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DATED 17 AUGUST 0000
XXXXXXXX XXXXXXXXXXX B.V.
and
XXXXX XXXXXX XXXXX
and
XXXXX XXXXXXX XXXXXX, XXXXXXX XXXXXX XXXXXX,
XXXXXX XXXXX XXXXX, and XXXXXX XXXXXXX XXXX
and
XXXXX XXXXXXX
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AGREEMENT
RELATING TO HUSSMANN XXXXXXXX LIMITED
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[XXXX-XXXXX LOGO]
BARRISTERS AND SOLICITORS
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CONTENTS
CLAUSE HEADING PAGE NO.
1. Definitions and Interpretation 1
2. Establishment ofHussmann XxXxxxxx Limited 2
3. Sale and Purchase of Pupuke's McVest Shares 3
4. Sale and Purchase of Remaining McVest Shares 4
5. Related Transactions 5
6. Before Settlement 6
7. Guarantees 7
8. Non-Competition 7
9. Transfer of Newco Shares 7
10. Post Settlement Operations 8
11. General Obligations of Parties 9
12. Confidentiality 9
13. Termination 9
14. Hussmann Warranties 9
15. Warranty Limitations 10
16. Notices 11
17. General Provisions 11
SCHEDULES
1. Newco Constitution
2. Warranties by Xxxxx, NZ Shareholders and Stainer
3. General Warranties
4. Restructuring Programme
5. Disclosures
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DATED 17 AUGUST 1998
PARTIES
(1) HUSSMANN NETHERLANDS B.V., a company incorporated under the laws of the
Netherlands with its head offices at Van Xxxxxxxxxxxxxxxxxxxx 00, 0000
XX Xxxxxxxxx, Xxxxxxxxxxx ("Hussmann"); and
(2) XXXXX XXXXXX XXXXX of Auckland, New Zealand, Company Director
("Xxxxx"); and
(3) XXXXX XXXXXXX XXXXXX, XXXXXX XXXXXX XXXXXX, XXXXXX XXXXX XXXXX, and
XXXXXX XXXXXXX XXXX, all of Auckland, Company Directors (the "NZ
Shareholders"); and
(4) XXXXX XXXXXXX of Sydney, Australia, Company Director ("Stainer")
INTRODUCTION:
x. Xxxxxxxx, the NZ Shareholders and Stainer have agreed to establish,
become shareholders and operate a new company called Hussmann XxXxxxxx
Limited ("Newco") and its subsidiaries (together, the "Newco Group") on
the terms set out in this Agreement.
X. Xxxxxxxx and the NZ Shareholders and Stainer have also agreed that,
following the establishment of Newco, Hussmann will provide Newco with
sufficient funds to enable Newco to purchase the interests of Xxxxx in
XxXxxxxx Investments Limited on the terms set out in this Agreement.
IT IS AGREED AS FOLLOWS:
1. DEFINITIONS AND INTERPRETATION
1.1 In this Agreement:
"ACCOUNTS" means the financial statements for XxXxxxxx Investments
Limited, and the other Subsidiaries as at the Latest Accounts Date;
"BUSINESS DAY" means a day on which trading banks in Auckland, New
Zealand and St Louis, Missouri are normally open for business;
"CURRENT ACCOUNTS" means the amount of Xxxxx'x and the NZ Shareholders'
current account advances to MRL directly or indirectly through XxXxxxxx
Finance Limited or in the case of Xxxxx, through Pupuke, as at the
Latest Accounts Date adjusted for any movements between the Latest
Accounts Date and the Settlement Date;
"CONSTITUTION" means the new constitution of Newco referred to in
clause 2.3(a), a copy of which is attached as Schedule 1;
"DIRECTOR" means any director of Newco;
"LATEST ACCOUNTS DATE" means 30 June 1998;
"MATERIAL" means significant dollars of at least A$100,000.00
"McVEST" means XxXxxxxx Investments Limited;
"MRL" means XxXxxxxx Refrigeration Limited;
"MRL CONVERTIBLE NOTES" means the convertible notes issued by MRL to
XxXxxxxx Finance Limited on 1 April 1996 and March 5, 1998 and securing
the sum of NZ$2,500,000;
"PUPUKE" means Pupuke Holdings Limited;
"PUPUKE'S McVEST SHARES" means the 515,912 shares in McVest held by
Pupuke;
"REMAINING McVEST SHARES" means the 484,088 shares in McVest held by
the NZ Shareholders;
"SETTLEMENT" means the performance by the parties of their obligations
under clauses 2, 3, 4, 5.1 and 5.2;
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"SETTLEMENT DATE" means 14 August 1998 or such other date as may be
agreed between the parties;
"STAINER'S TRIANGLE SHARES " means the 1,425 shares in Triangle held
by, or controlled by Stainer;
"SUBSIDIARIES" means McVest and every other company which will be a
subsidiary (as defined in Section 5 of the Companies Act 1993) of
McVest following Settlement, including Triangle and MRL;
"TRIANGLE" means Triangle Refrigeration Australia Pty Limited;
"TRIANGLE TAKEOVER OFFER" means the offer to be made by Newco to
acquire all of the shares in Triangle, such offer being subject to the
execution of this Agreement;
"VENDORS" means, Xxxxx, the NZ Shareholders and Stainer jointly;
"WARRANTIES" means the warranties set out in Schedules 2 and 3.
1.2 In this Agreement:
(a) a reference to any Act of Parliament, code, regulation or
ordinance or to any provision thereof includes any
modification or re-enactment thereof or any provision
substituted therefor and all statutory instruments issued
thereunder;
(b) a word denoting the singular includes the plural and vice
versa;
(c) a word denoting an individual includes a corporation and vice
versa;
(d) a reference to a clause, schedule or annexure is a reference
to a clause, schedule or annexure of or to this Agreement;
(e) a reference to any document or agreement, including this
Agreement, includes a reference to that document or agreement
as amended, novated, supplemented, varied or replaced from
time to time;
(f) a word denoting any gender includes all genders;
(g) a reference to any party to this Agreement or any other
document or agreement includes its successors or permitted
assigns;
(h) a reference to a time or date is a reference to local New
Zealand time or date; and
(i) a reference to "NZ$" or "NZ dollars" is a reference to New
Zealand currency, and a reference to "A$" or "A dollars" is a
reference to Australian currency and the exchange rate for
converting one currency to the other will be determined by
reference to the mid rate between the sell and buy rates
quoted by ASB Bank on the date on which the relevant payment
is to be made.
1.3 The headings to clauses, schedules or annexures are for convenient
reference only and do not form part of this Agreement or affect its
interpretation.
2. ESTABLISHMENT OF HUSSMANN XXXXXXXX LIMITED
2.1 To the extent that it has not already done so, Hussmann will arrange
for:
(a) the incorporation of Newco under the name "Hussmann XxXxxxxx
Limited" with its registered office at 00-00 Xxxxx Xxxx,
Xxxxxxx, Xxxxxxxx;
(b) the establishment of a bank account in the name of Newco with
the Xxxxxxx branch of ASB Bank;
(c) the passing of all resolutions and signing of all certificates
necessary for the issue by Newco to Hussmann or its nominee
(being a wholly-owned New Zealand subsidiary of Hussmann) of
6,500,000 shares at an issue price (subject to adjustment in
accordance with clause 2.2) of the New Zealand equivalent to
A$0.9231 per share, making a total issue price of the New
Zealand equivalent to A$6,000,000 (the "A Share Issue Price");
and
(d) payment of the A Share Issue Price to Newco in one sum in cash
on the Settlement Date.
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2.2 If the Accounts disclose that the net tangible asset value of the
Subsidiaries (on a combined basis) calculated in accordance with the
memorandum dated 1 July 1998 is less than minus A$2,083,000, the
purchase price for the McVest Shares will be reduced by A$1.00 for
every A$1.00 by which the net tangible asset value of the Subsidiaries
is less than minus A$2,283,000. In such circumstances the Vendors will
(subject to clause 15.2(b)) refund to Newco an amount equal to the
difference between minus A$2,283,000 and the actual net tangible asset
value of the Subsidiaries, such refund to be made within 10 Business
Days of completion of the audit of the Accounts. For the purposes of
this clause the Vendors will arrange for the Accounts to be audited
immediately and will deliver a copy of the Accounts to Hussmann within
5 Business Days following completion of the audit of the Accounts.
2.3 On the Settlement Date and following completion of the steps outlined
in clause 2.1 (but subject to completion of the steps referred to
clauses 3 and 4) Hussmann will arrange for the passing of all
resolutions and signing of all certificates necessary to ensure that:
(a) Newco adopts a constitution in the form annexed as Schedule 1;
(b) the following persons are appointed as directors of Newco:
(i) Xxxxxxxx Xxxxxx Xxxxxx and Xxxxxx Xxxxxx Dallas, who
will be deemed to have been appointed as Group A
Directors; and
(ii) Xxxxxx Xxxxx Xxxxx, Xxxxxx Xxxxxx Xxxxxx and Xxxxx
Xxxxxx Xxxxx, who will be deemed to have been
appointed as Group B Directors;
(c) the shares issued to Hussmann or its nominee under clause
2.1(c) are designated as Group A Shares;
(d) 3,500,000 shares are issued to the NZ Shareholders and Stainer
as Group B Shares as follows:
(i) 1,841,667 shares at an issue price of A$0.923077 per
share (making a total price of A$1,700,000); and
(ii) 1,658,333 shares at an issue price of A$1.386935 per
share (making a total price of A$2,300,000);
making a combined total issue price of A$4,000,000 (the "B Share Issue
Price").
2.4 The B Share Issue Price will be paid or satisfied as follows:
(a) A$1,881,245 will be satisfied by the transfer by the NZ
Shareholders to Newco of the Remaining McVest Shares in
accordance with clause 4;
(b) A$1,700,000 will be satisfied in the manner specified in
clause 5.1;
(c) A$141,271 will be satisfied in the manner specified in clause
5.4;
(d) A$277,484 will be satisfied in the manner specified in clause
5.1(a).
3. SALE AND PURCHASE OF PUPUKE'S MCVEST SHARES
3.1 Xxxxx will cause Pupuke to sell and Hussmann and the NZ Shareholders
will cause Newco to purchase all of Pupuke's McVest Shares, on the
terms set out in this clause 3.
3.2 The purchase price for Pupuke's McVest Shares will be A$3,000,000.
Subject to Xxxxx complying with clause 3.3, Hussmann will cause Newco
to pay such sum to Pupuke in cleared funds on the Settlement Date.
3.3 On the Settlement Date Xxxxx will deliver to Newco:
(a) a duly executed transfer of Pupuke's McVest Shares in favour
of Newco;
(b) share certificates for Pupuke's McVest Shares or a certificate
from a director of McVest that no such certificates have been
issued;
(c) resolutions of the directors of McVest approving the said
share transfer and resolving that it be entered in the Share
Register of McVest;
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(d) the resignation of Xxxxx as a director of McVest and its
subsidiaries, to take effect subsequent to the resolutions
referred to in paragraph (c);
(e) all books and records relating to McVest within Xxxxx'x
possession or control;
(f) a surrender of the MRL Convertible Notes duly signed by
XxXxxxxx Finance Limited, together with:
(i) a release of the second debenture given by MRL in
favour of XxXxxxxx Finance Limited; and
(ii) payment of the sum of NZ$1,289,750 in cleared funds
by way of a new advance to Newco, such sum to be
repaid on the terms set out in clauses 3.5 and 3.6;
(g) the waiver by Xxxxx of any pre-emption rights conferred on him
by the Constitution of McVest in relation to the Remaining
McVest Shares;
(h) all such other resolutions or documents completed by Xxxxx in
his capacity as a shareholder or director of McVest as may be
reasonably required by Hussmann or Newco to effect settlement
and the transfer of ownership and control of Pupuke's McVest
Shares, and the management and administration of McVest to
Newco, including the appointment of new officers nominated by
Hussmann or Newco, the alteration of the Constitution and the
alteration of authority to bankers in respect of the operation
of McVest's bank accounts.
3.4 In consideration of Hussmann entering into this Agreement and agreeing
to cause Newco to purchase Pupuke's McVest Shares, Xxxxx gives the
warranties as set out in part 1 of Schedule 2 and Schedule 3 and
indemnifies Newco against any loss or damage sustained by Newco
directly or indirectly by reason of a breach of any of the covenants or
warranties given by Xxxxx in this Agreement. All such warranties will
be deemed to have been repeated by Xxxxx on each day up to and
including the Settlement Date but will be subject to clause 15 and the
matters specifically disclosed in Schedule 5.
3.5 Subject to Xxxxx complying with clause 3.3(f), Hussmann and the NZ
Shareholders will:
(a) cause the MRL Convertible Notes to be repaid to XxXxxxxx
Finance Limited and the moneys secured by those Notes to be
distributed to Xxxxx and the NZ Shareholders;
(b) cause Newco to issue in favour of Pupuke a promissory note
whereby the sum of NZ$1,289,750 referred to in clause
3.3(f)(ii) is to be repaid in cleared funds on 30 June 2000,
provided that Newco may at its option repay all or part of
such sum at any time before 30 June 2000 without notice, in
which case interest on the amount repaid will cease on the
date of actual repayment;
(c) cause MRL to repay Xxxxx and/or Pupuke's Current Account
advances as and when the cashflow of Newco permits but in any
event no later than 30 June 2000.
3.6 Pending repayment of the sums referred to in clause 3.5 Newco will pay,
or will cause MRL to pay, interest on the outstanding amounts at the
rate of 15% per annum calculated daily, such interest to be paid on the
last working day of each calendar quarter.
3.7 Notwithstanding settlement of the sale and purchase of Pupuke's McVest
Shares and Xxxxx'x resignation as a director of McVest and its
subsidiaries, Hussmann will cause Xxxxx to be appointed as a
non-executive Group B Director in accordance with clause 2.3(b)(ii).
Xxxxx'x appointment will be for an initial period of two years from the
Settlement Date, during which time Xxxxx will make himself available as
a consultant for the provision of company secretarial duties to Newco.
In consideration of Xxxxx agreeing to provide such services Hussmann
and the NZ Shareholders will cause Newco to pay to Xxxxx directors'
fees of NZ$24,000.00 per annum.
3.8 In the event of a breach by Xxxxx of any of the warranties in Schedule
2 or any other failure by Xxxxx to comply with his obligations under
this Agreement Hussmann may cause Newco to set off against any money
owing to Xxxxx (whether before or after Settlement) the amount required
to remedy such breach or failure.
4. SALE AND PURCHASE OF REMAINING MCVEST SHARES
4.1 The NZ Shareholders will sell and Hussmann will cause Newco to purchase
all of the Remaining McVest Shares on the terms set out in this clause
4.
4.2 The purchase price for the Remaining McVest Shares will be A$1,881,245.
On the Settlement Date,
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subject to the NZ Shareholders complying with clause 4.3, Hussmann will
cause Newco to issue to the NZ Shareholders 1,356,405 shares being part
of the Group B Shares referred to in clause 2.3(d)(ii) in satisfaction
of such purchase price.
4.3 On the Settlement Date the NZ Shareholders will deliver to Newco:
(a) duly executed transfers of the Remaining McVest Shares in
favour of Newco;
(b) share certificates for the Remaining McVest Shares or a
certificate from a director of McVest that no such
certificates have been issued;
(c) resolutions of the directors of McVest approving the said
share transfers and resolving that they be entered in the
Share Register of McVest;
(d) all books and records relating to McVest within the NZ
Shareholders' possession or control;
(f) the waiver by the NZ Shareholders of any pre-emption rights
conferred on them by the Constitution of McVest in relation to
Pupuke's McVest Shares;
(g) all such other resolutions or documents completed by the NZ
Shareholders in their capacity as shareholders or directors of
McVest as may be reasonably required by Hussmann or Newco to
effect settlement and the transfer of ownership and control of
the Remaining McVest Shares, and the management and
administration of McVest to Newco, including the appointment
of new officers nominated by Hussmann or Newco, the alteration
of the Constitution and the alteration of authority to bankers
in respect of the operation of McVest's bank accounts.
4.4 In consideration of Hussmann entering into this Agreement and agreeing
to cause Newco to purchase the Remaining McVest Shares, the NZ
Shareholders jointly and severally give the warranties set out in Part
2 of Schedule 2 and Schedule 3 and indemnify Newco against any loss or
damage sustained by Newco directly or indirectly by reason of a breach
of any of the covenants or warranties given by such NZ Shareholder in
this Agreement. All such warranties will be deemed to have been
repeated by the NZ Shareholders on each day up to and including the
Settlement Date but will be subject to clause 15 and the matters
specifically disclosed in Schedule 5.
5. RELATED TRANSACTIONS
5.1 On the Settlement Date Hussmann will cause Newco to lend to MRL the sum
of A$1,977,484 (being part of the A Share Issue Price paid by Hussmann)
for the purpose of repaying to the NZ Shareholders part of the MRL
Convertible Notes and part of their Current Accounts with MRL. On
receipt of repayment the NZ Shareholders will use A$277,484 of that sum
to subscribe for 200,070 B Shares in Newco at a price of A$1.386935 per
share, thereby enabling Newco to make payment pursuant to the Triangle
Takeover Offer. .
5.2. Hussmann ,the NZ Shareholders and Stainer will cause the balance of the
Current Accounts (after repayment having been made pursuant to clause
5.1) to be repaid to the NZ Shareholders on the Settlement Date but
only to the extent that the cash position of MRL permits such
repayment. If there are insufficient funds to permit repayment of the
Current Accounts in full on Settlement, the balance of the Current
Accounts will be repaid as and when the cashflow of Newco permits but
in any event no later than 30 June 2000. Pending such repayment Newco
will cause MRL to pay interest on the outstanding amounts at the rate
of 15% per annum calculated on a daily basis, such interest to be paid
on the last working day of each calendar quarter.
5.3 To the extent that it has not already done so, Hussmann will as soon as
practicable cause Newco to make the Triangle Takeover Offer to acquire
all of the shares in the capital of Triangle and Stainer undertakes to
accept the Triangle Takeover Offer in respect of Stainer's Triangle
Shares for the sum of A$141,271.
5.4 On the date on which Stainer receives payment for Stainer's Triangle
Shares pursuant to the Triangle Takeover Stainer will contemporaneously
subscribe for, and Hussmann will cause Newco to issue to Stainer,
101,858 Group B Shares in consideration of payment by Stainer of the
sum of A$141,271.
5.6 In consideration of Hussmann entering into this Agreement and agreeing
to cause Newco to purchase Stainer's Triangle Shares (amongst others),
Stainer gives the warranties set out in Part 3 of Schedule 2 and
Schedule 3 and indemnifies Newco against any loss or damage sustained
by Newco directly or indirectly by reason of a breach of any of the
covenants or warranties given by Stainer in this Agreement. All such
warranties will be deemed to have been repeated by Stainer on each day
up to and including the Settlement Date but will be subject to clause
15 and the matters specifically disclosed in Schedule 5.
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5.7 On the Settlement Date or as soon as possible thereafter the NZ
Shareholders and Stainer will cause:
(a) Trans-Tasman Investments Limited to accept the Triangle
Takeover Offer in respect of its 4,224 B shares in Triangle
for A$162,400; and
(b) Triangle Pacific Investments Pty Limited to transfer to McVest
its 1,000,000 B shares in MRL for A$1,447,741.
6. BEFORE SETTLEMENT
6.1 Pending Settlement the Vendors will ensure that:
(a) Hussmann and its representatives have reasonable access to the
Subsidiaries' premises and records;
(b) all moneys owed to any Subsidiary by any of the Vendors or
other persons associated with them are paid at or prior to
Settlement unless Hussmann advises otherwise;
(c) releases of all encumbrances or charges over the McVest Shares
and Stainer's Triangle Shares or over the assets of McVest,
together with releases of any guarantees or indemnities given
by any Subsidiary, are obtained (other than the debentures and
cross-guarantees given by the Subsidiaries in favour of ASB
Bank and/or ANZ Bank);
(d) the Subsidiaries are operated in such a manner so as to ensure
that none of the Warranties are breached;
(e) no Subsidiary, without Hussmann's prior written approval,
enters into any agreement other than in the ordinary course of
business under which the consideration payable to, or
receivable by, the Subsidiary is greater than A$100,000, or
terminates the employment of any employee of the Subsidiary
whose remuneration is greater than A$100,000 per annum;
(f) Hussmann is notified immediately in writing if any of the
Vendors becomes aware of any matter or circumstance which
would constitute a breach of this Agreement or any of the
Warranties ;
(g) no Subsidiary declares or pays any dividends or makes any
other distribution of profit to its shareholders;
(h) no Subsidiary disposes of or acquires any assets having a
value of more than A$100,000 other than in the normal course
of business and for full value;
(I) each Subsidiary operates its business in the ordinary course
of business and in accordance with good business practice,
preserves its goodwill and reputation and does nothing outside
the normal course of business.
6.2 If, pending Settlement:
(a) any of the Vendors breaches or fails to comply with any of his
obligations under this Agreement in a material respect;
(b) any circumstances exist or arise which have the effect of
making any of the Warranties incorrect or untrue in a material
respect;
(c) any material asset of any Subsidiary is destroyed or rendered
unusable; or
(d) any party becomes aware of any event or circumstance which is
or may be materially adverse to the operations of the
Subsidiaries or the interests of Hussmann,
Hussmann may at its discretion give the Vendors notice either
postponing Settlement to a date not more than 30 business days after
the Settlement Date (in which case the provisions of this Agreement
will apply as if the new date is the Settlement Date) or cancelling
this Agreement. These rights are separate from and additional to any
rights of Hussmann conferred upon it by law or otherwise under this
Agreement.
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7. GUARANTEES
7.1 Hussmann undertakes that (Subject to clause 7.2) it will, as soon as
practicable, and in any event no later than 31 October 1998, procure
Newco to refinance the Subsidiaries supported solely by a Hussmann
guarantee, such that the guarantees given by Wall Street Properties
Limited to the ASB Bank and by Stainer and the other Triangle
shareholders to the ANZ Bank could be released.
7.2 Hussmann's obligations under clause 7.1 are subject to Hussmann
receiving from the NZ Shareholders and Stainer an indemnity in respect
of Hussmann's liability under the replacement guarantee to the ASB and
the ANZ banks, provided that the indemnity will be limited to the
amount that exceeds 65% of the total amount guaranteed by Hussmann.
8. NON-COMPETITION
8.1 Each of the Vendors severally covenants with Hussmann and Newco that he
will not for a period of three years after the date on which he ceases
to be employed by any company in the Newco Group (the "Restrictive
Period") anywhere in New Zealand or Australia (either alone or jointly
with any other person) directly or indirectly:
(a) carry on, or be engaged, concerned or financially interested
in, or in any way assist any business which competes, directly
or indirectly, with any business carried on by the Newco Group
at the start of the Restrictive Period;
(b) do or say anything which is harmful to the reputation of the
Newco Group or which may lead any person to reduce their level
of business with the Newco Group or seek to improve their
terms of trade with the Newco Group; or
(c) solicit or entice any of the employees or contractors of the
Newco Group to terminate their employment or contract with the
Newco Group,
Provided that nothing in paragraph (a) will be deemed to prohibit any
of the Vendors from holding up to 10% of the issued shares of any
company listed on a New Zealand or Australian stock exchange.
8.2 Each of the Vendors acknowledges that the undertakings contained in
clause 8.1 are reasonable and have been given for the protection of
Hussmann and Newco in respect of the goodwill of the businesses of the
Newco Group.
8.3 The undertakings in clause 8.1 are considered by the parties to be
reasonable in all the circumstances. However, if any undertaking should
be held invalid (as an unreasonable restraint of trade or for any other
reason whatever) but would have been held valid if part of its wording
had been deleted or its duration reduced, or the range of activities or
area dealt with reduced in scope, that undertaking will be deemed to
apply with the appropriate modifications necessary to make it valid and
effective and the other undertakings will remain valid and effective.
8.4 If required by Hussmann, undertakings similar to those referred to in
the preceding provisions of this clause 8 will be obtained by those
persons whom Hussmann and the NZ Shareholders and Stainer consider to
be key employees, in which case the NZ Shareholders will deliver such
undertakings to Hussmann on the Settlement Date.
9. TRANSFER OF NEWCO SHARES
9.1 The shares in Newco ("Newco Shares") may only be transferred in
accordance with the Constitution and the following provisions of this
clause 9. In the event of any inconsistency between this clause 9 and
the Constitution, this clause 9 will prevail.
9.2 In no circumstances may Hussmann, any NZ Shareholder or Stainer sell
his Newco Shares in the first year following Settlement without the
prior written consent of Hussmann and the other NZ Shareholders.
9.3 If Hussmann or Newco agrees to purchase a NZ Shareholder's or Stainer's
Newco Shares, payment for those shares will be made in accordance with
the following formula:
(a) if the purchase is made in the period between the Settlement
Date and 30 November 1999, the value of the Newco Shares will
be A$1.14286 per share (being the same as the value as at the
Settlement Date);
(b) if the purchase is made in the period between 1 December 1999
and 30 November 2000, the value of one Newco Share will be:
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the sum of:
(i) EBIT for the financial year ending 30 November 1999
times 4, minus outstanding interest-bearing debt as
at 30 November 1999 divided by the number of Newco
Shares on issue, times one-third;
plus
(ii) A$1.14286 per share times two-thirds.
(c) if the purchase is made in the period between 1 December 2000
and 30 November 2001, the value of one Newco Share will be:
the sum of:
(i) the average EBIT for the last two financial years
ending 30 November 2000 times 4, minus outstanding
interest-bearing debt as at 30 November 2000 divided
by the number of Newco Shares on issue, times
two-thirds;
plus
(ii) A$1.14286 per share times one-third.
(d) if the purchase is made after 30 November 2001, the value of
the Newco Shares will be:
(i) the average EBIT for the last three financial years
ending 30 November immediately preceding the date of
sale, times 4, minus outstanding interest-bearing
debt as at the end of the last financial year;
divided by
(ii) the number of Newco Shares on issue.
For the purposes of this clause 9.3: (i) in all cases EBIT will be the
normalised Earnings before Interest and Tax, excluding all abnormal
items and excluding any amortisation of goodwill; (ii) included in EBIT
will be the Net Profit before Tax of any associated companies; (iii)
interest-bearing debt will exclude any trade finance, whether or not
interest is payable; and (iv) EBIT will be calculated on a consistent
accounting basis based on the Accounting Policies and Procedures
adopted by the Subsidiaries.
9.4 If Stainer or a NZ Shareholder wishes to sell his Newco Shares and
neither Hussmann nor any other NZ Shareholder or Stainer (as the case
may be) wishes to purchase those shares within the time limits
specified in the Constitution, Hussmann, Stainer and the NZ
Shareholders will cause Newco to repurchase those shares in accordance
with the Constitution and the Companies Xxx 0000. Hussmann, as majority
shareholder, will see that Newco has access to the necessary funds to
accomplish the repurchase of the shares, provided that Hussmann will
not itself be obligated to contribute additional capital nor make any
loan to Newco pursuant to this obligation.
10. POST SETTLEMENT OPERATIONS
10.1 The transfer pricing arrangements that existed between Hussmann
Corporation and MRL prior to the date of this Agreement will continue
in force, apart from the additional 5% currency allowance, which will
be discontinued when the exchange rate of the Australian dollar against
the US dollar reaches 73 cents or higher. From the Settlement Date only
"normal published external price adjustments" will occur. All other
contractual arrangements between Hussmann Corporation and MRL
(including manufacturing licence agreements) will continue in force.
10.2 Unless otherwise agreed by Hussmann, all future funds required by Newco
and not reasonably obtainable from external sources (on a non-recourse
basis) will be contributed by Hussmann, Stainer and the NZ Shareholders
on the same terms, whether by way of debt or equity, in amounts
proportionate to their shareholdings. If notwithstanding the foregoing
any shareholder fails to contribute an amount proportionate to his or
its shareholding in Newco, such shareholder will not be in breach of
this Agreement but will be deemed to have waived any rights under the
Constitution in respect of the issue of shares to the other
shareholders in connection with that contribution.
10.3 The parties will share proportionately whether by way of dividend,
management fees or otherwise as agreed, in all profits and
distributions of the Newco Group and in all repayments of capital or
surplus assets.
10.4 The parties acknowledge that it will be the policy of Newco to
distribute profits from the Newco Group as circumstances permit, having
regard to the gearing policy of Newco as agreed from time to time by
the Directors. Unless otherwise agreed by the parties, dividends may be
declared by the Newco Board in an amount up to 30% of the after tax
profit of the Subsidiaries subject to:
(a) adequate accumulated retained earnings;
(b) sufficient cash; and
11
(c) any restrictions imposed by any external lenders to the
Subsidiaries.
10.5 No arbitrary management fees or corporate charges will be levied by
Hussmann.
10.6 Hussmann, the NZ Shareholders and Stainer will cause MRL to enter into
new employment agreements with the NZ Shareholders and Stainer on such
terms as may be agreed prior to the Settlement Date.
11. GENERAL OBLIGATIONS OF PARTIES
11.1 Hussmann and the NZ Shareholders and Stainer will exercise all their
rights and powers, and generally will use their best endeavours to
ensure that Newco and its Subsidiaries operate and carry on business so
as to give full effect to the intentions expressed in this Agreement.
11.2 None of Hussmann or the NZ Shareholders or Stainer will mortgage charge
encumber or pledge his or its shares in Newco in a way that could in
any way obviate the pre-emptive rights in this Agreement without the
prior written consent of the other parties.
12. CONFIDENTIALITY
12.1 Each party undertakes to each of the others that neither he nor it will
at any time hereafter use or disclose to any person (other than as
authorised by this Agreement) any confidential information concerning
the business, accounts, finance or contractual arrangements or other
dealings, transactions or affairs of Newco (the "Confidential
Information") which may come to his or its knowledge (such party being
referred to in this clause as a "recipient").
12.2 To safeguard the confidentiality of Confidential Information, each
recipient will take all practicable steps to procure that the same is
not disclosed to or obtained by any persons other than personnel
employed by the recipient or acting on the recipient's behalf who are
required to have access to it in order to enable this Agreement to be
carried into effect.
12.3 No party will at any time make or assist any other person whatsoever to
make any unauthorised disclosure or use of any Confidential Information
and will take all practicable steps to procure and ensure that every
person who, as his or its employee, officer or agent or otherwise
through or from it, acquires or becomes possessed or apprised of any
Confidential Information at any time will not make or assist any other
person whomsoever to make any unauthorised disclosure or use of that
Confidential Information.
12.4 Nothing in this clause prohibits the disclosure of Confidential
Information:
(a) to the extent necessary to a solicitor or any other person or
body acting for and necessary to protect or advise upon the
rights of a party in relation to the business of that party or
the obligation of that party under this Agreement;
(b) which was already known to the recipient or is or becomes part
of the public domain through no breach of this Agreement by
the recipient;
(c) by the recipient with the prior written consent of the other
party.
13. TERMINATION
13.1 This Agreement will continue in full force and effect for so long as
Hussmann holds at least 50% of the voting power at general meetings of
Newco.
13.2 Termination of this Agreement will not affect in any way any rights of
any party arising from any happening or event which occurs prior to the
date of termination of the Agreement, or any provisions of this
Agreement which are intended to survive termination of this Agreement.
14. HUSSMANN WARRANTIES
Hussmann represents and warrants to the other parties that:
(a) It has been duly incorporated as a company limited by shares
under the laws of the Netherlands, is validly existing under
those laws, duly owns its rights, property, undertaking and
assets and has power and authority to carry on its business as
now being conducted;
(b) it has power to enter into and observe its obligations under
the Agreement;
12
(c) this Agreement and the transactions under it do not contravene
its constituent documents or any law or regulation or official
directive or any of its obligations or undertakings by which
it or any of its assets are bound or cause a limitation on its
powers or the powers of its directors to be exceeded.
(d) no liquidator, provisional liquidator, or statutory manager or
receiver has been appointed to manage its affairs.
15 WARRANTY LIMITATIONS
15.1 The Warranties will be deemed to have been given subject to:
(a) any exception or qualification disclosed in writing by or on
behalf of the Vendors to Hussmann prior to execution of this
Agreement by Newco, or expressly stated in this agreement;
(b) any matter or thing hereafter done or omitted to be done
pursuant to any other provision of this Agreement or with the
approval of Hussmann.
15.2 If the Vendors become liable for breach of any of the Warranties:
(a) the liability will be assessed after taking into account any
saving to Newco and/or the Subsidiaries in taxation as a
result of the liability, claim or other amount in respect of
which the liability to Newco arose;
(b) no amount will be payable unless the amount claimed is
recorded in the Accounts or otherwise exceeds A$100,000 after
taking into account the provision of paragraph (a) in which
case the entire amount will be payable (and not just the
amount in excess of A$100,000).
15.3 Notwithstanding any other provision of this Agreement no claim may be
made in respect of any breach of the Warranties unless notice of the
claim has been given to the Vendor in good faith and in reasonable
detail within two years after the Settlement Date.
15.4 In the event of any liability whether actual or contingent of, or any
claim or proceedings of any nature against any of the Subsidiaries
("THIRD PARTY CLAIM") arising, in respect of which Newco makes, or may
seek to make, any claim against the Vendors pursuant to this Agreement
the following provisions shall apply:
(a) Hussmann will cause Newco to give notice thereof (including
reasonable details) to the Vendors and shall ensure that
neither Newco nor the Subsidiary concerned makes any payment
or admission of liability in respect of the Third Party Claim,
or takes any other steps which may in any way prejudice the
defence thereof, without the prior written consent of the
Vendors.
(b) The Vendors may at their option, in the name of the Subsidiary
concerned, conduct all negotiations and prosecute or defend
any proceedings relating to the Third Party Claim, and that
for such purpose the Subsidiaries will make available to the
Vendors all such information, books and records, and give such
other co-operation, as the Vendors may reasonably require for
the purpose.
(c) Where any payment has been made by any of the Vendors, in
respect of any third party claim or otherwise pursuant to this
Agreement, Hussmann will cause Newco and/or the Subsidiary
concerned if called upon to assign to the Vendors or their
nominee, or otherwise hold in trust for them, the benefit of
any debt, claim, cause of action, rights or other matter (if
capable of assignment) in respect of which the payment has
been made.
15.5 Notwithstanding the joint liability of the Vendors, Hussmann undertakes
that Newco will not make any claim or institute any proceedings against
any of them separately for any breach of the Warranties or any other
breach of this Agreement and will instead include all of the Vendors in
every claim or proceedings.
13
16. NOTICES
16.1 Any notice, demand or other communication given or made under this
Agreement will be in writing and will be deemed duly given or made if
delivered or sent by facsimile or telex as follows:
(a) in the case of Hussmann:
Van Xxxxxxxxxxxxxxxxxxxx 00
0000 XX Xxxxxxxxx,
Xxxxxxxxxxx
Facsimile No: 0-000-000-0000
with a copy to:
Xx Xxxxxx Xxxxxxx
Hussmann Corporation
00000 Xx Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxxx
XXXXXX XXXXXX OF AMERICA
Facsimile No: 0-000-000-0000
(b) in the case of Xxxxx:
0 Xxxx Xxxxxx,
Xxxxxxxx,
Xxxxxxxx
XXX XXXXXXX
Facsimile No: 00-0-000-0000
(c) in the case of the NZ Shareholders:
x/x X.X. Small
00-00 Xxxxx Xxxx,
Xxxxxxx,
Xxxxxxxx
XXX XXXXXXX
Facsimile No: 00-0-000-0000
(d) in the case of Stainer:
000-000 Xxxxxx Xxxx,
Xxxxxxxxx Xxxx,
Xxxxxx,
XXXXXXXXX
Facsimile No: 00-0-0000-0000
Any party may change his or its address or facsimile number for the
purposes of this Agreement by giving notice of such change to the other
parties pursuant to the provisions of this clause.
16.2 Any notice, demand or other communication will be deemed, in the
absence of proof to the contrary, to have been received by the party to
whom it was sent:
(a) in the case of hand delivery, upon the date of such delivery;
(b) in the case of facsimile transmission, at the time of
transmission, provided that, following the transmission, the
sender receives a transmission confirmation report,
unless in any such case it would be deemed to have been received on a
day which is not a business day in the place of address, or after 5.00
pm on such a business day in the place of destination of such notice in
which event it will be deemed to have been received on the next such
Business Day.
17. GENERAL PROVISIONS
17.1 Nothing contained in this Agreement will be deemed or construed to
constitute any partner, agent or representative of any other party, or
to create any trust, and this Agreement will not be construed as giving
to any party any of the rights or subjecting any party to any of the
liabilities incidental to a partnership, agency, representative or
trust relationship.
17.2 If one or more of the provisions of this Agreement will be invalid or
unenforceable the remaining provisions of this Agreement will not be
affected thereby and will continue in full force and effect.
17.3 No waiver by any party of any default in the strict and literal
performance and compliance with any
14
provision, condition or requirement herein will be deemed to be a
waiver of strict and literal performance of and compliance with any
other provision, condition or requirement herein, nor to be a waiver
of, or in any manner release the other party from strict compliance
with any provision, condition or requirement in the future.
17.4 No party will assign or transfer any of his or its rights or
obligations under this Agreement except in accordance with the
Constitution. In the event of any conflict between the provisions of
the Constitution and this Agreement the provisions of this Agreement
will prevail.
17.5 This Agreement may be executed in any number of counterparts including
facsimile copies, all of which when taken together will constitute one
and the same instrument. A party may enter into this Agreement by
signing any counterpart.
17.6 This Agreement will be governed by, and construed in accordance with,
the laws of New Zealand.
EXECUTED as an agreement.
SIGNED for and on behalf of ) /s/ Xxxxxx Xxxxxxx
---------------------------
HUSSMANN NETHERLANDS B.V. by: ) Director
SIGNED by XXXXX XXXXXX XXXXX ) /s/ Xxxxx Xxxxxx Xxxxx
---------------------------
SIGNED by XXXXX XXXXXXX ) /s/ Xxxxx Xxxxxxx Xxxxxx
---------------------------
XXXXXX )
SIGNED by XXXXXXX XXXXXX ) /s/ Xxxxxxx Xxxxxx Xxxxxx
XXXXXX ---------------------------
)
SIGNED by XXXXXX XXXXXXX ) /s/ Xxxxxx Xxxxxxx Xxxx
XXXX ---------------------------
)
SIGNED by XXXXXX XXXXX XXXXX ) /s/ Xxxxxx Xxxxx Xxxxx
---------------------------
SIGNED by XXXXX XXXXXXX ) /s/ Xxxxx Xxxxxxx
---------------------------
15
This document is the Constitution of Hussmann XxXxxxxx Limited as
adopted by the Company by Special Resolution passed on the day
of 1998
Certified as the Constitution of the Company.
---------------------
Authorised Person
CONSTITUTION
- of -
HUSSMANN XXXXXXXX LIMITED
[XXXX/GULLY LOGO]
BARRISTERS AND SOLICITORS
16
CONTENTS
1 INTERPRETATION
1.1 Definitions
1.2 Construction
2 COMPANIES ACT 1993
3 RIGHTS ATTACHING TO SHARES
3.1 Existing Ordinary Shares
4 ISSUE, CONSOLIDATION, SUBDIVISION AND REPURCHASE OF SHARES
4.1 Issue of New Shares
4.2 Consolidation and Subdivision of Shares
4.3 Bonus Issues
4.4 Shares in Lieu of Dividends
4.5 Share Repurchases
5 PRE-EMPTIVE RIGHTS ON ISSUE OF NEW SHARES
5.1 Pre-emptive Rights
5.2 Pro Rata Entitlements
5.3 Offer Notice
5.4 Acceptance Notices
5.5 Contingent Entitlements
5.6 Treasury Stock
6 ALTERATION OF SHAREHOLDERS' RIGHTS
6.1 Special Resolution Required
6.2 Meetings of Interest Groups
6.3 Issue of Further Shares
7 SHARE CERTIFICATES
7.1 Issue of Share Certificates
7.2 Replacement Share Certificates
8 CALLS ON SHARES
8.1 Board's Power
8.2 Liability to Pay
8.3 Differential Calls
8.4 Instalments
8.5 Time Call is Made
8.6 Interest on Overdue Amounts
8.7 Unpaid Instalments
8.8 Calls in Advance
8.9 Evidence
9 LIEN ON SHARES
9.1 Lien on Unpaid and Partly Paid Shares
9.2 Power of Sale
9.3 Absolute Title of Purchaser
9.4 Application of Sale Proceeds
10 FORFEITURE OF SHARES
10.1 Notice
10.2 Forfeiture
10.3 Sale of Forfeited Shares
10.4 Application of Sale Proceeds
10.5 Absolute Title of Purchaser
10.6 Consequences of Forfeiture
10.7 Evidence of Forfeiture
11 TRANSFER OF SHARES
11.1 Transferor to Remain Holder Until Registration
11.2 Authorised Transactions
11.3 Transfer Executed Outside New Zealand
11.4 Form of Transfer
11.5 Power to Refuse to Register
11.6 Registration of Transfers
11.7 Power to Divide Share Register
11.8 Transfer of Securities Other Than Shares
12 PRE-EMPTIVE RIGHTS ON TRANSFERS OF SHARES
12.1 Transfer Notices
12.2 Contents of Transfer Notice
12.3 Board Appointed Agent
12.4 Offer to Shareholders
12.5 Acceptance Notices
12.6 Notice to Intending Seller
12.7 Intending Seller's Right to Withdraw
12.8 Sale and Purchase
12.9 Purchasers
12.10 Price
17
12.11 Fair Value if No Agreement
12.12 Settlement
12.13 Payment
12.14 Execution by Company
12.15 Actions by Company
12.16 Validity
12.17 Seller's Rights if no Acceptances Received
12.18 Approved Transfer
12.19 Relatives and Trustees
12.20 Group A Director Ceasing to Act
12.21 Change in Ownership
13 BANKRUPTCY
14 TRANSMISSION OF SHARES
14.1 Transmission on Death of Shareholder
14.2 Rights of Personal Representatives
14.3 Joint Personal Representatives
14.4 Change of Trustees
14.5 Transfer of Shares by Personal Representatives
15 EXERCISE OF POWERS OF SHAREHOLDERS
15.1 Methods of Holding Meetings
15.2 Exercise of Power by Meeting or Written Resolution
15.3 Powers of Shareholders
16 MEETINGS OF SHAREHOLDERS
16.1 Annual Meetings
16.2 Time and Place of Annual Meeting
16.3 Resolution in Lieu of Annual Meeting
16.4 Special Meetings
16.5 Calling of Special Meetings
17 NOTICE OF MEETINGS OF SHAREHOLDERS
17.1 Written Notice
17.2 Contents of Notice
17.3 Irregularity in Notice
17.4 Adjourned Meetings
18 CHAIRPERSON OF MEETINGS OF SHAREHOLDERS
18.1 Chairperson of the Board to Act
18.2 Other Chairperson
18.3 Adjourned Meetings
18.4 Regulation of Procedure
19 QUORUM FOR MEETINGS OF SHAREHOLDERS
19.1 Quorum Required
19.2 Size of Quorum
19.3 Lack of Quorum
20 VOTING AT MEETINGS OF SHAREHOLDERS
20.1 Meetings in One Place
20.2 Audio-Visual Meetings
20.3 Postal Votes
20.4 Number of Votes
20.5 Declaration of Chairperson Conclusive
20.6 Right to Demand Poll
20.7 Time of Demand for Poll
20.8 Timing of Poll
20.9 Counting of Votes on Poll
20.10 Votes of Joint Holders
20.11 Validity of Votes
20.12 No Vote if Amounts Unpaid
21 PROXIES AND CORPORATE REPRESENTATIVES
21.1 Proxies Permitted
21.2 Form of Proxy
21.3 Lodging Proxy
21.4 Validity of Proxy Vote
21.5 Corporate Representatives
22 MINUTES OF SHAREHOLDER MEETINGS
23 SHAREHOLDER PROPOSALS
23.1 Notice to the Board
23.2 Notice to Shareholders at Company's Expense
23.3 Notice to Shareholders at Proposing Shareholder's Expense
23.4 Late Notice
23.5 Proposing Shareholder's Right to Give Written Statement
23.6 Defamatory, Frivolous or Vexatious Statements
23.7 Deposit of Costs by Proposing Shareholder
18
24 APPOINTMENT AND REMOVAL OF DIRECTORS
24.1 Number
24.2 Existing Directors
24.3 Appointment and Removal by Ordinary Resolution
24.4 Vacation of Office
25 ALTERNATE DIRECTORS
25.1 Appointment
25.2 Form of Appointment and Removal
25.3 Rights of Alternate Director
25.4 Remuneration and Expenses
25.5 Cessation of Appointment
26 POWERS OF DIRECTORS
26.1 Management of Company
26.2 Exercise of Powers by Board
26.3 Exercise of Powers by Shareholders
26.4 Delegation of Powers
26.5 Appointment of Attorney
26.6 Ratification by Shareholders
27 PROCEEDINGS OF THE BOARD
27.1 Methods of Holding Meetings
27.2 Notice of Meeting
27.3 Waiver of Irregularity
27.4 Quorum
27.5 Insufficient Number of Directors
27.6 Chairperson
27.7 Votes
27.8 Submission of Resolutions to Shareholders
27.9 Resolutions in Writing
27.10 Minutes
27.11 Validity of Acts
27.12 Other Procedures
28 DIRECTORS' INTERESTS
28.1 Disclosure of Interests
28.2 Personal Involvement of Directors
28.3 Interested Directors May Vote
28.4 Interests of Shareholders
29 DIRECTORS' REMUNERATION AND OTHER BENEFITS
30 INDEMNITY AND INSURANCE FOR DIRECTORS AND EMPLOYEES
30.1 Indemnity for Directors
30.2 Indemnities and Insurance
30.3 Interpretation
31 DIVIDENDS
31.1 Method of Payment
31.2 Currency of Payment
31.3 Deductions
31.4 Entitlement Date
31.5 Unclaimed Dividends
32 NOTICES
32.1 Method of Service
32.2 Joint Holders
33 INSPECTION OF RECORDS
34 LIQUIDATION
34.1 Distribution of Surplus
34.2 Distribution in Kind
34.3 Trusts
35 METHOD OF CONTRACTING
35.1 Deeds
35.2 Other Written Contracts
35.3 Other Obligations
19
CONSTITUTION
- OF -
HUSSMANN XxXXXXXX LIMITED
1. INTERPRETATION
a) DEFINITIONS: In this Constitution, unless the context otherwise
requires:
"ACT" means the Companies Xxx 0000;
"BOARD" means Directors who number not less than the required quorum
acting together as the board of directors of the Company;
"CLASS" means a class of Shares having attached to them identical
rights, privileges, limitations and conditions;
"COMPANY" means Hussmann XxXxxxxx Limited;
"CONSTITUTION" means this constitution, as altered from time to time;
"DIRECTOR" means a person appointed as a director of the Company;
"GROUP" means a Group of Shares;
"GROUP OF SHARES" means the Group A Shares or the Group B Shares, as
the case may require;
"GROUP A DIRECTOR" or "GROUP B DIRECTOR" means a person who has been
appointed as a Director by the holders of a majority of the Group A
Shares or the Group B Shares as the case may require;
"GROUP A SHARES" and "GROUP B SHARES" mean the Shares referred to in
clause 3;
"INTERESTED" in relation to a Director, has the meaning set out in
section 139 of the Act;
"INTEREST GROUP" in relation to any action or proposal affecting rights
attaching to Shares, means a group of Shareholders:
i) whose affected rights are identical;
ii) whose rights are affected by the action or proposal in the
same way; and
iii) who comprise the holders of one or more Classes, except
where action is taken in relation to some Shareholders in a
Class and not others, or a proposal expressly distinguishes
between some Shareholders in a Class and other Shareholders in
that Class, in which case the Shareholders in that Class may
fall into two or more interest groups;
"ORDINARYRESOLUTION" means a resolution passed by a simple majority of
the votes of Shareholders entitled to vote and voting and which is
supported by more than half of the votes cast by the holders of each
Group of Shares;
"PERSONAL REPRESENTATIVE" means:
(1) in relation to a deceased individual Shareholder, the
executor, administrator or trustee of the estate of that
Shareholder;
(2) in relation to a bankrupt individual Shareholder, the
assignee in bankruptcy of that Shareholder; and
(3) in relation to any other individual Shareholder,
a person appointed or deemed to have been appointed to
administer property under the Protection of Personal and
Property Rights Xxx 0000, a manager appointed or deemed to
have been appointed thereunder, and a donee of an enduring
power of attorney complying with that Act;
"REPRESENTATIVE" means a person appointed as a proxy or representative
under clause 21 or a Personal Representative;
"SHARE" means a share issued, or to be issued, by the Company;
20
"SHAREHOLDER" means a person whose name is entered in the share
register as the holder for the time being of one or more Shares;
"SPECIAL RESOLUTION" means a resolution passed by a majority of 75% or
more of the votes of those Shareholders entitled to vote and voting and
which is supported by more than half of the votes cast by the holders
of each Group of Shares;
"TREASURY STOCK" means Shares which have been acquired by the Company
and are held by the Company as treasury stock in accordance with the
Act.
b) CONSTRUCTION: In this Constitution, unless the context otherwise
requires:
i) the headings appear as a matter of convenience and shall not
affect the construction of this Constitution;
ii) in the absence of an express indication to the contrary,
references to sections, clauses or paragraphs are to sections,
clauses and paragraphs of this Constitution;
iii) a reference to any statute, statutory regulations or other
statutory instrument includes the statute, statutory
regulations or instrument as from time to time amended or
re-enacted or substituted;
iv) the singular includes the plural and vice versa and one gender
includes the other genders;
v) the words "written" and "writing" include facsimile
communications and any other means of communication resulting
in permanent visible reproduction;
vi) the word "person" includes any association of persons whether
corporate or unincorporate, and any state or government or
department or agency thereof, whether or not having separate
legal personality;
vii) words or expressions defined in the Act have the same meaning
in this Constitution.
2. COMPANIES XXX 0000
The Company, the Board, each Director and each Shareholder have the
rights, powers, duties and obligations set out in the Act except to the
extent that they are negated or modified by the Constitution.
3. RIGHTS ATTACHING TO SHARES
Ordinary shares at the date of adoption of this Constitution are
divided into the following Groups, each of which constitutes a separate
Class:
- Group A Shares comprising all of the shares on issue as at the
date of adoption of this Constitution, together with any new
shares that may be designated as Group A Shares; and
- Group B Shares comprising all new shares issued after the date of
adoption of this Constitution and designated as Group B Shares.
Except as expressly provided in this Constitution, all the Group A
Shares and the Group B Shares have the same rights and privileges and
are subject to the same restrictions and shall in particular confer on
the holders the rights set out below:
i) the right to receive notice of, and attend, every meeting of
the Shareholders;
ii) the right to vote at a meeting of the Shareholders on any
solution, including any resolution to:
a) appoint or remove a Director or auditor;
b) adopt a constitution;
c) alter the Company's constitution;
d) approve a major transaction;
e) approve an amalgamation of the Company under section 221
of the Act; or
f) put the Company into liquidation.
21
iii) subject to the rights which confer special rights as to
dividends, the right of an equal Share in dividends authorised
by the Board on a per Share basis;
iv) the right to receive an offer to acquire New Shares as set out
in clause 5; and
v) subject to the rights of Shareholders which confer special
rights as to surplus assets, the right to an equal Share in
the distribution of the surplus assets of the Company on a per
Share basis.
4. ISSUE, CONSOLIDATION, SUBDIVISION AND REPURCHASE OF SHARES
a) ISSUE OF NEW SHARES: Subject to clause 5, the Board may, with the
approval of the Shareholders by Special Resolution, issue further
Shares in the Company (including different Classes of Shares) which:
i) rank equally with, or in priority to, existing Shares; or
ii) have deferred, preferred or other special rights or
restrictions, whether as to voting rights or distributions or
otherwise.
b) CONSOLIDATION AND SUBDIVISION OF SHARES: The Board may, with the
approval of Shareholders by Special Resolution:
i) consolidate and divide the Shares or Shares of any Class in
proportion to those Shares or the Shares in that Class; or
ii) subdivide the Shares or Shares of any Class in proportion to
those Shares or the Shares in that Class.
c) BONUS ISSUES: The Board may, with the approval of Shareholders by
Special Resolution, resolve to apply any amount which is available for
distribution to Shareholders either:
i) in paying up in full Shares or other securities of the Company
to be issued credited as fully paid to:
a) the Shareholders who would be entitled to that amount if
it were distributed by way of dividend, and in the same
proportions; and
b) if applicable, the holders of any other securities of
the Company who are entitled by the terms of issue of
those securities to participate in bonus issues by the
Company, whether at the time the bonus issue is made to
the Shareholders, or at some time later, in accordance
with their respective entitlements; or
ii) in paying up any amount which is unpaid on any Shares held by
the Shareholders referred to in sub-clause (a)(i),
or partly in one way and partly in the other.
d) SHARES IN LIEU OF DIVIDENDS: The Board may, with the approval of
Shareholders by Special Resolution, exercise the right conferred by
section 54 of the Act to issue Shares to any Shareholders who have
agreed to accept the issue of Shares, wholly or partly in lieu of
proposed dividends or proposed future dividends.
e) SHARE REPURCHASES: The Company may purchase or otherwise acquire Shares
issued by it from one or more Shareholders and hold its own Shares.
5. PRE-EMPTIVE RIGHTS ON ISSUE OF NEW SHARES
a) PRE-EMPTIVE RIGHTS: All Shares proposed to be issued or transferred by
the Company must be offered for acquisition in the manner set out in
this clause 5 to the existing Shareholders, except to the extent that
the terms of any Shares already issued do not entitle the holders of
those Shares to receive an offer or to the extent that the existing
Shareholders unanimously resolve who the Shares are to be issued or
transferred to.
b) PRO RATA ENTITLEMENTS: Subject to the following sub-clauses (a) and
(b), all new Shares offered for acquisition pursuant to clause 5.1
("New Shares") must be offered to the existing Shareholders in
proportion to the number of Shares held:
i) if any existing Shares do not have rights to receive an offer
to acquire New Shares or have special or disproportionate
rights to receive an offer to acquire New Shares, the offer to
acquire New Shares must be made in accordance with the
relative proportionate entitlements of all Shareholders; and
ii) fractional entitlements to New Shares must be disregarded.
22
c) OFFER NOTICE: The offer must be made by written notice, specifying:
i) the number, Class and terms of the New Shares offered,
including the number of New Shares to which the offeree is
entitled;
ii) the issue price and payment conditions; and
iii) the date (being not less than 14 days nor more than 28 days
after the date of the written notice) by which the offeree
must give an acceptance notice in writing to the Company
containing the details set out in clause 5.4.
d) ACCEPTANCE NOTICES: Each acceptance notice must state whether or not
the offeree wishes to purchase:
i) the offeree's entitlement or some lesser number of New Shares;
and
ii) any New Shares offered to, but declined by, other offerees
("Declined New Shares") and if so what number.
e) CONTINGENT ENTITLEMENTS: If, and to the extent that, offerees do not,
within the period referred to in clause 5.3, accept the offer, their
entitlements to Declined New Shares will be used for satisfying the
requests for the Declined New Shares upon the basis that the Declined
New Shares not claimed by the holders of Shares in a particular Group
will be allocated first to the other holders of Shares in that Group
who have requested Declined New Shares, in proportion to their existing
holdings in that Group, and thereafter to the holders of Shares in the
other Group who have requested Declined New Shares in proportion to
their existing holdings in that Group, but no Shareholder will be
allocated more Declined New Shares than the number requested by that
Shareholder.
f) TREASURY STOCK: The provisions of this clause 5 also apply to the
transfer of Shares held by the Company in itself as if the transfer was
an issue of New Shares by the Company.
6. ALTERATION OF SHAREHOLDERS' RIGHTS
a) SPECIAL RESOLUTION REQUIRED: Any action affecting the rights,
privileges, limitations or conditions attached to any Shares by this
Constitution, the Act, or the terms on which any of the Shares were
issued, must be approved by Special Resolution of each Interest Group.
b) MEETINGS OF INTEREST GROUPS: The provisions of this Constitution
relating to meetings of Shareholders shall apply to separate meetings
of the Shareholders in each Interest Group, except that the necessary
quorum shall be two persons holding or representing the holders of not
less than one third of the Shares of the relevant Interest Group. Any
Shareholder in the Interest Group present in person or by
Representative may demand a poll.
c) ISSUE OF FURTHER SHARES: The issue of further Shares ranking equally
with existing Shares whether as to voting rights, distribution or
otherwise, is deemed not to be an action affecting the rights attaching
to the existing Shares of that Class.
7. SHARE CERTIFICATES
a) ISSUE OF SHARE CERTIFICATES: The Company may issue Share certificates
in respect of all or any Shares and must, within 20 working days after
receiving an application by a Shareholder, send to that Shareholder a
Share certificate, in accordance with section 95 of the Act.
b) REPLACEMENT SHARE CERTIFICATES: The Company:
i) may issue a replacement certificate for any Share certificate
that is worn out or defaced; and
ii) shall issue a replacement Share certificate for one that has
been lost or destroyed; and
iii) shall issue a replacement Share certificate for any Group A
Shares that have been redesignated as Group B Shares pursuant
to clause 12.20,
subject in the case of (a) and (b) to satisfactory proof of that fact,
payment of the reasonable expenses of the Company and, if so required
by the Board, an appropriate indemnity being given to the Company.
8. CALLS ON SHARES
a) BOARD'S POWER: The Board may, by notice in writing to a Shareholder or
Shareholders, make calls in respect of all moneys unpaid on Shares and
which are not, by the terms applicable to the Shares, payable at fixed
times. The Board may revoke or postpone a call before payment is
received.
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b) LIABILITY TO PAY: Each relevant Shareholder shall be liable (jointly
and severally in the case of joint Shareholders) to pay, in accordance
with the relevant notice, every call and shall remain liable to do so
notwithstanding the subsequent transfer of the relevant Shares.
c) DIFFERENTIAL CALLS: Calls may be made in respect of certain Shares and
not others and for different amounts in respect of certain Shares from
others. The Board may, at the time of issue of any Shares,
differentiate between the holders as to the amount of calls to be paid
and the time of payment.
d) INSTALMENTS: The Board may determine that a call is payable by
instalments.
e) TIME CALL IS MADE: A call shall be deemed to have been made at the time
the resolution of the Board authorising the call was passed.
f) INTEREST ON OVERDUE AMOUNTS: A call not paid when due shall bear
interest from the due date to the date of actual receipt by the Company
at the rate fixed in the notice of call or the terms applicable to the
relevant Shares or, if there is no such rate, as the Board determines.
The Board may waive payment of interest wholly or in part.
g) UNPAID INSTALMENTS: Any amount payable on issue of a Share or on any
fixed date or as an instalment of a call shall be deemed to be a call
and if not paid, the provisions of this clause 8 and clauses 9 and 10
shall apply as if that sum had become payable by the making of a call.
h) CALLS IN ADVANCE: The Board may, in its discretion, receive any moneys
uncalled and unpaid upon any Shares in advance of its due date and, may
pay interest on the amount received at such rate (if any) and on such
terms as the Board determines.
i) EVIDENCE: In any proceedings for the recovery of moneys due in respect
of any call a statutory declaration by a Director or any other person
authorised by the Board that:
i) the name of the Shareholder is entered in the Share register
as the holder (or one of the holders) of the relevant Shares;
ii) the resolution making the call is recorded in the records of
the Company; and
iii) notice of the call was sent to the Shareholder,
shall be conclusive evidence of the indebtedness of the Shareholder to
the Company in respect of the call.
9. LIEN ON SHARES
a) LIEN ON UNPAID AND PARTLY PAID SHARES: The Company shall have a first
and paramount lien on every Share which is not a fully paid Share (and
any dividends or other distributions in respect of that Share) for:
i) all unpaid calls, instalments, or other amounts, and any
interest payable on those amounts, relating to that Share; and
ii) any amounts the Company may be called upon to pay under any
legislation in respect of that Share.
b) POWER OF SALE: If any amount due in respect of a Share on which the
Company has a lien is unpaid for more than 14 days after notice in
writing demanding payment has been given to the Shareholder or the
person entitled to receive notices in respect of that Share:
i) the Company may sell the Share in the manner set out in clause
5 as if it constituted an issue of New Shares; and
ii) to give effect to any such sale, the Board may authorise any
person to execute a transfer of the Share to, or at the
direction of, the purchaser.
c) ABSOLUTE TITLE OF PURCHASER: The title of a purchaser of any Shares
sold pursuant to clause 9.2 shall not be affected by any irregularity
or invalidity in any sale.
d) APPLICATION OF SALE PROCEEDS: The net proceeds of sale of any Share
sold pursuant to clause 9.2, after deducting expenses of sale shall be
applied in and towards satisfaction of any unpaid calls, instalments or
other amounts and any interest on those amounts and the balance (if
any) shall be paid to the person entitled to the Share at the date of
sale.
10. FORFEITURE OF SHARES
a) NOTICE: If a call on a Share is not paid when due, the Directors may
give 14 days notice to the Shareholder requiring
24
payment of the call, together with interest on the amount of the call.
The notice shall specify the place of payment and state that if the
notice is not complied with the relevant Share will be liable to be
forfeited.
b) FORFEITURE: If the notice is not complied with the Share may, before
payment of the overdue amount has been made, be forfeited by resolution
of the Board.
c) SALE OF FORFEITED SHARES: A forfeited Share may be sold or otherwise
disposed in the manner set out in clause 5 as if it constituted an
issue of New Shares. To give effect to any sale or disposal the Board
may authorise any person to execute any relevant documentation. The
Board may, at any time before the sale or disposal, cancel the
forfeiture.
d) APPLICATION OF SALE PROCEEDS: The net proceeds of sale of any forfeited
Share shall be applied in the same manner as set out in clause 9.4.
e) ABSOLUTE TITLE OF PURCHASER: The title of a purchaser of a forfeited
Share shall not be affected by any irregularity or invalidity in the
forfeiture, sale or other disposal of the Share.
f) CONSEQUENCES OF FORFEITURE: A person whose Shares have been forfeited
shall cease to be a Shareholder in respect of those Shares and shall
surrender the Share certificate for cancellation but shall remain
liable to the Company for all moneys due to the Company at the date of
forfeiture in respect of the Shares together with interest thereon.
g) EVIDENCE OF FORFEITURE: A statutory declaration by a Director or any
other person authorised by the Board that a Share has been forfeited on
a specified date shall be conclusive evidence of that forfeiture.
11. TRANSFER OF SHARES
a) TRANSFEROR TO REMAIN HOLDER UNTIL REGISTRATION: The transferor of a
Share shall remain the holder of the Share until the name of the
transferee is entered in the Share register.
b) AUTHORISED TRANSACTIONS: Any Shares disposed of by an "authorised
transaction" within the meaning of the Securities Transfer Act 1991 may
be transferred by an instrument of transfer complying with the
provisions of that Act or by an instrument complying with clause 11.4.
c) TRANSFER EXECUTED OUTSIDE NEW ZEALAND: Where an instrument of transfer
would have complied with the provisions of the Securities Transfer Act
1991 if it had been executed by the transferor in New Zealand, it may
nevertheless be registered by the Company if it is executed under the
common seal of a corporation as transferor or otherwise in any usual
manner for execution by such a corporation, or in any other case if the
signature of the transferor has been witnessed by a person who has
added his or her occupation and address after his or her signature.
d) FORM OF TRANSFER: Every instrument of transfer of Shares not falling
within clauses 11.2 and 11.3 shall comply with the following
provisions:
i) the form of the instrument of transfer shall be any usual or
common form or any other form which the Board may approve;
ii) the instrument of transfer must be signed or executed by or on
behalf of the transferor; and
iii) where the Shares being transferred are not fully paid up, the
instrument of transfer must also be signed or executed by or
on behalf of the transferee.
e) POWER TO REFUSE TO REGISTER: The Board may decline to register any
transfer of Shares where:
i) the Company has a lien on any of the Shares; or
ii) the Shares are not fully paid up; or
iii) the transfer is not accompanied by the certificate (if any)
for the Shares to which it relates or other evidence as the
Board may reasonably require to show the right of the
transferor to make the transfer; or
iv) the Board has notice of any agreement by the Shareholder to
transfer the Shares only to some specified person or subject
to some specified condition; or
v) the transferor has not complied with the provisions of clauses
12 or 14,
provided that the Board resolves to exercise its powers under this
clause within 30 working days after receipt of the relevant transfer
and notice of the resolution is sent to the transferor and to the
transferee within five working days of the resolution being passed by
the Board.
25
f) REGISTRATION OF TRANSFERS: Every instrument of transfer shall be
delivered to the Company's Share register, together with the Share
certificate (if any) for the Shares to be transferred. If there is no
Share certificate for those Shares or if the Share certificate has been
lost, damaged or destroyed, the transferee shall provide such other
evidence as the Board may reasonably require to show the right of the
transferor to make the transfer.
g) POWER TO DIVIDE SHARE REGISTER: The Share register may be divided into
two or more registers kept in different places.
h) TRANSFER OF SECURITIES OTHER THAN SHARES: This section 11 shall also
apply to transfers of securities of the Company other than Shares with
any necessary modifications.
12. PRE-EMPTIVE RIGHTS ON TRANSFERS OF SHARES
a) TRANSFER NOTICES: Every Shareholder who desires to sell or transfer any
legal or beneficial interest in Shares in the Company (other than
pursuant to clause 5.6) (the "Intending Seller") must give notice in
writing (a "Transfer Notice") to the Board that the Intending Seller
desires to sell or transfer those Shares. For the purposes of this
clause, the word "Shareholder" includes a manager, protection attorney,
assignee in bankruptcy or Personal Representative of any Shareholder.
b) CONTENTS OF TRANSFER NOTICE: The Transfer Notice must specify:
i) the Group which the Shares to be sold or transferred form part
or all of (the "Specified Group");
ii) the number of Shares the Intending Seller intends to sell or
transfer (the "Specified Shares"); and
iii) the sum which the Intending Seller proposes as the sale price
of the Specified Shares (the "Proposed Sale Price").
c) BOARD APPOINTED AGENT: A Transfer Notice constitutes the Board as the
agent of the Intending Seller for the sale of the Specified Shares in
accordance with the provisions of this clause 12. A Transfer Notice is
not revocable by the Intending Seller except as provided in clause 12.7
and clause 12.11.
d) OFFER TO SHAREHOLDERS: Immediately upon receipt of a Transfer Notice,
the Board must promptly give written notice to Shareholders offering
the Specified Shares in accordance with the provisions of this clause
12.4;
i) if the Specified Shares comprise all the Shares in the
Specified Group, they must be offered in accordance with
sub-clauses (c) and (d) to the holders of the Shares in the
other Group of Shares.
ii) if the Specified Shares comprise part only of the Shares in
the Specified Group, they must be first offered in accordance
with sub-clauses (c) and (d) to the holders of the remaining
Shares in the Specified Group and if any of the Specified
Shares remain unallocated thereafter they must then be offered
in accordance with sub-clauses (c) and (d) to the holders of
the Shares in the other Group of Shares.
iii) an offer pursuant to sub-clause (a) or (b) must be made by
written notice to each of the relevant Shareholders, in
proportion to their existing holdings in their relevant Group.
The notice must state:
a) the number of Specified Shares to which the offeree is
entitled;
b) the Proposed Sale Price; and
c) the date (being not less than 21 days nor more than 28
days after the receipt by the Company of the Transfer
Notice) by which the offeree must give notice in writing
to the Company (an "Acceptance Notice") containing the
details set out in clause 12.5.
iv) If all the offerees in the relevant Group do not claim their
full entitlements, the unclaimed Shares ("Declined Shares")
must be used to satisfy the requests for Declined Shares. If
there are insufficient Declined Shares to satisfy such
requests, the Declined Shares must be divided among those
offerees who requested Declined Shares, in proportion to their
existing holdings in the relevant Group but no Shareholder
shall be allocated more Declined Shares than the number which
that Shareholder has requested.
v) If any Specified Shares remain unallocated after the procedure
set out in the proceeding sub-clauses have been followed, the
Company may offer those Shares to any person nominated by the
holders of the majority of the Shares in the Group other than
the Specified Group.
e) ACCEPTANCE NOTICES: Each Acceptance Notice must state whether or not
the offeree:
i) wishes to purchase the offeree's entitlement or some lesser
number of Specified Shares;
26
ii) wishes to purchase any Declined Shares and if so what number;
and
iii) accepts the Proposed Sale Price or wishes the sale price to be
the Fair Value determined in accordance with clause 12.11.
f) NOTICE TO INTENDING SELLER: After receipt of Acceptance Notices from
all offerees or the expiry of the date specified in clause 12.4(c)(iii)
(whichever is the earlier) the Board must within seven days either send
to the Intending Seller copies of all Acceptance Notices received or
notify the Intending Seller that no Acceptance Notices have been
received.
g) INTENDING SELLER'S RIGHT TO WITHDRAW: If Acceptance Notices are
received which do not contain acceptances for all of the Specified
Shares the Intending Seller may within seven days of being given notice
under clause 12.6, revoke the Transfer Notice by giving a notice in
writing to the Board ("Withdrawal Notice"). If the Intending Seller
gives a Withdrawal Notice under this clause 12.7 the Transfer Notice
will be revoked and the Intending Seller may, within three months after
the Withdrawal Notice is given, sell or transfer all of the Specified
Shares (but not part only) at a price which is not less than the
proposed sale price and otherwise on terms no more favourable to a
Purchaser than the terms offered to the existing Shareholders.
h) SALE AND PURCHASE: Subject to clause 12.11, the Intending Seller will
become bound to sell the Specified Shares in respect of which
Acceptance Notices have been received when:
i) Acceptance Notices are given under clause 12.5 which relate to
all of the Specified Shares in a Transfer Notice; or
ii) Acceptance Notices are given under clause 12.5 which relate
only to some of the Shares specified in a Transfer Notice and
the Intending Seller does not give a Withdrawal Notice under
clause 12.7.
i) PURCHASERS: The purchasers of the Specified Shares will be determined
as follows:
i) if all offerees have accepted their entitlements then each
offeree will become bound to purchase that number of Specified
Shares equivalent to that offeree's entitlement; and
ii) in any other case:
a) each offeree will become bound to purchase that number
of Specified Shares equal to the lesser of the number of
Specified Shares the offeree agreed to accept in the
offeree's Acceptance Notice and the number of Specified
Shares equivalent to the offeree's entitlement; and
b) each offeree who has agreed to accept Declined Shares
and, if more than one, pro rata according to their
respective entitlements, will become bound to purchase
that number of Declined Shares.
j) PRICE: If an offeree's Acceptance Notice states that the offeree
accepts the Proposed Sale Price that offeree will be bound to purchase
the relevant Specified Shares at that price.
k) FAIR VALUE IF NO AGREEMENT: If an offeree's Acceptance Notice states
that the offeree does not accept the Proposed Sale Price the sale price
will be the fair value ("Fair Value") fixed by a person (the "Expert")
appointed by agreement between the Intending Seller and the Remaining
Shareholder or, failing agreement, appointed by the President of the
New Zealand Society of Accountants. The Expert will be an expert, not
an arbitrator. The Arbitration Xxx 0000 does not apply. If the Expert
fixes the Fair Value at a price below the Proposed Sale Price, the
Intending Seller may, within seven days of being given notice of the
Expert's determination, revoke the Transfer Notice by giving a
Withdrawal Notice in the same manner as under clause 12.7. The
provisions of clause 12 will nevertheless apply to any further attempt
by the Intending Seller to sell or transfer any Shares.
l) SETTLEMENT: Settlement of the sale and purchase of the Shares must take
place:
i) within 14 days after the Intending Seller becomes bound to
sell the Specified Shares pursuant to clause 12.8 (if at the
Proposed Sale Price); or
ii) in any other case within 14 days after the determination of
the Fair Value.
m) PAYMENT: On settlement:
i) the offeree must pay the price for the Shares to the Intending
Seller in cleared funds; and
ii) in return, the Intending Seller must deliver to the offeree
the signed Share transfer and relevant Share certificate (if
any).
27
n) EXECUTION BY COMPANY: If the Intending Seller does not transfer the
Shares in accordance with clause 12.13(b), the Company shall execute
transfers of the Shares on behalf of the Intending Seller and receive
the price for the Shares.
o) ACTIONS BY COMPANY: Upon receipt of the price for the Shares, the
Company must cause the name of the relevant offeree to be entered in
the Share register as the holder of those Shares and hold the amount
paid in trust for the Intending Seller.
p) VALIDITY: The Board's receipt is a good discharge to the offeree for
the purchase price. No question may be raised as to the title of the
offeree to the Shares.
q) SELLER'S RIGHTS IF NO ACCEPTANCE NOTICES RECEIVED: If an Intending
Seller has given a Transfer Notice and no Acceptance Notices are
received during the Acceptance Period, the Intending Seller may, within
three months after the expiry of the Acceptance Period, sell or
transfer all of the Specified Shares (but not part only) at a price
which is not less than the Proposed Sale Price and otherwise on terms
no more favourable to a purchaser than the terms offered to the
Remaining Shareholders.
r) APPROVED TRANSFER: Any Share may be transferred by a Shareholder to any
person if the transfer is approved in writing by the holders of 75% of
the Shares in the Company of the same Class and the restrictions in the
preceding provisions of this clause 12 shall not apply to any transfer
authorised by this clause 12.18.
s) RELATIVES AND TRUSTEES: Any Share may be sold or transferred by a
Shareholder free from the restrictions contained in the preceding
provisions of this clause 12, to:
i) the husband or wife of that Shareholder or any person with
whom that Shareholder is living in a relationship in the
nature of marriage;
ii) a parent, child or grandchild of that Shareholder;
iii) a trustee or trustees of any trust which is, in the opinion of
the Board, exclusively or principally for the benefit of one
or more of the persons specified sub-clauses (a) and (b).
Shares standing in the name of the trustees of any such trust
may be transferred upon any change of trustee to the new
trustees of such trust; or
iv) (subject to clause 12.21) a company owned or controlled by a
Shareholder or any of the persons referred to in paragraphs
(a), (b) and (c) of this clause 12.19.
t) GROUP B SHAREHOLDER CEASING TO BE A DIRECTOR OR EMPLOYEE: If a holder
of Group B Shares ceases for any reason to be a Director or employee of
the Company or any of its subsidiaries, that holder must give a
Transfer Notice in respect of his Group B Shares within 21 days of
ceasing to be a Director or employee as aforesaid. If that holder fails
to give a Transfer Notice within th 21 day period, the other Directors
will be deemed to have been appointed as that Shareholder's attorney
and may give a Transfer Notice on that Shareholder's behalf.
u) CHANGE IN OWNERSHIP: If there is a change of ownership or control of
more than 50% of the shareholding in the holder of any Shares, that
holder must give a Transfer Notice in respect of its Shares within 21
days of the change in ownership as aforesaid. If that holder fails to
give a Transfer Notice within the such period, a Transfer Notice will
have been deemed to have been given within 21 days of the Company
notifying the holder of the relevant Shares that it has become aware of
the change of ownership. This clause will not apply in the case of a
corporate restructuring, statutory merger, amalgamation or other
reorganisation within the group of companies of which the holder of the
relevant Shares forms part.
13. BANKRUPTCY
If a Shareholder is adjudicated bankrupt, then the adjudication
constitutes the Board the agent of the bankrupt Shareholder (and of his
or her estate in bankruptcy or death):
i) to give the Board a Transfer Notice; and
ii) to sell the Shares as provided in clause 12.
The Proposed Sale Price will be the Fair Value and will be fixed prior
to the offer to Shareholders. The Intending Seller will have no right
to withdraw the Transfer Notice under clause 12.
14. TRANSMISSION OF SHARES
a) TRANSMISSION ON DEATH OF SHAREHOLDER: If a Shareholder dies the
survivor, if the deceased was a joint Shareholder, or the Shareholder's
Personal Representative, shall be the only person recognised by the
Company as having any title to or interest in the Shares of the
deceased Shareholder. Nothing in this clause shall release the estate
of a deceased
28
joint Shareholder from any liability in respect of any Share or
constitute a release of any lien which the Company may have in respect
of any Share.
b) RIGHTS OF PERSONAL REPRESENTATIVES: A Shareholder's Personal
Representative:
i) is entitled to exercise all rights (including without
limitation the rights to receive distributions, to attend
meetings and to vote in person or by Representative), and is
subject to all limitations, attached to the Shares held by
that Shareholder; and
ii) is entitled to be registered as holder of those Shares, but
such registration shall not operate as a release of any rights
(including any lien) to which the Company was entitled prior
to registration of the Personal Representative pursuant to
this sub-clause.
c) JOINT PERSONAL REPRESENTATIVES: Where a Share is subject to the control
of two or more persons as Personal Representatives, they shall, for the
purposes of this Constitution, be deemed to be joint holders of the
Share.
d) CHANGE OF TRUSTEES: Shares in the Company standing in the name of the
Personal Representatives of a deceased Shareholder may be transferred
upon any change of Personal Representative of such deceased
Shareholder.
e) TRANSFER OF SHARES BY PERSONAL REPRESENTATIVES: The Personal
Representative of a deceased Shareholder must, not later than six
months after the death of the Shareholder, give a Transfer Notice in
respect of all the Shares held by the deceased Shareholder and all the
provisions of section 12 shall apply accordingly. If the Personal
Representative fails to do so then, at the expiration of the six month
period, the Personal Representative shall be deemed to have given a
Transfer Notice in respect of all of the Shares held by the deceased
Shareholder unless the requirements of this clause have previously been
waived by written notice to the Company signed by all of the
Shareholders. The Proposed Sale Price will be the Fair Value and will
be fixed prior to the offer to Shareholders. The Intending Seller will
have no right to withdraw the Transfer Notice under clause 12.7.
15. EXERCISE OF POWERS OF SHAREHOLDERS
a) METHODS OF HOLDING MEETINGS: A meeting of Shareholders may be held
either:
i) by a number of Shareholders, who constitute a quorum, being
assembled together at the place, date, and time appointed for
the meeting; or
ii) if determined by the Board, by means of audio, or audio and
visual, communication by which all Shareholders participating
and constituting a quorum, can simultaneously hear each other
throughout the meeting.
b) EXERCISE OF POWER BY MEETING OR WRITTEN RESOLUTION: A power reserved to
the Shareholders by the Act or by this Constitution may be exercised
either:
i) at a meeting of Shareholders; or
ii) by a resolution in writing signed in accordance with section
122 of the Act.
c) POWERS OF SHAREHOLDERS: Unless otherwise specified in the Act or this
Constitution any power reserved to Shareholders may be exercised and
any approval of Shareholders may be given by Ordinary Resolution.
16. MEETINGS OF SHAREHOLDERS
a) ANNUAL MEETINGS: Subject to clause 16.3, the Company shall hold an
annual meeting in each calendar year in addition to any other meetings
in that year not later than:
i) six months after the balance date of the Company; and
ii) fifteen months after the previous annual meeting.
b) TIME AND PLACE OF ANNUAL MEETING: Each annual meeting shall be held at
such time and place as the Board appoints.
c) RESOLUTION IN LIEU OF ANNUAL MEETING: It is not necessary for the
Company to hold an annual meeting in any calendar year if everything
required to be done at the meeting (by resolution or otherwise) is done
by resolution in writing signed in accordance with section 122 of the
Act.
d) SPECIAL MEETINGS: All meetings other than annual meetings shall be
called special meetings.
e) CALLING OF SPECIAL MEETINGS: A special meeting:
29
i) may be called by the Board at any time; and
ii) shall be called by the Board on the written request of
Shareholders holding Shares carrying together not less than 5%
of the voting rights entitled to be exercised on any of the
questions to be considered at the meeting.
17. NOTICE OF MEETINGS OF SHAREHOLDERS
a) WRITTEN NOTICE: Written notice of the time and place of a meeting of
Shareholders must be sent to every Shareholder entitled to receive
notice of the meeting and to every Director and the auditor of the
Company (if any) not less than 10 working days before the meeting.
b) CONTENTS OF NOTICE: The notice must state:
i) the nature of the business to be transacted at the meeting in
sufficient detail to enable a Shareholder to form a reasoned
judgment in relation to it; and
ii) the text of any Special Resolution to be submitted to the
meeting.
c) IRREGULARITY IN NOTICE: An irregularity in a notice of a meeting is
waived if all the Shareholders entitled to attend and vote at the
meeting attend the meeting without protest as to the irregularity, or
if all such Shareholders agree to the waiver. The accidental omission
to give a notice of a meeting to, or the non-receipt of a notice of a
meeting by, any person will not invalidate the proceedings at the
meeting.
d) ADJOURNED MEETINGS: If a meeting of Shareholders is adjourned for less
than 30 days it is not necessary to give notice of the time and place
of the adjourned meeting other than by announcement at the meeting
which is adjourned.
18. CHAIRPERSON OF MEETINGS OF SHAREHOLDERS
a) CHAIRPERSON OF THE BOARD TO ACT: If the Directors have elected a
chairperson of the Board, and the chairperson of the Board is present
at a meeting of Shareholders, that Director must chair the meeting.
B) OTHER CHAIRPERSON: If no chairperson of the Board has been elected or
if at any meeting of Shareholders the chairperson of the Board is not
present within 15 minutes of the time appointed for the commencement of
the meeting or the chairperson is unwilling or unable to act, the
Directors present, if any, may elect one of their number to be
chairperson of the meeting. If no Director is willing to act as
chairperson or if no Director is present within 15 minutes of the time
appointed for the commencement of the meeting, the Shareholders present
may choose one of their number to be chairperson.
c) ADJOURNED MEETINGS: The chairperson may, and if directed by the meeting
must, adjourn the meeting to a new time and place. No business can be
transacted at any adjourned meeting other than unfinished business at
the original meeting.
d) REGULATION OF PROCEDURE: Subject to the provisions of the Act, and
except as otherwise provided in this Constitution, the chairperson may
regulate the proceedings at meetings of Shareholders.
19. QUORUM FOR MEETINGS OF SHAREHOLDERS
a) QUORUM REQUIRED: Subject to clause 19.3 no business may be transacted
at a meeting of Shareholders if a quorum is not present.
b) SIZE OF QUORUM: For so long as there are only Group A Shares on issue,
a quorum for a meeting of Shareholders is such number of Shareholders
or their Representatives who are present and who between them hold or
or represent the holders of the majority of the Group A Shares. If at
any time there are Group B Shares on issue the quorum for a meeting of
Shareholders will be such number of Shareholders or their
Representatives who are present and who between them hold or represent
the holders of the majority of the Shares in each Group.
c) LACK OF QUORUM: If a quorum is not present within 30 minutes after the
time appointed for the meeting:
i) in the case of a meeting called by the Board on the written
request of Shareholders under section 121(b) of the Act, the
meeting is dissolved; or
ii) in the case of any other meeting, the meeting is adjourned to
the same day in the following week at the same time and place,
or to such other date, time, and place as the Directors may
appoint and if, at the adjourned meeting, a quorum is not
present within 30 minutes after the time appointed for the
commencement of the meeting, the Shareholders or their
Representatives present will constitute a quorum.
30
20. VOTING AT MEETINGS OF SHAREHOLDERS
a) MEETINGS IN ONE PLACE: In the case of a meeting of Shareholders held
under clause 15.1(a), unless a poll is demanded, voting at the meeting
shall be by whichever of the following methods is determined by the
chairperson:
i) voting by voice; or
ii) voting by show of hands.
b) AUDIO-VISUAL MEETINGS: In the case of a meeting of Shareholders held
under clause 15.1(b), unless a poll is demanded, voting at the meeting
shall be by the Shareholders signifying individually their assent or
dissent by voice.
c) POSTAL VOTES: Unless the Board determines otherwise, Shareholders may
not exercise the right to vote at a meeting by casting postal votes. If
the Board determines that Shareholders may exercise the right to vote
at a meeting by casting postal votes, the procedures in relation to
postal voting shall be those set out in clause 7 of the First Schedule
to the Act together with any other procedures determined by the Board.
d) NUMBER OF VOTES: Subject to any rights or restrictions attached to any
Share:
i) where voting is by voice or a show of hands, every Shareholder
present in person or by Representative has one vote; and
ii) on a poll every Shareholder present in person or by
Representative has:
a) one vote in respect of every fully paid Share held
by that Shareholder; and
b) in respect of each Share held by that Shareholder
which is not fully paid, a proportion of the vote or
votes which would be exercisable if that Share was
fully paid equivalent to the proportion of the total
issue price of that Share which has been paid
(disregarding any payment in advance).
e) DECLARATION OF CHAIRPERSON CONCLUSIVE: A declaration by the chairperson
that a resolution is carried by the requisite majority is conclusive
evidence of that fact unless a poll is demanded in accordance with
clause 20.6.
f) RIGHT TO DEMAND POLL: At a meeting of Shareholders a poll may be
demanded by:
i) not less than five Shareholders having the right to vote at
the meeting; or
ii) a Shareholder or Shareholders representing not less than 10%
of the total voting rights of all Shareholders having the
right to vote at the meeting; or
iii) a Shareholder or Shareholders holding Shares in the Company
that confer a right to vote at the meeting and on which the
aggregate amount paid up is not less than 10% of the total
amount paid up on all Shares that confer that right; or
iv) the chairperson.
For the purposes of this clause, the instrument appointing a proxy to
vote at a meeting of the Company confers authority to demand or join in
demanding a poll and a demand by a person as proxy for a Shareholder
has the same effect as a demand by the Shareholder.
g) TIME OF DEMAND FOR POLL: A poll may be demanded either before or after
the vote is taken on a resolution. The demand for a poll may be
withdrawn.
h) TIMING OF POLL: The chairperson may determine the time and manner in
which a poll is to be taken and any business other than that upon which
a poll has been demanded may be proceeded with pending the taking of
the poll.
i) COUNTING OF VOTES ON POLL: If a poll is taken, votes must be counted
according to the votes attached to the Shares of each Shareholder
present in person or by Representative and voting.
j) VOTES OF JOINT HOLDERS: Where two or more persons are registered as the
holder of a Share, the vote of the person named first in the Share
register and voting on a matter must be accepted to the exclusion of
the votes of the other joint holders.
k) VALIDITY OF VOTES: In the case of any dispute as to the admission or
rejection of a vote the chairperson shall determine the same and such
determination made in good faith shall be conclusive.
l) NO VOTE IF AMOUNTS UNPAID: No Shareholder shall be entitled to vote at
any meeting in respect of Shares on which
31
any call or other moneys are due and unpaid.
21. PROXIES AND CORPORATE REPRESENTATIVES
a) PROXIES PERMITTED: A Shareholder may exercise the right to vote either
by being present in person or by proxy. A proxy for a Shareholder is
entitled to attend and be heard at a meeting of Shareholders as if the
proxy were the Shareholder.
b) FORM OF PROXY: A proxy must be appointed by notice in writing signed by
the Shareholder and the notice must state whether the appointment is
for a particular meeting or a specified term not exceeding 12 months.
c) LODGING PROXY: No proxy is effective in relation to a meeting unless
the proxy form is produced before the start of the meeting.
d) VALIDITY OF PROXY VOTE: A vote given in accordance with the terms of an
instrument of proxy shall be valid notwithstanding the previous death
or mental disorder of the principal or revocation of the proxy or of
the authority under which the proxy was executed, or the transfer of
the Share in respect of which the proxy is given, if no written notice
of such death, mental disorder, revocation, or transfer has been
received by the Company at its registered office before the
commencement of the meeting or adjourned meeting at which the proxy is
used.
e) CORPORATE REPRESENTATIVES: A body corporate which is a Shareholder may
appoint a representative to attend a meeting of Shareholders on its
behalf in the same manner as that in which it could appoint a proxy. A
corporate representative shall have the same rights and powers as if
the representative were a proxy.
22. MINUTES OF SHAREHOLDER MEETINGS
The Board must ensure that minutes are kept of all proceedings at
meetings of Shareholders. Minutes which have been signed correct by the
chairperson are prima facie evidence of the proceedings.
23. SHAREHOLDER PROPOSALS
a) NOTICE TO THE BOARD: A Shareholder may give written notice to the Board
of a matter the Shareholder proposes to raise for discussion or
resolution at the next meeting of Shareholders at which the Shareholder
is entitled to vote.
b) NOTICE TO SHAREHOLDERS AT COMPANY'S EXPENSE: If the notice is received
by the Board not less than 20 working days before the last day on which
notice of the relevant meeting of Shareholders is required to be given
by the Board, the Board must, at the expense of the Company, give
notice of the Shareholder proposal and the text of any proposed
resolution to all Shareholders entitled to receive notice of the
meeting.
c) NOTICE TO SHAREHOLDERS AT PROPOSING SHAREHOLDER'S EXPENSE: If the
notice is received by the Board not less than five working days and not
more than 20 working days before the last day on which notice of the
relevant meeting of Shareholders is required to be given by the Board,
the Board must, at the expense of the Shareholder, give notice of the
Shareholder proposal and the text of any proposed resolution to all
Shareholders entitled to receive notice of the meeting.
d) LATE NOTICE: If the notice is received by the Board less than five
working days before the last day on which notice of the relevant
meeting of Shareholders is required to be given by the Board, the Board
may, if practicable, and at the expense of the Shareholder, give notice
of the Shareholder proposal and the text of any proposed resolution to
all Shareholders entitled to receive notice of the meeting.
e) PROPOSING SHAREHOLDER'S RIGHT TO GIVE WRITTEN STATEMENT: If the
Directors intend that Shareholders may vote on the proposal they must
give the proposing Shareholder the right to include in or with the
notice given by the Board a statement of not more than 1,000 words
prepared by the proposing Shareholder in support of the proposal,
together with the name and address of the proposing Shareholder.
f) DEFAMATORY, FRIVOLOUS OR VEXATIOUS STATEMENTS: The Board is not
required to include in or with the notice given by the Board a
statement prepared by a Shareholder which the Directors consider to be
defamatory, frivolous, or vexatious.
g) DEPOSIT OF COSTS BY PROPOSING SHAREHOLDER: Where the costs of giving
notice of the Shareholder proposal and the text of any proposed
resolution are required to be met by the proposing Shareholder, the
proposing Shareholder must, on giving notice to the Board, deposit with
the Company or tender to the Company a sum sufficient to meet those
costs.
24. APPOINTMENT AND REMOVAL OF DIRECTORS
a) NUMBER: The number of Group A Directors must not at any time be more
than four and the number of Group B Directors must not at any time be
more than three.
32
b) EXISTING DIRECTORS: The Directors in office at the date of adoption of
this Constitution shall continue in office and shall be deemed to have
been appointed pursuant to this Constitution.
c) APPOINTMENT AND REMOVAL: Subject to clause 24.1, the holders of a
majority of the Shares in a Group may at any time by written notice to
the Company appoint a person as a Director and may similarly remove
from office any Director previously appointed by the holders of a
majority of the Shares in that Group.
d) VACATION OF OFFICE: A Director shall cease to hold office as a Director
if the Director:
i) becomes bankrupt or makes an arrangement or compromise with
the Director's creditors generally;
ii) becomes disqualified from being a Director pursuant to Section
151 of the Act;
iii) resigns from office by notice in writing to the Company; or
iv) is removed from office pursuant to this Constitution or the
Act.
25. ALTERNATE DIRECTORS
a) APPOINTMENT: Each Director may from time to time appoint any person who
is not already a Director and who is approved by a majority of the
other Directors to be the Director's alternate director (an "Alternate
Director"). No Director may appoint a deputy or agent otherwise than by
way of appointment of an Alternate Director.
b) FORM OF APPOINTMENT AND REMOVAL: Any appointment or removal of an
Alternate Director must be by notice in writing to the Company signed
by the relevant Director.
c) RIGHTS OF ALTERNATE DIRECTOR: Each Alternate Director will be entitled
to:
i) receive notices of all meetings of the Board if the Director
who appointed the Alternate Director is known to be either
outside of New Zealand or otherwise unavailable to attend
meetings;
ii) attend and vote at any such meeting at which the Director who
appointed the Alternate Director is not personally present;
and
iii) in the absence of the Director who appointed the Alternate
Director, perform all the functions, and exercise all the
powers, of that Director.
d) REMUNERATION AND EXPENSES: Each Alternate Director's:
i) remuneration (if any) must be paid by the Director who
appointed the Alternate Director; and
ii) expenses incurred in attending meetings of the Directors and
otherwise in relation to the discharge of duties will be paid
by the Company.
e) CESSATION OF APPOINTMENT: An Alternate Director will cease to be an
Alternate Director:
i) if the Director who appointed the Alternate Director ceases to
be a Director or revokes the appointment;
ii) on the occurrence of any event relating to the Alternate
Director which, if the Alternate Director were a Director,
would disqualify the Alternate Director from being a Director;
or
iii) if a majority of the other Directors resolve to revoke the
Alternate Director's appointment.
26. POWERS OF DIRECTORS
a) MANAGEMENT OF COMPANY: Except as provided in clause 26.3, the business
and affairs of the Company shall be managed by, or under the direction
or supervision of, the Board.
b) EXERCISE OF POWERS BY BOARD: Subject to the provisions of clause 26.3,
the Board may exercise all the powers of the Company which are not
required, either by the Act or this Constitution, to be exercised by
the Shareholders.
c) EXERCISE OF POWERS BY SHAREHOLDERS: The Shareholders may at any time by
Ordinary Resolution exercise any of the powers which would otherwise
fall to be exercised by the Board but the exercise of any such power
shall not invalidate any prior act of the Board which would have been
valid if the power had not been exercised by the Shareholders.
33
d) DELEGATION OF POWERS: The Board may delegate to a committee of
Directors, a Director, an employee of the Company, or to any other
person, any one or more of its powers, other than a power set out in
the Second Schedule to the Act.
e) APPOINTMENT OF ATTORNEY: The Company may exercise the power conferred
by section 181 of the Act to appoint a person as its attorney, either
generally or in relation to a specified matter. Any such power of
attorney may contain such provisions for the protection of persons
dealing with the attorney as the Board thinks fit, and may also
authorise any attorney to delegate all or any of the powers,
authorities and discretions vested in the attorney.
f) RATIFICATION BY SHAREHOLDERS: Subject to the provisions of section 177
of the Act (relating to ratification of directors' actions) the
Shareholders, or any other person in whom a power is vested by this
Constitution or the Act, may ratify the purported exercise of that
power by a Director or the Board in the same manner as the power may be
exercised. The purported exercise of a power that is ratified under
this clause is deemed to be, and always to have been, a proper and
valid exercise of that power.
27. PROCEEDINGS OF THE BOARD
a) METHODS OF HOLDING MEETINGS: A meeting of the Board may be held
either:
i) by a number of the Directors who constitute a quorum, being
assembled together at the place, date and time appointed for
the meeting; or
ii) by means of audio, or audio and visual, communication by which
all the Directors participating and constituting a quorum can
simultaneously hear each other throughout the meeting.
b) NOTICE OF MEETING: A Director or, if requested by a Director to do so,
an employee of the Company approved by the Board for this purpose, may
convene a meeting of the Board. Notice of a meeting of directors must
be given to:
i) every Director who is in New Zealand; and
ii) any Alternate Director (as defined in clause 25.1) who is in
New Zealand who is an alternate of a Director who is not in
New Zealand.
c) WAIVER OF IRREGULARITY: An irregularity in a notice of meeting is
waived if all the Directors entitled to receive notice of the meeting
attend or participate in the meeting without protest as to the
irregularity or if all Directors entitled to receive notice of the
meeting agree to the waiver.
d) QUORUM: The quorum for a meeting of the Board will be two Directors
including at least one Director representing the holders of each Group
of Shares. No business may be transacted at a meeting of Directors if a
quorum is not present.
e) INSUFFICIENT NUMBER OF DIRECTORS: The Directors may act notwithstanding
any vacancy in their body.
f) CHAIRPERSON: The Directors may elect one of their number as chairperson
of the Board and determine the period for which the chairperson is to
hold office. If no chairperson is elected, or if at any meeting the
chairperson is not present within five minutes after the time appointed
for the commencement of the meeting, the Directors present may choose
one of their number to be chairperson of the meeting.
g) VOTES:The Directors appointed by the Group A Shareholders shall jointly
have four votes regardless of the actual number of Directors present at
a meeting of the Board and the Directors appointed by the Group B
Shareholders shall jointly have three votes regardless of the actual
number of Directors present at a meeting of the Board. In the case of
an equality of votes, the chairperson will not have a casting vote. A
resolution of the Board is passed if a majority of the votes cast on it
are in favour of it. A Director present at a meeting of the Board is
presumed to have agreed to, and to have voted in favour of, a
resolution of the Board unless that Director expressly dissents or
expressly abstains from voting on, or voting against, the resolution.
h) SUBMISSION OF RESOLUTIONS TO SHAREHOLDERS: If a resolution submitted to
a meeting of the Board is not passed, any Director may, within seven
days of the date upon which the resolution was lost, give written
notice to the Board that the resolution is to be submitted to a meeting
of shareholders and may thereafter take such steps as are necessary to
submit such resolution to a meeting of Shareholders.
i) RESOLUTIONS IN WRITING: A resolution in writing, signed or assented to
by all Directors is as valid and effective as if it had been passed at
a meeting of the Board duly convened and held. Any such resolution may
consist of several documents (including facsimile or other similar
means of communication) in like form, each signed or assented to by one
or more Directors. A copy of any such resolution must be entered in or
kept with the records of Board proceedings.
j) MINUTES: The Board must ensure that minutes are kept of all proceedings
at meetings of the Board.
34
k) VALIDITY OF ACTS: All acts done by any meeting of the Board or of a
committee of Directors or by any person acting as a Director are valid
notwithstanding:
i) any defect in the appointment of any Director or person acting
as a Director; or
ii) that they or any of them were disqualified; or
iii) any irregularity in a notice of meeting.
l) OTHER PROCEDURES: Except as set out in this clause 27, the Board may
regulate its own procedure. The provisions of the Third Schedule of the
Act shall not apply to proceedings of the Board except to the extent
that those provisions are included in this Constitution.
28. DIRECTORS' INTERESTS
a) DISCLOSURE OF INTERESTS: A Director shall comply with the provisions of
section 140 of the Act (relating to disclosure of interest of
directors) but failure to comply with that section does not affect the
operation of clause 28.2.
b) PERSONAL INVOLVEMENT OF DIRECTORS: Notwithstanding any rule of law or
equity to the contrary, but subject to sections 107(3) and 141 of the
Act (relating to avoidance of transactions in which a Director is
Interested) and section 199(2) of the Act (prohibiting a director from
acting as auditor of a company), a Director may:
i) contract with the Company in any capacity;
ii) be a party to any transaction with the Company;
iii) have any direct or indirect personal involvement or Interest
in any transaction or arrangement to which the Company is a
party or in which it is otherwise directly or indirectly
interested or involved;
iv) become a director or other officer of, or otherwise Interested
in, any company promoted by the Company or in which the
Company may be directly or indirectly Interested as a
shareholder or otherwise; and
v) retain any remuneration, profit or benefits in relation to any
of the foregoing,
and no contract or arrangement of any kind referred to in this clause
may be avoided by reason of a Director's Interest.
c) INTERESTED DIRECTORS MAY VOTE: A Director who is Interested in a
transaction entered into, or to be entered into, by the Company may not
vote on any matter relating to the transaction but may otherwise:
i) attend a meeting of the Board at which any matter relating to
the transaction arises and be included among the Directors
present at the meeting for the purposes of a quorum;
ii) sign a document relating to the transaction on behalf of the
Company; and
iii) do any other thing in his or her capacity as a Director in
relation to the transaction,
as if the Director were not Interested in the transaction.
d) INTERESTS OF SHAREHOLDERS: Any Director may, when exercising powers or
performing duties as a Director, act in a manner which he or she
believes is in the best interests of a Shareholder or Shareholders,
even though it may not be in the best interests of the Company.
29. DIRECTORS' REMUNERATION AND OTHER BENEFITS
The Board may exercise the power conferred by section 161 of the Act to
authorise any payment or other benefit of the kind referred to in that
section.
30. INDEMNITY AND INSURANCE FOR DIRECTORS AND EMPLOYEES
a) INDEMNITY FOR DIRECTORS: Every Director shall be indemnified by the
Company for any costs referred to in section 162(3) of the Act and any
liability or costs referred to in section 162(4) of the Act.
b) INDEMNITIES AND INSURANCE: In addition to the indemnity set out in
clause 30.1, the Company may:
35
i) indemnify a director or employee of the Company or a related
company for any costs referred to in section 162(3) of the
Act;
ii) indemnify a director or employee of the Company or a related
company in respect of any liability or costs referred to in
section 162(4) of the Act; and
iii) effect insurance for a director or employee of the Company or
a related company in respect of any liability or costs
referred to in section 162(5) of the Act.
c) INTERPRETATION: Words given extended meanings by section 162(9) of the
Act have those extended meanings in this clause.
31. DIVIDENDS
a) METHOD OF PAYMENT: Any dividend or other money payable to a Shareholder
may be paid by cheque sent through the post to the registered address
of the holder or in any other manner determined by the Board and
directed by the person entitled to the payment. In the case of joint
holders, cheques may be sent to the registered address of the person
first named on the register.
b) CURRENCY OF PAYMENT: The Board may, in its discretion, differentiate
between Shareholders as to the currency in which dividends are to be
paid. In exercising that discretion the Board may have regard to the
registered address of a Shareholder, the register on which a
Shareholder's Shares are registered or any other matter the Board
considers appropriate. In any case where a dividend is to be paid in a
currency other than New Zealand currency, the amount payable will be
converted from New Zealand currency in a manner, at a time and at an
exchange rate determined by the Board.
c) DEDUCTIONS: The Board may deduct from dividends payable to any
Shareholder in respect of any Shares any:
i) unpaid calls, instalments, premiums or other amounts, and any
interest payable on such amounts, relating to the specific
Shares; and
ii) amounts the Company may be called upon to pay under any
legislation in respect of the specific Shares.
d) ENTITLEMENT DATE: Dividends and other distributions or payments to
Shareholders will be payable to the persons who are the registered as
Shareholders on an entitlement date fixed by the Board.
e) UNCLAIMED DIVIDENDS: Dividends or other monetary distributions
unclaimed for one year after having been authorised may be used for the
benefit of the Company until claimed. All dividends or other monetary
distributions unclaimed for five years after having been authorised may
be forfeited by the Board for the benefit of the Company. The Board
may, nevertheless, agree to pay a claimant who produces evidence of
entitlement.
32. NOTICES
a) METHOD OF SERVICE: All notices, reports, accounts or documents required
to be sent to a Shareholder shall be sent in the manner set out in
section 391 of the Act. Notices to any other person shall be sent in
the same manner as if that person was a Shareholder.
b) JOINT HOLDERS: A notice may be given by the Company to the joint
holders of a Share in the Company by giving the notice to the joint
holder named first in the Share register in respect of the Share.
33. INSPECTION OF RECORDS
Except as provided in the Act or unless the Board determines otherwise
in any particular case, no holder of securities shall be entitled to:
i) inspect any records, books, papers, correspondence or
documents of the Company; or
ii) require or receive any information concerning the Company's
business, trading or customers, or any trade secret or secret
process of or used by the Company.
34. LIQUIDATION
a) DISTRIBUTION OF SURPLUS: Subject to the rights of any Shareholders and
to clauses 34.2 and 34.3, upon the liquidation of the Company the
surplus assets of the Company (if any) must be distributed among the
Shareholders in proportion to their Shareholding. If any Shareholder's
Shares are not fully paid up the liquidator of the Company may require
those Shares to be fully paid up before the Shareholder receives any
distribution of the surplus assets of the Company in respect of those
Shares.
36
b) DISTRIBUTION IN KIND: With the approval of the Shareholders by Ordinary
Resolution, the liquidator of the Company may divide amongst the
Shareholders in kind the whole or any part of the assets of the Company
(whether or not they are of the same kind) and for that purpose the
liquidator may:
i) attribute values to assets as the liquidator considers
appropriate; and
ii) determine how the division will be carried out as between the
Shareholders or different classes of Shareholders.
c) TRUSTS: With the approval of the Shareholders by Ordinary Resolution,
the liquidator may vest the whole or any part of any surplus assets of
the Company in trustees upon trust for the benefit of Shareholders.
The liquidator may determine the terms of the trust.
35. METHOD OF CONTRACTING
a) DEEDS: A deed which is to be entered into by the Company may be signed
on behalf of the Company, by:
i) two or more Directors;
ii) if there is only one Director, by that Director whose
signature must be witnessed;
iii) one or more attorneys appointed by the Company; or
iv) any Director and a person authorised by the Board whose
signature must be witnessed.
b) OTHER WRITTEN CONTRACTS: An obligation or contract which is required by
law to be in writing, and any other written obligation or contract
which is to be entered into by the Company, may be signed on behalf of
the Company by a person acting under the express or implied authority
of the Company.
c) OTHER OBLIGATIONS: Any other obligation or contract may be entered into
on behalf of the Company in writing or orally by a person acting under
the express or implied authority of the Company.
37
SCHEDULE 2
PART 1 - XXXXX WARRANTIES
1. SHARES: Pupuke is the legal owner of Pupuke's McVest Shares, those
Shares are fully paid up, are unencumbered and together with the
Remaining McVest Shares pursuant to the trust deed establishing the
Pupuke Trust, constitute all of the issued shares in the capital of
McVest, and no third party has any actual or contingent right to claim
an interest of any nature whatsoever in any of Pupuke's McVest Shares.
2. FULL AUTHORITY: Xxxxx and Pupuke have full power and authority to enter
into this Agreement and to carry out the transactions provided for in
this Agreement. This Agreement has been duly executed and delivered by
Xxxxx and is a valid and binding document of Xxxxx.
PART 2 - NZ SHAREHOLDER WARRANTIES
1. SHARES: The NZ Shareholders are the legal and/or beneficial owners of
the Remaining McVest Shares, in the following proportions:
a) Xxxxxx Small and Xxxxx Xxxxx as trustees of the Kohi Trust are
the legal owner of 100,000 shares pursuant to the trust deed
establishing the Kohi Trust;
b) Xxxxxxx Xxxxxx and Xxxxx Xxxxxx as trustees of the Seaview
Trust are the legal owners of 142,255 shares pursuant to the
trust deed establishing the Seaview Trust;
c) Korat Promotions Limited is the legal and beneficial owner of
96,733 shares
d) Xxxxxx Xxxxxxx Xxxx is the legal and beneficial owner of
145,100 shares
Those Shares are fully paid up, are unencumbered and together with
Pupuke's McVest Shares, constitute all of the issued shares in the
capital of McVest, and no third party has any actual or contingent
right to claim an interest of any nature whatsoever in any of the
Remaining McVest Shares.
2. FULL AUTHORITY: The NZ Shareholders have full power and authority to
enter into this Agreement and to carry out the transactions provided
for in this Agreement. This Agreement has been duly executed and
delivered by the NZ Shareholders and is a valid and binding document of
the NZ Shareholders.
PART 3 - STAINER WARRANTIES
1. SHARES: Stainer is the legal and beneficial owner of 625 of Stainer's
Triangle Shares and holds an enduring power of attorney over a further
800 of those Shares which are held in the name of Mrs J Stainer, those
Shares are fully paid up, are unencumbered and no third party has any
actual or contingent right to claim an interest of any nature
whatsoever in any of Stainer's Triangle Shares.
2. FULL AUTHORITY: Stainer has full power and authority to enter into this
Agreement and to carry out the transactions provided for in this
Agreement. This Agreement has been duly executed and delivered by
Stainer and is a valid and binding document of Stainer.
38
SCHEDULE 3
GENERAL VENDORS' WARRANTIES
The following warranties are given subject to the matters specifically disclosed
in Schedule 5
1. ALL INFORMATION TRUE: All information in respect of the Subsidiaries or
their business or assets given by or on behalf of the Vendors to
Hussmann or any representative of Hussmann, was when given, and
remains, true, complete, accurate and not misleading in all material
respects and all information which the Vendors knew or ought to have
known was material has been disclosed in writing to Hussmann.
2. STANDING OF SUBSIDIARIES: Each Subsidiary has been duly incorporated
under the laws of New Zealand or Australia (as the case may be), is
validly existing under those laws, and has power and authority to carry
on its business as now being conducted.
3. ASSETS: The Subsidiaries are the legal and beneficial owner of all of
their rights, property, undertaking and assets, which assets are
unencumbered (except for title retention provisions arising in respect
of goods supplied in the ordinary course of business) and no third
party has any actual or contingent right to claim an interest of any
nature whatsoever in any of such rights, property, undertaking or
assets.
4. NO INDEBTEDNESS: At Settlement the Subsidiaries will not owe (either
directly or contingently) any monies to any third parties (including
any banks or shareholders) other than trade creditors arising in the
ordinary course of business and other debts as set out in this
Agreement or otherwise disclosed in writing to Hussmann.
5. ACCURACY OF THE ACCOUNTS: The Accounts:
a) comply with all relevant legislation and have been prepared in
accordance with prescribed accountancy standards and generally
accepted accountancy principles, consistently applied; and
b) give a true and fair view of all of the assets and liabilities
(whether actual or contingent) and of the state of affairs of
the Subsidiaries at the relevant balance date, and the value
of those assets is not overstated (and in particular not
greater than any valuation received by the Subsidiaries) nor
are those liabilities understated in the Accounts; and
c) make full provision or reserve for all liabilities (including
contingent liabilities and bad or doubtful debts) including
(without limitation) all leave entitlements.
6. SOLVENCY: No liquidator, provisional liquidator, or statutory manager
or receiver has been appointed to manage the affairs of any Subsidiary.
7. OPERATION OF THE SUBSIDIARIES: Since the Latest Accounts Date:
a) there has been no material adverse change to the business or
financial position of the Subsidiaries;
b) the business of the Subsidiaries has been carried on in the
ordinary course of business and in accordance with good
business practice and has been conducted so as to maintain the
Subsidiaries' goodwill, reputation and customer relationships;
c) no Subsidiary has acquired or disposed of any assets other
than to parties not related to that Subsidiary and then only
in the ordinary course of business and for full consideration
on normal terms;
d) each Subsidiary has ensured that the level of raw materials
and stock are not excessive but are adequate for current
trading conditions and that such materials and stock are of a
merchantable quality;
e) no Subsidiary has issued any shares, options or other
securities and has not declared or paid any dividend or other
distribution or effected any distribution of its assets or
made any loan or other payment (other than a payment in the
ordinary course of business) to its shareholders or any other
person;
f) no Subsidiary has passed any resolution of directors or
shareholders issuing any shares,
39
registering any transfer of shares, or altering the rights
attaching to any shares, in that Subsidiary;
g) each Subsidiary has maintained its material machinery,
equipment and vehicles in a good state of operating condition
and repair and no machinery, equipment or vehicles are in need
of renewal or replacement, except in the ordinary course of
business
8. NO CAPITAL COMMITMENTS: No Subsidiary has any capital commitments
(which in aggregate exceed A$250,000 which should reasonably be
incurred in the next 12 months in order for the Subsidiary to continue
to operate its current business.
9. NO UNUSUAL AGREEMENTS: No Subsidiary is a party to:
a) any xxxx of sale, pledge or hypothecation or to any hiring or
leasing agreement, hire purchase agreement, credit or
conditional sale agreement, agreement for payment on deferred
terms or any other similar agreement or arrangement except in
the ordinary course of business;
b) any unusual, onerous or long term (ie., more than six months)
agreement or arrangement or any agreement entered into
otherwise than on an arms length basis and in the ordinary
course of business except in the ordinary course of business;
c) any agreement, obligation, or liability which cannot be
properly performed by the Subsidiary without being likely to
result in a loss to the Subsidiary or which cannot be
performed on time without undue, or unusual, expenditure of
money or effort except in the ordinary course of business;
d) any agreement or arrangement with any shareholder, or any
person related to a shareholder except for employment or
management contracts with the Vendors;
e) any agreement, tender or arrangement (including any obligation
referred to in (f) below) which involves, or is likely to
involve, obligations or liabilities which by reason of their
magnitude, is material to the Subsidiary;
f) any guarantee, indemnity, warranty, comfort or other similar
or analogous obligation except in the ordinary course of
business; or
g) any option or agreement which gives any person the right to
call for the issue of any shares or other securities of the
Subsidiary or the transfer of any assets of the Subsidiary.
10. NO BREACH OF AGREEMENTS: No Subsidiary is in material breach of any
agreements to which it is a party.
11. NO AGREEMENTS OR RELATIONSHIPS AFFECTED: No agreement to which a
Subsidiary is a party (including any employment arrangements) gives any
other party to such agreement the right to determine or vary their
obligations under the agreement or to require the Subsidiaries to make
any additional payment or take any additional action, by reason of the
transactions referred to in this Agreement. In addition, no supplier or
customer of any Subsidiary has indicated that it may cease or
materially reduce its level of business with that Subsidiary.
12. NO LITIGATION: The Subsidiaries are not engaged in, or threatened with,
any claims, litigation, disputes with employees, investigations or any
legal proceedings of any kind whatsoever, nor are Xxxxx, the NZ
Shareholders or Stainer aware of any matters which they knew or ought
to have known are likely to give rise to any such litigation, disputes,
investigations or proceedings.
13. NO DEFECTIVE PRODUCTS: The Subsidiaries have not sold or supplied
products or services which are in any material respect faulty or
defective and which may result in claims against the Subsidiaries, and
there are no claims for faulty or defective products against the
Subsidiaries which will remain outstanding at Settlement, except for
products or services in respect of which a Subsidiary has given a 12
month supply warranty.
40
14. PROPERTIES: None of the Subsidiaries owns any freehold interest in any
property and no Subsidiary is in breach of any lease of any property
leased or occupied by it. In particular:
a) there are no restrictive covenants or provisions, legislation
or orders which preclude the use of any leasehold property for
the purposes for which it is now used, and that use is
permitted under the provisions of the planning acts and
regulations and is in accordance with the requirements of the
relevant local authorities;
b) no Subsidiary is in breach of any covenant, restriction or
other obligation (including by-laws) affecting any leasehold
property and no rights, easements, quasi-easements or
privileges exist in favour of any person in respect of such
property;
c) there are no outstanding enforcement or other notices or
proceedings issued in respect of any leasehold property or any
order or resolution for the compulsory acquisition of any part
of such property;
d) there is no outstanding liability for repairs or dilapidations
or to carry out works in respect of any leasehold property.
15. DIRECTORS AND EMPLOYEES: No current or former director, employee or
contractor of the Subsidiaries has any grounds to bring a claim against
the Subsidiaries or is otherwise entitled to receive any payment of any
kind from the Subsidiaries (other than current employees' or
contractors' usual wages, salaries fees or bonuses). No director,
employee or contractor is entitled to any special bonus or to any share
of the profits of the Subsidiaries. No employee or contractor is
employed or engaged on terms which cannot be terminated by three
months' notice or less without giving rise to a claim for damages or
compensation (other than a claim for redundancy or unfair dismissal).
The Subsidiaries are not aware that any employee or contractor has
indicated any intention to leave the Subsidiaries. No loans or other
financial accommodation are owed by any director, employee or
contractor to the Subsidiaries.
16. SUPERANNUATION:
a) There is no claim for, nor is any Subsidiary under any legal
liability to pay, any pension or retirement, death or
disability or other similar payment to any past or present
director, employee or contractor or their families or
dependents and no such pension or payment is now being paid
voluntarily, except for payments under the relevant Australian
compulsory superannuation schemes (the "Schemes");
b) No Subsidiary is in breach of its obligation to fund the
benefits under the Schemes.
17. NO BREACH OF STATUTES: To the best of the Vendors' belief (after due
and careful enquiry) the Subsidiaries have not done or omitted to do
any act or thing which is or could be in contravention of the
provisions of any statute or statutory regulations (including without
limitation the Resource Management Act 1991).
18. ALL CONSENTS HELD: Each Subsidiary holds all material consents (whether
statutory, regulatory or otherwise) required for the carrying on of its
business and is not in breach of the terms or conditions of such
consents. There are no pending or threatened proceedings which might in
any way affect those consents or rights. None of the consents or rights
will be in any way prejudiced or revoked as a consequence of the entry
into the transactions referred to in this Agreement.
19. BOOKS PROPERLY MAINTAINED: Each Subsidiary has in all material respects
properly kept and maintained all necessary books of account, minute
books, and other and registers; all such documents contain full and
accurate records of all matters required to be recorded in them; and
all resolutions, returns and notices required to be delivered to the
Registrar of Companies have been delivered and are true and accurate in
all material respects.
20. INTELLECTUAL PROPERTY RIGHTS: The Subsidiaries own all intellectual
property rights used by them (including the exclusive right to use the
Subsidiaries' trade names) and have not infringed any trade xxxx,
patent, registered design, copyright or other intellectual property
right or any third party. No royalty or other fee is required to be
paid by the Subsidiaries to any person in respect of the intellectual
property rights used by the Subsidiaries.
41
21. NO VIRUSES ETC: The computer systems used by the Subsidiaries
(including hardware, software, databases and data) are fee from
viruses, locks, drop-dead devices and millennium defects which may have
a material adverse effect on the Subsidiaries and which are unable to
be rectified and each Subsidiary has taken, and will continue to take,
steps and implement procedures as it does at the date of this Agreement
to ensure, so far as reasonably possible, that such systems are free
from the same at Settlement.
22. INSURANCE: The insurance policies held by the Subsidiaries are valid
and enforceable and adequate to fully cover all risks reasonably
foreseeable in relation to the business and assets of the Subsidiaries
and there is no claim pending and no event has occurred which has or
may result in a claim under any of the policies or otherwise being
brought against the Subsidiaries.
23. NO POWERS OF ATTORNEY: No Subsidiary has granted any power of attorney
or conferred on any person other than its directors and employees any
authority to enter into any transaction on behalf of or to bind that
Subsidiary in any way.
24. ACC RATING: There are no claims associated with the Subsidiaries which
might adversely affect their experience rating under the Accident
Rehabilitation and Compensation Insurance (Experience Rating)
Regulations 1993.
25. FULL PROVISION FOR TAXATION: The Accounts make full provision or
reserve for all taxation liable to be assessed on the Subsidiaries or
for which they may be accountable, including in particular (but without
limitation) taxation of profits, gains, income, receipts, benefits and
other items subject to taxation for any period ending on or before, and
for any transactions or events occurring down to the Latest Accounts
Date.
26. TAXATION LIABILITY AFTER THE LATEST ACCOUNTS DATE: All liability of the
Subsidiaries for taxation in respect of the period from the Latest
Accounts Date to the Settlement Date has been incurred in the ordinary
course of business.
27. ENVIRONMENTAL MATTERS:
(a) In this warranty:
(i) "Environmental Law" means any law relating or
pertaining to the Environment or the health or
safety of the public or workers;
(ii) "Environment" means the environment or surroundings
including (without limitation) air (including,
without limitation, that within buildings or natural
or man-made structures, whether above or below
ground), water (including, without limitation,
territorial, coastal and inland waters and natural
water) and land (including, without limitation, sea
bed or river bed under any water as described above,
surface land and sub-surface land);
(iii) "Substance" includes (without limitation) any solid,
liquid, gas or noise.
(b) Each Subsidiary, together with all previous owners or
operators of its business or any part of it has:
(i) acted in accordance with best practice from time to
time in relation to all matters and practices
affecting or which might affect the Environment; and
(ii) obtained and complied with all consents necessary or
advisable under Environmental Law in relation to the
Subsidiary's business and has since the time of its
incorporation always had and complied with all the
consents from time to time necessary or advisable
under Environmental Law, whether in relation to the
conduct of that Subsidiary's business, or, without
prejudice to the generality of the foregoing, the
disposal, handling, management, treatment or
transport of waste. There are no likely changes in
any such consents (including amendment, renewal or
cancellation) that would require any material
additional expense to ensure compliance. All such
consents are valid and subsisting to the extent that
they are necessary or advisable for any Subsidiary's
business as now carried on and none of them is
likely to be suspended, cancelled, refused or
revoked. No notification or indication (formal or
informal) has been received that further consents
may be required, or that any existing consent may
42
be withdrawn, limited, restricted, amended, not
renewed, not renewed in full, or otherwise affected.
(c) No Subsidiary or anyone who previously owned or operated all
or any part of that Subsidiary's business:
(i) has caused, permitted or contributed to any
unauthorised pollution, contamination, release,
discharge, or emission whatsoever, or done any other
thing (including any omission), which has caused or
is likely to cause any unauthorised damage to the
Environment or which has given or could give rise to
any violation of, Environmental Law; or
(ii) has spilled, discharged, disposed, displaced,
emitted, released, or otherwise caused to become
located anywhere in the Environment any contaminant,
pollutant or other Substance, or caused any other
event or circumstances to occur or exist, that may
be harmful to human health or the Environment (or
that would or might be harmful if emitted,
discharged or released); or
(iii) has permitted any event referred to in (ii) above to
occur; or
(iv) unlawfully uses, stores, treats, transports,
produces (whether as a product, by-product or
otherwise), or otherwise manages or has on its land
or property any Substance mentioned in (ii) above;
or
(v) has received any complaints or inquiries from
employees, neighbours or any other person or body in
respect of any matter related to the Environment or
Environmental Law; or
(vi) is aware (after due and careful inquiry) of any
circumstances that may lead to, or be included in,
any investigation, inquiry, order, decree, judgment,
notice or other communication nor to the withdrawal,
limitation, restriction, amendment, non-renewal,
non-renewal in full, or other affecting, of any
consent.
(d) The Vendors undertake to indemnify and hold Newco harmless,
and to reimburse Newco with respect to, any and all losses,
damages, liabilities, claims, costs and expenses (including,
without limitation, fines, penalties, clean-up activities and
obligations, legal fees, technical consultancy, engineers' and
expert's fees) which may be sustained or suffered by Newco
arising out of, based upon or by reason of the production,
use, storage, treatment, transport, disposal, discharge,
displacement, spillage, release, emission, or threat or
release of any contaminant, pollutant or other Substance on or
before Settlement or resulting directly or indirectly from
acts or omissions, or circumstances existing on or before
Settlement:
(i) at any location owned or used by any Subsidiary in
respect of its business; or
(ii) at any place where any Subsidiary in respect of its
business has caused or permitted any such substances
to be sent, spilt, discharged, disposed of,
displaced or otherwise directly or indirectly to
become located; or
(iii) otherwise arising out of or in connection with the
Subsidiary's business.
28 CONTAMINATION ISSUES
(a) This clause 28 will apply only to the extent of the
environmental matters referred to in the Reports as defined in
clause 28(b) but is subject in all other respects to clause 27
of this Schedule.
(b) Hussmann has obtained reports from Dames & Xxxxx Pty Ltd
called Phase I Environmental Assessment and Due Diligence
Questionnaire dated 28 May 1998 and Environmental Assessment,
XxXxxxxx Refrigeration Facility, Xxxxxxx, Auckland New Zealand
dated 24 July 1998 ("the Reports") and has provided the
Vendors with a copy of the Reports.
(c) Hussmann has engaged Xxxxxxxx Xxxxx (NZ) Ltd to comment on the
Reports and to provide local advice. The Vendors have been
provided with a copy of E-mails from Xxxxxx Xxxxxx to Xxxxxxx
Xxxxx dated 28 and 29 July 1998 which provide comment and
advice ("the E-mails").
(d) The Reports have identified some soil and groundwater
contamination, although it is not clear whether the source of
groundwater contamination is site-based or from an off-site
source.
43
(e) In the E-mails, Xxxxxxxx Xxxxx has carried out a preliminary
assessment of risk resulting from the findings in the Reports
but has stressed that the assessment is subject to
confirmation by further testing and a site specific risk
assessment.
(f) Xxxxxxxx Xxxxx has also identified the possible requirement
for a resource consent to legitimise the discharge of
contaminants to groundwater and the possible need for soil
and/or groundwater remediation.
(g) The Vendors and Hussmann agree that
- any party may at his or its own expense request
Xxxxxxxx Xxxxx or any other environmental
consultants ("Consultants") to carry out a further
Phase I assessment for on and off site contamination
sources, a further Phase II investigation of soil
and groundwater and/or a site-specific risk
assessment with recommendations (all called "the
Further Reports");
- the party obtaining the Further Reports will provide
copies to the other parties;
- the costs of the Further Reports will be borne by
the party who obtains them;
- the parties will co-operate fully with the
Consultants so that the Further Reports can be
completed as expeditiously and accurately as
possible.
(h) Any party may on reasonable notice call a meeting with the
other parties and the Consultants to discuss the Further
Reports and the recommendations contained therein ("the
Recommendations").
(i) The parties will endeavour to reach agreement on action to be
taken in respect of the Recommendations, including but not
limited to discussions with the Auckland Regional Council,
applying for resource consent in respect of the discharge of
contaminants to groundwater, and any remedial work in relation
to on-site soil or groundwater conditions.
(j) The parties acknowledge that any action to be taken will only
be such as may be necessary to enable operations to be
lawfully conducted on the site or to otherwise comply with any
obligation under the Resource Management Xxx 0000 in
connection with any adverse effects arising as a result of
site contamination.
(k) If the parties are unable to reach agreement on the action to
be taken in respect of the Recommendations, then the matter
shall be referred to arbitration under clause 28(m) of this
Schedule.
(l) The parties will ensure that the Recommendations are
implemented immediately as agreed or as determined by the
outcome of the arbitration, provided that all expenses,
penalties and other costs of implementing any Recommendations
will be borne solely by the Vendors.
(m) If the parties cannot reach agreement pursuant to clause 28(k)
of this Schedule within seven days of the Recommendations
being provided to all of the parties, the parties will jointly
appoint a suitably qualified person as a sole arbitrator to
decide the dispute pursuant to the Arbitration Xxx 0000. If
the parties cannot agree on such a person within a further
seven business days, the arbitrator will be appointed on the
application of any party by the president of the Auckland
District Law Society or his nominee. The arbitral award will
be final and binding and there will be no right to appeal
against the award or to seek judicial review of it in any
court and, in particular, clause 5 of the Arbitration Xxx 0000
will not apply in respect of any arbitration under this clause
28. The decision of the arbitrator will constitute the
decision of the parties and the arbitrator's costs will be
borne equally by the parties.
29. NO BREACH OF STATUTES: No Subsidiary has done or omitted to do any act
or thing which is or could be in contravention of any statute or
statutory regulations, including and all statutory, municipal and other
mandatory requirements applicable to each Subsidiary's business have
been and there are no such requirements which have not been complied
with.
30. RESTRUCTURING PROGRAMME: The Subsidiaries' restructuring programme and
employee redundancies, the costs of which are set out in Schedule 4,
have been completed.
44
SCHEDULE 4
RESTRUCTURING PROGRAMME
ESTIMATED RESTRUCTURING COSTS AUD$
EFFECT ON EXTRA TOTAL
P&L CASH
1) REDUCE W.A. TO SERVICE CENTRE
REDUNDENCIES 10
NOTICE IN LIEU 15
HOLIDAY PAY 30
VEHICLE LEASES 20
EXCESS RENT 60
RELOCATION COSTS 40
OTHER 20
----- ----- ----
165 30 195
2) REDUCE S.A. TO SERVICE CENTRE
REDUNDENCIES 25
NOTICE IN LIEU 10
HOLIDAY PAY 0 20
VEHICLE LEASES 20
EXCESS RENT 10
RELOCATION COSTS 0
OTHER 10
----- ----- ----
75 20 95
3) REDUCE HEAD OFFICE/NSW STAFF
REDUNDENCIES/NOTICE 150
HOLIDAY PAY 155
VEHICLE LEASES 15
OTHER 30
----- ----- ----
195 155 350
4) RATIONALISE INSTALL STAFF
REDUNDENCIES/NOTICE 40
HOLIDAY PAY 20
VEHICLE LEASES 12
OTHER 20
----- ----- ----
72 20 92
5) SELL/RATIONALISE AIRCON
REDUNDENCIES/NOTICE 56
HOLIDAY PAY 26
VEHICLE LEASES 10
OTHER 10
----- ----- ----
76 26 102
6) CLOSE DUBAI
REDUNDENCIES/NOTICE 30
HOLIDAY PAY 20
AIRFARES 20
SPONSORS FEE 60 60
WRITE DOWN FIXED ASSETS 30
SPINNEYS CONTRACT 60
OTHER 15
----- ----- ----
215 80 295
7) DOWNSIZE SHEETMETAL NZ
REDUNDENCIES/NOTICE 80
HOLIDAY PAY 8
----- ----- ----
80 8 88
----- ----- ----
TOTAL 878 339 1217
45
SCHEDULE 5
DISCLOSURES
XxXXXXXX
INVESTMENTS
LIMITED
XX Xxx 00 303 11-17 Walls Road
Xxxxxxx Xxxxxxx
Auckland Auckland
New Zealand New Zealand
Phone 0000 0 000 0000 Fax 0000 0 000 0000
20 July 1998
Hussmann International BV
x/x Xxxx Xxxxx
Xxxxxxxxxx
XX Xxx 0000
XXXXXXXX
Dear Sirs
DISCLOSURE LETTER
SCHEDULE 2 WARRANTIES
Warranty Exception or Qualifications
No.
1. (i) The relationship of the subsidiaries to their
various customers and suppliers have been orally
disclosed to Hussmann, but written disclosures have
not been made except in those cases which Hussmann
has declared to be material.
(ii) Xxxxx has not disclosed any written information that
has not been made available to him by the
subsidiaries, and which has not been requested by
Hussmann.
46
SCHEDULE 3 WARRANTIES
Warranty Exception or Qualification
No.
2 (i) Certain motor vehicles, radio telephone systems and
telephone systems are subject to financial leases,
written details of which were made available to the
Hussmann due diligence team in Auckland and Sydney
during May 1998.
(ii) All assets are charged to either the ANZ Banking
Group or the ASB Bank under floating charge
Debentures, copies of which have been made
available.
(iii) The assets of XxXxxxxx Refrigeration Ltd. are
subject to a second charge Debenture to XxXxxxxx
Finance Ltd. (of which the vendors are Directors and
Shareholders), copy of which has been made
available.
(iv) Assets which are not shown in the accounts, or are
shown in the accounts as being encumbered, are not
legally and beneficially owned by the subsidiaries.
3. (i) Debts as disclosed in the Latest Accounts,
(subject to any changes in amount from the date of
the Latest Accounts until settlement).
(ii) Debts or liabilities for which full provision
or reserves have been made in the Latest Accounts.
4(a) Where the requirement that the accounts be "complete
and accurate in all respects" has conflicted with
preparation of accounts "in accordance with
prescribed accountancy standard and generally
accepted accountancy principles" the latter
provision has prevailed.
6(d) The stock of Hussmann cabinets is excessive, in
light of current trading conditions and currency
values.
6(e) Subsidiaries have made salary payments and loan
repayments to shareholders of immaterial amounts,
details of which will be disclosed in writing prior
to settlement.
7. Aggregate commitments to renew vehicle leases,
or enter into leases for replacement vehicles, will
exceed $250,000.
8(d) (i) Agreement between Arrow Refrigeration Ltd. /
Chill Freeze Rentals Ltd. (of which the vendor
Xxxxxxx Xxxxxx Xxxxxx is a shareholder and Director)
and XxXxxxxx Refrigeration Ltd.
(ii) Property lease agreement between Wall Street
Properties
47
Ltd. (of which the vendors are shareholders and
Directors) and XxXxxxxx Refrigeration Ltd., in
regard to properties at Walls Road, Xxxxxxx,
Auckland.
8(e) and The following agreements and obligations are
8(f) material:
- All of the installation contracts entered into by
the subsidiaries with supermarket chains in
Australia or New Zealand.
- The Distribution Agreement entered into with
Hussmann Corporation Inc.
- All Agreements entered into between the subsidiaries
and their bankers.
- All of the contracts entered into with
suppliers for goods or services of a value
exceeding $100,000.
- The cross guarantees which have been given by all
subsidiaries to ANZ Banking Group in Australia and
ASB Bank in New Zealand.
8(g) XxXxxxxx Refrigeration has issued NZ$2,500,000 of
Convertible Notes in favour of XxXxxxxx Finance Ltd.
(of which the vendors are shareholders and
Directors) repayment of such Notes being secured by
way of a registered second charge Debenture.
9. (i) All subsidiaries are currently in breach of their
agreements with their respective bankers, being ANZ
Banking Group or ASB Bank.
(ii) Triangle Refrigeration (Australia) Proprietary
Ltd.("Triangle") and its subsidiaries, and XxXxxxxx
Refrigeration Ltd. are overdue with payments owing
to trade creditors and to shareholders.
10. (i) Agreements with various suppliers and customers may
have non-assignment clauses, and such clauses may be
triggered by change of control of the subsidiary
which has entered into the Agreement in the normal
course of business.
(ii) The Manufacturing Agreement and Distribution
Agreement entered into with Hussmann Corporation
have non-assignment clauses, which are triggered by
change in control of XxXxxxxx Refrigeration Ltd.
(iii) Leases of properties occupied by the subsidiaries
have non-assignment clauses which are triggered
by changes in control of the subsidiaries.
11. (i) Litigation has been commenced against XxXxxxxx
Refrigeration Ltd. by the following plaintiffs:-
48
- Allvend International Ltd.
- Xxxxxxx Xxxxxx and Others
- Warwick Rumble
and XxXxxxxx Refrigeration Ltd. has issued
proceedings against Coil Specialties Ltd.
(ii) Xxxxx and Wyngate have issued proceedings against
XxXxxxxx Industries Ltd. in respect of redundancy.
(iii) Franklin has lodged claims against Triangle
regarding a number of unresolved warranty claims.
Written particulars of all of the above were made
available to the Hussmann due diligence team in May.
(iv) The vendors are aware of those matters which have
been referred to the Board and are included in
the Minute books of the subsidiaries or in the
reports by Xxxxxxxx Xxxxxxx and Xxxxxxx, copies of
which have been made available to the Hussmann due
diligence team in Auckland and Sydney during May
1999.
12. (i) Claims for which provision has been made in the
latest accounts;
(ii) The litigation mentioned above in relation to clause
11.
13. The covenants, provisions, restrictions,
obligations, rights, easements, quasi-easements or
privileges as may appear from the Certificates of
Title and lease documents relative to each leasehold
property, copies of such leases having been made
available to the Hussmann due diligence team in May
1998.
14. (i) The employment contracts with Messrs. Small, Miller,
Courtier, Xxxx and Stainer run for 3-years from the
date of settlement, and cannot be terminated by
3-months notice or less without giving rise to a
claim for damages or compensation.
(ii) All of the shareholders of McVest are entitled to
receive payments of their current accounts.
(iii) An employee of XxXxxxxx Refrigeration Ltd. is
entitled to receive a share of profits of the Otago
branch.
(iv) X. Xxxxxxx is entitled to receive an advance of
A$1,000 per month from Triangle, which he is to
repay with interest.
18. The books of account of Triangle during the period
up to 31 January 1998 contained inaccuracies as
detailed in the Xxxxxxxx Xxxxxxx Xxxxxxx report of
February 1998. A copy
49
of this report was made available to Xx. Xxxxxx of
Hussmann in Auckland in March 1998.
19. Royalties are payable as follows:
- To Hussmann Corporation in relation to
refrigeration products manufactured in the Tauranga
factory of XxXxxxxx Refrigeration Ltd.
- To Hysave International Ltd. in relation to LPA
pumps installed by the subsidiaries.
20. The computer system installed at the Tauranga
factory is currently being upgraded to overcome
millennium defects, and the systems at Auckland,
Christchurch and Dunedin are planned to be
upgraded with new software which is Year 2000
compliant, so as to overcome millennium defects.
There is no allowance in the Latest Accounts for
these expenditures, none of which is expected to
exceed the level of materiality.
21. Claims pending by Franklins in respect of food
despoliation are being negotiated. A copy of a list
of these claims was made available to the Hussmann
due diligence team in Sydney during May 1998.
23. A disputed claim has been made by X. Xxx of
Tauranga, an employee of XxXxxxxx Refrigeration Ltd.
26. Held over.
B.E. Xxxxx
Director
