course of usual business and
in a normal, proper and efficient manner.
10.2 Consultation
Until Completion, TWG must:
(a) notify SVI as to all material decisions concerning the operation of its
business;
(b) not make any material changes to the operation of its business unless
SVI approves (such approval not to be unreasonably withheld or
delayed);
(c) provide to SVI copies of all significant reports relating to the
affairs of all members of the TWC Group prepared by or for the
management of TWC at the same time as the reports are provided to
senior management of that company or TWC; and
(d) instruct the management of each member of the TWC Group of the
requirements of this Clause 10.
10.3 Specific Matters
Until Completion, unless SKI approves (such approval not to be unreasonably
withheld or delayed) or except as contemplated by this Agreement, TWC must not
permit or suffer any member of the TWC Group (other than TWC) to:
(a) increase, reduce or otherwise alter its share capital;
(b) issue, sell, purchase, redeem or otherwise acquire any shares, other
securities or equity interests or grant any options for the issue of
any shares, other securities or equity interests;
(c) declare, make or pay any dividends, bonuses or other distributions to
shareholders;
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(d) do any act or thing or suffer or permit any omission in contravention
or breach of any of the provisions of any exchange control regulation,
taxation or revenue statute;
(e) do any act or thing or permit any omission which would make any policy
of insurance written for the benefit of any member of the TWC Group
void or voidable or do anything that would mean any existing policy is
not in full force land effect at Completion;
(f) do any act or thing the doing or suffering of which, or permit any
omission which, is or could be a breach of:
a. any industrial or similar award;
b. any determination or order of any tribunal, person or body empowered
to determine any dispute relating to the rights or duties of any member
of the TWC Group or of any trade union or member of a trade union,
pursuant to any industrial or similar award;
c. any term contained or implied in any industrial agreement between
any member of the TWC Group and any trade or labour union;
d. any term contained or implied in any agreement between any member of
the TWC Group and any of the employees of any member of the TWC Group;
or
e. which leads or is likely to or could lead to any industrial action
or cause any labour problems of whatever nature;
(g) pass any special resolution other than special resolutions to approve
all transactions in any way related to the Acquisition;
(h) enter into any hire purchase, leasing or credit sale agreement in
respect of an item the value of which exceeds $100,000;
(i) make a distribution or revaluation of assets;
(j) except in the normal and ordinary course of business or as recommended
by the Remuneration Committee, enter into any contract involving total
expenditure in excess of $100,000 or not capable of termination on 90
days notice or less or any service, employment or other agreement not
capable of termination on 30 days notice or less;
(k) except in the normal and ordinary course of business enter into any
transactions exceeding $100,000;
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(l) except in the normal and ordinary course of business, create any
encumbrances over or declare itself trustee of any asset;
(m) purchase or sell any asset for more than $100,000 or total assets for
more than $100,000 except in the normal and ordinary course of
business;
(n) make or agree to make any alteration to the remuneration or terms of
employment of any employee earning more than $100,000 per annum
otherwise than in the ordinary and normal course of business;
(o) except in the normal and ordinary course of business, assume any
liability exceeding $100,000 or give any bank guarantee;
(p) enter into any profit sharing, revenue sharing, cash flow sharing or
profit participation agreement with any person except in the ordinary
course of business;
(q) alter its constitution; or
(r) agree, whether in writing or otherwise, to do any of the above,
and TWC must ensure that no member of the TWC Group (other than TWC) takes any
of the above actions.
10.4 General Conduct of the SVI Business
Until Completion unless TWC otherwise approves (such approval not to be
unreasonably withheld or delayed), SVI must carry on its business in the
ordinary course of usual business and in a normal, proper and efficient manner.
10.5 Consultation
Until Completion, SVI must:
(a) notify TWC as to all material decisions concerning the operation of its
business;
(b) not make any material changes to the operation of its business without
the prior approval of TWC;
(c) provide to TWC copies of all significant reports relating to the
affairs of all members of SVI prepared by or for the management of SVI
at the same time as the reports are provided to senior management of
SVI; and
(d) instruct the management of SVI of the requirements of this Clause.
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10.6 Specific Matters
Until Completion, unless TWC otherwise approves (such approval not to be
unreasonably withheld or delayed) or except as contemplated by this Agreement,
SVI must not:
(a) increase, reduce or otherwise alter its share capital;
(b) issue, sell, purchase, redeem or otherwise acquire any SVI Shares or
other Securities or grant any options for the issue of SVI Shares or
issue any securities with rights of conversion to SVI Securities or
agree to do any of the foregoing;
(c) declare, make or pay any dividends, bonuses or other distributions to
shareholders;
(d) do any act or thing or suffer or permit any omission in contravention
or breach of any of the provisions of any exchange control regulation,
taxation or revenue statute;
(e) do any act or thing or permit any omission which would make any policy
of insurance written for the benefit of SVI void or voidable or do
anything that would mean any existing policy is not in full force and
effect at Completion;
(f) do any act or thing the doing or suffering of which, or permit any
omission which, is or could be a breach of:
a. any industrial or similar award;
b. any determination or order of any tribunal, person or body empowered
to determine any dispute relating to the rights or duties of SVI or of
any trade union or member of a trade union, pursuant to any industrial
or similar award;
c. any term contained or implied in any industrial agreement between
SVI and any trade or labour union;
d. any term contained or implied in any agreement between SVI and any
of the employees of SVI; or
e. which leads or is likely to or could lead to any industrial action
or cause any labour problems of whatever nature;
(g) pass any special resolution;
(h) enter into any hire purchase, leasing or credit sale agreement in
respect of an item the value of which exceeds $100,000;
-22-
(i) make a distribution or revaluation of assets;
(j) except in the normal and ordinary course of business, enter into any
contract involving total expenditure in excess of $100,000 or not
capable of termination on a 90 days notice or less or any service,
employment or other agreement not capable of termination on 30 days
notice or less;
(k) except in the normal and ordinary course of business enter into any
transactions exceeding $100,000;
(l) except in the normal and ordinary course of business, create any
encumbrance over or declare itself trustee of any asset;
(m) purchase or sell any asset for more than $100,000 or total assets for
more than $100,000 except in the normal and ordinary course of
business;
(n) make or agree to make any alteration to the remuneration or terms of
employment of any employee earning more than $100,000 per annum
otherwise than in the ordinary and normal course of business;
(o) except in the normal and ordinary course of business assume any
liability exceeding $100,000 or give any bank guarantee;
(p) enter into any revenue sharing, cashflow sharing, profit sharing or
profit participation agreement with any person except in the ordinary
course of business;
(q) alter its articles of incorporation or bylaws; or
(r) agree, whether in writing or otherwise, to do any of the above.
10.7 Transaction Documents
(a) SVI must not, from the date of this Agreement until the earlier of
termination of this Agreement and Completion, enter into any contract
which is inconsistent with the proposed rights of TWC under the
Transaction Documents.
(b) TWC must not, and must procure that each member of the TWC Group does
not, from the date of this Agreement until the earlier of termination
of this Agreement and Completion, enter into any contract which is
inconsistent with the proposed rights of SVI under the Transaction
Documents.
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10.8 OTC Bulletin Board
Until Completion, SVI agrees that it must use its reasonable endeavours to
maintain inclusion and the quotation of SVI Shares on the OTC bulletin board.
10.9 SVI Access
Until Completion TWG must procure that its Subsidiaries allow the officers,
employees, counsel, agents, investment bankers, accountants and other
representatives of SVI to:
(a) have free and full access to their respective plant, properties, books
and records;
(b) make extracts from the copies of such books and records; and
(c) provide SVI with such additional financial and operating data and other
information as to the financial condition, results of operations,
businesses, properties, assets, liabilities or future prospects of TWG
and its Subsidiaries as SVI from time to time may reasonably request,
provided that this access does not materially interfere with the then business
operations of TWC and its Subsidiaries.
10.10 TWC Access
Until Completion, SVI must allow the officers, employees, counsel, agents,
investment bankers, accountants and other representatives of TWC to:
(a) free and full access to its plant, properties, books and records;
(b) make extracts from the copies of such books and records; and
(c) provide TWC with such additional financial and operating data and other
information as to the financial condition, results of operations,
businesses, properties, assets, liabilities or future prospects of SVI
as TWC may from time to time may reasonably request,
provided that this access does not materially interfere with the then business
operations of SVI.
10.11 Advice of Changes
Until Completion, each Party must immediately advise the other Parties in a
detailed written notice of any material fact or occurrence or any pending or
threatened occurrence of which it obtains knowledge and which:
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(a) (if existing and known at the date of this Agreement) would have been
required to be set out or disclosed in this Agreement;
(b) (if existing and known at any time prior to or at Completion) would
make the performance by any Party of a material obligation contained in
this Agreement impossible or make performance materially more difficult
than in the absence of such fact or occurrence; or
(c) (if existing and known at Completion) would cause a material condition
to any Party's obligations under this Agreement not to be fully
satisfied.
11. CONDITIONS PRECEDENT
11.1 Conditions
Completion and the conclusion of the transactions comprising the Merger
contemplated by this Agreement is conditional on:
(a) satisfaction of all requirements of the Corporations Law for completion
of the buyback of TWG Shares under Clause 3;
(b) receipt by TWC of written confirmation of approval of the Merger and
all of the transactions contemplated by this Agreement by the VSE and
the BCSC (if required);
(c) no occurrence of a material adverse change affecting the assets,
liabilities or prospects of the business of TWC or SVI between the date
of this Agreement and the Completion Date;
(d) approval of the Merger and each transaction contemplated by this
Agreement by shareholders of SVI in general meeting for all purposes
(if required by the laws of the place of incorporation of SVI);
(e) the grant of all necessary regulatory approvals for the Merger and each
transaction contemplated by this Agreement;
(f) completion of due diligence enquiries regarding TWC to the full
satisfaction of XXXX and SVI;
(g) completion of due diligence enquiries regarding SVI to the full
satisfaction of each of TWC and XXXX
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(h) completion of an audited consolidated balance sheet as at 30 June 1998
and profit and loss account for the period to 30 June 1998 for the TWC
Group which is acceptable to XXXX and SVI in their absolute discretion,
(i) completion of an audited consolidated balance sheet as at 31 December
1999 and profit and loss account for the period to 31 December 1999 for
SVI which is acceptable to XXXX and TWC in their absolute discretion;
(j) receipt by TWC of an opinion from counsel for SVI authorised to
practice in the United States of America confirming that:
a. SVI is a corporation validly existing and in good standing under the
laws of the State of Idaho, United States of America, with all
requisite corporate power and authority to own, lease, licence and use
its properties and assets and to carry on the business in which it is
engaged as at the date of this Agreement;
b. SVI is duly qualified to transact the business in which it is
engaged as at the date of this Agreement;
c. the authorised and outstanding capital stock of SVI is 1,100,000
ordinary shares of common stock (of which not more than 600,000 are
held by XXXX and its Affiliates) and all the outstanding shares of
capital stock of SVI are validly authorised, validly issued, fully paid
and non-assessable; and
d. this Agreement has been duly authorised, executed and delivered by
SVI, constitutes the legal, valid and binding obligation of SVI and
(subject to applicable bankruptcy, insolvency and other laws affecting
the enforceability of creditors' rights generally) this Agreement and
each Transaction Document is enforceable as to SVI in accordance with
its terms;
(k) receipt by SVI of an opinion from counsel for TWC authorised to
practice in Bermuda confirming that:
a. TWC is a corporation validly existing and in good standing under the
laws of Bermuda, with all requisite corporate power and authority to
own, lease, licence and use its properties and assets and to carry on
the business in which it is engaged as at the date of this Agreement;
b. TWC is duly qualified to transact the business in which it is
engaged as at the date of this Agreement; and
c. this Agreement has been duly authorised, executed and delivered b,
TWC, constitutes the legal, valid and binding obligation of TWC and
(subject to applicable
-26-
bankruptcy, insolvency and other laws affecting the enforceability of
creditors' rights generally) is enforceable as to TWC in accordance
with its terms;
(l) receipt by TWC or SVI (as the case may be) of such other documents as
that Party may reasonably request from the other party or "XXXX in
order to enable that Party to determine whether the conditions to
Completion have been met or otherwise to carry out the provisions of
this Agreement or implement any transactions related to those
contemplated by this Agreement;
(m) no legal proceeding relating to or seeking to prohibit or otherwise
challenge the consummation of the transactions contemplated by this
Agreement or to obtain substantial damages with respect thereto have
been instituted or threatened;
(n) completion of a capital raising by SVI to raise net proceeds of not
less than $250,000 with the only condition to the release of the
proceeds of the raising being Completion;
(o) the total number of outstanding shares of SVI immediately prior to
Completion being not more than 1,100,000 ordinary shares (of which not
more than 600,000 are held by or on behalf of "XXXX and its Affiliates)
and delivery of an officers certificate in a form acceptable to TWC
confirming this fact; and
(p) receipt by TWC of such other documents executed by XXXX as TWC may
require regarding the performance of AICH's obligations under the
Consulting Agreement.
11.2 Satisfaction of Conditions
Each of the Parties must use their best endeavours to obtain the fulfilment of
the Conditions as soon as practicable.
11.3 Waiver
(a) The Conditions set out in Clauses 11.1(a)-(b) and (c) in the case of
SVI, may be waived by TWC in its absolute discretion.
(b) The Conditions set out in Clauses 11.1(c) in the case of TWC, and (d)
may be waived by SVI in its absolute discretion.
(c) All other Conditions may only be waived by agreement of the Parties.
12. TERMINATION
12.1 Termination Events
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If:
(a) any Condition is not fulfilled or waived by 13 January 1999 (or such
later date agreed by the Parties);
(b) a Party commits a material breach of this Agreement which remains
unremedied for 10 Business Days after the notice of the breach is
served on the Party in default; or
(c) an Insolvency Event occurs with respect to a Party,
then, if the Party who seeks to terminate the Agreement has complied with its
obligations under Clause 11.2 and, in the case of Clause 12.1(b) is not the
Party in breach, this Agreement may be terminated at any time before Completion
on not less than 2 Business Days notice given by that Party to the others.
12.2 Materiality
For the purposes of this Clause 12, Material means material to the decision of a
prudent intending purchaser of the business of the TWC Group or business of SVI
(as the case may be), in the circumstances of the Party not in breach, in
determining whether or not to proceed with the Acquisition on the terms and
subject to the conditions of this Agreement.
12.3 Rights on Termination
If this Agreement is terminated under this Clause 12, in addition to any other
rights, powers or remedies provided by law:
(a) each Party is released from its obligations to further perform the
Agreement except those under Clauses 13.1 and 13.2; and
(b) each Party retains the rights it has against any other Party in respect of
any past breach.
13. INTENTIONALLY DELETED
14. POST-COMPLETION UNDERTAKINGS
14.1 Application for Listing
(a) SVI must use its best endeavours to satisfy the listing requirements of
the Exchange and must promptly apply for listing of SVI and quotation
of SVI Shares on an Exchange as soon as possible and in any event
within 60 days after completion of the Placement.
-28-
(b) Each of "XXXX and TWC must provide to SVI and permit the disclosure of
all information relating to the business conducted by that Party which
SVI may reasonably require and will otherwise co-operate with SVI in
the preparation of an application for listing of SVI and quotation SVI
Shares on an Exchange including, without limitation, compliance with
continuous disclosure obligations imposed by the Exchange or the
security laws and regulations of the jurisdiction in which the Exchange
operates.
(c) Each of "XXXX and TWC must promptly advise SVI if any information
provided to SVI under Clause 14.1(a) becomes inaccurate or incomplete
in any material respect and to provide the information needed to
correct that inaccuracy.
14.2 Acknowledgment
(a) TWC acknowledges that the 1933 Act, 1934 Act and "XXXX may require TWC
to Accept restrictions on its ability to re-sell the Merger Securities.
(b) TWC and "XXXX must use their best endeavours to negotiate the terms of
re-sale restrictions for the Merger Securities having regard to current
market practice in the securities industry in the United States of
America and the transactions contemplated by this Agreement.
(c) Any agreement reached under clause 14.1(b) must permit TWC to undertake
an exchange of Merger Securities held by TWC for the transfer and
cancellation of TWC Shares held by TWC shareholders in accordance with
the issuer bid provisions of the Securities Act and the share buy-back
provisions of the Corporations Law and may require agreement to the
imposition of comparable re-sale restrictions on those TWC shareholders
who participate in the Issuer Bid and who following completion of the
Issuer Bid would constitute an Affiliate of SVI.
15. COSTS AND STAMP DUTY
15.1 Costs
(a) Subject to Clause 15.1(b), SVI must pay all reasonable costs associated
with the preparation, negotiation and execution of this Agreement and
the Transaction Documents and related in any way to completion of the
Transactions contemplated by this Agreement including, without
limitation, legal fees on a solicitor - own client basis incurred by
TWC, TWG and XXXX.
(b) The Parties acknowledge that TWC has paid up to US$5,000 to meet
expenses associated with preparation of any registration statement
required to be filed with the SEC to permit TWC to re-sell the Merger
Securities in the United States of America and admission of
-29-
SVI to the official list of an Exchange and quotation of the Merger
Securities on an Exchange. "XXXX must pay the balance of all such
costs.
15.2 Stamp Duty
SVI must bear all stamp duty payable on this Agreement and each document and/or
transaction contemplated by it.
16. INTENTIONALLY DELETED
17. INTENTIONALLY DELETED
18. NOTICES
18.1 Notices
A notice, approval, consent or other communication in connection with the
Agreement:
(a) must be in writing;
(b) must be marked for the attention of the persons specified below; and
(c) must be left at the address of the addressee, or sent by prepaid
security post (airmail if posted to or from a place outside Australia)
to the address of the addressee or sent by facsimile to the facsimile
number of the addressee which is specified in this Clause or if the
addressee notifies another address or facsimile number then to that
address or facsimile number.
The address, and facsimile of each party is:
TWC:
Address: Xxxxx 00, Xxxxxxxxx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxx XXX 0000
Xxxxxxxxx
Facsimile: (000) 0000 0000
Attention: Xxxx Xxxx
SVI:
Address:
Facsimile:
Attention:
-30-
XXXX
Address: 0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000, Xxxx Xxxxx
Xxxxxxx, 00000
Xxxxxx Xxxxxx of America
Facsimile: (0 000) 000 0000
Attention: Xxxxxxx lamunno
18.2 A notice, approval, consent to other communication takes effect from
the time it is received unless a later time is specified in it.
18.3 Receipt
A letter or facsimile is taken to be received:
(a) where delivered by hand, at the time of delivery;
(b) where dispatched by facsimile transmission, 24 hours after the time
recorded on the transmitting machine unless:
a. within those 24 hours the intended recipient has informed the sender
that the transmission was received in an incomplete or garbled form; or
b. the transmission result report of the sender indicates a faulty or
incomplete transmission;
(c) where dispatched by security post, on acknowledgment of receipt by
or behalf of the recipient,
but if any delivery or receipt is on a day other than a Business Day or is later
than 4.00 pm (local time) on any day, the notice will be vacant to be received
on the next Business Day.
19. ASSIGNMENT
A Party may not assign its rights under this Agreement without the consent of
the other Party.
20. GENERAL
20.1 Exercise of Rights
A Party may exercise a right, power or remedy at its discretion, and separately
or concurrently with another right, power or remedy. A single or partial
exercise of a right, power or remedy by a Party does not prevent a further
exercise of that or of any other right, power or remedy. Failure
-31-
by a Party to exercise or delay in exercising a right, power or remedy does not
prevent its exercise.
20.2 Waiver & Variation
A provision of or a right created under this Agreement may not be:
(a) waived except in writing signed by the Party granting the waiver; or
(b) varied except in writing signed by the Parties.
20.3 Approvals & Consents
A Party may give conditionally or unconditionally or withhold its approval or
consent in its absolute discretion unless this Agreement expressly provides
otherwise. 1 20.4 Remedies
20.4 Remedies Cumulative
Except as provided in this Agreement, the rights, powers and remedies provided
in this Agreement are cumulative with and not exclusive of the rights, powers or
remedies provided by law independently of this Agreement.
20.5 No Merger
The provisions of this Agreement do not merge on Completion.
20.6 Survival of Indemnities
Each indemnity in this Agreement is a continuing obligation, separate and
independent from the other obligations of the Parties and survives Completion
and otherwise survives termination of this Agreement.
20.7 Enforcement of Indemnities
It is not necessary for a Party to incur an expense or make payment before
enforcing a right of indemnity conferred by this Agreement.
20.8 Further Assurances
Each Party agrees, at its own expense, on the request of any other Party, to do
everything reasonably necessary to:
(a) give effect to this Agreement;
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(b) give effect to the transactions contemplated by this Agreement
including, without limitation:
a. the acquisition;
b. the execution of the Transaction Documents; and
c. the issue of securities; and
(c) to use all reasonable endeavours to cause relevant third parties to
give effect to t the transactions contemplated by Clauses 20.8(a) and
20.8(b).
20.9 No Representation or Warranties
Each Party acknowledges and represents and warrants to the other that in
entering into this Agreement it has not relied on any representations or
warranties about its subject matter given by any person except as provided in
this Agreement.
21. GOVERNING LAW
21.1 Governing Law
(a) This Agreement and the transactions contemplated by this Agreement are
governed by the law in force in the State of New South Wales.
(b) Each Party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of the State of New South Wales.
EXECUTED as an Agreement.
SIGNED by TRADE WIND )
COMMUNICATIONS LIMITED )
in the presence of )
------------------------------ ------------------------------
Director/Secretary Director
------------------------------ ------------------------------
Name (please print) Name (please print)
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SIGNED for and on behalf of )
TRADE WIND GROUP PTY )
LIMITED in the presence of : )
------------------------------ ------------------------------
Director/Secretary Director
------------------------------ ------------------------------
Name (please print) Name (please print)
SIGNED for and on behalf of )
XXXXX VENTURE, INC. by its )
attorney in the presence of: )
------------------------------ ------------------------------
President/Director Witness
------------------------------ ------------------------------
Name (please print) Name (please print)
SIGNED for and on behalf of )
ATLANTIC I INTERNATIONAL )
CAPITAL HOLDINGS, LTD )
by its attorney in the presence of: )
------------------------------ ------------------------------
Witness Director
------------------------------ ------------------------------
Name (please print) Name (please print)
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SCHEDULE 1
TWC Representations & Warranties
TWC represents and warrants that:
(a) TWC has been duly incorporated as a company in accordance with the laws
of the Bermuda and is validly existing under those laws;
(b) it has power to enter into and perform its obligations under this
Agreement and, on satisfaction of the Conditions, the Transaction
Documents;
(c) it has in full force and effect all authorizations necessary to enter
into this Agreement and, on satisfaction of the Conditions, the
Transaction Documents, perform its obligations under this Agreement and
the Transaction Documents and allow this Agreement and the Transaction
Documents to be enforced;
(d) its obligations under this Agreement are valid and binding and are
enforceable against it in accordance with its terms;
(e) on execution, its obligations under the Transaction Documents will be
valid and binding and will be enforceable against it in accordance with
its terms;
(f) the execution, delivery and performance of this Agreement and, on
satisfaction of the Conditions, the Transaction Documents and
compliance with the provisions of this Agreement and the Transaction
Documents by TWC will not:
a. violate any provision of law, statute, ordinance, rule or regulation
or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or any governmental body, the violation of
which would have a material adverse impact on the financial condition
or business of TWC;
b. conflict with or result in any breach of any terms, conditions or
provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any right of termination, cancellation
or acceleration) under any material agreement, document, instrument,
contract, understanding, arrangement, note, indenture, mortgage or
leases) to which TWC is a party or under which TWC or any of its assets
is bound or affected; or
c. result in the creation of lien, security interest, charge or
encumbrance upon any of the properties or assets of TWC;
-35-
(g) it has the power and authority to own and operate its properties and
assets and to carry on its business as now conducted and is proposed to
be conducted in accordance with this Agreement;
(h) it is qualified to transact business and is in good standing in each
jurisdiction in which the failure to qualify would have a material
adverse effect on its business or properties;
(i) except as set out in this Agreement there is no action, suit,
proceeding or investigation pending or to TWC's knowledge, currently
threatened against TWC which questions the validity of this Agreement
or the Transaction Documents or the right of TWC to enter into this
Agreement or the Transaction Documents, or to consummate the
transactions contemplated by this Agreement or the Transaction
Documents, or result in any change in the current equity ownership of
TWC, nor is TWC aware that there is any basis for the foregoing. TWC is
not a party to any order, writ, injunction, judgment or decree of any
court;
(j) except as set out in TWC's Balance Sheet as at 30 June 1998 and
provided to SVI and "XXXX prior to execution of this Agreement (the
~TWC Balance Sheets), TWC has not incurred any unpaid indebtedness for
money borrowed or any other liabilities, contingent or otherwise;
(k) it maintains and consistently applies and will continue to maintain and
consistently apply a standard system of accounting established and
administered in accordance with general accepted accounting principles;
(l) it has filed all tax returns and reports as required, and within the
time prescribed, by law, including without limitation, all federal,
state and local income, excise or franchise tax returns, real estate
and personal property tax returns, sales tax returns, payroll tax
returns and other tax returns or reports of a crime to be filed by it.
These returns and reports are true and correct in all material
respects;
(m) it has paid or made provision for the payment of all accrued and
un-paid taxes and other charges to which TWC is subject and which are
not currently due and payable;
(n) the income tax returns of TWC have never been audited by the Australian
Taxation Office and TWC has not agreed to an extension of the statute
of limitation with respect to any of its tax years;
(o) neither the Australian Taxation Office nor any other taxing authority
is now asserting, nor is threatening to assert against TWC any
deficiency or claim for additional taxes or interest or penalties in
connection with that such deficiency, nor does such deficiency or claim
or basis of such deficiency or claim exist;
-36-
(p) it understands that the representations and warranties given in this
Agreement are deemed material and have been relied on by SVI and XXXX
(q) no representation or warranty by TWC in this Agreement and no written
statement contained in any document, certificate or other writing
delivered by TWC to SVI or "XXXX contains any untrue statement of
material fact or omits to state any material fact necessary to make
such statements, in light of the Circumstances under which they were
made, not misleading.
(r) to the best of the knowledge and belief of TWC, all information:
a. which a reasonably prudent purchaser (in the circumstances of TWC)
and its professional advisers would reasonably require for the purpose
of making an informed assessment of whether or not to proceed with the
Acquisition regarding the assets and liabilities, financial position
and profits and losses of the TWC; and
b. which has been sought by SVI or its professional advisers,
has been disclosed to TWC or its professional advisers;
(s) to the best of the knowledge and belief of TWC all information given by
TWC and its professional advisers to SVI and its professional advisers
in the course of negotiations leading to this Agreement and Completion
is true and accurate in all respects;
(t) to the best of the knowledge and belief of TWC none of the information
given by TWC and its professional advisers to SVI and its professional
advisers in the course of negotiations leading to this Agreement and
Completion is misleading in any particular, whether by omission or
otherwise.
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SCHEDULE 2
XXXX Representations & Warranties
XXXX represents and warrants that:
(a) XXXX has been duly incorporated as a company in accordance with the
laws of the Bermuda and is validly existing under those laws;
(b) it has power to enter into and perform its obligations under this
Agreement and, on satisfaction of the Conditions, the Transaction
Documents;
(c) it has in full force and effect all authorizations necessary to enter
into this Agreement and, on satisfaction of the Conditions, the
Transaction Documents, perform its obligations under this Agreement and
the Transaction Documents and allow this Agreement and the Transaction
Documents to be enforced;
(d) its obligations under this Agreement are valid and binding and are
enforceable against it in accordance with its terms;
(e) on execution, its obligations under the Transaction Documents will be
valid and binding and will be enforceable against it in accordance with
its terms;
(f) the execution, delivery and performance of this Agreement and, on
satisfaction of the Conditions, the Transaction Documents and
compliance with the provisions of this Agreement and the Transaction
Documents by "XXXX will not:
a. violate any provision of law, statute, ordinance, rule or regulation
or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or any governmental body, the violation of
which would have a material adverse impact on the financial condition
or business of "XXXX
b. conflict with or result in any breach of any terms, conditions or
provisions of, or constitute (with due notice or lapse of time, or
both) default (or give rise to any right of termination, cancellation
or acceleration), under any material agreement, document, instrument,
contract, understanding, arrangement, note, indenture, mortgage or
leases) to which "XXXX is a party or under which "XXXX or any of its
assets is bound or affected; or
c. result in the creation of lien, security interest, charge or
encumbrance upon any of the properties or assets of XXXX;
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(g) except as set out in this Agreement there is no action, suit,
proceeding or investigation pending or to AlCH's knowledge, currently
threatened against XXXX which questions the validity of this Agreement
or the Transaction Documents or the right of "XXXX to enter into this
Agreement or the Transaction Documents, or to consummate the
transactions contemplated by this Agreement or the Transaction
Documents, or result in any change in the current equity ownership of
"XXXX nor is "XXXX aware that there is any basis for the foregoing.
"XXXX is not a party to any order, writ, injunction, judgment or decree
of any court;
(h) it understands that the representations and warranties given in this
Agreement are deemed material and have been relied on by TWC and SVI;
(i) no representation or warranty by "XXXX in this Agreement and no written
statement contained in any document, certificate or other writing
delivered by "XXXX to TWC or SVI contains any untrue statement of
material fact or omits to state any material fact necessary to make
such statements, in light of the circumstances under which they were
made, not misleading.
(j) to the best of the knowledge and belief of "XXXX all information given
by XXXX and its professional advisers to TWC and its professional
advisers in the course of negotiations leading to this Agreement and
Completion is true and accurate in all respects;
(k) to the best of the knowledge and belief of "XXXX none of the
information given by XXXX and its professional advisers to TWC and its
professional advisers in the course of negotiations leading to this
Agreement and Completion is misleading in any particular, whether by
omission or otherwise.
-39-
SCHEDULE 3
SVI Representations & Warranties
Each of the Principals and SVI represents and warrants that:
(a) SVI has been duly incorporated as a company in accordance with the laws
of the State of Idaho and is validly existing under those laws;
(b) it has power to enter into and perform its obligations under this
Agreement and, on satisfaction of the Conditions, the Transaction
Documents;
(c) it has in full force and effect all authorizations necessary to enter
into this Agreement and, on satisfaction of the Conditions, the
Transaction Documents, perform its obligations under this Agreement and
the Transaction Documents and allow this Agreement and the Transaction
Documents to be enforced;
(d) its obligations under this Agreement are valid and binding and are
enforceable against it in accordance with its terms;
(e) on execution, its obligations under the Transaction Documents will be
valid and binding and will be enforceable against it in accordance with
its terms;
(f) the execution, delivery and performance of this Agreement and, on
satisfaction of the Conditions, the Transaction Documents and
compliance with the provisions of this Agreement and the Transaction
Documents by SVI will not:
a. violate any provision of law, statute, ordinance, rule or regulation
or any ruling, writ, injunction, order, judgment or decree of any
court, administrative agency or any governmental body, the violation of
which would have a material adverse impact on the financial condition
or business of SVI;
b. conflict with or result in any breach of any terms, conditions or
provisions of, or constitute (with due notice or lapse of time, or
both) default (or give rise to any right of termination, cancellation
or acceleration), under any material agreement, document, instrument,
contract, understanding, arrangement, note, indenture, mortgage or
leases) to which SVI is a party or under which SVI or any of its assets
is bound or affected; or
c. result in the creation of lien, security interest, charge or
encumbrance upon any of the properties or assets of SVI;
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(g) it has the power and authority to own and operate its properties and
assets and to carry on its business as now conducted and is proposed to
be conducted in accordance with this Agreement;
(h) it is qualified to transact business and is in good standing in each
jurisdiction in which the failure to qualify would have a material
adverse effect on its business or properties;
(i) it has delivered to TWC true, correct and complete copies of its
Certificate of Incorporation and the By-Laws in effect on the date of
this Agreement;
(j) immediately prior to Completion, the authorised and outstanding capital
of SVI is 1,100,000 ordinary shares of common stock;
(k) except as disclosed in writing to TWC and "XXXX prior to execution of
this Agreement there are:
a. no outstanding options, warrants, rights (including conversion or
preemptive rights) or agreements pursuant to which SVI is or may be
obligated to issue, sell or repurchase any securities of SVI;
b. no restrictions on the transfer of SVl's capital stock imposed by
its by-laws or any agreement to which SVI is a party, in the order of
any court or governmental agency to which SVI is subject, or any
statute other than those imposed by relevant state and federal
securities law;
c. no cumulative voting or pre-emptive rights for any of SVl's capital
stock;
d. no registration rights under the 1934 Act with respect to SVl's
capital stock;
e. no anti-dilution adjustment provisions or similar rights with
respect to the outstanding securities of SVI which will be triggered by
the issue of the securities contemplated by this Agreement;
f. no voting trusts or agreements, shareholders agreements, pledge
agreements, by-sell rights, rights of first offer, negotiation or
refusal or proxies or similar arrangements relating to any securities
of SVI to which SVI is a party; and
g. (vii) to the best of SVl's knowledge and belief, no options or other
rights to purchase securities from its shareholders granted by such
shareholders;
(l) it has never owned nor does it presently own or control, directly or
indirectly, any other corporation, association, or other business
entity and has never owned or controlled and does not currently own or
control, directly or indirectly, any capital stock or other
-41-
ownership interests, directly or indirectly, in any corporation,
association, partnership, trust, joint venture, or other entity than
otherwise as envisaged under this Agreement;
(m) except as set out in this Agreement there is no action, suit,
proceeding or investigation pending or to the knowledge of SVI or the
Principals, currently threatened against SVI which questions the
validity of this Agreement or the Transaction Documents or the right of
SVI to enter into this Agreement or the Transaction Documents, or to
consummate the transactions contemplated by this Agreement or the
Transaction Documents, or result in any change in the current equity
ownership of SVI, nor is SVI or a Principal aware that there is any
basis for the foregoing. SVI is not a party to any order, writ,
injunction, judgment or decree of any court;
(n) except as set out in SVl's Balance Sheet as at 30 December 1998 (the
SVI Balance Sheet"), SVI has not incurred any unpaid indebtedness for
money borrowed or any other liabilities, contingent or otherwise;
(o) since the date of the SVI Balance Sheet, SVI has conducted no
operations;
(p) except as set forth in the SVI Balance Sheet, SVI has no liabilities,
contingent or otherwise and SVI is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
(q) it maintains and consistently applies and will continue to maintain and
consistently apply a standard system of accounting established and
administered in accordance with general accepted accounting principles;
(r) it has filed all tax returns and reports as required, and within the
time prescribed, by law, including without limitation, all federal,
state and local income, excise or franchise tax returns, real estate
and personal property tax returns, sales tax returns, payroll tax
returns and other tax returns or reports of a crime to be filed by it.
These returns and reports are true and correct in all material
respects;
(s) it has paid or made provision for the payment of all accrued and
un-paid taxes and other charges to which SVI is subject and which are
not currently due and payable;
(t) the Federal income tax returns of SVI have never been audited by the
Internal Revenue Service and SVI has not agreed to an extension of the
statute of limitation with respect to any of its tax years;
(u) neither the Internal Revenue Service nor any other taxing authority is
now asserting, nor is threatening to assert against SVI any deficiency
or claim for additional taxes or interest or penalties in connection
with that such deficiency, nor does such deficiency or claim or basis
of such deficiency or claim exist;
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(v) the stock consolidation and stock split implemented by SVI prior to
Completion to ensure the total outstanding shares of common stock of
SVI is 1,100,000 has been undertaken in accordance with the certificate
of incorporation and bylaws of SVI and is compliant in all respects
with requirements of the laws of the place of incorporation of SVI and
any other laws or regulations binding on SVI;
(w) it understands that the representations and warranties given in this
Agreement are deemed material and have been relied on by TWC and "XXXX
(x) no representation or warranty by SVI in this Agreement and no written
statement contained in any document, certificate or other writing
delivered by SVI to TWC or XXXX contains any untrue statement of
material fact or omits to state any material fact necessary to make
such statements, in light of the circumstances under which they were
made, not misleading.
(y) to the best of the knowledge and belief of SVI, all information,.
a. which a reasonably prudent purchaser (in the circumstances of SVI)
and its professional advisers would reasonably require for the purpose
of making an informed assessment of whether or not to proceed with the
Acquisition regarding the assets and liabilities, financial position
and profits and losses of the SVI; and
b. which has been sought by TWC or its professional advisers,
has been disclosed to SVI or its professional advisers;
(z) to the best of the knowledge and belief of SVI all information given by
SVI and its professional advisers to TWC and its professional advisers
in the course of negotiations leading to this Agreement and Completion
is true and accurate in all respects;
(aa) to the best of the knowledge and belief of SVI none of the information
given by SVI and its professional advisers to TWC and its professional
advisers in the course of negotiations leading to this Agreement and
Completion is misleading in any particular, whether by omission or
otherwise.
SCHEDULE 4
XXXX Agreement
CONSULTING AGREEMENT
This Agreement is effective as of the day of January, 1999, by and
between XXXXX VENTURE, INC. (the "Company"), and ATLANTIC INTERNATIONAL CAPITAL
HOLDINGS, LTD., a Bermuda corporation (the "Consultant").
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WHEREAS, the Company is a publicly held company; and
WHEREAS, the Consultant is in the business of assisting public
companies in financial relations; and
WHEREAS, the Company desires to retain Consultant to provide certain
specified services for the Company, including without limitation the services
outlined on Exhibit A.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. Duties and Involvement
a. The Company hereby engages Consultant to provide financial and
public relations services set out below and in Exhibit A (the "Services"). Such
services will generally include advice to and consulting with the Company's
management concerning marketing surveys, investor profile information, methods
of expanding investor support and increasing investor awareness of the Company
and its products and/or services. Consultant will also provide additional
services to the Company, including broker relations, the preparation of
necessary or desirable public and private securities offering and registration
documents in consultation with the Company and format of due diligence meetings,
and attendance at conventions and trade shows and do all other things required
by the Company to enable registration of securities of the Company. Consultant
shall be responsible for all expenses incurred in connection with providing
services to the Company. Consultant shall perform finders duties in the good
faith effort to arrange the private placement of ordinary shares of Company
common stock to raise gross proceeds of not less than US$3,660,000.00, after
reduction for customary direct selling expenses ("Private Placement"). The
Private Placement shall require a minimum issue price of US$3.00 per share for
the Company's common stock other than in respect of issue referred to in Clause
2(a).
b. Consultant acknowledges that neither Consultant nor any of its
employees or affiliates is an officer, director, or agent of the Company, that
in rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
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2. Term
This Agreement shall continue until twelve (12) months from date of
execution. This Agreement shall terminate prior to that date at the election of
the Company by written notice to Consultant in the event:
a. Consultant does not introduce to the Company persons or entities
that purchase a minimum of 300,000 shares of common stock of the Company at a
minimum per share price of $2.50 to provide net proceeds of not less than
$750,000 available to the Company by no later than January 31, 1999;
b. Consultant does not introduce to the Company persons or entities
that purchase a minimum 1,000,000 shares of common stock of the Company to
provide net proceeds of not less than $3,660,000 available to the Company within
70 days of the date of this Agreement or such later date as may be fixed by the
Company;
c. Consultant breaches a material term of this Agreement;
d. Any representation given by Consultant to the Company is or becomes
incorrect or misleading in a material respect; or
e. Consultant becomes unable to pay its debts as and when it falls due,
a resolution is passed or any steps are taken to wind up Consultant, an
administrator, receiver, liquidator, provisional liquidator or other external
controller is appointed to the Company or in respect of any of its assets.
3. Compensation
As total and complete consideration for the Services to be provided by
Consultant to the Company, and provided that Consultant has not materially
breached this Agreement, the Consultant or its designee shall receive:
a. Eight (8%) Percent of the net offering proceeds from the Private
Placement received by the Company from those investors introduced by
the Consultant to the Company; and
b. US$5,000.00 per month payable on the seventh day of each month
hereafter. In addition, Consultant shall be reimbursed for all
reasonable out-of-pocket expenses incurred by Consultant with respect
to the Services (other than relating to the Private Placement) provided
those expenses have been approved by the Company and Trade Wind
Communications Limited before being incurred.
-45-
4. Services Not Exclusive
Consultant shall devote such time and effort as necessary to discharge
its duties hereunder. The Company acknowledges that Consultant is engaged in
other business activities and that it will continue such activities during the
term of this Agreement, subject to the other terms and conditions hereof shall
not be restricted from engaging in other business activities during the term of
this Agreement.
5. Confidentiality
Consultant acknowledges that it will have access to confidential
information regarding the Company and its businesses. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, use, divulge,
furnish, or make accessible to any person (other than with the written
permission of the Company) any knowledge or information or plans of the Company
with respect to the Company or its businesses, including, but not limited to,
the products, financial information, ideas, and other trade secrets of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof, and
any other information identified by the Company as confidential except as
expressly authorised by the Company.
6. Assignment
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
7. Representations
Consultant represents to the Company that the Consultant holds all necessary
authorizations and licences required by United States Federal or State law
necessary to enable it to undertake its obligations in accordance with this
Agreement. The Consultant acknowledges that the Company has entered into this
Agreement in reliance on this representation.
8. Indemnification
a. The Company agrees to indemnify and hold harmless Consultant and its
agents and employees against any losses, claims, damages or liabilities, joint
or several, to which Consultant or any such other person may become subject,
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof arise out of or
are based upon any untrue statement of any material fact contained in the
Registration Statement, any preliminary prospectus, the prospectus, or any
amendment or supplement thereto, or arise out of or are based upon the omission
to state therein a material fact required to make the statements contained
therein not misleading, and will reimburse the Consultant or any such other
person for any legal or other expenses reasonably incurred by Consultant or any
such other
-46-
person in connection with investigating or defending any such loss, claim,
damage, liability, or action, suit or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based, in whole or in part, upon
an untrue statement, or omission or alleged omission from the Registration
Statement, any preliminary prospectus, the prospectus, or any such amendment or
supplement, in reliance upon and in conformity with information furnished to the
Company by the Consultant. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
b. Consultant will indemnify and hold harmless the Company, each of its
directors, each of its officers who has signed the Registration Statement and
each person, if any, who controls the Company within the meaning of the Act
against any losses, claims, damages or liabilities to which the Company or any
such other person may become subject, under the Act or otherwise, insofar as
such losses, claims, damages, or liabilities (or actions, suits, or proceedings
in respect thereof) arise out of or are based upon any untrue statement of any
material fact contained in the Registration Statement, any preliminary
prospectus, the prospectus, or any amendment or supplement thereto, or arise out
of or are based on the omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading to the
extent that such untrue statement or omission is made or omitted in whole or in
part in reliance upon and in conformity with information furnished to the
Company by Consultant. Consultant will reimburse any legal or other expenses
reasonably incurred by the Company or any such other person in connection with
investigating or defending any such loss, claim, damage, liability, or action,
suit or proceeding. This indemnity agreement will be in addition to any
liability which the Consultant may have.
c. Consultant will indemnify and hold harmless the Company, each of its
directors, each of its officers and each person, if any, who controls the
Company within the meaning of the Act, against any losses, claims, damages or
liabilities to which the Company or any such other person may become subject,
under the Act or otherwise, in so far as such losses, claims, damages or
liabilities (or actions, suits or proceedings in respect thereof) arise out of
or are based upon any breach of a representation by the Consultant under this
Agreement or any breach of an obligation of the Consultant under this Agreement.
d. Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, suit or proceeding, such indemnified
party will, if a claim in respect thereof is to be made against an indemnifying
party under this Section, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise that
under this Section. In case any such action, suit or proceeding is brought
against any indemnified party, and it notified an indemnifying party of the
Commencement thereof, the indemnifying party will be entitled to participate
therein, and, to the extent it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party, and after notice from the indemnifying
party to such
-47-
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation.
9. Notices - All notices required or permitted to be given under with
Agreement shall be in writing and shall be deemed to have been duly given: (i)
two (2) hours after delivered personally to the party to be notified; or (ii)
five (5) business days after deposited in the U.S. mail, postage paid via
registered or certified mail, return receipt requested. Notices to the Company
shall be addressed to its president at its principal executive office and to the
Consultant et the address set forth beneath the signature line, or to such other
addresses as either party may designate upon at least ten days' notice to the
other party.
10. Entire Agreement - This Agreement contains the entire understanding and
agreement between the parties. There are no other agreements, conditions or
representations, oral or written, express or implied, with regard thereto. This
Agreement may be amended only in writing signed by both parties.
11. Non-waiver - A delay or failure by either party to exercise a right under
this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.
12. Headings - Headings in this Agreement are for convenience only and shall not
be use Id to interpret or construe its provisions.
13. Counterparts - This Agreement may be executed in counterparts, each of which
shall be deemed an original but all of which together shall constitute one and
the same agreement.
14. Binding Effect - The provisions of this Agreement shall be binding upon the
parties, their successors and assigns.
15. Severability - If any provision of this Agreement or application thereof to
any . person or circumstance shall be deemed or held to be invalid, illegal, or
unenforceable to any extent, the remainder of this Agreement shall not tee
affected end the application of such affected provision shall be enforced to the
greatest extent possible under law.
16. Restrictions -
a. Company states and represents that there are no S-8 registrations in
effect or contemplated.
a. Company states and represents that there are no Regulation-S
placements in effect or contemplated.
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first above written.
XXXXX VENTURE, INC. ATLANTIC INTERNATIONAL
CAPITAL HOLDINGS, LTD.
By: /s/ Xxxx Xxx By:/s/ Xxxxxxx Iammuno
---------------- ----------------------
Matt Xxx Xxxxxxx Iammuno
-------- ---------------
President/Director Director
EXHIBIT A
DIRECT MAIL CAMPAIGN
The Company, with Consultant's advice, will choose one of two possible
publications for direct mail purposes. By _____________, a four page,
four color direct mail lead generation piece highlighting the Company
and benefits of owning the Company's stock will be created and mailed
to 100, 000 selected investors. This piece, printed either on heavy
gloss, includes a postage paid business reply card or an identifying
telephone number enabling investors to respond immediately. The second
is a 4-color, 2-page 250,000 piece mailing in ___________ magazine. The
magazine will highlight the Company in a familiar newsletter or
magazine format. Additionally, at the Company's option market makers
names and phone numbers may be listed directly on the mailing piece for
call-in generation. Campaign services for both choices will include
creative writing, design, artwork, printing, list rentals, mail
handling, postage, and business reply card coordination.
PUBLICATIONS
Personal Investing News
International, Money and Politics
PRINT MEDIA ADVERTISING
An advertisement, geared to both brokers and investors, will be created
and inserted in a major financial and investment related newspaper or
magazine. The emphasis is to utilize publications that target and
deliver large numbers of brokers and investors without the
prohibitively high advertising costs of the more famous media
counterparts.
-49-
OTHER SERVICES
Such other services as are reasonably intended and designed to provide
complete financial and public relations support to the Company during
the term of this agreement as contemplated under this consulting
agreement or as otherwise deemed appropriate by Consultant.
-50-
SCHEDULE 5
Management Agreement
This Agreement is effective as of the day of January, 1999, by and
between XXXXX VENTURE, INC. (the "Company"), and TRADE WIND COMMUNICATIONS
LIMITED, a Bermuda corporation (the "Consultant").
WHEREAS, the Company is a publicly held company; and
WHEREAS, the Company desires to retain Consultant to provide certain
specified services for the Company, including without limitation the services
outlined on Exhibit A.
NOW, THEREFORE, in consideration of the mutual covenants and promises
contained herein, the receipt and sufficiency of which is hereby acknowledged,
the parties hereby agree as follows:
1. Duties and Involvement
a. The Company hereby engages Consultant to provide management services
set out below (the "Services"). Such services will generally include advice to
and consulting with the Company's management concerning the conduct of a
business distributing communication systems and data applications to clients in
the financial services industry in Australia, particularly providing products
and services that facilitate the execution of purchase and sale transactions
involving securities, commodities and other financial instruments.
b. Consultant acknowledges that neither Consultant nor any of its
employees or affiliates is an officer, director, or agent of the Company, that
in rendering advice or recommendations to the Company it is not and will not be
responsible for any management decisions on behalf of the Company and that it is
not authorized or empowered to commit the Company to any recommendation or
course of action. The Company represents that Consultant does not have, through
stock ownership or otherwise, the power to control the Company nor to exercise
any dominating influence over its management.
2. Term
This Agreement shall continue until two (2) years from date of
execution. This Agreement shall terminate prior to that date at the election of
the Company by written notice to Consultant in the event:
a. Consultant breaches a material term of this Agreement;
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b. Any representation given by Consultant to the Company is or becomes
incorrect or misleading in a material respect; or
c. Consultant becomes unable to pay its debts as and when it falls due,
a resolution is passed or any steps are taken to wind up Consultant, an
administrator, receiver, liquidator, provisional liquidator or other external
controller is appointed to the Company or in respect of any of its assets.
3. Compensation
As total and complete consideration for the Services to be provided by
Consultant to the Company, and provided that Consultant has not materially
breached this Agreement, the Consultant or its designee shall receive
US$5,000.00 per month payable on the seventh day of each month hereafter. In
addition, Consultant shall be reimbursed for all reasonable out-of-pocket
expenses incurred by Consultant with respect to the provided those expenses have
been approved by the Company before being incurred.
4. Services Not Exclusive
Consultant shall devote such time and effort as necessary to discharge
its duties hereunder. The Company acknowledges that Consultant is engaged in
other business activities and that it will continue such activities during the
term of this Agreement, subject to the other terms and conditions hereof.
Consultant shall not be restricted from engaging in other business activities
during the term of this Agreement.
5. Confidentiality
Consultant acknowledges that it will have access to confidential
information regarding the Company and its businesses. Consultant agrees that it
will not, during or subsequent to the term of this Agreement, use, divulge,
furnish, or make accessible to any person (other than with the written
permission of the Company) any knowledge or information or plans of the Company
with respect to the Company or its businesses, including, but not limited to,
the products, financial information, ideas, and other trade secrets of the
Company, whether in the concept or development stage or being marketed by the
Company on the effective date of this Agreement or during the term hereof, and
any other information identified by the Company as confidential except as
expressly authorised by the Company.
6. Assignment
This Agreement may not be assigned by either party hereto without the
written consent of the other but shall be binding upon the successors of the
parties.
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7. Notices - All notices required or permitted to be given under with
Agreement shall be in writing and shall be deemed to have been duly given: (i)
two (2) hours after delivered personally to the party to be notified; or (ii)
five (5) business days after deposited in the U.S. mail, postage paid via
registered or certified mail, return receipt requested. Notices to the Company
shall be addressed to its president at its principal executive office and to the
Consultant at the address set forth beneath the signature line, or to such other
addresses as either party may designate upon at least ten days' notice to the
other party.
8. Entire Agreement - This Agreement contains the entire understanding
and agreement between the parties. There are no other agreements, conditions or
representations, oral or written, express or implied, with regard thereto. This
Agreement may be amended only in writing signed by both parties.
9. Non-waiver - A delay or failure by either party to exercise a right
under this Agreement, or a partial or single exercise of that right, shall not
constitute a waiver of that or any other right.
10. Headings - Headings in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.
11. Counterparts - This Agreement may be executed in counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same agreement.
12. Binding Effect - The provisions of this Agreement shall be binding
upon the parties, their successors and assigns.
13. Severability - If any provision of this Agreement or application
thereof to any person or circumstance shall be deemed or held to be invalid,
illegal, or unenforceable to any extent, the remainder of this Agreement shall
not be affected and the application of such affected provision shall be enforced
to the greatest extent possible under law.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement to be effective as of the day and year first above written.
XXXXX VENTURE, INC. TRADE WIND COMMUNICATIONS
LIMITED
By: /s/ Xxxx Xxx By:_____________________________
Xxxx Xxx _____________________________
President/Director
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