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AGREEMENT FOR SALE
AND PURCHASE OF SHARES
Parties
THE SHAREHOLDERS OF EASY PC
COMPUTER RENTALS LIMITED
XXXXXXX INVESTMENTS (N.Z.) LIMITED
Relating to Easy PC Computer Rentals Limited
LOWNDES JORDAN
BARRISTERS & SOLICITORS
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AGREEMENT dated 10th July 1997
PARTIES
1. The parties specified in Item 1 of Schedule 1 (Vendors)
2. XXXXXXX INVESTMENTS (N.Z.) LIMITED at Auckland (Purchaser), a subsidiary
of Xxxxxxx Investments Limited a company incorporated under the laws of
Alberta, Canada (BKI)
INTRODUCTION
A. The Vendors are the holder of the Shares together with all rights
attaching to the Shares.
B. The Vendors have agreed to sell to the Purchaser and the Purchaser has
agreed to purchase from the Vendors all of the Shares for the
Consideration and upon the terms and conditions contained in this
Agreement.
TERMS
1. Interpretation
1.1 Defined Terms: In this Agreement the following terms shall have
the meanings specified:
Accounts each and every part of the financial
statements of the Company which have
been provided by the Vendors to the
Purchaser copies of which are annexed as
Annexure 1.
Asset Value the sum of $388,000 adjusted pursuant to
clause 3.1.2.
Associated Person has the meaning given in section 0D7(1)
of the Income Tax Xxx 0000.
Xxxxxx Xxxxxxxx Xxxx Xxxxxx
Business Day a day (other than a Saturday or Sunday)
on which registered banks are open for
business.
Business Records all books of account, accounts, records,
files, data, databases, certificates or
other evidence of title to assets and
information howsoever recorded or stored
relating to or required for the business
of the Company or pertaining to its
affairs.
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Cashflow shall have the meaning ascribed to that
term in the Escrow Agreement.
Charge includes option, right to acquire, lien,
pledge, mortgage, assignment, charge,
security interest, bailment, or
encumbrance or adverse interest of any
nature whether legal or equitable and no
matter how arising.
Company Easy PC Computer Rentals Limited, a
company incorporated under the Companies
Xxx 0000 as a private company limited by
shares under No. WN 547870 having its
registered office at Wellington and
having its capital divided into 60,000
ordinary shares each of which rank pari
passu in all respects and which have
been issued and are paid up and 15,850
non-voting shares each of which rank
pari passu in all other respects with
the ordinary shares and which have been
issued and are paid up.
Completion completion by the parties of the sale
and purchase of the Shares as provided
in clause 5.
Completion Date the actual date of Completion being 16
July 1997 or 7 days after the conditions
referred to in clause 9 have been
satisfied or waived by the party
entitled to waive the same (whichever is
the later) or such other date as may be
agreed upon by the parties.
Consideration the sum of $88,050, the Asset Value and
the Goodwill Value subject to adjustment
as provided in clause 3.3.
Constitution the Memorandum and Articles of
Association of the Company or its
Constitution, as the case may be.
Costs includes any and all costs (on a
solicitor and own client basis),
expenses, damages, penalties, interest,
compensation, and awards.
Disclosure Letter the letter of disclosure referred to as
such, signed by the Vendors and dated
and delivered to the Purchaser the same
date as this Agreement.
Escrow Agreement the Escrow Agreement in the form annexed
as Annexure 3 and entitled Form C to be
entered into by BKI, the Vendors and the
Trustee.
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Exchange Rate the average between the Westpac buy and
sell rates for the exchange of $NZ to
$CAD, at the close of business on the
date specified in this Agreement or
where a date is not specified, on the
last bank Business Day prior to the date
of the relevant transaction.
Goodwill Value the value calculated by applying a
multiple of 4 to the actual audited NPAT
of the Company for the Year ending on 31
March 1998 calculated on the basis that
an allowance is made for income tax at
the rate of 33 %.
GST Act the Goods and Services Tax Xxx 0000.
GST Goods and Services Tax levied under the
GST Act.
Intellectual Property includes confidential information, trade
secrets, drawings, designs, techniques,
programmes, processes, logos,
copyrights, trade or service marks,
patents, registered designs, and other
information and rights capable of being
protected under New Zealand or other
laws relating to intellectual property
no matter how recorded or stored and any
applications for same. Interest Rate the
cost of funds rate for the BKI Group.
Last Accounting Date 31 March 1997.
NPAT the net profit after income tax
calculated in accordance with generally
accepted accounting principals.
Penalty Rate the Westpac Indicator Lending Rate plus
8 %.
Premises the premises at 00 Xxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx and at Xxxxx 0, XXX
Xxxxxxxx, 000 Xxxxxxxxxxxx Xxxxxx,
Xxxxxxxxxx together with all other land
and buildings owned, occupied or used by
the Company. Proceedings includes
proceedings, claims, demands, actions,
conferences, mediations, conciliations,
compromises, arbitrations, hearings or
appeals arising out of, preliminary to
or in connection with any dispute or
alleged dispute.
Proceedings includes proceedings, claims, demands,
actions, conferences, mediations,
conciliations, compromises,
arbitrations, hearings or appeals
arising out of, preliminary to or in
connection with any dispute or alleged
dispute.
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Related Company a related company as defined in section
158 of the Companies Xxx 0000 or section
5 to 8 of the Companies Xxx 0000, as the
case may be.
Shares all of the existing issued shares in the
capital of the Company being acquired by
the Purchaser pursuant to this
Agreement.
Statutory Books the Company's Constitution, and its
Certificate of Incorporation, Directors'
and Members' minute book, Register of
Members, Register of Directors and
Secretaries, Interests Register,
Register of Charges and Seal Register
(if any).
Strike Price in respect of the BKI shares to be
issued pursuant to this Agreement is the
last sale price for BKI shares on the
Alberta Stock Exchange on the relevant
date.
Subsidiary a subsidiary as defined in sections 5 to
8 of the Companies Xxx 0000.
Taxation all forms of taxation (including without
limitation capital gains tax, income
tax, surtax, estate duty, stamp duty,
rates, GST, PAYE, withholding tax,
provisional tax, duties, customs and
other import or export duties and all
other statutory, fiscal, central or
local government or municipal
impositions, duties and levies) and all
re-assessments, penalties, Charges,
Costs and interest relating to such
taxation for non-compliance or
otherwise.
Trustee the trustee approved by the Alberta
Stock Exchange to hold BKI shares
pursuant to the Escrow Agreement.
Warranties the representations, warranties, and
undertakings of the Vendors set out in
Schedule 2.
Year a financial year from 1 April to 31
March in the next year.
1.2 General Interpretation: In the interpretation of this Agreement,
unless the context otherwise requires:
1.2.1 References to the parties include their respective
executors, administrators, successors and permitted
assigns;
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1.2.2 References to persons include individuals, partnerships,
firms, associations, corporations and unincorporated bodies
of persons, government or semi-government or local body or
municipal bodies, and agencies or political subdivisions of
them in any case whether having separate legal personality
or not;
1.2.3 Words in the singular shall include the plural and vice
versa;
1.2.4 Words importing one gender shall include the other genders;
1.2.5 Any obligation not to do anything includes an obligation
not to suffer, permit or cause that thing to be done;
1.2.6 Headings have been inserted for convenience only and shall
not affect the construction of this Agreement;
1.2.7 Reference to a statute includes all statutes amending,
consolidating or replacing the statute referred to and
includes all subsidiary or delegated legislation or
exercises of authority under such statute or legislation;
1.2.8 References to clauses, schedules and annexures shall be
construed as references to the same in this Agreement;
1.2.9 References to money are references to New Zealand currency.
1.3 Joint and Several: The covenants herein expressed or implied shall
bind all persons executing this Agreement and any two or greater
number of them jointly and each of them severally.
1.4 Time of the Essence: Time shall be of the essence of this
Agreement both as to dates and periods.
1.5 Precedence of Documents: If there is any conflict between the
provisions of this Agreement and the Escrow Agreement, the
provisions of this Agreement shall prevail.
2. Agreement for Sale and Purchase
2.1 Sale and Purchase: The Vendors agree to sell and the Purchaser
agrees to purchase the Shares for the Consideration.
2.2 Accrual Rules: The Consideration is the lowest price the parties
would have agreed upon at the date of this Agreement for the sale
and purchase of the Shares and is consequently the core
acquisition price pursuant to Section OB1(c) of the Income Tax Xxx
0000.
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3. Consideration and Payment
3.1 Satisfaction of Consideration: The Consideration shall be paid or
satisfied by the Purchaser as follows:
3.1.1 Deposit: By payment of a deposit on the Completion Date of
the sum of $88,050 by way of:
(a) A cash payment of $71,183.00 allocated to the
Vendors in accordance with clause 3.5;
(b) The balance of $16,867 by way of the issue of BKI
shares based on Strike Price converted to NZ$ at the
Exchange Rate as at 24 April 1997. Such shares shall
be issued by BKI to the Trustee to be held in escrow
pursuant to the Escrow Agreement but not subject to
earn out conditions and released to the Vendors
pursuant to clause 3.5 on 31 March 1998.
3.1.2 Asset Value: The sum of $150,000 shall be paid in cash to
Xxxxxx on the Completion Date subject to the following:
(a) If requested by Xxxxxx, the Purchaser shall may
interest on the moneys payable under this clause
3.1.2 (as adjusted) at the minimum rates specified
from time to time under the Fringe Benefit Tax
regulations;
(b) The sum of $150,000 shall be subject to adjustment
following disposal of all assets specified in
Annexure 4 utilising the following formula:
AV = 150,000 x RV
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388,000
Where:
AV is the adjusted Asset Value; and
RV is the net value realised by the Company upon
the termination of the leases for such assets
and the disposal of the residual interests of
the Company.
(c) If the sum calculated pursuant to paragraph (b) is
less than $150,000 then the amount of the deficiency
shall be refunded upon demand by Xxxxxx to the
Purchaser. The Purchaser shall have the right to set
off any such amount against any Consideration
payable under clause 3.2.
(d) If the sum calculated pursuant to paragraph (b)
exceeds $150,000 then the Purchaser shall procure
that excess amount is paid to Xxxxxx.
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3.1.3 Share Exchange: The balance being the Goodwill Value
(subject to adjustment as provided in clause 3.3) shall be
paid in the manner provided in clauses 3.2 and 3.3 by way
of the issue and allotment to the Vendors free from all
Charges of fully paid ordinary shares in the capital of BKI
ranking in all respects pari passu with the existing
ordinary shares in the capital of BKI.
3.2 Issue of Shares: The Purchaser shall procure the issue by BKI of
the shares pursuant to clause 3.1.3 (Earnout Shares). The Earnout
Shares shall be:
3.2.1 Issued in one tranche by 30 June 1998.
3.2.2 Issued in numbers which have a value (based on the Strike
Price converted to $NZ at the Exchange Rate as at 31 March
1998) equal to the Goodwill Value calculated for the Year
which ended on 31 March 1998.
3.2.3 Issued initially to the Trustee to be held in escrow
pursuant to the Escrow Agreement and subject to the earn
out and escrow conditions specified in clause 3.3 and in
the Escrow Agreement.
3.3 Escrow and Earn Out Provisions: The Earnout Shares shall be held
by the Trustee subject to the following conditions:
3.3.1 The Earnout Shares shall only be released to the Vendors if
the Company produces sufficient cumulative Cashflow between
1 April 1997 and the Years ending on 31 March 1998, 31
March 1999 and 31 March 2000 (Earnout Period).
3.3.2 Earnout Shares shall be released to the Vendors in 3
tranches on 30 June 1998, 30 June 1999 and 30 June 2000
(Release Dates).
3.3.3 The Earnout Shares to be released on each of the Release
Dates shall not exceed in value (based on the Strike Price
converted to $NZ at the Exchange Rate as at 31 March 1998)
the cumulative Cashflow of the Company between 1 April 1997
and the end of the Year prior to the relevant Release Date.
3.3.4 Final Adjustment of Acquisition Price:
(a) It is agreed that the Goodwill Value shall be
reduced on the basis of a $NZ 1.00 reduction for
each $NZ 1.00 by which the cumulative Cashflow of
the Company over the Earnout Period falls short of
the Goodwill Value calculated initially according to
the formula provided in clause 1.1.
(b) Prior to 30 June 2000 there shall be a final
calculation of the Goodwill Value based on the
cumulative Cashflow for the three Years ending on 31
March 2000.
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(c) The Goodwill Value and the Consideration shall then
be adjusted accordingly. Any Earnout Shares which
are not required to be released to the Vendors
following such final calculation shall be cancelled.
3.4 Dividends on Earnout Shares: Any dividends declared in respect of
Earnout Shares held in escrow pursuant to clauses 3.2 or 3.3 shall
be held in trust by the Trustee. Such dividends declared in
respect of shares which are released to the Vendors shall be paid
to the Vendors when the shares are released. Any dividends held in
trust by the Trustee in respect of BKI shares which are cancelled
will be forfeited to BKI on the date of cancellation.
3.5 Apportioning of Consideration: The Consideration shall be
apportioned amongst the Vendors in the proportions specified in
Item 2 of Schedule 1 however the Purchaser shall have no
responsibility for the apportionment of the cash portion of the
Consideration and the Vendors' solicitors' receipt shall be
sufficient discharge of the Purchaser's obligations in respect of
satisfaction of this amount.
4. Parties' Obligations on or before Completion
4.1 Vendors' Obligations: On or before Completion the Vendors shall:
4.1.1 Release of Liability to Associated Persons: Procure that
the Company is released unconditionally from all liability
and obligations whatsoever (whether actual or contingent)
to the Vendors or any Associated Persons of the Vendors. If
such release is not or cannot properly be provided on or
before Completion then the Vendors will indemnify the
Company and the Purchaser from and against all Costs and
Proceedings in respect of such liability and obligations
provided that liabilities and obligations incurred in
respect of normal trade purchases or transactions on usual
commercial terms for payment and performance shall not be
required to be so released;
4.1.2 Access to Premises and Business: Ensure that the Purchaser
and its representatives have full access to the Premises,
the Statutory Books and the Business Records from the date
of this Agreement and will be given promptly all
information they may reasonably require concerning the
business or affairs of the Company;
4.1.3 Filing of Satisfactions of Charges: File memoranda of
satisfaction with the Registrar of Companies, the High
Court Chattels Register or the Land Transfer Office or the
Motor Vehicles Security Register (as appropriate) in
respect of all Charges registered against the property of
the Company except those Charges which are specified in
Item 2 of Schedule 4.
4.1.4 Service Agreement: Procure the execution by the Company of
an employment contract for a term of 3 years with Xxxxxx as
General Manager of the Company in the form annexed as
Annexure 2.
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4.1.5 Personal Assets: Procure that all assets owned by the
Company but principally employed for the personal use of
Xxxxxx are sold and removed from the Company asset register
by the Completion Date.
4.1.6 Consultation: Consult with the Purchaser in relation to all
matters which materially affect the Company or its
operations including items of capital expenditure and
general expenses above $3000 or falling outside the
ordinary course of business of the Company.
4.2 Purchaser's Obligations: The Purchaser shall use best endeavours
to obtain a release of all of the Company's existing directors and
Xxxxxx Xxxxxx Xxxxx of all personal liabilities which may arise
after Completion in relation to personal guarantees (as specified
in Item 3 of Schedule 4) provided by them in respect of
obligations of the Company. Should any such releases not be
procured then the Purchaser shall indemnify such directors in
respect of all Costs and Proceedings which arise in relation to
their personal guarantees for acts or omissions of the Company
after Completion.
5. Completion
5.1 Completion shall take place on the Completion Date at the offices
of the Vendors' solicitors Xxxxx Xxxxxx & Xxxxxxxx at 2.15 p.m. or
at such other time or place as the parties shall agree at which
time the Purchaser shall be entitled to the possession of the
business conducted by the Company and the Vendors will hand to the
Purchaser:
5.1.1 Share Transfers: Transfers of the Shares to the Purchaser
and/or its nominee duly executed by the Vendors in
registrable form;
5.1.2 Share Certificates: The share certificates (if any) for the
Shares or if none have been issued a statutory declaration
by an officer of the Company to such effect;
5.1.3 Pre-emptive Rights Waivers: A waiver signed by all the
Vendors whereby they waive all rights of pre-emption
conferred on them by the Constitution or otherwise in
respect of the transfer of all or any of the Shares;
5.1.4 Directors' Resolutions: Evidence of the passing of
effective resolutions of the Directors of the Company
approving the transfer of the Shares and directing that
upon presentation of the same duly executed the name of the
Purchaser and/or its nominee (as the case may be) be
entered in the Register of Members of the Company in
respect of the Shares.
5.1.5 Shareholders' Resolutions: Evidence of the passing of
effective shareholders' resolutions appointing Xxxxxxx
Xxxxxxx as a director of the Company in addition to Xxx
Xxxxxx.
5.1.6 Releases of Charges over Shares: Unconditional releases of
any Charges over any of the Shares;
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5.1.7 Company Records: The Statutory Books, the Business Records
and the common seal(s) of the Company or if there is no
common seal, a certificate from a director confirming that;
5.1.8 Pre-conditions: Evidence satisfactory to the Purchaser that
the Vendors has fulfilled its obligations under clause 4;
and against compliance with the above provisions the Purchaser
shall pay or satisfy the deposit as specified in clause 3.1.1.
6. Default at Completion
6.1 Default by Vendors: Without prejudice to clause 8, if any of the
provisions of clauses 4 or 5 are not fully complied with on
Completion, the Purchaser may (in addition to and without
prejudice to all other rights or remedies available to the
Purchaser under this Agreement or otherwise) at the Purchaser's
option:
6.1.1 Rescind: Rescind this Agreement; or
6.1.2 Completion: Effect Completion so far as practicable having
regard to the defaults which have occurred (without
releasing the Vendors from liability to comply as soon as
possible with the Vendors' obligations under clauses 4 and
5); or
6.1.3 Delay Completion: Fix a new date for Completion not being
more than 28 days after the Completion Date) and in that
case the Vendors shall pay to the Purchaser interest at the
Interest Rate on the Consideration payable on the
Completion Date from the date on which Completion was due
until Completion takes place. If Completion does not take
place other than by reason of a default by the Purchaser
then such payment shall not be refundable to the Vendors;
6.2 Default by Purchaser: Subject to clause 3.6, if from any cause
whatsoever save the default of the Vendors any portion of the
Consideration is not paid upon the due date for payment the
Purchaser shall pay to the Vendors interest at the Interest Rate
on the portion of the Consideration so unpaid from the due date
for payment until payment, without prejudice to any of the
Vendors' rights or remedies.
7. Warranties
7.1 Xxxxxx'x Warranties: Xxxxxx warrants and undertakes to the
Purchaser in terms of the Warranties and it is agreed that:
7.1.1 Investigations not to affect Warranties: Except as
disclosed in Schedule 3 and/or the Disclosure Letter, the
Warranties shall not be modified, qualified or discharged
or in any way affected by any investigation made by the
Purchaser into the affairs of the Company;
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7.1.2 Separate and Independent: Each of the Warranties shall be
separate and independent and save as expressly otherwise
provided shall not be limited by reference to any other of
the Warranties or any other provision of this Agreement.
7.2 Reliance on Warranties: The Vendors acknowledge that the Purchaser
has entered into this Agreement in reliance (among other things)
on the Warranties.
7.3 Xxxxxx'x Covenants: Xxxxxx warrants, represents and undertakes to
the Purchaser and also as a separate covenant to the Company:
7.3.1 Indemnity: That Xxxxxx will keep the Purchaser and the
Company fully indemnified against all and any depletion in
or reduction in the value of the Shares or any of the
assets of the Purchaser or the Company and all Proceedings
and Costs reasonably suffered or incurred by the Purchaser
or the Company as a result of or in relation to any breach
or non-fulfilment of any of the Warranties and all Costs
incurred in making, defending or compromising any
Proceedings in relation to facts or matters which are or
would if proved or might constitute such a breach or
non-fulfilment; and
7.3.2 No Representations Made: That no promise or representation
has been made to them in connection with any of the
Warranties or the Disclosure Letter in respect of which the
Company or any of the directors or employees of the Company
might be liable; and
7.3.3 No Breach of Warranties Prior to Completion: That Xxxxxx
will procure that (except only as may be necessary to give
effect to this Agreement) neither he nor the Company shall
do, allow or procure any act or omission before Completion
which would constitute a breach of any of the Warranties if
they were given at any time prior to or on Completion or
which would make any of the Warranties inaccurate or
misleading if they were so given; and
7.3.4 Disclosure of Change in Circumstances: Xxxxxx will
forthwith disclose in writing to the Purchaser any matter
or thing which may arise or become known to him after the
date of this Agreement and prior to Completion which is
inconsistent with any of the Warranties or which might
render any of them inaccurate or misleading when given at
Completion or which might be material to be known by a
purchaser for value of the Shares or which might have a
material adverse effect on the value of the Shares or any
of the assets of the Company.
7.4 Warranty Limitations: Notwithstanding any other provisions of this
Agreement, the warranties are made and given subject to the
provisions of Schedule 3.
8. Rights of Rescission
8.1 Rescission for Breach: Without prejudice to clause 6, if on or
prior to Completion it should be found that:
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8.1.1 Unfulfilled Obligations : Any obligation of the Vendors
contained in this Agreement is or will on Completion be
unfulfilled; or
8.1.2 Breach of Warranties : Any Warranty is or may at Completion
be inaccurate or misleading;
then the Purchaser may, without prejudice to any other rights
available to it under clause 8.2 of this Agreement, by notice in
writing to the Vendors, rescind this Agreement.
8.2 Effect of Rescission under Clause 8.1: Rescission of this
Agreement under clause 8.1 shall not extinguish any right of the
Purchaser to damages or compensation to the extent of the audit
Costs incurred by the Purchaser.
8.3 Rescission for Matters other than Default: If on or prior to
Completion:
8.3.1 Destruction of Assets: Any asset of the Company shall be
destroyed or damaged to an extent which in the opinion of
the Purchaser materially and adversely affects the Company
or the carrying on of the business of the Company; or
8.3.2 Material Adverse Change: Any other event shall occur which
affects or is likely to affect adversely to a material
degree the Company or the financial position, business,
assets or profitability of the Company or the value of the
Shares to the Purchaser,
the Purchaser shall be entitled by notice in writing to the Vendors
to rescind this Agreement, but the occurrence of such an event
shall not give rise to any right to damages or compensation except
where Xxxxxx has failed to give notice of such event as required by
clause 7.3.4.
9. Conditions
9.1 This Agreement is conditional upon:
9.1.1 Charge Holders' Consent: All debenture holders or other
Charge holders having Charges over the Shares or any assets
of the Company (where the failure to obtain any approval
might constitute an event of default under such Charge)
approving the transfer of the Shares to the Purchaser and
agreeing to release such Charges on terms satisfactory to
the Vendors and the Purchaser; and
9.1.2 Asset Lessor's Consent: Consent being given by the lessor
of any assets leased by or on hire or conditional purchase
to the Company to the transfer of the Shares to the
Purchaser where the failure to obtain such consent might
constitute an event of default under such lease or hire or
conditional purchase agreement; and
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9.1.3 Government or Regulatory Consents: Consent being given by
any New Zealand or Canadian government or regulatory body
whose consent is required to enable Completion of this
Agreement; and
9.1.4 Material Contractors' Consent: Consent being given by the
other party or parties to any agreement under which the
Company enjoys any material benefit where without such
consent such agreement might be terminated, which
agreements include without limitation those specified in
Item 1, Schedule 4; and
9.1.5 Landlord's Consent: The lessor of the Premises consenting
to the transfer of the Shares to the Purchaser; and
9.1.6 Stock Exchange Approval: The approval of the Alberta Stock
Exchange.
9.1.7 Board Approval: The approval of the board of directors of
the Purchaser and of BKI.
9.2 Fulfilment of Conditions: Each of the parties shall do all acts
and things reasonably necessary to procure the fulfilment of the
conditions set out in clause 9.1
9.3 Benefit of Conditions: The Vendors acknowledge that the conditions
contained in clauses 9.1.1 to 9.1.7 have been inserted solely for
the protection of the Purchaser and accordingly the Purchaser may
waive any of such conditions and in such event this Agreement
shall remain binding on the parties.
9.4 Failure of Conditions: Should:
9.4.1 Not Satisfied: Any of the conditions set out in clause 9.1
not be fulfilled or waived (as the case may be) by 16 July
1997 or such later date as may be agreed by the parties; or
9.4.2 Unreasonable Conditions: Any consent or approval required
in terms of the conditions set out in clause 9.1 be granted
on terms not reasonably acceptable to any affected party;
then this Agreement shall be voidable by notice in writing and
this Agreement shall then be at an end and the parties shall not
have any further rights or obligations except that the Vendors
will repay any deposit.
10. Non Competition
10.1 Non-Competition: In consideration of the Purchaser entering into
this Agreement and as a condition precedent the Vendors and each
of them acknowledge that the value of the Goodwill Value is
dependent upon and the Purchaser has agreed to pay the Goodwill
Value on the basis that Xxxxxx will not carry on a business the
same as or in substantial competition with that at present carried
on by the Company in opposition to the Company after Completion
for
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the period specified below and accordingly Xxxxxx covenants and
agrees with the Purchaser that:
10.1.1 Business: He will not during a period of 1 year from the
date of termination of his Service Agreement provided for
in clause 4.1.4 at any place in New Zealand (except as a
servant of the Company or the Purchaser) or except with the
prior written consent of the Purchaser be directly or
indirectly engaged or connected or interested in either on
their own account or as a partner with or as an employee of
any other person or as a shareholder, director, officer,
consultant, adviser or employee of any person (other than
as holder of not more than 5 % of the shares in the capital
of any public company if and only so long as such shares
are listed on any official stock exchange) or directly or
indirectly assist financially any such business; and
10.1.2 Orders: He will not on his own account or for any person,
enterprise, firm, trust, joint venture or syndicate solicit
orders for such business otherwise than for the benefit of
the Company from any person, firm or company who at the
Completion Date was or had previously been a customer of
the Company; and
10.1.3 Employees: He will not on his own account or for any
person, enterprise, firm, trust, joint venture or syndicate
entice or attempt to entice away from the Company or the
Purchaser any employee of the Company or the Purchaser.
10.2 Provisions with respect to Covenants: Each of the covenants
contained in clause 10.1 shall:
10.2.1 Separate and Severable: Be separate and severable and to
the extent that any such provision is unenforceable by
reason of its period, scope or area being held by a court
of competent jurisdiction to be unreasonable, then such
provision shall be limited to the maximum period, scope or
area which such court considers reasonable and shall be
enforceable on those terms;
10.2.2 Benefit of Purchaser and Assigns: Be given for the benefit
of and be enforceable by the Purchaser and the Purchaser's
successors and assigns.
11. Post Completion Obligations
11.1 Loan: The Purchaser shall provide to the Company for marketing
purposes an interest free loan of $50,000 following Completion.
Such loan shall be repayable as to $25,000 on 31 March 1999 and as
to the balance of $25,000 on 31 March 2000.
11.2 Working Capital: The Purchaser shall not unreasonably refuse to
provide funding to the Company for working capital during the
Earnout Period if it is required as a consequence of customer
sales demand. The Company will be
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15
required to pay interest to the Purchaser on all working capital
advances for the Year ending 31 March 1998 at the Interest Rate.
12. Arbitration
12.1 If any dispute or difference shall arise between any of the
parties in any way arising out of or in connection with this
Agreement such dispute or difference shall be referred to the
arbitration pursuant to the Arbitration Xxx 0000.
13. General
13.1 Non-Merger: The warranties, indemnities, representations and
undertakings set out in this Agreement shall notwithstanding any
rule of law to the contrary not merge in the instruments of
transfer executed pursuant to this Agreement but shall remain in
full force and effect and enforceable to the fullest extent.
13.2 No Announcement: The parties agree that (except as may be required
by law or by the requirements of the Alberta Stock Exchange) they
will not make any announcement or disclosures as to the subject
matter of this Agreement except in a form and manner and at such
time as all parties may agree.
13.3 Notices: Any notice to be given pursuant to this Agreement shall
be given in accordance with and subject to the following
provisions of this clause 13.3:
13.3.1 In Writing: All notices shall be in writing signed by a
duly authorised officer of the party giving the notice or
by the party's solicitor:
13.3.2 Delivery: Without prejudice to any other sufficient mode of
delivery, a notice may be sent by hand, prepaid post. telex
or facsimile to the address or number (in the case of telex
or facsimile) of the intended recipient last advised to the
sender in accordance with this clause. The initial
addresses and numbers of the parties are:
Vendors c/o Xxxxx Xxxxxx & Xxxxxxxx
Barristers and Solicitors
P 0 Box 989
AUCKLAND 1
Facsimile: 307 2093
Purchaser 0 Xxxx Xxxxxx
Xxxx Xxxx
XXXXXXXX
Facsimile: 376 7891
13.3.3 Notice by Hand: Subject to clause 13.3.6, a notice
delivered by hand shall be received on delivery;
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16
13.3.4 Notice by Post: Subject to clause 13.3.6, a notice sent by
prepaid post shall be deemed to be received 3 days after
being posted;
13.3.5 Notice by Telex or Facsimile: Subject to clause 13.3.6, a
notice sent by telex or facsimile shall be deemed to be
received at the time of transmission where a transmission
report or answerback code produced by the sender's machine
indicates successful transmission;
13.3.6 Receipt Outside Business Hours: Any notice received or
deemed to be received pursuant to clauses 13.3.3, 13.3.4 or
13.3.5 after 5.00 pm (recipient's time) on a Business Day
in the recipient's city or on a day which is not a Business
Day in the recipient's city shall be deemed to be received
at 9.00 am (recipient's time) on the next Business Day in
the recipient's city;
13.3.7 Proof of Delivery: In proving delivery of a notice, it
shall be sufficient:
(a) By Hand: In the case of a notice by hand, to provide
evidence that the notice was delivered to the
address of the recipient and no acknowledgement from
the recipient shall be necessary;
(b) By Post: In the case of a notice by post, to provide
evidence that the notice was correctly addressed and
posted in a prepaid envelope;
(c) By Telex or Facsimile: In the case of a notice by
telex or facsimile, to provide the transmission
report produced by the sender's machine showing a
successful transmission to the correct number of the
recipient and to have telephoned the recipient to
confirm receipt of a legible copy of such notice.
13.4 Applicable Law and Jurisdiction: This Agreement shall be governed
by and construed and interpreted in accordance with the laws of
New Zealand and the parties irrevocably submit to the exclusive
jurisdiction of the New Zealand courts.
13.5 Further Assurance: The parties will do all things including
without limitation the execution of documents as shall be
necessary to give full effect to this Agreement.
13.6 Entire Agreement: This Agreement including all schedules,
annexures and exhibits to it, and any documents incorporated by
express reference forms the entire agreement between the parties
relating to its subject matter and supersedes all prior agreements
and understandings between the parties with respect to that
subject matter. If there is any conflict between the terms of this
document and any other document forming part of this Agreement,
the terms set out in this document shall prevail.
13.7 Variation: This Agreement may only be varied by an express written
agreement executed by all the parties or by persons duly
authorised in writing on their respective behalf.
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13.8 Costs: Each party shall bear their own costs of and incidental to
the preparation, Completion and implementation of this Agreement.
13.9 Waiver: No failure to exercise and no delay in exercising on the
part of the Purchaser any right under this Agreement shall operate
as a waiver of that right nor shall any single or partial exercise
of any right preclude any other or further exercise of such right
or the exercise of any other right. Any such waiver unless
otherwise expressly agreed in writing, shall only apply in respect
of the particular circumstances for which it is given.
13.10 Counterparts: This Agreement may be signed in any number of
counterparts, all of which when taken together constitute one and
the same instrument. Any party may enter into this Agreement by
executing any such counterpart. The parties will co-operate to
circulate all counterparts to each other for the purposes of
having all counterparts executed by all parties as soon as
practicable following Completion.
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EXECUTED by the parties.
SIGNED by )/s/ X. X. XXXXXX
XXXXXXXX XXXX XXXXXX )--------------------------------
)X X Xxxxxx
SIGNED by )/s/ X. X. XXXXXX
XXXXXXXX XXXX XXXXXX )--------------------------------
as duly authorised agent for )M Xxxxxx per duly authorised
XXXXX XXXXXX )agent X X Xxxxxx
SIGNED by )
XXXXXXXX XXXX XXXXXX )/s/ X. X. XXXXXX
as duly authorised agent for )--------------------------------
XXXXX XXXXXX ASSOCIATES )Xxxxx Xxxxxx Associates per duly
authorised agent X X Xxxxxx
SIGNED by )/s/ X. X. XXXXXX
XXXXXXXX XXXX XXXXXX )--------------------------------
as duly authorised agent for )M Xxxxxxx per duly authorised
XXXX XXXXXXX )agent X X Xxxxxx
SIGNED by )
XXXXXXXX XXXX XXXXXX )/s/ X. X. XXXXXX
as duly authorised agent for )--------------------------------
XXXXXX XXXXXXXXX )C Xxxxxxxxxx per duly authorised
agent X X Xxxxxx
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19
SIGNED by )/s/ X. X. XXXXXX
XXXXXXXX XXXX XXXXXX )--------------------------------
as duly authorised agent for )G Xxxxx and J Xxxxx per duly
XXXXX XXXXX and XX XXXXX )authorised agent X X Xxxxxx
Witness to all of the above signatures
/s/ ILLEGIBLE Witness's Signature
------------------------------------------
/s/ ILLEGIBLE Name
------------------------------------------
/s/ ILLEGIBLE Occupation
------------------------------------------
/s/ ILLEGIBLE Address
------------------------------------------
SIGNED for XXXXXXX (N.Z.) )Signature /s/ XXX XXXXXXXX
INVESTMENTS LIMITED by: ) ----------------------
)Name Xxx Xxxxxxxx
) ----------------------
Director/Officer
Signature
----------------------
Name
----------------------
Director
(C) Lowndes Jordan
Xxxxxxxx 0000
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SCHEDULE 1
Item 1.
Shareholders Class A Class B Shareholdings
Shares Shares
Xxxxxxxx Xxxx Xxxxxx 49,696 13,958 63,654
Xxxxx Xxxxxx 6,503 702 7,205
Xxxxx Xxxxxx Associates 1,301 140 1,441
Xxxx Xxxxxxx 800 570 1,370
Xxxxxx Xxxxxxxxx 1,000 200 1,200
Xxxxx Xxxxx and Xx Xxxxx 700 280 980
(jointly)
Total 60,000 15,850 75,850
Item 2.
Shareholders Share of Cash Value of Deposit Value of
Deposit Shares to be Goodwill Value
(clause 3.5) Issued Shares
(Clause 3.5) (Clauses 3.1.3 and
3.5)
Xxxxxxxx Xxxx Xxxxxx 31,827.00 0 83.92%
Xxxxx Xxxxxx 23,250.24 9,964.00 9.50%
Xxxxx Xxxxxx 4,650.05 1,993.00 1.90%
Associates
Xxxx Xxxxxxx 4,420.93 1,895.00 1.81%
Xxxxxx Xxxxxxxxx 3,872.35 1,660.00 1.58%
Xxxxx Xxxxx and Jo 3,162.42 1,355.00 1.29%
Xxxxx (jointly)
Total 71,183.00 16,867.00 100%
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SCHEDULE 2
Warranties (clause 7.1)
1. General
1. 1 Disclosure Letter: All information contained or referred to in
the Disclosure Letter is true complete and accurate in all
respects and Xxxxxx is not aware of any other fact or matter which
renders or might upon its disclosure render any such information
misleading.
1.2 Agreement: The provisions of the recitals to this Agreement,
clause 1.1 of this Agreement and all information contained in the
Schedules and Annexures to this Agreement are complete and correct
in all respects.
1.3 Information Supplied: All written information which has been given
or authorised to be given by Xxxxxx or any of the directors or
secretary or any of the officials of the Company or by any
professional advisers of the Vendors or the Company to the
Purchaser or to any of its directors officials agents or
professional advisers in the course of the negotiations leading to
this Agreement was when given and will at Completion be true
complete and accurate in all respects and Xxxxxx is not aware of
any other fact or matter which renders or might upon its
disclosure render any such information misleading.
1.4 All Necessary Disclosures Made: All the facts and circumstances
relating to the Shares and to the assets, business and affairs of
the Company material for disclosure to an intending purchaser of
the Shares have been disclosed to the Purchaser or its advisers in
writing and any such facts arising prior to Completion will
forthwith be disclosed in writing to the Purchaser or its
advisers.
1.5 Constitution: The Constitution of the Company to be handed to the
Purchaser pursuant to this Agreement will be an accurate copy or
originals, if available, of the documents in force at Completion
and will have annexed a copy of every resolution required to be
annexed by the Companies Xxx 0000 or the Companies Xxx 0000, as
the case may be.
2. Shares
2.1 Shares: The Shares constitute the whole of the issued and allotted
share capital of the Company and they are and will be on
Completion held by the Vendors in the Vendors' own right.
2.2 Encumbrances: There is not any and will not at Completion be any
Charge on, over or affecting the Shares and there is no agreement
or commitment to give or create any such Charge and no demand has
been made by any person claiming to be entitled to any such
Charge.
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2.3 No Subsidiaries: The Company never has had and does not have and
will not prior to Completion without the prior written consent of
the Purchaser create or acquire any Subsidiary or any shares in
any other company other than the Company's Subsidiaries.
2.4 No Increase in Capital: The Company has not since the Last
Accounting Date and will not pending Completion increase its share
capital or subdivide, amalgamate, or consolidate the Shares or any
of them nor has it or will it agree to do so.
2.5 No Decrease in Capital: The Company has not at any time repaid or
agreed to repay or redeem or buy back or repurchase any shares of
any class of its share capital or otherwise reduced or agreed to
reduce its issued share capital or any class of its share capital
and has not at any time amalgamated or agreed to amalgamate with
any other company.
2.6 No Related Companies: The Company has no Related Companies.
2.7 No Change of Capital Structure or Name: Xxxxxx will not permit to
be passed before Completion any resolution by the Company:
2.7.1 Altering its share capital;
2.7.2 Altering the rights or obligations attaching to any of the
Shares:
2.7.3 Changing its name;
2.7.4 Altering its Constitution.
3. Accounts
3.1 Books of Account: All the Business Records and Statutory Books are
in the Company's possession or under its control and have been
fully and correctly completed and will pending Completion continue
to be so completed and there are and will pending Completion be no
material inaccuracies or discrepancies of any kind contained or
reflected in any of them. They give and reflect and at Completion
will give and reflect a true and fair view of the financial,
contractual and trading position of the Company and of its plant
and machinery, fixed and current assets and liabilities (actual
and contingent), debtors and creditors, work in progress and
stock.
3.2 Retention of Records: The Company holds and will on Completion
have in its possession all books of Account and other records
which it is bound by law to retain in its possession either
indefinitely or for a particular period or periods of time.
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3.3 Accounts:
3.3.1 True and Fair View: The Accounts are complete and accurate
and give and reflect and will at Completion give and
reflect a true and fair view of the Company, its activities
and its financial status in all respects.
3.3.2 Comply with Statute: The Accounts comply with all
applicable requirements of the Companies Xxx 0000, the
Companies Xxx 0000 and the Financial Reporting Xxx 0000, as
the case may be.
3.3.3 GAAP: The Accounts have been prepared in accordance with
generally accepted accounting practice as that term is
defined in the Financial Reporting Xxx 0000 and to the
extent consistent with such generally accepted accounting
practice on a basis consistent with that adopted for
preceding accounting periods.
3.3.4 No Unusual or Extraordinary Items: The Accounts are not
affected by any unusual extraordinary exceptional or
non-recurring items or by any other factor rendering the
results set out in the Accounts (or any of them) unusually
better or worse than they (or any of them) might otherwise
be or have been.
3.3.5 Financial Position: The Accounts properly reflect the
financial position of the Company as at the Last Accounting
Date and of its results for the accounting period ending on
that date.
3.3.6 Full Disclosure: The Accounts fully disclose all the assets
and liabilities (whether ascertained, contingent, deferred
or otherwise and whether or not quantified or disputed) of
the Company as at the Last Accounting Date and make full
provision and/or reserve for all such liabilities.
3.3.7 Provisions for Losses: The Accounts make full provision for
any foreseeable losses which may arise on Completion and/or
on realisation of stock and/or on Completion of any
existing or proposed contract.
3.3.8 Provision for Bad Debts: The Accounts make adequate
provision for all bad and doubtful debts of the Company and
for depreciation of the fixed assets of the Company having
regard to their original cost and estimated useful life.
3.3.9 Financial Commitments: The Accounts fully disclose all
financial commitments in existence as at the Last
Accounting Date.
3.4 Period Between Agreement and Completion: From the Last Accounting
Date to Completion:
3.4.1 Conduct of Business: The Company has carried on and will
carry on its business in an efficient normal and proper
manner so that the financial standing and position of the
Company as at Completion will not have deteriorated
materially from that disclosed in the Accounts:
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3.4.2 Liabilities: The Company has not incurred and will not
incur any liability (whether contingent or otherwise) and
has not made any payments except in the normal and ordinary
course of business;
3.4.3 Disposals: The Company has not disposed of and will not
dispose of any material portion of its undertaking or any
material part of its fixed assets or any of its goodwill;
3.4.4 Acquisitions: The Company has not acquired any assets of a
capital nature and will not acquire any assets of a capital
nature exceeding $3,000 in value without the Purchaser's
prior consent;
3.4.5 Revaluations: The Company has not revalued upwards and will
not revalue upwards any of its assets;
3.4.6 Capital Investments: The Company has not entered into and
will not enter into any material capital investment or
commitment in excess of $3,000 in aggregate or any major
transaction as that term is defined in section 129(2) of
the Companies Xxx 0000;
3.4.7 Dividends: The Company has not declared, paid or made and
will not declare, pay or make any dividend, bonus or
similar distribution;
3.4.8 Insurance: The Company has kept and will keep effectively
insured to the full insurable amounts all assets and
undertaking of the Company against all normal insurance
risks including reasonable loss of profits insurance;
3.4.9 Terms of Trade: The Company has not made or permitted and
will not make or permit any change to any of its product
lines or to the terms or conditions of any agency held by
the Company or to the selling prices or terms and
conditions of sale of any products or services of the
Company;
3.4.10 Turnover:The Company has attained a turnover no less than
that for the corresponding period in the previous financial
year:
3.4.11 Deposits: The Company has deposited and will deposit all
amounts received by it to the credit of its bank account
and such amounts appear in the appropriate books of
Account;
3.4.12 Debts: The Company has paid and will continue to pay all
its debts as they fell or fall due.
3.5 Non-Disclosure of Liabilities: If it is discovered before or after
Completion that the Company was liable at the Completion Date
(whether contingently or otherwise) to any person in respect of
the Company prior to the Completion Date except in the ordinary
course of business which liability has not been fully disclosed to
the Purchaser then without prejudice to any other rights of the
Purchaser, Xxxxxx will immediately upon demand by the Purchaser
pay to the Purchaser or as directed by the Purchaser the amount of
each such liability after deducting from each such liability any
saving to the Company in Taxation as a result of such liability.
For the purposes of this clause:
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3.5.1 The word "liability" shall include liability for or in
respect of Taxation or any re-assessment thereof which the
Company may be required to pay in respect of any period
prior to the Completion Date and which has not been so
fully disclosed and any amount whatsoever (including all
Costs in connection therewith) arising out of any
occurrence or happening which shall have taken place prior
to the Completion Date;
3.5.2 Provision of any amount by way of note to the Accounts
shall not be deemed to be provision of that amount in the
Accounts.
4. Stock
4.1 Valuation: The methods of valuing stock and work in progress as at
the Last Accounting Date (which included a physical stocktaking)
were the same as those adopted for the 3 immediately preceding
financial years and all redundant and obsolete stock was wholly
written off all slow moving stock was written down appropriately
and the value attributed to the remaining stock did not exceed the
lower of direct cost or net realisable value.
4.2 Changes to Stock Since Last Accounting Date: The stock on hand at
Completion will comprise the stock as at the Last Accounting Date
less stock sold and with the addition of stock bought in the
ordinary course of business since that date and no stock currently
held other than that written off or written down in the Accounts
or which are service spares, is slow moving, out of date or
fashion, redundant or obsolete or which will not realise its book
value within 12 months of the Completion Date.
5. GST
5.1 Registration: The Company is registered for the purposes of the
GST Act and:
5.1.1 Not a Member of a Group: The Company has not at any time
been a member of a Group or been treated as a member of a
Group for such purposes and no application for it to be so
treated has at any time been or pending Completion will be
made and no act or transaction has been or pending
Completion will be effected in consequence whereof the
Company is or may be held liable for any GST chargeable
against some other company except the Company's
Subsidiaries;
5.1.2 Compliance with GST Act: The Company has complied and
pending Completion will comply in all respects with the GST
Act legislation;
5.1.3 Maintenance of Records: The Company has given obtained made
and maintained and pending Completion will give, obtain,
make and maintain complete correct and up to date invoices,
records and other documents appropriate or requisite for
the purposes of the GST Act;
5.1.4 No Arrears: The Company is not and will not pending
Completion be in arrears with any payment or returns under
the GST Act or liable to any
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abnormal or non-routine payment or any forfeiture or
penalty or to the operation of any penal provision and
where payment is not yet due or receivable has provided for
such payment;
5.1.5 All Supplies Taxable: All supplies made and to be made
pending Completion by the Company are taxable supplies and
the Company is not and will not pending Completion be
denied credit for any input tax.
6. Taxation
6.1 Returns Made: All forms, notices, elections, computations,
payments (including, without limitation, any fines or penalties)
and returns which should be made by the Company for any Taxation
purpose have and will at Completion have been made and are and
will be up-to-date, correct and on a proper basis and none of them
is now or will at Completion be the subject of any dispute with
the Inland Revenue Department or any other Taxation collection
agency. In particular the returns in relation to provisional
Taxation will not give rise to any assessment, adjustment or
set-off (including any claim for interest on unpaid Taxation) by
the Inland Revenue Department.
6.2 Provision in Accounts: Full provision and reserves were made in
the Accounts in respect of all Taxation liabilities to or for
which the Company was at the Last Accounting Date or at any time
since may have become or may become liable to be assessed or
charged or to pay. Provision of any amount by way of a notice to
the Accounts shall not be a provision for the purposes of this
paragraph.
6.3 No Non-commercial Transactions: The Company has not at any time
entered into a transaction or series of transactions containing
steps inserted without any commercial or business purpose apart
from the obtaining of a Taxation or stamp duty advantage.
6.4 Debtors Recorded Appropriately: All amounts included in the
Accounts or (in the case of an amount arising after the date of
the Accounts) in the books of the Company as due from Debtors
represent amounts actually invoiced by the Company to such debtors
not earlier than 3 months prior to the Last Accounting Date (or in
the case of an amount arising after the date of the Accounts not
earlier than 3 months prior to the date on which it was recorded
in the books of the Company) and no part of such amounts still
outstanding has been released on terms that any debtor pays less
than the full book value of its debt or has been written off or
has proved to any extent irrecoverable or is now regarded as
irrecoverable or has been compromised on any terms.
7. Loans
7.1 No Undisclosed Loans: The aggregate amount appearing in the
Accounts as being outstanding in respect of loans owing by the
Company was at the Last Accounting Date the aggregate of all loans
or financial accommodation of whatever nature from any source so
outstanding.
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7.2 Loans Within Corporate Powers: Such aggregate did not (and the
amount outstanding in respect of loans owing by the Company does
not and will not at Completion) exceed any limitation on the
Company's borrowing contained in its Constitution or in any loan
offer, facility letter, debenture or other deed or document
executed by it or, in the case of borrowings on overdraft, its
overdraft facilities.
7.3 Loans from Directors or Shareholders: All amounts outstanding and
appearing in the books of the Company as loan accounts or as due
to directors or shareholders wholly represent money or money's
worth paid or transferred to the Company as the case may be or
remuneration accrued due and payable for services rendered and
(save for such remuneration) no part thereof has been provided
directly or indirectly out of the assets of the Company.
7.4 No Repayments: The Company has not repaid and pending Completion
will not repay any loans or other financial accommodation in whole
or in part nor has it by reason of any default by it in any of its
obligations become bound or liable to be called upon to repay
prematurely any loans or borrowed moneys and pending Completion no
such default will occur.
8. Liabilities and Commitments
8.1 No Capital Commitments: Since the Last Accounting Date the Company
has not except in the ordinary course of business made any capital
expenditure or incurred any capital commitments nor has it
disposed of or realised any substantial capital assets or any
interest in such assets and has no outstanding capital commitment
and pending Completion no capital commitments nor disposals of
capital assets or land or any estate or interest in such assets or
land will be undertaken by the Company without the prior written
consent of the Purchaser.
8.2 No Guarantees: The Company is not and will not prior to Completion
become a party to any contract of guarantee or indemnity.
8.3 No Material Contracts: The Company has not entered into and will
not enter into any material contract (including the granting of
options to purchase or Charges over all or any of the Company's
assets) except in the normal and ordinary course of business and
that the Company has not and will not become a party to any
unusual, abnormal or onerous contract or agreement whatsoever.
8.4 No Long Term Contracts: The Company is not and will not on
Completion be a party to any contract of service or supply which
cannot be terminated by not more than 1 month's notice without
giving rise to any claim for damages or compensation.
8.5 No Commitments since Last Accounting Date: The Company has not
since the Last Accounting Date been and will not at Completion be
a party to any contract, commitment or arrangement of any nature
except such as have been entered into in the normal and ordinary
course of trading and are capable of being wholly
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satisfied or performed within 3 months from Completion or of being
terminated within such period without cost to the Company.
8.6 No Arrangements: The Company is not and will not on Completion be
a party to any joint venture, partnership, syndicate or other
consortium arrangement.
8.7 No Agents: No person is authorised to act as agent for the Company
or otherwise to bind the Company other than the directors of the
Company acting as a board and the Company has not appointed any
agents, distributors or managers in respect of any of its products
or services in any part of the world.
8.8 No Default under Agreements: The Company is not now, nor pending
Completion will it become, in default under any agreement to which
it is or may become a party or in respect of any other obligations
binding upon it an no event has occurred which would enable any
third party to terminate any contract or any benefit enjoyed by
the Company.
9. Employees
9.1 Full Disclosure of Terms: Full disclosure in writing of the
current rate of remuneration, fees and expenses payable to each
officer and employee of or consultant to the Company and the terms
of such employment or consultancy (including obligations in
respect of any directors' or officers' keyman or indemnity
insurance) have been made to the Purchaser in writing and no such
officer or employee or consultant has given notice or is under
notice of dismissal or termination of employment of any
consultancy agreement.
9.2 No Amounts Due: No amounts are due to or in respect of any former
officer or employee or consultant and there are outstanding no
arrears of salary, wages, fees, holiday pay or other remuneration.
9.3 No Industrial Disputes: The Company is not involved in any
industrial or trade dispute or any dispute with any trade union or
organisation or body of employees.
9.4 No Changes: No change has been made in the terms of employment or
consultancy by the Company of any person who was employed at the
Last Accounting Date and pending Completion the Company will not
without the Purchaser's prior written consent engage any new
employee or consultant.
9.5 No Other Payments: No moneys other than in respect of remuneration
or emoluments of employment or fees are payable to or for the
benefit of any director or officer of the Company.
9.6 No Profit Sharing: The Company is not and will not prior `to
Completion become a party to any agreement with any director,
officer, employee or consultant of the Company under which any
such person is entitled to a share of profits of the Company or to
any bonus calculated on profits or to participate in any share
incentive scheme or share option scheme or similar arrangement and
that no pensions, retiring allowances or other benefits are or
will be payable by
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29
the Company to any director, officer or employee of the Company
during such person's employment or consultancy.
9.7 No Schemes: There are not now and will not on Completion be in
existence any retirement, death or disability benefit schemes for
directors or employees or any obligations to or in respect of any
present or past directors or employees with regard to retirement,
redundancy, death, sickness or disability pursuant to which the
Company is or may become liable to make any payments.
9.8 No Breaches of Contract: Since the Last Accounting Date no
liability has been incurred or payment made by the Company for
breach of any contract (whether express or implied) of service,
for redundancy or for compensation for loss of office or wrongful
dismissal or in respect of retirement, death, sickness or
disability and no gratuitous payment has been made or will prior
to Completion be made or promised by the Company to or in respect
of any director or employee.
9.9 No Liability for Leave Payments: The Company is not and will not
at Completion be under any liability to any person in respect of
long service leave or accrued annual leave.
9.10 Compliance with Legislation: The Premises and operation of the
business of the Company and the terms on which the employees of
the Company were recruited and are employed comply and will at
Completion comply with the Employment Contracts Xxx 0000, the
Equal Pay Xxx 0000, the Human Rights Xxx 0000, the New Zealand
Xxxx of Rights Xxx 0000, the Wages Protection Xxx 0000, the
Holidays Xxx 0000, the Health and Safety in Employment Xxx 0000
and all applicable legislation governing employment and safety of
employees.
10. Statutory Obligations
10.1 Holding of Licences: The Company holds and will on Completion be
in possession of all current licences (including import licences
and concessions, if any) consents, authorities and permits from or
issued by any Governmental Department, municipal or local body or
other authority whether in respect of the Premises, plant,
machinery, buildings or other assets of the business or otherwise
necessary or required to enable it to carry on its business fully
and effectively and that the Company has not had notice that any
such licences, consents, authorities or permits are being or are
likely to be withdrawn or in any manner qualified whether by
reason of the sale of the Shares or otherwise howsoever.
10.2 No Requisitions: There has not since the Last Accounting Date been
and will not on Completion be any unsatisfied requisitions by or
dispute with any local body health authority, government or ad hoc
authority or other body or official or authority having competent
jurisdiction affecting or relating to any of the Premises, plant,
machinery, buildings or other assets of the business, or the
employment of staff by the Company.
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30
10.3 No Illegal Trade Practices: The Company is not, has not been and
will not pending Completion be a party to any agreement,
arrangement, understanding or practice which is contrary to the
provisions of the Commerce Xxx 0000. or the Fair Trading Xxx 0000,
or the Consumer Xxxxxxxxxx Xxx 0000, or the Privacy Xxx 0000.
10.4 No Breach of Statute: The Company has not committed any breach
which was unremedied at the Last Accounting Date of any statutory
provision, order, bylaw or regulation (in every case whether
applicable in New Zealand or elsewhere) binding on or applicable
to it with regard to the formation and operation of the Company,
the carrying on of the business of the Company or any other matter
relating to the Company and that the Company has not since such
date and will not prior to Completion commit any such breach.
10.5 All Documents Stamped: All documents which in any way affect the
right, title or interest of the Company in or to any of its
property, undertaking or assets or to which the Company is a party
and which attract stamp duty have been duly stamped and no
liability to pay stamp duty will arise as a result of Completion
by virtue of any previous transfer of any property, undertaking or
assets to the Company in particular but without limitation under
section 13(4) of the Stamp and Cheque Duties Xxx 0000.
10.6 Compliance with Companies Act: The Company has complied with and
will up to Completion comply with all the requirements of the
Companies Xxx 0000 or the Companies Xxx 0000 (whichever is
applicable) and any Act or Acts amending the same in relation to
the filing of all documents required to be filed with the
Registrar of Companies and otherwise howsoever.
10.7 All Registers Complete: The entries in the Register of Members,
Register of Directors and Secretaries, Interests Register,
Register of Charges and Register of Directors' Shareholdings of
the Company are correct and that such registers have been properly
kept.
11. Properties and Assets
11.1 Leasehold Premises: The Premises are held upon lease terms which
have been fully disclosed to the Purchaser.
11.2 Title and Compliance: The Company had on the Last Accounting Date
and will on Completion have sole title to and possession and
control of all the freehold and leasehold properties used or
occupied by it free from all leases, tenancies or Charges and each
of the said properties complies and will on Completion comply with
the local body code or ordinances affecting the same and with all
other statutory, local body and other regulations and
requirements.
11.3 All Premises Included: The Premises comprise all the freehold and
leasehold land and premises owned, used or occupied by the Company
and all the estate interest right and title whatsoever of the
Company in, under, over or in respect of any such land or
premises.
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31
11.4 Compliance with Statutes: The Company has complied with all
provisions of the Building Xxx 0000, Resource Management Xxx 0000
and all other legislation (including regulations, bylaws,
ordinances, codes of practice, circulars and guidance notes made
thereunder) relating to building, planning or environmental
matters and dealing with (but without limitation) waste,
contaminated land, discharges to land or ground and surface water
or sewers, emissions to air, noise, dangerous, hazardous or toxic
substances and materials, nuisance or health and safety and there
are no actions, claims or proceedings (whether actual or
potential) existing in relation to such matters nor is likely to
arise any liability in relation to such matters.
11.5 Compliance with Leases: The Company has paid all rent that may be
payable and has performed and observed all covenants (whether in
relation to freehold or leasehold land) conditions, agreements,
statutory requirements, planning or building or resource consent,
bylaws, orders and regulations affecting the Premises or any
business carried on the Premises and no notice of any breach of
any such matter has been received nor is the Vendors aware of any
such breach having occurred.
11.6 No Defects: No structural, drainage or other material defects have
appeared in respect of or affected the buildings and structures on
or comprising the Premises or any parts thereof and all such
buildings are in good and substantial repair and condition and
none has been constructed, maintained, altered or repaired using
materials containing any deleterious building material and none of
the Premises has been affected by flooding or subsidence.
11.7 No Other Matter: There is no other matter of which the Vendors are
or ought to be aware on reasonable enquiry and which adversely
affects the value of any of the Premises or casts any doubt on the
right or title of the Company to those Premises or its use of
those Premises for its business which should be revealed to a
Purchaser of the Shares of the Company or other person entering
into this Agreement.
11.8 Plant and Machinery: The Company's plant and machinery (including
fixed plant and machinery) and all equipment furniture and
vehicles are in good repair and condition (fair wear and tear
excepted) and in satisfactory working order and none of it is
surplus to the Company's requirements.
11.9 Debts Recoverable: The amount of all debts due or recorded in the
Accounts or the books of the Company as being due to the Company
as at Completion (less the amount of any provision or reserve made
in the Accounts or the books of the Company in respect of any
particular debts) will be good and collectable in full in the
ordinary course of business and in any event not later than 3
months after Completion and none of the said debts is or will at
Completion be subject to any counterclaim or set-off except to the
extent of any such provision or reserve.
11.10 Debtors Recovery: Should any of the debtors of the Company as at
the Completion fail to satisfy its liability to the Company in
full within 3 months from the Completion Date and the aggregate
amount due to such debtors exceeds $3,000, the Vendors will
immediately upon demand by the Purchaser pay to the Purchaser (or
the Purchaser may deduct from the Consideration) the amount of
E-185
32
such excess amount. Following payment of such amount the Purchaser
shall be entitled to an assignment of the benefit of such excess
debts.
11.11 Changes Since the Last Accounting Date: Since the Last Accounting
Date:
11.11.1 NoWrite-Offs or Write-Downs: None of the assets of the
Company have been written off or written down nor has
there been any agreement for the release of any person
under liability to the Company:
11.11.2 Cash: The Company has neither disbursed nor received any
cash except in the ordinary course of its business and
amounts received by the Company have been deposited with
its bankers and appear in the appropriate books of
Account;
11.11.3 Depletion in Assets: There has been no depletion in the
net assets of the Company and they have not been
materially diminished by the negligent, wrongful or
fraudulent act of any person;
11.11.4 GAAP: Everything which should according to generally
accepted accounting practices (as defined in the
Financial Reporting Act 1993) have been written up or
recorded in the Statutory Books and financial records of
the Company with respect to the asset of the Company
(including the Premises), has been written up and
recorded;
11.11.5 Compliance with Notices: There have been no notices,
claims or demands served on the Company in respect of any
of its assets (including the Premises) which have not
been fully complied with. 12. Intellectual Property
12.1 All Intellectual Property Included: The Consideration for the
Shares is assessed on the basis that all licences and all
Intellectual Property or other similar rights relating to the
business of or used by the Company, if any, which are at present
owned solely and beneficially by the Company and that all of such
rights shall remain the property of the Company as the case may be
to the intent that the Company shall be the sole unencumbered and
undisputed owner of all such things as at Completion.
12.2 No Intellectual Property Agreements: The Company has not entered
into any agreement or arrangement for the provision of technical
information or assistance or granting rights in respect of any
patents, trade marks or registered designs or copyright and that
to the best of Xxxxxx'x knowledge and belief the operations of the
Company do not infringe any patent or other intellectual property
right of any kind vested in any other party.
12.3 Disclosure of Intellectual Property: Full details of all
Intellectual Property owned or used by the Company have been given
to the Purchaser and no person has been authorised to make any use
whatsoever of any lntellectual Property owned by the Company and
the Company has not disclosed (except in the ordinary course of
its business) any of its know-how, trade secrets, technical
E-186
33
processes, confidential information, Intellectual Property or
lists of customers or suppliers to any other person.
12.4 Use of Names: The Company is entitled to use its trade names in
those parts of the world in which it currently conducts its
business or its products are sold to its customers and no person
has been authorised to make any use whatsoever of either such name
and the use of such names by the Company does not infringe the
rights of any other person or entitle any other person to a claim
against the Company and neither name is being used claimed opposed
or attacked by any other person.
12.5 Name: The Company has not consented to and will not before
Completion consent to the adoption of a similar name by any other
company or person.
12.6 Intellectual Property Not Disputed: The Intellectual Property
rights of the Company have not been and will not at Completion be
challenged or disputed by any third party and the Vendors are not
aware of any facts or circumstances which might entitle a third
party to challenge the Company's ownership or use of the
Intellectual Property used in the business.
13. Commercial Matters
13.1 All Actions Indemnified: There is no cause of action in respect of
which the Company is not fully indemnified which could and might
be used for the purpose of commencing proceedings either civil or
criminal.
13.2 No Legal Proceedings: The Company is not engaged in any
Proceedings whatsoever nor are any Proceedings of any kind being
taken against it nor is Xxxxxx aware of any Proceedings against
the Company pending or threatened.
13.3 No Breaches of Contract: The Company is not and will not on
Completion be in breach of any contract, commitment or arrangement
of any nature whatsoever to which it is now or will then be a
party and is not and will not on Completion be a party to any
contract, commitment or arrangement which may be unenforceable by
the Company by reason of the transaction being voidable at the
instance of any other party or ultra xxxxx, void or illegal.
13.4 Insurance: Full details of all insurance policies maintained by
the Company have been supplied to the Purchaser and all such
insurances are now in force and all premiums due have been paid
and pending Completion the Company shall not permit any of its
insurances to lapse or do or omit to do anything the doing or
omission of which would make any such policy of insurance void or
voidable or would or might result in an increase in the rate of
premiums and no claims are outstanding and nothing has occurred to
give rise to any such claim.
13.5 No Notice from Lenders to Repay: The Company has not received
notice (whether formal or informal) from any lenders of money to
the Company requiring repayment or intimating the enforcement by
such lenders of any security which they may hold over any assets
of the Company and Xxxxxx is not
E-187
34
aware of any circumstances likely to give rise to any such notice
being given or which would enable any such notice to be given.
13.6 Effect of Acquisition of Shares: Xxxxxx has no reason to believe
that as a result of the proposed acquisition of the Shares by the
Purchaser:
13.6.1 No Cessation of Supplies: Any supplier of the Company will
cease supplying the Company or may substantially reduce its
supplies to the Company or alter the terms on which it
supplies the Company; or
13.6.2 No Cessation of Custom: Any customer of the Company will
terminate any contract with the Company or cease or
materially reduce its business with it; or
13.6.3 No Notice of Termination of Employment: Any officer or
senior employee of the Company will give notice of
termination of his or her employment with the Company; or
13.6.4 No Termination of Contracts: Any of the licences, consents,
approvals, agreements or contracts currently granted to or
entered into by the Company required in connection with the
carrying on of its business in the manner in which it has
been carried on at any time during the 2 years prior to the
date hereof will be withdrawn, cancelled or be capable of
termination.
13.7 Arm's Length Supplies: All supplies of goods or services to the
Company are purchased by the Company direct from manufacturers or
suppliers on an arm's length basis and no commissions or similar
payments are made to the Vendors or any other intermediaries in
respect of such supplies.
13.8 No Outstanding Offers: No offer, tender or the like given or made
by the Company and still outstanding is capable of giving rise to
a contract merely by any unilateral act of a third party.
13.9 No Liabilities: The Company does not have and at Completion will
not have any outstanding debts, liabilities, contracts or
engagements, guarantees, undertakings or liabilities (including
contingent liabilities) other than liabilities implied by statute
or disclosed in the Accounts or incurred in the ordinary and
proper course of its trading business.
13.10 Continuance of Name: The Company does not and pending Completion
will not use on its letterheads, brochures, sales literature,
books, Premises or vehicles or otherwise carry on its business
under any name other than its corporate name.
13.11 Electronic Storage: The Company has not and will not pending
Completion have any of its records, systems, controls, data or
information recorded, stored, maintained, operated or otherwise
dependent upon or held by any means (including any electronic,
mechanical or photographic process whether computerised or not)
which (including all means of access thereto and therefrom) are
not under the exclusive ownership and direct control of the
Company. There has been no breach of any service or maintenance
contract relevant to any such
E-188
35
electronic, mechanical or photographic process or equipment
whereby any person or body providing services or maintenance
thereunder may have the right to terminate such service or
maintenance contract.
13.12 Transactions with Associated Persons: The Vendors and their
Associated Persons have not entered into and will not prior to
Completion enter into any loan, borrowing, agreement or other
arrangement with or on behalf of the Company (other than as
employee of the Company on terms fully disclosed to the Purchaser)
and are not and will not at Completion be interested, whether
directly or indirectly, in or have any Charge over any of the
assets of the Company.
14. Corporate Matters
14.1 Share Capital: There is not now outstanding and will not be
outstanding at Completion in respect of the Company any option or
agreement under which any person has or may in any circumstances
have or acquire the right to subscribe for or purchase any share
or loan capital of the Company or to convert any stock or share or
security into share capital or into share capital of a different
class.
14.2 Attorneys: The Company has not given any power of attorney or any
other authority (express, implied or ostensible) which is still
outstanding or effective to any person to enter into any contract
or commitment or do anything on its behalf (other than any
authority of employees to enter into routine trading contracts in
the normal course of their duties) nor will it do so prior to
Completion.
14.3 Officers: Since the Last Accounting Date no appointments or
removals of any officers of the Company have been made.
14.4 Ultra Xxxxx Contracts: To the best of Xxxxxx'x knowledge and
belief none of the activities or contracts or rights of the
Company is ultra xxxxx, unauthorised, invalid or unenforceable or
in breach of any contract or covenant.
E-189
36
SCHEDULE 3
(clause 7.4)
1. Warranty Limitations: Notwithstanding any other provisions of this
Agreement, Xxxxxx shall not be liable in respect of any Proceedings or
Costs for breach of any of the Warranties or other breach of this
Agreement:
1.1 Notice: Unless, promptly after the Purchaser becomes aware or ought to
have become aware of any breach, they shall have received from the
Purchaser written notice containing full details of the relevant
Proceedings including, if practicable, the matter or default which gives
rise to the Proceedings, the breach that results and the amount claimed
in respect of the Proceedings:
1.1.1 Other than Taxation: In the case of any of the Warranties other
than Warranties in relation to Taxation, within a period of 2
years after Completion; or
1.1.2 Taxation: In the case of any of the Warranties in relation to
Taxation, within a period ending the earlier of the date 7 years
after Completion and the date falling six weeks after the date on
which any relevant statutory limitation period in the jurisdiction
relevant to the Taxation Proceedings shall expire;
and (unless the relevant Proceedings shall have been withdrawn or
satisfied) action in a court of competent jurisdiction in respect of such
breach shall have been commenced within 1 year after receipt of such
notice;
1.2 Aggregate of Warranties to Exceed Specified Amount: Unless the aggregate
amount of the liability of Xxxxxx for all such Costs and Proceedings
exceeds $5,000;
1.3 Limit for Single Proceedings: Unless, in respect of any single breach of
any of the Warranties, the amount of the liability of Xxxxxx for such
Costs and Proceedings in respect of such breach exceeds $1,000;
1.4 Exclusion where Covered by Insurance: If and to the extent that (after
taking account of related Costs and any normal excess in such policy)
recovery is made by the Purchaser or the Company under any policy of
insurance effected by or for the benefit of the Company in respect of any
of the subject matters of such Proceedings;
1.5 Exclusion where Recovery under Another Agreement: If and to the extent
that those Proceedings or Costs occasioned thereby has been recovered
under any other agreement entered into between the parties and vice
versa;
1.6 Provisions Made in Account: If and to the extent that proper provision or
allowance therefor has been made in the Accounts;
E-190
37
1.7 Subsequent Changes: If and to the extent that such Proceedings and any
Costs in connection therewith arise or is increased as a result of:
1.7.1 Any alteration in rates of Taxation after the date of this
Agreement with retrospective effect or the withdrawal after the
date of this Agreement of any published extra-statutory concession
or the alteration after that date of any published statement of
practice of the relevant revenue authority; or
1.7.2 The passing of, or any change in, any legislation after the date
of this Agreement; or
1.7.3 Any change in accounting policy or practice of the Company after
Completion including any changes in methods or practices in
relation to stock valuation;
1.7.4 Any voluntary act or omission or transaction of the Purchaser or
the Company after Completion otherwise than in the ordinary course
of the Company's business as carried on at the date of this
Agreement including (without limitation):
(a) The payment of any unusual or abnormal--dividend by the
Company;
(b) A change of the date up to which the Company makes up its
Statutory Books;
(c) The cessation of any business carried on by the Company;
1.8 Liability Disclosed: If and to the extent the facts, matters or
circumstances giving rise to the breach are referred to in the Disclosure
Letter or any document disclosed with the Disclosure Letter or in any
document disclosed to the Purchaser or any officer of or professional
adviser to the Purchaser in relation to this Agreement or the matters
contemplated herein or in the Accounts where such liabilities are
accepted by the Purchaser by written notice to Xxxxxx;
1.9 Utilisation of Taxation Relief: In the case of a Proceedings arising in
connection with a payment of Taxation, if and to the extent that such
payment could have been avoided by the utilisation of trading losses or
other reliefs from Taxation (other than trading losses, or other reliefs
arising after the Last Accounting Date) available to the Company;
1.10 Over Provision in Accounts: If and to the extent that there is any over
provision in respect of any matter included in the Accounts;
1.11 Pursuant to Agreement: If and to the extent that such matter giving rise
to the Proceedings properly falls to be done in implementing the terms of
this Agreement;
X-000
00
0. Limitations Separate and Independent: For the avoidance of doubt each of
the above paragraphs of this Schedule shall be construed as being
separate and independent and none of them shall be construed as limiting
the effect of any other.
3. Recovery from Third Party: If Xxxxxx pays an amount pursuant to a
Proceedings in respect of breach of any of the Warranties and the Company
or the Purchaser has a right of reimbursement against any person other
than the Company in respect of or relating to those Proceedings, the
Company or the Purchaser shall (subject to the Company or the Purchaser,
as the case may be, being indemnified to its reasonable satisfaction by
Xxxxxx against all reasonable Costs) take all reasonable steps or
proceedings to enforce such right. If the Purchaser subsequently recovers
such reimbursement from such third party, the Purchaser shall forthwith
repay to Xxxxxx such part of the amount paid by Xxxxxx by way of damages
for breach of that Warranty as equals the amount of the which is so
recovered by the Purchaser in respect of the facts, matters or
circumstances giving rise to the breach of that Warranty (after taking
account of the Costs of recovery and (if appropriate) any Taxation
arising solely as a result of the recovery).
4. Conduct of Proceedings by Xxxxxx: The Purchaser shall give and shall
procure that the Company shall give, to Xxxxxx full facilities to
investigate any Proceedings and the extent of possible liability under
the Warranties and at the request of Xxxxxx shall (subject to the
Purchaser being indemnified as to any reasonable Costs which may be
incurred thereby) allow Xxxxxx at his own expense to participate in, or
have the conduct of (as Xxxxxx may elect), all proceedings of whatsoever
nature against the relevant third party arising out of, or in connection
with such Proceedings or dispute, in the name of the Company or the
Purchaser as it may consider necessary in order to mitigate any
Proceedings or Costs arising under this Agreement. Neither the Purchaser
nor the Company shall accept or pay or compromise any such liability or
Proceedings as is referred to above without Xxxxxx either consenting to
such action or having a reasonable opportunity to resist the same.
E-192
39
SCHEDULE 4
(clauses 9.1.4 and 9.1.6)
Item 1. Consents (clause 9.1.5)
o Quatorze Holdings Limited (Auckland premises landlord)
o AMP (Wellington premises landlord)
o Bank of New Zealand (Debentureholder)
0 Equipment Finance Limited (Chargeholder)
Item 2. Charges (clause 4.1.3)
o Bank of New Zealand debenture dated 31 October 1996
registered on 28 November 1996.
o Equipment Finance Limited Instrument by Way of Security
dated 5 December 1995 registered on 11 December 1995.
Item 3. Guarantees (clause 4.2)
o Quatorze Holdings Limited (Auckland premises landlord)
o AMP (Wellington premises landlord)
o Bank of New Zealand (Debentureholder)
o Equipment Finance Limited (Chargeholder)
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40
ANNEXURES
1. Accounts (clause 1.1)
2. Service Agreement (clause 4.1.4)
3. Form of Escrow Agreement (clause 1.1)
4. Assets Schedule (clause 3.1.2)
E-194
[LOGO]
BROKER
INVESTMENTS
Private & Confidential
Xxx Xxxxxx
Easy PC Computer Rentals Limited
00 Xxxxxx Xxxx
Xxxxxxxxxx
XXXXXXXX
14 September 1998
Dear Xxx
Earn-out calculation schedule
Enclosed please find the earn out calculation for the year ended 31 March 1998
with respect to Easy PC Computer Rentals Limited.
I understand that you have reviewed this schedule and the calculations with
Xxxxxxx Investments (NZ) Limited.
With your signed acceptance, on behalf of the shareholders of Easy PC Computer
Rentals Limited, we will instruct our solicitor to issue the share script to
escrow. Please sign and return a copy of this letter so we may initaite these
instructions.
Yours faithfully
/s/ Xxxx Xxxxxxx
Xxxx Xxxxxxx
Chief Executive Officer
--------------------------------------------------------------------------------
For and on behalf of the share holders of Easy PC Computer Rentals Limited
/s/ X. X. XXXXXX Date 28/11/98
------------------------------ ------------
Xxxxx Xxxxxx
Signed by XXXXXXXXX XXXX XXXXXX
as duly authorised agent for XXXXX XXXXXX
/s/ X. X. XXXXXX Date 28/11/98
------------------------------ ------------
Xxxxxxx Xxxxxxx
Signed by XXXXXXXXX XXXX XXXXXX
as duly authorised agent for XXXXXXX XXXXXXX
E-195
/s/ X. X. XXXXXX Date 28/11/98
------------------------------ ------------
Xxxxx Theorpe Associates
Signed by XXXXXXXXX XXXX XXXXXX
as duly authorised agent for XXXXX XXXXXX ASSCOIATES
/s/ C. A. XXXXXXXXX Date 28/11/98
------------------------------ ------------
Xxxxxx Xxxxxxxxx
/s/ X. X. XXXXXX Date 28/11/98
------------------------------ ------------
Xxxxxxx Xxxxxxx
Signed by XXXXXXXXX XXXX XXXXXX
as duly authorised agent for XXXXXXX XXXXXXX
/s/ X. X. XXXXXX Date 28/11/98
------------------------------ ------------
Xxxxx Xxxxx and Xx Xxxxx
Signed by XXXXXXXXX XXXX XXXXXX
as duly authorised agent for GEOFF and XX XXXXX
CC: Xxx Xxxxxxxx, Xxxxxxx Investments
Xxxxxx Xxxxxxxxxxx, Xxxxxxxxxxx Xxxxxxxxx
E-196
[LOGO]
XXXXXXX
INVESTMENTS
EASY PC COMPUTER RENTALS LIMITED
ACQUISITION VALUATION AND SHARE ISSUE CALCULATION
AS AT 30 JUNE 1998
1 Purchase price
Made up of following components:
Initial cash consideration
Asset value
Goodwill value
2 Goodwill
Four times multiple of net audited profit after tax @33% for the year
ended 31 March 1998.
3 Asset value
Established as $388,000 as at 30 June 1997. This value must be realised
in residual sales.
4 Consideration paid to date
Initial cash on settlement of 71,183
Initial shares on settlement 8,128 16,867
------------
88,050
Advance on settlement 150,000
(to be clawed-back or increased subject to asset value being earned)
5 Goodwill calculation
NZ$
Net income 93,216
Tax @33% (30,761)
--------
62,455
-------
x4 249,819
-------
6 Escrow shares to be issued
Shares to be issued and held in escrow equalling the goodwill value
As at 31 March 1998
Exchange rate (NZ:CAD) 0.7816
Share Price (strike) c$ 1.75
-------
Shares to be issued 111,576
-------
E-197
[LOGO]
XXXXXXX
INVESTMENTS
EASY PC COMPUTER RENTALS LIMITED
ACQUISITION VALUATION AND SHARE ISSUE CALCULATION
AS AT 3O JUNE 1998
7 Escrow shares to be released
First release to be 30 June 1998
Based on cumulative cash flow earned for the year ended 31 March 1998 (as
defined in Escrow Agreement)
March 1998 March 1999 March 2000 TOTAL
Net profit after tax 62,455 62,455
0
Add back: 0
Depreciation 145,865 145,865
Depletion -- 0
Deferred tax -- 0
Interest allowance (Marketting) 3,917 3,917
Goodwill amortisation -- 0
Research and development amortisation -- 0
Remuneration increase adjustment -- 0
----------- -----------
212,237 212,237
-----------
Shares to be released from escrow 94,791
-----------
8 Summary
NZ$
Total purchase price currently:
Cash 88,050
Asset value 150,000
Goodwill value 249,819
-----------
487,869
Paid to date
Cash 88,050
Asset value 150,000
Goodwill value
To release shares 212,237
Total consideration paid and
released 450,287
-----------
To be potentially released in future $ 37,582
===========
E-198
[LOGO]
XXXXXXX
INVESTMENTS
EASY PC COMPUTER RENTALS LIMITED
ACQUISITION VALUATION AND SHARE ISSUE CALCULATION
AS AT 30 JUNE 1998
--------------------------------------------------------------------------------
9 Conclusion
--------
Goodwill value 249,819
-------- -------
Shares to issue to escrow 111,576
------- ------
Shares to release from escrow 94,791
------
As escrow release is based on cumulative cash flows until 31 March 2000,
what happens to shares released from escrow if Easy PC generates losses
for next two years.
E-199
Sale and Purchase Agreement
Between:
Communicorp Holdings Ltd; trading as "ComputerLand Northland"
and
Northmark Technologies Limited "Northmark"
And
Xxxxxxx Investments (NZ) Limited
Dated: Friday, 20 November 1998
--------------------------------------------------------------------------------
ComputerLand Northland wish to acquire some of the business assets of Northmark
and its shareholders wish to sell these company assets, subject to necessary
approvals and due diligence review, and due consideration being passed.
This document outlines the understanding which exists between the parties.
The assets acquired will be valued as the net cost of:
1. Stock On Hand at valuation on the date of acquisition and in saleable
condition with a reduction in price for the following items.
Winframe 1.7nfr special @ zero dollars
Model TH1536-4 4Gb HP Dat tape drive @ $1,000.00
DEC Xxxxxx 562 & Carry Case @ $2,000.00
HPL 3952 Laserjet 5N printer @ $1,699.00
(approx value as at 20/11/98 $25,000.00)
2. Trade Debtors (less Trade Creditors) (approx value as at 20/11/98
$41,000.00)
The assets and business of Northmark are to be sold as a going concern,
therefore GST, if any, will be zero rated.
The consideration to be paid by Computerland is total of 1 and 2 above less a
deposit of $500.00 paid on acceptance of this agreement.
90 day terms will be provided for settlement of this transaction.
Timing of the transaction is 24th November 1998. Ownership of any assets will
not transfer to ComputerLand Northland until payment has been received in full
by Xxxxxxx Investments (NZ) Limited.
Any debtor accounts which prove uncollectable after 90 days for date of sale
will be resold to Northmark, however ComputerLand Northland will work actively
in a
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timely manner to ensure that all trading account amounts outstanding are duly
collected.
Each party warrants to the best of their knowledge the information being relied
upon is fair and accurate.
This agreement is contingent upon the approval of the Board of Xxxxxxx
Investments (NZ) Limited by 5:00pm 23 November, 1998 otherwise this clause is
waived.
ComputerLand NorthLand will interview all current Northmark employees with a
view to offering employment to as many of said employees as ComputerLand
Northland feels able to given the prospective volume of business available to
ComputerLand and the skills of the individuals.
Both Parties will keep this information confidential. A press announcement will
occur once the heads of agreement is signed, however there will not be general
disclosure, until the formal contract is signed.
The parties agree with the terms and conditions, by their respective signatures,
/s/ ILLEGIBLE ILLEGIBLE
-------------------------------------------
For and behalf of Communicorp Holdings Ltd.
Director
/s/ ILLEGIBLE
-------------------------------------------
For and behalf of Xxxxxxx Investments (NZ) Limited
Director
Friday, 20 November 1998
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