SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): February 14, 1996
KYSOR INDUSTRIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN
(State or Other Jurisdiction
of Incorporation)
1-8973 38-1909000
(Commission File Number) (IRS Employer
Identification Number)
ONE MADISON AVENUE
CADILLAC, MICHIGAN 49601
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (616) 779-2200
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Kysor Industrial Corporation ("Kysor") entered into negotiations in
November, 1995 to purchase a minority interest in Austral Refrigeration Pty Ltd
("Austral"). On December 16, 1995, Kysor entered into an agreement to purchase
24.255% of the outstanding shares of Austral from Lobike Pty Ltd, Locana Pty
Ltd, Lofiva Pty Ltd, and Logela Pty Ltd., subject to the following events: (1)
drafting of an acceptable executive compensation program; (2) purchase by
Austral of certain land and buildings; and (3) approval of the transaction by
Australia's Foreign Investment Review Board.
On January 26, 1996, Australia's Foreign Investment Review Board granted
its approval to proceed and the closing of the transaction was scheduled for
February 14, 1996. On that date, Kysor, along with MBO Partners of Hong Kong
("MBO") and Hill Young & Associates of Sydney, Australia ("Hill Young"),
exercised rights and collectively purchased 49% of the outstanding shares of
Austral. Kysor purchased 24.255%, MBO purchased 24.255%, and Hill Young
purchased .49%.
Austral is a holding company headquartered in Sydney, Australia which owns
interests in a variety of service and installation companies and manufacturing
companies that produce refrigerated display cases and related products for the
supermarket industry. Austral's major customers are Coles and Woolworths, the
two largest supermarket chains in Australia.
The major manufacturing division of Austral, Kysor/Warren Australia Pty
Ltd, is a licensee of the Kysor/Warren division of Kysor and has been such a
licensee for a period in excess of twenty years.
The aggregate consideration given by Kysor for this acquisition was
$18,744,295. The purchase price and terms of the transaction were negotiated on
an arm's-length basis by the parties and their representatives. The transaction
was financed through Kysor's revolving credit agreements with NBD Bank and Old
Kent Bank at .5% over LIBOR, or 5.6%. The transaction will be accounted for by
Kysor using the equity method of accounting.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(a) FINANCIAL STATEMENTS OF BUSINESS ACQUIRED. As of the date
of the filing of this Current Report on Form 8-K, it is impracticable
for the Registrant to provide financial statements for Austral
Refrigeration Pty Ltd. In accordance with Item 7(a)(4) of Form 8-K,
these financial statements will be filed by amendment to this Form 8-K
as soon as practicable, but no later than 60 days after the date that
this Current Report on Form 8-K must be filed.
(b) PRO FORMA FINANCIAL INFORMATION. As of the date of the
filing of this Current Report on Form 8-K, it is impracticable for
the Registrant to provide pro forma financial statements for Kysor
Industrial Corporation. In accordance with Item 7(a)(4) of Form 8-K,
these financial statements will be filed by amendment to this Form 8-K
as soon as practicable, but no later than 60 days after the date that
this Current Report on Form 8-K must be filed.
(c) EXHIBITS. The following exhibits are furnished with this
Current Report:
EXHIBIT NO. DOCUMENT
2.1 Share Purchase Agreement between Lobike Pty Ltd;
Locana Pty Ltd; Lofiva Pty Ltd; Logela Pty Ltd;
David James McIntosh; John Ralph Rogan; Kenneth
John Moon; Leslie Owen Miller; and Kysor Industrial
Corporation, dated December 16, 1995.
2.2 Shareholders Agreement between Lobike Pty Ltd;
Locana Pty Ltd; Lofiva Pty Ltd; Logela Pty Ltd;
Refrigeration Investment (MBO) Limited; Kysor
Industrial Corporation; Hill Young & Associates
Limited; T & M Lawrence Nominees Pty Ltd; David
James McIntosh; John Ralph Rogan; Kenneth John
Moon; Leslie Owen Miller; Terry John Lawrence; and
Austral Refrigeration Pty Ltd, dated February 14,
1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
KYSOR INDUSTRIAL CORPORATION
Date: February 29, 1996 By /s/ TERRY M. MURPHY
Terry M. Murphy
Vice President-Chief
Financial Officer
EXHIBIT INDEX
EXHIBIT NO. DOCUMENT
2.1 Share Purchase Agreement between Lobike Pty Ltd; Locana
Pty Ltd; Lofiva Pty Ltd; Logela Pty Ltd; David James
McIntosh; John Ralph Rogan; Kenneth John Moon; Leslie
Owen Miller; and Kysor Industrial Corporation, dated
December 16, 1995.
2.2 Shareholders Agreement between Lobike Pty Ltd; Locana
Pty Ltd; Lofiva Pty Ltd; Logela Pty Ltd; Refrigeration
Investment (MBO) Limited; Kysor Industrial Corporation;
Hill Young & Associates Limited; T & M Lawrence
Nominees Pty Ltd; David James McIntosh; John Ralph
Rogan; Kenneth John Moon; Leslie Owen Miller; Terry
John Lawrence; and Austral Refrigeration Pty Ltd, dated
February 14, 1996.
EXHIBIT 2.1
SHARE PURCHASE AGREEMENT
Lobike Pty Ltd
(A.C.N. 001 874 380)
Locana Pty Ltd
(A.C.N. 001 874 317)
Lofiva Pty Ltd
(A.C.N. 001 876 982)
Logela Pty Ltd
(A.C.N. 001 876 820)
David James McIntosh
John Ralph Rogan
Kenneth John Moon
Leslie Owen Miller
and
Kysor Industrial Corporation
THIS SHARE PURCHASE AGREEMENT is made on 16 DECEMBER 1995 between the
following parties:
1. LOBIKE PTY LTD (A.C.N. 001 874 380) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for The Vernon Avenue
Trust ("Lobike");
2. LOCANA PTY LTD (A.C.N. 001 874 317) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for The Leumeah Road
Trust ("Locana");
3. LOFIVA PTY LTD (A.C.N. 001 876 982) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for The Sunset Place
Trust ("Lofiva");
4. LOGELA PTY LTD (A.C.N. 001 876 820) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for The Cairnes Road
Trust ("Logela"),
Lobike, Logela, Lofiva and Locana together jointly and severally
referred to as "the Sellers";
5. DAVID JAMES MCINTOSH of 36 The Grand Parade, Brighton-Le-Sands, New
South Wales ("McIntosh");
6. JOHN RALPH ROGAN of 50 Huntingdale Drive, Denham Court, New South
Wales ("Rogan");
7. KENNETH JOHN MOON of 12 Fairway Drive, Kellyville, New South Wales
("Moon");
8. LESLIE OWEN MILLER of Unit 1303, The Connaught, 187 Liverpool Street,
Sydney, New South Wales ("Miller"),
McIntosh, Rogan, Moon and Miller together jointly and severally
referred to as "the Guarantors"; and
9. KYSOR INDUSTRIAL CORPORATION, a company incorporated under the laws of
Michigan, of One Madison Avenue, Cadillac, Michigan, United States of
America ("the Buyer").
RECITALS:
A. Lobike is the owner of the Lobike Rights.
B. Locana is the owner of the Locana Rights.
C. Lofiva is the owner of the Lofiva Rights.
D. Logela is the owner of the Logela Rights.
E. Lobike agrees to sell and the Buyer agrees to buy the Lobike Rights on
the terms and conditions set out in this agreement.
F. Locana agrees to sell and the Buyer agrees to buy the Locana Rights on
the terms and conditions set out in this agreement.
G. Lofiva agrees to sell and the Buyer agrees to buy the Lofiva Rights on
the terms and conditions set out in this agreement.
H. Logela agrees to sell and the Buyer agrees to buy the Logela Rights on
the terms and conditions set out in this agreement.
I. The Guarantors agree to guarantee the obligations of the Sellers under
this agreement.
THE PARTIES AGREE in consideration of, among other things, the mutual
promises contained in this agreement:
PART 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
"ACCOUNTING STANDARDS" means the accounting standards and practices
determined under clause 1.4;
"ACCOUNTS" means the consolidated audited balance sheet of the Company
Group as at the Accounts Date and the consolidated audited profit and loss
account of the Company Group for the year ending on the Accounts Date
annexed to this agreement as annexure A;
"ACCOUNTS DATE" means 30 June 1995;
"BUSINESS" means the business of the manufacture, sale, installation and
servicing of refrigeration equipment carried on by the Company Group in
Australia;
"BUSINESS DAY" means a day on which banks are open for business in Sydney,
excluding a Saturday or a Sunday or a public holiday;
"CAIRNES ROAD TRUST" means the trust constituted by the Cairnes Road Trust
Deed;
"CAIRNES ROAD TRUST DEED" means the Deed of Trust dated 11 April 1979
between Robcharta Nominees (NSW) Pty Limited and Robert James Laurence;
"CAPPED LIABILITY WARRANTIES" means the Warranties other than Warranty 9.9
and part 23 of the Warranties;
-2-
"CAPPED WARRANTY PERIOD" means the period commencing on the Completion Date
and ending 14 days after the date of the adoption by the directors of the
Company of the audited accounts of the Company for the financial year
ending 30 June 1997;
"COLLATERAL SECURITY" means any present or future Security Interest,
guarantee or other document or agreement reserved, created or entered into
by the Sellers or any other person as security for the payment of any of
the Guaranteed Moneys or for the performance of the obligations of the
Sellers under this agreement;
"COMPANY" means Austral Refrigeration Pty Ltd (A.C.N. 001 702 594);
"COMPANY GROUP" means the Company and any Subsidiary of the Company and any
one or more of them;
"COMPANY GROUP INTELLECTUAL PROPERTY RIGHTS" means any Intellectual
Property Rights the Company Group uses or needs to carry on its business
including but not limited to those listed in schedule 3;
"COMPLETION" means completion of the sale and purchase of the Rights under
parts 3 and 7;
"COMPLETION DATE" means the date on which Completion occurs under clause
7.1;
"CONFIDENTIAL INFORMATION MEMORANDUM" means the undated Confidential
Information Memorandum in respect of the Company Group issued by Hill
Young;
"DISCLOSURE LETTER" means the letter from the Sellers to the Buyer dated on
or before the date of this agreement which was delivered to the Buyer
before the signing of this agreement and which contains disclosures in
respect of the Warranties;
"DOLLARS" "A$" and "$" means the lawful currency of the Commonwealth of
Australia;
"DUTY" means any stamp, transaction or registration duty or similar charge
imposed by any Government Agency and includes, but is not limited to, any
interest, fine, penalty, charge or other amount imposed in respect of the
above but excludes any Tax;
"ENVIRONMENTAL LAW" means any law, whether statute or common law,
concerning environmental matters, and includes but is not limited to law
concerning land use, development, pollution, waste disposal, toxic and
hazardous substances, conservation of natural or cultural resources and
resource allocation including any law relating to exploration for or
development of any natural resource;
-3-
"ENVIRONMENTAL LIABILITY" means any obligation, expense, penalty or fine
under Environmental Law which would or could be imposed upon the Buyer or
any occupier of the Properties as a result of activities carried on during
the ownership or occupation of the property by the Company Group, or by the
Company Group's predecessors in title or by any previous occupier of the
Properties;
"FREEHOLD PROPERTIES" means the freehold properties at which the Business
is carried on listed in part 1 of schedule 8;
"GOVERNMENT AGENCY" means any government or governmental, semi-governmental,
administrative, fiscal, or judicial body, department,
commission, authority, tribunal, agency or entity;
"HILL YOUNG" means Hill Young & Associates Limited (A.C.N. 003 977 106);
"IMMEDIATELY AVAILABLE FUNDS" means cash or bank cheque;
"INDONESIAN JOINT VENTURE" means the Joint Venture constituted by a written
agreement between the Company and PT Porkka Indonesia;
"INTELLECTUAL PROPERTY RIGHTS" includes both in Australia and throughout
the world and for the duration of the rights:
(a) any patents, utility models, copyrights, registered or unregistered
trade marks or service marks, trade names, brand names, indications of
source or appellations of origin, eligible layout rights, plant
variety rights, registered designs and commercial names and
designations;
(b) any invention, discovery, trade secret, know-how, computer software
and confidential, scientific, technical and product information;
(c) any other rights resulting from intellectual activity in the
industrial, scientific, literary and artistic fields whether
industrial, commercial, agricultural or extractive and whether dealing
with manufactured or natural products; and
(d) any letters patent, deed of grant, certificate or document of title
for any thing referred to in paragraphs (a), (b) or (c) and any medium
in which any thing referred to in those paragraphs is stored or
embodied;
"LAWRENCE" means Terry John Lawrence of 42 Edinburgh Road, Lilydale,
Victoria;
"LEUMEAH ROAD TRUST" means the trust constituted by the Leumeah Road Trust
Deed;
-4-
"LEUMEAH ROAD TRUST DEED" means the Deed of Trust dated 25 April 1979
between Robcharta Nominees (NSW) Pty Limited and Brian Harding;
"LICENSING AGREEMENTS" means the licensing and distribution agreements
between any member of the Company Group and:
(a) Kysor/Warren a division of the Buyer;
(b) Ardco Inc.; and
(c) Computer Process Controls Inc.;
"LOBIKE GUARANTEED MONEYS" means all debts and monetary liabilities of
Lobike or McIntosh to the Buyer under or in relation to this agreement;
"LOBIKE PURCHASE PRICE" means the amount of $6,152,930;
"LOBIKE RIGHTS" means the right to subscribe for 3,031 ordinary shares of
$1.00 each in the capital of the Company, which Lobike holds on trust for
the Vernon Avenue Trust;
"LOCANA GUARANTEED MONEYS" means all debts and monetary liabilities of
Locana or Rogan to the Buyer under or in relation to this agreement;
"LOCANA PURCHASE PRICE" means the amount of $6,154,960;
"LOCANA RIGHTS" means the right to subscribe for 3,032 ordinary shares of
$1.00 each in the capital of the Company, which Locana holds on trust for
the Leumeah Road Trust;
"LOFIVA GUARANTEED MONEYS" means all debts and monetary liabilities of
Lofiva or Moon to the Buyer under or in relation to this agreement;
"LOFIVA PURCHASE PRICE" means the amount of $6,154,960;
"LOFIVA RIGHTS" means the right to subscribe for 3,032 ordinary shares of
$1.00 each in the capital of the Company, which Lofiva holds on trust for
the Sunset Place Trust;
"LOGELA GUARANTEED MONEYS" means all debts and monetary liabilities of
Logela or Miller to the Buyer under or in relation to this agreement;
"LOGELA PURCHASE PRICE" means the amount of $6,154,960;
"LOGELA RIGHTS" means the right to subscribe for 3,032 ordinary shares of
$1.00 each in the capital of the Company, which Logela holds on trust for
the Cairnes Road Trust;
-5-
"MBO PARTNERS" means MBO Partners Limited, a company incorporated under the
laws of the British Virgin Islands, as general partner for and on behalf of
The Asian MBO Fund, L.P., an exempted limited partnership under the
Exempted Limited Partnership Law of 1991 of the Cayman Islands;
"MBO SHARE PURCHASE AGREEMENT" means the Share Purchase Agreement dated on
or about the date of this agreement between:
(a) Lobike,
(b) Locana;
(c) Lofiva;
(d) Logela;
(e) McIntosh;
(f) Rogan;
(g) Moon;
(h) Miller; and
(i) MBO,
an unexecuted copy of which is annexed to this agreement as Annexure C;
"POWER" means any right, power, authority, discretion or remedy conferred
by this agreement or any applicable law;
"PROPERTIES" means the Freehold Properties, the properties leased under the
Property Leases and any properties occupied under licence by the Company
Group;
"PROPERTY LEASES" means the leases of the real property at which the
Business is carried on listed in part 2 of schedule 8;
"PURCHASE PRICE" means the amount of $24,617,810, being the aggregate of:
(a) the Lobike Purchase Price;
(b) the Locana Purchase Price;
(c) the Lofiva Purchase Price; and
(d) the Logela Purchase Price;
-6-
"RELATED CORPORATION" means a "related body corporate" as that expression
is defined in the Corporations Law (on the basis that the term "subsidiary"
in that definition has the same meaning as in this agreement) and includes
a body corporate which is at any time after the date of this agreement a
"related body corporate" but ceases to be a "related body corporate"
because of an amendment, consolidation or replacement of the Corporations
Law;
"RESTRUCTURING" means the restructuring of the Company Group described in
Section 7 of Volume 1 of the Confidential Information Memorandum;
"RIGHTS" means:
(a) the Lobike Rights;
(b) the Locana Rights;
(c) the Lofiva Rights; and
(d) the Logela Rights;
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset including, but not
limited to, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset
under a bill of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt or any other monetary
obligation or the performance of any other obligation and includes, but is
not limited to, any agreement to grant or create any of the above;
"SELLERS' SOLICITORS" means Manion McCosker of Level 7, 1 Chifley Square,
Sydney, New South Wales;
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement to be entered
into between:
(a) Lobike,
(b) Locana;
(c) Lofiva;
(d) Logela;
(e) the Buyer;
(f) MBO;
-7-
(g) Hill Young;
(h) Lawrence;
(i) McIntosh;
(j) Rogan;
(k) Moon;
(l) Miller; and
(m) the Company,
an unexecuted copy of which is annexed to this agreement as Annexure B;
"SUBSIDIARY" has the following meanings:
(a) the meaning given to that expression in the Corporations Law;
(b) a corporation is a Subsidiary of another corporation if that other
corporation has appointed or is in a position to appoint a director or
directors who are in a position to cast, or control the casting of,
more than one-half of the maximum number of votes that might be cast
at a meeting of the board of directors of the first-mentioned
corporation;
(c) a corporation is a Subsidiary of another corporation if at any time
after the date of this agreement it is a Subsidiary but ceases to be a
subsidiary as defined in the Corporations Law because of an amendment,
consolidation or replacement of the Corporations Law;
"SUNSET PLACE TRUST" means the trust constituted by the Sunset Place Trust
Deed;
"SUNSET PLACE TRUST DEED" means the Deed of Trust dated 11 April 1979
between Robcharta Nominees (NSW) Pty Limited and Doris May Byrne;
"TAX" means any tax, levy, charge, impost, duty, fee, deduction, compulsory
loan or withholding, which is assessed, levied, imposed or collected by any
Government Agency and includes, but is not limited to any interest, fine,
penalty, charge, fee or any other amount imposed on, or in respect of any
of the above but excludes Duty;
"TAX LAW" means any law relating to either Tax or Duty as the context
requires;
"VERNON AVENUE TRUST" means the trust constituted by the Vernon Avenue
Trust Deed;
-8-
"VERNON AVENUE TRUST DEED" means the Deed of Trust dated 11 April 1979
between Robcharta Nominees Pty (NSW) Limited and Sarah Doris Mulhall; and
"WARRANTIES" means the warranties and representations set out in schedule
1.
1.2 INTERPRETATION
In this agreement, headings and underlinings are for convenience only and
do not affect the interpretation of this agreement and, unless the context
otherwise requires:
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include any gender;
(c) other parts of speech and grammatical forms of a word or phrase
defined in this agreement have a corresponding meaning;
(d) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body
corporate and any Government Agency;
(e) a reference to any thing (including, but not limited to, any right)
includes a part of that thing;
(f) a reference to a part, clause, party, annexure, exhibit or schedule is
a reference to a part and clause of, and a party, annexure, exhibit
and schedule to, this agreement and a reference to this agreement
includes any annexure, exhibit and schedule;
(g) a reference to a statute, regulation, proclamation, ordinance or by-law
includes all statutes, regulations, proclamations, ordinances or
by-laws amending, consolidating or replacing it, and a reference to a
statute includes all regulations, proclamations, ordinances and by-laws
issued under that statute;
(h) a reference to a document includes all amendments or supplements to,
or replacements or novations of, that document;
(i) a reference to a party to a document includes that party's successors
and permitted assigns;
(j) no provision of this agreement will be construed adversely to a party
solely on the ground that the party was responsible for the
preparation of this agreement or that provision;
(k) a covenant or agreement on the part of two or more persons binds them
jointly and severally;
-9-
(l) a reference to an agreement other than this agreement includes an
undertaking, deed, agreement or legally enforceable arrangement or
understanding whether or not in writing;
(m) a reference to an asset includes all property of any nature,
including, but not limited to, a business, and all rights, revenues
and benefits;
(n) a reference to a document includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind;
(o) a reference to liquidation includes official management, appointment
of an administrator, compromise, arrangement, merger, amalgamation,
reconstruction, winding-up, dissolution, assignment for the benefit of
creditors, scheme, composition or arrangement with creditors,
insolvency, bankruptcy, or any similar procedure or, where applicable,
changes in the constitution of any partnership or person, or death;
(p) a reference to a body, other than a party to this agreement
(including, without limitation, an institute, association or
authority), whether statutory or not:
(1) which ceases to exist; or
(2) whose powers or functions are transferred to another body,
is a reference to the body which replaces it or which substantially
succeeds to its powers or functions;
(q) a reference to "the Sellers" is a reference to Lobike, Locana, Lofiva
and Logela jointly and severally; and
(r) a reference in the Warranties that a matter is "to the Knowledge of
the Sellers" means that the matter:
(1) is to the best of the knowledge, information or belief after
making reasonable inquiries of; or
(2) ought to be known by a reasonable person in such a position as,
any or all of:
(3) Lobike;
(4) Locana;
(5) Lofiva;
(6) Logela;
-10-
(7) McIntosh;
(8) Rogan;
(9) Moon;
(10) Miller; or
(11) Neild Alfred McIntosh.
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done is not a Business Day,
that thing must be done on or by the next following Business Day.
1.4 ACCOUNTING STANDARDS
In respect of any accounting practice relevant to this agreement, the
following accounting standards apply:
(a) the accounting standards required under the Corporations Law;
(b) if no accounting standard applies under the Corporations Law in
relation to an accounting practice, the standards acceptable to the
Australian Accounting Research Foundation, including:
(1) the Australian Accounting Concepts;
(2) the Australian Accounting Standards; and
(3) the Approved Accounting Standards; and
(c) if no accounting standard applies under clause 1.4(a) or 1.4(b), the
accounting practice agreed between the parties.
PART 2
CONDITIONS PRECEDENT FOR COMPLETION
2.1 CONDITIONS PRECEDENT
(a) FOREIGN INVESTMENT REVIEW BOARD APPROVAL: Completion will not proceed
unless:
(1) a notice in writing is issued by, or on behalf of, the Treasurer
of the Commonwealth of Australia stating that the Commonwealth
Government does not object to the parties entering into and
completing this agreement either unconditionally or on terms
acceptable to the Buyer; or
-11-
(2) the Treasurer of the Commonwealth of Australia becomes precluded
from making an order in respect of the acquisition of the Rights
under the Foreign Acquisitions and Takeovers Act 1975 (Cth).
(b) SHAREHOLDERS AGREEMENT: Completion will not proceed unless the Buyer
receives on the Completion Date an original of the Shareholders
Agreement executed by each of:
(1) Lobike;
(2) Locana;
(3) Lofiva;
(4) Logela;
(5) MBO;
(6) Hill Young;
(7) Lawrence;
(8) McIntosh;
(9) Rogan;
(10) Moon;
(11) Miller; and
(12) the Company.
(c) MBO SHARE PURCHASE AGREEMENT: Completion will not proceed unless the
Buyer receives on the Completion Date an original of the MBO Share
Purchase Agreement executed by each of:
(1) Lobike;
(2) Locana;
(3) Lofiva;
(4) Logela;
(5) McIntosh;
(6) Rogan;
(7) Moon;
-12-
(8) Miller; and
(9) MBO,
and completion under the MBO Share Purchase Agreement occurs
simultaneously with Completion.
(d) EQUITY INCENTIVE PLAN: Completion will not proceed unless the Buyer,
MBO and the Sellers agree the terms of an equity incentive plan for
senior managers employed by members of the Company Group.
(e) OTHER CONDITIONS PRECEDENT: Completion will not proceed if as at the
Completion Date:
(1) BREACH OF AGREEMENT: the Sellers have breached this agreement in
a material respect;
(2) WARRANTIES TRUE: any of the Warranties is or has become false,
misleading or incorrect in a material respect (except to the
extent disclosed in the Disclosure Letter);
(3) DIVIDENDS AND DISTRIBUTIONS: the Company Group has paid any
dividends or made any other payments or distributions of assets
since the Accounts Date other than a dividend of $800,000 by
Queensland Refrigeration Pty Ltd (A.C.N. 010 031 455) to its
members;
(4) ACQUISITION AND DISPOSAL: the Company Group has acquired or
disposed of any assets since the Accounts Date other than:
(A) in the ordinary course of business;
(B) in connection with the Restructuring; or
(C) disclosed in the Disclosure Letter;
(5) MATERIAL ADVERSE CHANGE: there has been a material adverse change
affecting:
(A) the Company Group taken as a whole or a significant part of
the Company Group; or
(B) the financial, business or trading position or prospects of
the Company Group taken as a whole or a significant part of
the Company Group,
since the Accounts Date.
-13-
(f) ARTICLES OF ASSOCIATION: Completion will not proceed unless the
Sellers, the Buyer and MBO agree a form of the Articles of Association
of the Company consistent with the provisions of the Shareholders
Agreement to be adopted by the Company on the Completion Date.
(g) PROPERTY: Completion will not proceed unless the Sellers, the Buyer
and MBO agree a form of agreement for the acquisition by the Company
from Jodune Pty Ltd (A.C.N. 001 689 309) of the properties situated at
66 Glendenning Road, Glendenning, New South Wales (being title
reference folio identifier 541/850659) and Lot 4 and Lot 5, Power
Street, Glendenning, New South Wales (being title reference folio
identifiers 104/847635 and 105/847635) for a total purchase price of
$8,250,000 and completion of that acquisition occurs on or before
Completion.
2.2 BEST ENDEAVOURS
(a) The Buyer and Sellers must each use their best endeavours to satisfy
the conditions precedent for Completion set out in clause 2.1 and the
Buyer must lodge its application with the Foreign Investment Review
Board to acquire the Rights on or before the Business Day following
the date of this agreement.
(b) The Sellers must use their best endeavours to ensure that the Company
Group does all things necessary to ensure that the conditions
precedent set out in clause 2.1 are satisfied.
2.3 NOTICE
The Buyer and the Sellers must promptly notify the other in writing if any
condition precedent for Completion in clause 2.1 is satisfied or cannot be
satisfied.
2.4 WAIVER
The conditions precedent for Completion in clause 2.1(b), (d) and (e) may
be waived only by the Buyer.
2.5 CUT-OFF DATE
If any condition precedent for Completion set out in clause 2.1 is not the
subject of a notice under clause 2.3 from the Buyer or is not satisfied on
or before 14 February 1996 or such later date as the parties may agree,
either party may, by not less than 2 Business Days written notice to the
other party, terminate this agreement. Upon termination, this agreement
has no further effect and neither the Buyer nor the Sellers are liable to
the other except:
(a) under clause 5.1;
-14-
(b) under part 10;
(c) under part 11; and
(d) in respect of any breach of this agreement occurring before
termination.
PART 3
SALE AND PURCHASE
3.1 SALE OF RIGHTS
Subject to clause 2.1, on the Completion Date:
(a) Lobike must sell and the Buyer must buy the Lobike Rights for the
Lobike Purchase Price free of Security Interests and other third party
rights and Lobike must renounce the Lobike Rights in favour of the
Buyer;
(b) Locana must sell and the Buyer must buy the Locana Rights for the
Locana Purchase Price free of Security Interests and other third party
rights and Locana must renounce the Locana Rights in favour of the
Buyer;
(c) Lofiva must sell and the Buyer must buy the Lofiva Rights for the
Lofiva Purchase Price free of Security Interests and other third party
rights and Lofiva must renounce the Lofiva Rights in favour of the
Buyer; and
(d) Logela must sell and the Buyer must buy the Logela Rights for the
Logela Purchase Price free of Security Interests and other third party
rights and Logela must renounce the Logela Rights in favour of the
Buyer.
PART 4
PURCHASE PRICE
4.1 AMOUNT
The total price payable for the Rights is the Purchase Price.
4.2 PAYMENT
At Completion, the Buyer must pay to:
(a) Lobike the Lobike Purchase Price;
(b) Locana the Locana Purchase Price;
-15-
(c) Lofiva the Lofiva Purchase Price; and
(d) Logela the Logela Purchase Price.
PART 5
PAYMENT OF PURCHASE PRICE
5.1 PAYMENT AT COMPLETION
Subject to the Sellers' performance of their obligations under clauses 7.2
and 7.3, at Completion the Buyer must pay to:
(a) Lobike the Lobike Purchase Price in Immediately Available Funds;
(b) Locana the Locana Purchase Price in Immediately Available Funds;
(c) Lofiva the Lofiva Purchase Price in Immediately Available Funds; and
(d) Logela the Logela Purchase Price in Immediately Available Funds.
PART 6
PERIOD BEFORE COMPLETION
6.1 CARRYING ON OF BUSINESS
Between the date of this agreement and Completion the Sellers must ensure
that:
(a) the business of the Company Group is conducted in the ordinary course
of ordinary business;
(b) the Company Group does not enter into any new commitment for more than
$1,000,000 or for longer than 1 year without the prior written consent
of the Buyer, which consent must not be unreasonably withheld;
(c) the Company Group does not acquire, dispose of, or create a Security
Interest over any of its assets other than acquisitions or disposals
of stock in trade in the ordinary course of ordinary business;
(d) the Company Group does not distribute or return any capital to its
members;
(e) the Company Group does not pay any dividend to its members or pay any
management fee, or similar amount, unless the Buyer first consents in
writing;
(f) the Company Group does not issue or agree to issue any shares, options
or securities which are convertible into shares in the Company Group
other than as referred to in the Shareholders Agreement;
-16-
(g) the Company Group does not do or omit to do anything as a result of
which any of the Warranties, as qualified by the Disclosure Letter,
would not be true if given at any time before Completion; and
(h) the Company Group does not alter its Memorandum or Articles of
Association unless the Buyer first consents in writing, which consent
must not be unreasonably withheld.
6.2 ACCESS
Before the Completion Date, the Sellers must ensure that the Buyer and any
persons authorised by the Buyer, are given full access during normal
business hours on reasonable notice to inspect the assets, Properties,
books of account, records and documents of the Company Group.
PART 7
COMPLETION
7.1 DATE FOR COMPLETION
Subject to clause 2.1, Completion must take place at the office of the
Sellers' Solicitors at 12.00 midday on the day which is 5 Business Days
after satisfaction or waiver of the conditions precedent set out in clause
2.1 or any other time and date as the Buyer and Sellers agree.
7.2 DELIVERY OF DOCUMENTS
At Completion:
(a) Lobike must give to the Buyer the following documents:
(1) the unexecuted entitlement and acceptance form for the Lobike
Rights; and
(2) the renunciation form in respect of the Lobike Rights in favour
of the Buyer, executed by Lobike;
(b) Locana must give to the Buyer the following documents:
(1) the unexecuted entitlement and acceptance form for the Locana
Rights;
(2) the renunciation form in respect of the Locana Rights in favour
of the Buyer, executed by Locana;
(c) Lofiva must give to the Buyer the following documents:
(1) the unexecuted entitlement and acceptance form for the Lofiva
Rights;
-17-
(2) the renunciation form in respect of the Lofiva Rights in favour
of the Buyer, executed by Lofiva;
(d) Logela must give to the Buyer the following documents:
(1) the unexecuted entitlement and acceptance form for the Logela
Rights;
(2) the renunciation form in respect of the Logela Rights in favour
of the Buyer, executed by Logela; and
(e) the Sellers must give to the Buyer the written resignations of all
directors of the Company except Kenneth John Moon, Neild Alfred
McIntosh and Terrence John Lawrence to be effective on the appointment
of the director to be appointed at the Board meeting to be convened
under clause 7.3.
7.3 BOARD MEETING
At Completion the Sellers must ensure that a meeting of the directors of
the Company is convened and conducts the following business:
(a) the acceptance of the application to be made under clause 7.4(c);
(b) the issue of 12,127 shares in the Company to the Buyer pursuant to the
application referred to in clause 7.3(a);
(c) the issue to the Buyer of a share certificate for 12,127 ordinary
shares in the Company; and
(d) the appointment of George R Kempton as a director of the Company.
7.4 BUYER'S OBLIGATIONS AT COMPLETION
Subject to the Sellers' performance of their obligations under clauses 7.2
and 7.3, at Completion the Buyer must:
(a) perform its obligations under clause 5.1;
(b) deliver to the Sellers the written consent to act from George R
Kempton as a director of the Company;
(c) exercise the rights attached to the Rights and apply to the Company
for the issue of 12,127 ordinary shares in the Company pursuant to the
Rights; and
(d) pay the amount of $12,127 to the Company, being the application money
for the shares applied for under clause 7.4(c).
-18-
7.5 CONDITIONS OF COMPLETION
(a) Completion is conditional on both the Buyer and the Sellers complying
with all of their obligations under this part 7.
(b) If either the Sellers or the Buyer fails to fully comply with its
obligations under this part 7 and the parties do not complete this
agreement then:
(1) each party must return to the other all documents delivered to it
under this part 7;
(2) each party must repay to the other all payments received by it
under this part 7;
(3) each party must do everything reasonably required by the other
party to reverse any action taken under this part 7;
without prejudice to any other rights any party may have in respect of
that failure.
PART 8
NOT USED
PART 9
WARRANTIES
9.1 GIVING OF WARRANTIES
Subject only to clear and specific qualifications made in the Disclosure
Letter, the Sellers jointly and severally give the Warranties in favour of
the Buyer as at the date of this agreement and for each day up to and
including Completion.
9.2 BUYER'S INVESTIGATION
Any investigation, whether before or after the date of this agreement, made
by or for the Buyer in respect of the Company Group does not affect either:
(a) the Warranties; or
(b) the Power of the Buyer if a warranty is untrue, incorrect or
misleading.
9.3 INDEPENDENT WARRANTIES
Each of the Warranties is to be construed independently of the others and
is not limited by reference to any other Warranty.
-19-
9.4 INDEMNITY
Subject to clause 9.6, each of the Sellers severally indemnifies the Buyer
against any claim, action, damage, loss, liability, cost, charge, expense
or outgoing which the Buyer pays, suffers, incurs or is liable for in
respect of:
(a) any matter or thing in respect of the Company Group being other than
as warranted in this agreement; and
(b) any breach by the Sellers of this agreement.
9.5 RELIANCE
The Buyer has entered into this agreement in reliance only on the
Warranties and on no other statement or representation made to the Buyer or
its agents and representatives.
9.6 LIMITATION ON CLAIMS FOR BREACH OF THE CAPPED LIABILITY WARRANTIES
Subject to clause 9.8, the Buyer's right to claim for breach of the Capped
Liability Warranties and under the indemnity in clause 9.4(a) in respect of
the Capped Liability Warranties is limited as follows:
(a) the Buyer must give written notice to the Sellers of the general
nature of the claim in question during the Capped Warranty Period;
(b) the aggregate amount claimed against the Sellers in respect of all
breaches must exceed $500,000, in which case the Buyer may recover all
amounts claimed and not just the excess over $500,000; and
(c) the maximum aggregate amount which the Buyer may recover from any of
the Sellers in respect of all claims (exclusive of interest and the
costs and expenses of making claims) is the amount of the Purchase
Price paid to that specific Seller.
9.7 BUYER'S WARRANTIES
The Buyer gives the following warranties in favour of the Sellers as at the
date of this agreement and for each day up to and including Completion:
(a) it has power and authority to enter into this agreement and perform
its obligations under this agreement;
(b) it has taken all necessary action to authorise the execution, delivery
and performance of this agreement in accordance with its terms.
(c) the execution, delivery and performance by it of this agreement
complies with:
-20-
(1) each law, regulation, authorisation, ruling, judgement, order or
decree of any Government Agency; and
(2) its memorandum and articles of association or other constituent
documents.
9.8 NEGATIVE COVENANTS
(a) During the Capped Warranty Period, Lobike must not:
(1) deal with, sell or otherwise part with possession of;
(2) create, permit, suffer to exist, or agree to, any Security
Interest or other third party right, other than a Security
Interest or right in favour of the Buyer over; or
(3) attempt to do anything listed in clauses 9.8(a)(1) and (2) in
respect of,
any of the 5,750 ordinary shares in the Company of which Lobike is the
registered holder after Completion without the prior written consent
of the Buyer.
(b) During the Capped Warranty Period, Locana must not:
(1) deal with, sell or otherwise part with possession of,
(2) create, permit, suffer to exist, or agree to, any Security
Interest or other third party right, other than a Security
Interest or right in favour of the Buyer over; or
(3) attempt to do anything listed in clauses 9.8(b)(1) and (2) in
respect of,
any of the 5,750 ordinary shares in the Company of which Locana is the
registered holder after Completion without the prior written consent
of the Buyer.
(c) During the Capped Warranty Period, Lofiva must not:
(1) deal with, sell or otherwise part with possession of;
(2) create, permit, suffer to exist, or agree to, any Security
Interest or other third party right, other than a Security
Interest or right in favour of the Buyer over; or
(3) attempt to do anything listed in clauses 9.8(c)(1) and (2) in
respect of,
-21-
any of the 5,750 ordinary shares in the Company of which Lofiva is the
registered holder after Completion without the prior written consent
of the Buyer.
(d) During the Capped Warranty Period, Logela must not:
(1) deal with, sell or otherwise part with possession of;
(2) create, permit, suffer to exist, or agree to, any Security
Interest or other third party right, other than a Security
Interest or right in favour of the Buyer over; or
(3) attempt to do anything listed in clauses 9.8(d)(1) and (2) in
respect of,
any of the 5,750 ordinary shares in the Company of which Logela is the
registered holder after Completion without the prior written consent
of the Buyer.
PART 10
TERMINATION AND DAMAGES
10.1 RIGHT OF BUYER TO TERMINATE
(a) If at any time up to Completion:
(1) the Sellers breach a term of this agreement in a material
respect;
(2) any Warranty is or becomes false, misleading or incorrect in a
material respect when made or regarded as made under this
agreement (except to the extent disclosed in the Disclosure
Letter); or
(3) a material adverse change occurs in:
(A) the Business;
(B) the assets of the Company Group taken as a whole or a
significant part of the Company Group; or
(C) the financial or trading position or prospects of the
Company Group taken as a whole,
since the Accounts Date which was not disclosed in the Disclosure
Letter,
then the Buyer may by giving Written notice to the Sellers before
Completion elect to terminate its obligation to buy the Rights and to
perform its other obligations under this agreement.
-22-
(b) The Buyer may exercise its right of termination under clause 10.1(a)
without affecting any of its other rights and remedies.
PART 11
CONFIDENTIALITY
11.1 LEGAL REQUIREMENTS
A party may disclose anything in respect of this agreement as required:
(a) by applicable law or any agreement binding on the party; or
(b) by any recognised stock exchange on which its shares or the shares of
any Related Corporation are listed,
but to the extent possible, it must consult with the other parties before
making the disclosure and use reasonable endeavours to agree on the form
and content of the disclosure.
11.2 DISCLOSURE TO OFFICERS AND PROFESSIONAL ADVISORS
A party may disclose anything in respect of this agreement or the terms of
the sale of the Rights to the officers and professional advisors of that
party and its Related Corporations to the extent reasonably required in the
conduct of that party's business but it must use its best endeavours to
ensure all matters disclosed are kept confidential.
11.3 FURTHER PUBLICITY
Subject to clauses 11.1 and 11.2 no party may disclose the provisions of
this agreement, the Purchase Price or other terms on which the Rights are
sold unless the other party first consented in writing.
PART 12
DUTIES, COSTS AND EXPENSES
12.1 DUTIES
(a) The Buyer must pay any Duty in respect of the execution, delivery and
performance of:
(1) this agreement; and
(2) any agreement or document entered into or signed under this
agreement.
(b) The Buyer must pay any fine, penalty or other cost in respect of a
failure to pay any Duty except to the extent that the fine, penalty or
other cost is caused by an act or default on the part of the Sellers.
-23-
(c) The Buyer indemnifies the Sellers against any amount payable under
clause 12.l (a) or clause 12.1 (b) or both.
12.2 COSTS AND EXPENSES
Subject to clause 12.1, each party must pay its own costs and expenses in
respect of the negotiation, preparation, execution, delivery and
registration of this agreement or other agreement or document described in
clause 12.1(a).
12.3 COSTS OF PERFORMANCE
Any action to be taken by the Buyer or the Sellers in performing its
obligations under this agreement must be taken at its own cost and expense
unless otherwise provided in this agreement.
PART 13
LOBIKE GUARANTEE AND INDEMNITY
13.1 GUARANTEE
McIntosh unconditionally and irrevocably guarantees to the Buyer:
(a) the payment of the Lobike Guaranteed Moneys; and
(b) the performance of Lobike's obligations under this agreement.
13.2 PAYMENT
If the Lobike Guaranteed Moneys are not paid when due, McIntosh must
immediately on demand from the Buyer pay to the Buyer the Lobike Guaranteed
Moneys in the same manner and currency as the Lobike Guaranteed Moneys are
required to be paid.
13.3 PERFORMANCE
If Lobike fails to perform its obligations under this agreement when they
are due, McIntosh must immediately on demand from the Buyer cause Lobike to
perform its obligations under this agreement.
13.4 INDEMNITY
(a) If any of the Lobike Guaranteed Moneys (or amounts which would have
been Lobike Guaranteed Moneys had they not been irrecoverable) are:
(1) irrecoverable from Lobike; and
(2) not recoverable by the Buyer from McIntosh on the basis of a
guarantee,
-24-
McIntosh as a separate and principal obligation:
(3) indemnifies the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered,
paid or incurred by the Buyer in relation to the non-payment of
those amounts; and
(4) must pay to the Buyer an amount equal to those amounts.
(b) McIntosh indemnifies the Buyer against any claim, action, damage,
loss, liability, cost, charge, expense, outgoing or payment suffered,
paid or incurred by the Buyer in relation
to:
(1) the failure of Lobike to perform its obligations under this
agreement; or
(2) the failure of McIntosh to cause Lobike to perform its
obligations under this agreement.
13.5 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 13 applies:
(1) to the present and future amount of the Lobike Guaranteed Moneys
and the present and future obligations of Lobike under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the consent of McIntosh.
(b) The obligations of McIntosh under this part 13 extend to any increase
in the Lobike Guaranteed Moneys and any change in the obligations of
Lobike as a result of any amendment, supplement, renewal or
replacement of any agreement to which Lobike, McIntosh and the Buyer
are a party.
(c) This part 13 is not affected nor are the obligations of McIntosh under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
13.6 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting the Lobike Guaranteed Moneys or any obligation of Lobike
under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
-25-
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of McIntosh under this part 13 and any Power is the same
as if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 13.6(a)(3),
had not been made and McIntosh must immediately take all action and
sign all documents necessary or required by the Buyer to restore to
the Buyer this part 13 and any Security Interest held by the Buyer
immediately before the payment, conveyance, transfer or transaction.
13.7 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 13 is:
(1) a principal obligation and is not to be treated as ancillary or
collateral to any other right or obligation; and
(2) independent of and not in substitution for or affected by any
other Collateral Security which the Buyer may hold in respect of
the Lobike Guaranteed Moneys or the obligations of Lobike under
this agreement or any other person.
(b) This part 13 is enforceable against McIntosh:
(1) without first having recourse to any Collateral Security; and
(2) whether or not the Buyer has:
(A) made demand upon Lobike; or
(B) given notice to Lobike or any other person in respect of any
thing; or
(C) taken any other steps against Lobike or any other person.
13.8 NO COMPETITION
(a) Subject to clause 13.8(b), until the Lobike Guaranteed Moneys have
been fully paid, until the obligations of Lobike under this agreement
have been fully performed and until this part 13 has been finally
discharged, McIntosh must not, either directly or indirectly prove in,
claim or receive the benefit of any distribution, dividend or payment
arising out of or relating to the liquidation of Lobike.
-26-
(b) If required by the Buyer, McIntosh must prove in any liquidation of
Lobike for all amounts owed to McIntosh.
(c) All amounts recovered by McIntosh from any liquidation or under any
Security Interest from Lobike must be received and held in trust by
McIntosh for the Buyer to the extent of the unsatisfied liability of
McIntosh under this part 13.
13.9 CONTINUING GUARANTEE AND INDEMNITY
This part 13 is a continuing obligation of McIntosh, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) all the Lobike Guaranteed Moneys have been paid in full;
(d) the obligations of Lobike under this agreement have been performed;
and
(e) this part 13 has been finally discharged by the Buyer.
PART 14
LOCANA GUARANTEE AND INDEMNITY
14.1 GUARANTEE
Rogan unconditionally and irrevocably guarantees to the Buyer:
(a) the payment of the Locana Guaranteed Moneys; and
(b) the performance of Locana's obligations under this agreement.
14.2 PAYMENT
If the Locana Guaranteed Moneys are not paid when due, Rogan must
immediately on demand from the Buyer pay to the Buyer the Locana Guaranteed
Moneys in the same manner and currency as the Locana Guaranteed Moneys are
required to be paid.
14.3 PERFORMANCE
If Locana fails to perform its obligations under this agreement when they
are due, Rogan must immediately on demand from the Buyer cause Locana to
perform its obligations under this agreement.
-27-
14.4 INDEMNITY
(a) If any of the Locana Guaranteed Moneys (or amounts which would have
been Locana Guaranteed Moneys had they not been irrecoverable) are:
(1) irrecoverable from Locana; and
(2) not recoverable by the Buyer from Rogan on the basis of a
guarantee,
Rogan as a separate and principal obligation:
(3) indemnifies the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered,
paid or incurred by the Buyer in relation to the non-payment of
those amounts; and
(4) must pay to the Buyer an amount equal to those amounts.
(b) Rogan indemnifies the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by the Buyer in relation
to:
(1) the failure of Locana to perform its obligations under this
agreement; or
(2) the failure of Rogan to cause Locana to perform its obligations
under this agreement.
14.5 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 14 applies:
(1) to the present and future amount of the Locana Guaranteed Moneys
and the present and future obligations of Locana under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the consent of Rogan.
(b) The obligations of Rogan under this part 14 extend to any increase in
the Locana Guaranteed Moneys and any change in the obligations of
Locana as a result of any amendment, supplement, renewal or
replacement of any agreement to which Locana, Rogan and the Buyer are
a party.
(c) This part 14 is not affected nor are the obligations of Rogan under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
-28-
14.6 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting the Locana Guaranteed Moneys or any obligation of Locana
under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Rogan under this part 14 and any Power is the same as
if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 14.6(a)(3),
had not been made and Rogan must immediately take all action and sign
all documents necessary or required by the Buyer to restore to the
Buyer this part 14 and any Security Interest held by the Buyer
immediately before the payment, conveyance, transfer or transaction.
14.7 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 14 is:
(1) a principal obligation and is not to be treated as ancillary or
collateral to any other right or obligation; and
(2) independent of and not in substitution for or affected by any
other Collateral Security which the Buyer may hold in respect of
the Locana Guaranteed Moneys or the obligations of Locana under
this agreement or any other person.
(b) This part 14 is enforceable against Rogan:
(1) without first having recourse to any Collateral Security; and
(2) whether or not the Buyer has:
(A) made demand upon Locana; or
(B) given notice to Locana or any other person in respect of any
thing; or
(C) taken any other steps against Locana or any other person.
-29-
14.8 NO COMPETITION
(a) Subject to clause 14.8(b), until the Locana Guaranteed Moneys have
been fully paid, until the obligations of Locana under this agreement
have been fully performed and until this part 14 has been finally
discharged, Rogan must not, either directly or indirectly prove in,
claim or receive the benefit of any distribution, dividend or payment
arising out of or relating to the liquidation of Locana.
(b) If required by the Buyer, Rogan must prove in any liquidation of
Locana for all amounts owed to Rogan.
(c) All amounts recovered by Rogan from any liquidation or under any
Security Interest from Locana must be received and held in trust by
Rogan for the Buyer to the extent of the unsatisfied liability of
Rogan under this part 14.
14.9 CONTINUING GUARANTEE AND INDEMNITY
This part 14 is a continuing obligation of Rogan, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) all the Locana Guaranteed Moneys have been paid in full;
(d) the obligations of Locana under this agreement have been performed;
and
(e) this part 14 has been finally discharged by the Buyer.
PART 15
LOFIVA GUARANTEE AND INDEMNITY
15.1 GUARANTEE
Moon unconditionally and irrevocably guarantees to the Buyer:
(a) the payment of the Lofiva Guaranteed Moneys; and
(b) the performance of Lofiva's obligations under this agreement.
-30-
15.2 PAYMENT
If the Lofiva Guaranteed Moneys are not paid when due, Moon must
immediately on demand from the Buyer pay to the Buyer the Lofiva Guaranteed
Moneys in the same manner and currency as the Lofiva Guaranteed Moneys are
required to be paid.
15.3 PERFORMANCE
If Lofiva fails to perform its obligations under this agreement when they
are due, Moon must immediately on demand from the Buyer cause Lofiva to
perform its obligations under this agreement.
15.4 INDEMNITY
(a) If any of the Lofiva Guaranteed Moneys (or amounts which would have
been Lofiva Guaranteed Moneys had they not been irrecoverable) are:
(1) irrecoverable from Lofiva; and
(2) not recoverable by the Buyer from Moon on the basis of a
guarantee,
Moon as a separate and principal obligation:
(3) indemnifies the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered,
paid or incurred by the Buyer in relation to the non-payment of
those amounts; and
(4) must pay to the Buyer an amount equal to those amounts.
(b) Moon indemnifies the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by the Buyer in relation
to:
(1) the failure of Lofiva to perform its obligations under this
agreement; or
(2) the failure of Moon to cause Lofiva to perform its obligations
under this agreement.
15.5 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 15 applies:
(1) to the present and future amount of the Lofiva Guaranteed Moneys
and the present and future obligations of Lofiva under this
agreement; and
-31-
(2) to this agreement, as amended, supplemented, renewed or replaced
with the consent of Moon.
(b) The obligations of Moon under this part 15 extend to any increase in
the Lofiva Guaranteed Moneys and any change in the obligations of
Lofiva as a result of any amendment, supplement, renewal or
replacement of any agreement to which Lofiva, Moon and the Buyer are a
party.
(c) This part 15 is not affected nor are the obligations of Moon under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
15.6 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting the Lofiva Guaranteed Moneys or any obligation of Lofiva
under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Moon under this part 15 and any Power is the same as
if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 15.6(a)(3),
had not been made and Moon must immediately take all action and sign
all documents necessary or required by the Buyer to restore to the
Buyer this part 15 and any Security Interest held by the Buyer
immediately before the payment, conveyance, transfer or transaction.
15.7 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 15 is:
(1) a principal obligation and is not to be treated as ancillary or
collateral to any other right or obligation; and
(2) independent of and not in substitution for or affected by any
other Collateral Security which the Buyer may hold in respect of
the Lofiva Guaranteed Moneys or the obligations of Lofiva under
this agreement or any other person.
-32-
(b) This part 15 is enforceable against Moon:
(1) without first having recourse to any Collateral Security; and
(2) whether or not the Buyer has:
(A) made demand upon Lofiva; or
(B) given notice to Lofiva or any other person in respect of any
thing; or
(C) taken any other steps against Lofiva or any other person.
15.8 NO COMPETITION
(a) Subject to clause 15.8(b), until the Lofiva Guaranteed Moneys have
been fully paid, until the obligations of Lofiva under this agreement
have been fully performed and until this part 15 has been finally
discharged, Moon must not, either directly or indirectly prove in,
claim or receive the benefit of any distribution, dividend or payment
arising out of or relating to the liquidation of Lofiva.
(b) If required by the Buyer, Moon must prove in any liquidation of Lofiva
for all amounts owed to Moon.
(c) All amounts recovered by Moon from any liquidation or under any
Security Interest from Lofiva must be received and held in trust by
Moon for the Buyer to the extent of the unsatisfied liability of Moon
under this part 15.
15.9 CONTINUING GUARANTEE AND INDEMNITY
This part 15 is a continuing obligation of Moon, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) all the Lofiva Guaranteed Moneys have been paid in full;
(d) the obligations of Lofiva under this agreement have been performed;
and
(e) this part 15 has been finally discharged by the Buyer.
-33-
PART 16
LOGELA GUARANTEE AND INDEMNITY
16.1 GUARANTEE
Miller unconditionally and irrevocably guarantees to the Buyer:
(a) the payment of the Logela Guaranteed Moneys; and
(b) the performance of Logela's obligations under this agreement.
16.2 PAYMENT
If the Logela Guaranteed Moneys are not paid when due, Miller must
immediately on demand from the Buyer pay to the Buyer the Logela Guaranteed
Moneys in the same manner and currency as the Logela Guaranteed Moneys are
required to be paid.
16.3 PERFORMANCE
If Logela fails to perform its obligations under this agreement when they
are due, Miller must immediately on demand from the Buyer cause Logela to
perform its obligations under this agreement.
16.4 INDEMNITY
(a) If any of the Logela Guaranteed Moneys (or amounts which would have
been Logela Guaranteed Moneys had they not been irrecoverable) are:
(1) irrecoverable from Logela; and
(2) not recoverable by the Buyer from Miller on the basis of a
guarantee,
Miller as a separate and principal obligation:
(3) indemnities the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered,
paid or incurred by the Buyer in relation to the non-payment of
those amounts; and
(4) must pay to the Buyer an amount equal to those amounts.
(b) Miller indeninifies the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by the Buyer in relation
to:
(1) the failure of Logela to perform its obligations under this
agreement; or
-34-
(2) the failure of Miller to cause Logela to perform its obligations
under this agreement.
16.5 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 16 applies:
(1) to the present and future amount of the Logela Guaranteed Moneys
and the present and future obligations of Logela under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the consent of Miller.
(b) The obligations of Miller under this part 16 extend to any increase in
the Logela Guaranteed Moneys and any change in the obligations of
Logela as a result of any amendment, supplement, renewal or
replacement of any agreement to which Logela, Miller and the Buyer are
a party.
(c) This part 16 is not affected nor are the obligations of Miller under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
16.6 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting the Logela Guaranteed Moneys or any obligation of Logela
under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Miller under this part 16 and any Power is the same
as if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 16.6(a)(3),
had not been made and Miller must immediately take all action and sign
all documents necessary or required by the Buyer to restore to the
Buyer this part 16 and any Security Interest held by the Buyer
immediately before the payment, conveyance, transfer or transaction.
-35-
16.7 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 16 is:
(1) a principal obligation and is not to be treated as ancillary or
collateral to any other right or obligation; and
(2) independent of and not in substitution for or affected by any
other Collateral Security which the Buyer may hold in respect of
the Logela Guaranteed Moneys or the obligations of Logela under
this agreement or any other person.
(b) This part 16 is enforceable against Miller:
(1) without first having recourse to any Collateral Security; and
(2) whether or not the Buyer has:
(A) made demand upon Logela; or
(B) given notice to Logela or any other person in respect of any
thing; or
(C) taken any other steps against Logela or any other person.
16.8 NO COMPETITION
(a) Subject to clause 16.8(b), until the Logela Guaranteed Moneys have
been fully paid, until the obligations of Logela under this agreement
have been fully performed and until this part 16 has been finally
discharged, Miller must not, either directly or indirectly prove in,
claim or receive the benefit of any distribution, dividend or payment
arising out of or relating to the liquidation of Logela.
(b) If required by the Buyer, Miller must prove in any liquidation of
Logela for all amounts owed to Miller.
(c) All amounts recovered by Miller from any liquidation or under any
Security Interest from Logela must be received and held in trust by
Miller for the Buyer to the extent of the unsatisfied liability of
Miller under this part 16.
16.9 CONTINUING GUARANTEE AND INDEMNITY
This part 16 is a continuing obligation of Miller, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
-36-
and remains in full force and effect until:
(c) all the Logela Guaranteed Moneys have been paid in full;
(d) the obligations of Logela under this agreement have been performed;
and
(e) this part 16 has been finally discharged by the Buyer.
PART 17
GENERAL
17.1 NOTICES
(a) Any notice or other communication including, but not limited to, any
request, demand, consent or approval, to or by a party to this
agreement:
(1) must be in legible writing and in English addressed as shown
below:
(A) if to Lobike:
Address: 36 The Grand Parade
Brighton-Le-Sands NSW 2216
Attention: Mr David McIntosh;
(B) if to Locana:
Address: 50 Huntingdale Drive
Denham Court NSW 2565
Attention: Mr John Rogan;
(C) if to Lofiva:
Address: P.O. Box 66
Kellyville NSW 2153
Attention: Mr Kenneth Moon;
(D) if to Logela:
Address: Unit 1303
The Connaught
187 Liverpool Street
Sydney NSW 2000
Attention: Mr Leslie Miller;
-37-
(E) if to McIntosh:
Address: 36 The Grand Parade
Brighton-Le-Sands NSW 2216;
(F) if to Rogan:
Address: 50 Huntingdale Drive
Denham Court NSW 2565;
(G) if to Moon:
Address: P.O. Box 66
Kellyville NSW 2153;
(H) if to Miller:
Address: Unit 1303
The Connaught
187 Liverpool Street
Sydney NSW 2000; and
(I) if to the Buyer:
Address: One Madison Avenue
Cadillac, Michigan, USA
Attention: Mr Terry Murphy/Mr David Crooks
Facsimile: 0011 1 616 775 3950,
or as specified to the sender by any party by notice;
(2) where the sender is a company, must be signed by an officer or
under the common seal of the sender;
(3) is regarded as being given by the sender and received by the
addressee:
(A) if by delivery in person, when delivered to the addressee;
(B) if by post, 5 Business Days from and including the date of
postage; or
(C) if by facsimile transmission, whether or not legibly
received, when received by the addressee,
but if the delivery or receipt is on a day which is not a
Business Day or is after 4.00 pm (addressee's time) it is
regarded as received at 9.00 am on the following Business Day;
and
-38-
(4) can be relied upon by the addressee and the addressee is not
liable to any other person for any consequences of that reliance
if the addressee believes it to be genuine, correct and
authorised by the sender.
(b) A facsimile transmission is regarded as legible unless the addressee
telephones the sender within 2 hours after the transmission is
received or regarded as received under clause 17.1(a)(3) and informs
the sender that it is not legible.
(c) In this clause 17.1, reference to an addressee includes a reference to
an addressee's officers, agents or employees.
(d) Notwithstanding any other paragraph of this clause 17.1, a notice will
be deemed to be given by or to the Sellers if it is given by or to, as
the case may be, Moon at the address for service for Moon specified in
clause 17.1(a)(1)(G).
17.2 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of New South Wales.
(b) Each party irrevocably submits to the exclusive jurisdiction of the
courts of New South Wales.
(c) Each party irrevocably waives any objection to the venue of any legal
process in New South Wales on the basis that the process has been
brought in an inconvenient forum.
17.3 PROHIBITION OR ENFORCEABILITY
(a) Any provision of, or the application of any provision of, this
agreement which is prohibited in any jurisdiction is, in that
jurisdiction, ineffective only to the extent of that prohibition.
(b) Any provision of, or the application of any provision of this
agreement, which is void, illegal or unenforceable in any jurisdiction
does not affect the validity, legality or enforceability of that
provision in any other jurisdiction or of the remaining provisions of
this agreement in that or any other jurisdiction.
(c) The application of this clause 17.3 is not limited by any other
provision of this agreement in relation to severability, prohibition
or enforceability.
17.4 WAIVERS
(a) A waiver, forbearance, abandonment, election or estoppel of, or
affecting:
-39-
(1) a term of this agreement (including this clause 17.4);
(2) a right, power, authority, discretion or remedy under this
agreement;
(3) a right, power, authority, discretion or remedy created or
arising on a breach of or default under this agreement; or
(4) the exercise of a right, power, authority, discretion or remedy
referred to in either paragraph (2) or (3),
must be in writing, or, in the case of estoppel, must be based on, a
written statement signed by the party against whom the waiver,
abandonment, election, forbearance or estoppel is claimed.
(b) A failure or delay in the exercise, or a partial exercise, of a right,
power, authority, discretion or remedy referred to in clause
17.4(a)(2) or (3) is not regarded as either a waiver, forbearance,
abandonment or election or the basis of an estoppel, of or affecting
any thing referred to in clause 17.4(a)(1), (2), (3) or (4).
17.5 VARIATION
A variation of any term of this agreement must be in writing and signed by
the parties.
17.6 CUMULATIVE RIGHTS
The powers of a party under this agreement do not exclude any other power.
17.7 NON-MERGER AND SURVIVAL OF WARRANTIES
(a) Neither the Warranties nor any other provision of this agreement which
necessarily survives Completion merges on Completion.
(b) The Warranties survive Completion of this agreement.
17.8 CONTINUING INDEMNITIES AND SURVIVAL OF INDEMNITIES
(a) Each indemnity of the Sellers contained in this agreement is a
continuing obligation of the Sellers despite:
(1) any settlement of account; or
(2) the occurrence of any other thing,
and remains in full force and effect until all money owing,
contingently or otherwise, under any indemnity has been paid in full.
(b) Each indemnity of the Sellers contained in this agreement:
-40-
(1) is an additional, separate and independent obligation of the
Sellers and no one indemnity limits the generality of any other
indemnity; and
(2) survives the termination of this agreement.
17.9 FURTHER ASSURANCES
Each party must do all things necessary to give full effect to this
agreement and the transactions contemplated by this agreement.
17.10 SPECIFIC PERFORMANCE
The Sellers acknowledge that monetary damages alone would not be adequate
compensation to the Buyer for the Sellers' breach of their obligations
under this agreement and that accordingly specific performance of those
obligations is an appropriate remedy.
17.11 ENTIRE AGREEMENT
(a) This agreement embodies the entire agreement between the parties with
respect to the subject matter of this agreement and supersedes any
prior negotiation, arrangement, understanding or agreement with
respect to the subject matter or any term of this agreement.
(b) Any statement, representation, term, warranty, condition, promise or
undertaking made, given or agreed to in any prior negotiation,
arrangement, understanding or agreement, has no effect except to the
extent expressly set out or incorporated by reference in this
agreement.
17.12 THIRD PARTY RIGHTS
No person (including, but not limited to, an Employee) other than the Buyer
and the Sellers has or is intended to have any right, power or remedy or
derives or is intended to derive any benefit under this agreement.
17.13 COUNTERPARTS
(a) This agreement may be executed in any number of counterparts.
(b) All counterparts, taken together, constitute one instrument.
(c) A party may execute this agreement by signing any counterpart.
-41-
SCHEDULE 1
WARRANTIES
(Clause 1.1)
PART 1 TITLE AND AUTHORITY
1.1 LOBIKE AND THE VERNON AVENUE TRUST
(a) Lobike is the sole trustee of the Vernon Avenue Trust and enters into
this agreement as trustee of the Vernon Avenue Trust pursuant to its
powers under the Vernon Avenue Trust Deed.
(b) Lobike has power and authority including, without limitation, under
the Vernon Avenue Trust Deed to enter into this agreement and perform
its obligations under this agreement including, without limitation,
selling and transferring the Lobike Rights.
(c) Lobike has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its
terms.
(d) The execution, delivery and performance by Lobike of this agreement
complies with:
(1) each law, regulation, authorisation, ruling, judgement, order or
decree of any Government Agency;
(2) the memorandum and articles of association or other constituent
documents of Lobike; and
(3) the Vernon Avenue Trust Deed.
(e) This agreement is entered into as part of the due and proper
administration of the Vernon Avenue Trust and is for the benefit of
the beneficiaries of the Vernon Avenue Trust.
(f) There has been no resolution or direction to terminate the Vernon
Avenue Trust.
(g) There has been no resolution or direction to remove Lobike as trustee
of the Vernon Avenue Trust.
(h) Lobike holds the Lobike Rights on trust for the Vernon Avenue Trust
and the Lobike Rights are free of all Security Interests and other
third party interests or rights.
(i) Lobike is able to sell and transfer the Lobike Rights without the
consent of any other person and free of any pre-emptive rights or
rights of first refusal.
-42-
1.2 LOCANA AND THE LEUMEAH ROAD TRUST
(a) Locana is the sole trustee of the Leumeah Road Trust and enters into
this agreement as trustee of the Leumeah Road Trust pursuant to its
powers under the Leumeah Road Trust Deed.
(b) Locana has power and authority including, without limitation, under
the Leumeah Road Trust Deed to enter into this agreement and perform
its obligations under this agreement including, without limitation,
selling and transferring the Locana Rights.
(c) Locana has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its
terms.
(d) The execution, delivery and performance by Locana of this agreement
complies with:
(1) each law, regulation, authorisation, ruling, judgement, order or
decree of any Government Agency;
(2) the memorandum and articles of association or other constituent
documents of Locana; and
(3) the Leumeah Road Trust Deed.
(e) This agreement is entered into as part of the due and proper
administration of the Leumeah Road Trust and is for the benefit of the
beneficiaries of the Leumeah Road Trust.
(f) There has been no resolution or direction to terminate the Leumeah
Road Trust.
(g) There has been no resolution or direction to remove Locana as trustee
of the Leumeah Road Trust.
(h) Locana holds the Locana Rights on trust for the Leumeah Road Trust and
the Locana Rights are free of all Security Interests and other third
party interests or rights.
(i) Locana is able to sell and transfer the Locana Rights without the
consent of any other person and free of any pre-emptive rights or
rights of first refusal.
1.3 LOFIVA AND THE SUNSET PLACE TRUST
(a) Lofiva is the sole trustee of the Sunset Place Trust and enters into
this agreement as trustee of the Sunset Place Trust pursuant to its
powers under the Sunset Place Trust Deed.
-43-
(b) Lofiva has power and authority including, without limitation, under
the Sunset Place Trust Deed to enter into this agreement and perform
its obligations under this agreement including, without limitation,
selling and transferring the Lofiva Rights.
(c) Lofiva has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its
terms.
(d) The execution, delivery and performance by Lofiva of this agreement
complies with:
(1) each law, regulation, authorisation, ruling, judgement, order or
decree of any Government Agency;
(2) the memorandum and articles of association or other constituent
documents of Lofiva; and
(3) the Sunset Place Trust Deed.
(e) This agreement is entered into as part of the due and proper
administration of the Sunset Place Trust and is for the benefit of the
beneficiaries of the Sunset Place Trust.
(f) There has been no resolution or direction to terminate the Sunset
Place Trust.
(g) There has been no resolution or direction to remove Lofiva as trustee
of the Sunset Place Trust.
(h) Lofiva holds the Lofiva Rights on trust for the Sunset Place Trust and
the Lofiva Rights are free of all Security Interests and other third
party interests or rights.
(i) Lofiva is able to sell and transfer the Lofiva Rights without the
consent of any other person and free of any pre-emptive rights or
rights of first refusal.
1.4 LOGELA AND THE CAIRNES ROAD TRUST
(a) Logela is the sole trustee of the Cairnes Road Trust and enters into
this agreement as trustee of the Cairnes Road Trust pursuant to its
powers under the Cairnes Road Trust Deed.
(b) Logela has power and authority including, without limitation, under
the Cairnes Road Trust Deed to enter into this agreement and perform
its obligations under this agreement including, without limitation,
selling and transferring the Logela Rights.
-44-
(c) Logela has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its
terms.
(d) The execution, delivery and performance by Logela of this agreement
complies with:
(1) each law, regulation, authorisation, ruling, judgement, order or
decree of any Government Agency;
(2) the memorandum and articles of association or other constituent
documents of Logela; and
(3) the Cairnes Road Trust Deed.
(e) This agreement is entered into as part of the due and proper
administration of the Cairnes Road Trust and is for the benefit of the
beneficiaries of the Cairnes Road Trust.
(f) There has been no resolution or direction to terminate the Cairnes
Road Trust.
(g) There has been no resolution or direction to remove Logela as trustee
of the Cairnes Road Trust.
(h) Logela holds the Logela Rights on trust for the Cairnes Road Trust and
the Logela Rights are free of all Security Interests and other third
party interests or rights.
(i) Logela is able to sell and transfer the Logela Rights without the
consent of any other person and free of any pre-emptive rights or
rights of first refusal.
PART 2 SHARES AND CAPITAL
2.1 AUTHORISED CAPITAL
The authorised capital of the Company is $50,000,000 divided into
50,000,000 ordinary shares of $1.00 each.
2.2 ISSUED CAPITAL
The total number of issued shares in the capital of the Company is 2,504
ordinary shares.
2.3 ISSUE OF OTHER SECURITIES
The Company is not under any obligation to issue or allot, and has not
granted any person the right to call for the issue or allotment, of any
shares or other securities of the Company at any time.
-45-
2.4 RIGHTS
The copies of:
(a) the Notice of Meeting of the Directors of the Company dated 28
November 1995;
(b) the Resolution of the Directors of the Company dated 28 November 1995;
and
(c) the Minute of Agreement under section 255 of the Corporations Law
dated 28 November 1995,
in relation to the issue of the Rights by the Company are accurate,
complete and not misleading.
PART 3 COMPANY GROUP
3.1 CORPORATE EXISTENCE
The Company:
(a) is a proprietary company;
(b) has the power to own its assets and carry on its business as it is now
being conducted;
(c) is not registered and is not required to be registered in any place as
a recognised foreign company; and
(d) does not carry on business in any place other than Australia.
3.2 COMPLIANCE WITH CONSTITUENT DOCUMENTS
The business affairs of the Company Group have been conducted in accordance
with the respective Memoranda and Articles of Association of the members of
the Company Group.
3.3 COMPANY GROUP
The corporate structure of the Company Group is set out in schedule 7.
3.4 COMPANY GROUP SECURITIES
Schedule 7 sets out, in the respect of each member of the Company Group
except the Company:
(a) its authorised capital;
(b) the total number of issued shares in its capital; and
-46-
(c) the registered holders of the issued shares.
3.5 ISSUE OF OTHER SECURITIES
No member of the Company Group is under any unfulfilled obligation to issue
or allot, and has not granted any person a right which remains unexercised
to call for the issue or allotment, of any shares or other securities of
that member of the Company Group at any time.
PART 4 ACCURACY OF INFORMATION
4.1 INFORMATION ACCURATE
The written information given by or on behalf of the Sellers or their
advisers to the Buyer or its advisers in respect of the Company Group and
the sale of the Rights, copies of which is exhibited to this agreement at
the time of execution and signed by the parties for purpose of
identification, is in all material respects accurate and not misleading.
4.2 DISCLOSURE LETTER ACCURATE
The information in the Disclosure Letter and the schedules is in all
material respects accurate and not misleading.
4.3 CONFIDENTIAL INFORMATION MEMORANDUM
(a) With the exception of the projected financial information contained in
Section 10 of Volume 1 of the Confidential Information Memorandum, the
information contained in Volume 1 of the Confidential Information
Memorandum is true and correct in all material respects.
(b) The historical financial information contained in Volume 2 of the
Confidential Information Memorandum is true and correct in all
material respects.
(c) The projected financial information contained in Section 10 of Volume
1 of the Confidential Information Memorandum and the projected
financial information contained in Volume 2 of the Confidential
Information Memorandum represent reasonable forecasts to the Knowledge
of the Sellers.
PART 5 THE ACCOUNTS
5.1 BASIS OF PREPARATION
The Accounts:
(a) have been prepared in accordance with the Accounting Standards;
-47-
(b) show a true and fair view of the financial position and the assets and
liabilities of the Company Group at the Accounts Date and of the
income, expenses and results of the operations of the Company Group
for the financial period ended on the Accounts Date;
(c) are not affected by any unusual or non-recurring item;
(d) take account of all gains and losses, whether realised or unrealised
arising from foreign currency transactions;
(e) include all reserves and provisions for taxation that are necessary to
cover all Tax liabilities of the Company Group in respect of any
period up to the Accounts Date;
(f) include all liabilities of the Company Group at the Accounts Date; and
(g) set out all contingent liabilities of the Company Group at the
Accounts Date.
PART 6 POSITION SINCE ACCOUNTS DATE
6.1 POSITION SINCE ACCOUNTS DATE
Since the Accounts Date:
(a) the Business has been conducted in the ordinary course of ordinary
business and in a proper and efficient manner;
(b) the Company Group has not disposed of any of its assets other than in
the ordinary course of ordinary business;
(c) the Company Group has not acquired any assets other than in the
ordinary course of ordinary business;
(d) the Company Group has not incurred any liabilities other than in the
ordinary course of ordinary business;
(e) there has been no material adverse change affecting the Business, the
assets of each member of the Company Group, or the financial or
trading position or prospects of each member of the Company Group; and
(f) no dividends, bonus issues or other distributions or repayments of
shareholders' loans have been declared, made or paid by any member of
the Company Group and no share buy-backs have been agreed to or
completed by any member of the Company Group.
-48-
PART 7 ASSETS
7.1 TITLE TO ASSETS
All the significant non-current assets used in the Business and all other
significant non-current assets of each member of the Company Group are:
(a) fully paid for;
(b) in the possession of relevant member of the Company Group;
(c) used solely by the Company Group;
(d) the absolute property of the relevant member of the Company Group free
of all Security Interests and other third party rights; and
(e) not the subject of any lease or hire purchase agreement or agreements
for purchase on deferred terms,
except as set out in schedule 2.
7.2 SECURITY INTERESTS
No member of the Company Group has granted or created, or agreed to grant
or create, any Security Interests in respect of the assets of that member
of the Company Group other than the Security Interests listed in schedule
2.
7.3 PLANT AND MACHINERY
To the Knowledge of the Sellers, all items of plant, machinery, equipment
and vehicles of each member of the Company Group or used in the Business
are:
(a) in good repair and condition having regard to their age;
(b) in satisfactory working order;
(c) capable of doing the work for which they are designed;
(d) not surplus to the requirements of the Company Group and the Business;
and
(e) recorded in the books of the relevant member of the Company Group.
7.4 STOCK
(a) Subject to Warranty 7.4(b) and to the Knowledge of the Sellers, all
stock of each member of the Company Group is of good and merchantable
quality.
-49-
(b) Any slow-moving or obsolete stock has been written-down or written-off.
(c) Inventory levels are sufficient to meet the requirements of the
Business and customer stock held in storage has been sold and has been
adequately insured.
PART 8 INTELLECTUAL PROPERTY RIGHTS
8.1 OWNERSHIP
The Company Group beneficially owns or has an enforceable right to use all
the Company Group Intellectual Property Rights listed in Schedule 3.
8.2 LIST COMPLETE
The Company Group does not own, use, or require in its business any
Intellectual Property Rights other than those listed in schedule 3.
8.3 NO THIRD PARTY RIGHTS
No person, other than the Company Group or a licensor to the Company Group
or the Indonesian Joint Venture, has any right to or may benefit from any
Company Group Intellectual Property Right.
8.4 NO INFRINGEMENT
To the Knowledge of the Sellers, the use by the Company Group of the
Company Group Intellectual Property Right does not breach or infringe any
Intellectual Property Right of any other person.
8.5 REGISTRATION
The Company Group Intellectual Property Rights listed in schedule 3 are
registered in the name of members of the Company Group as disclosed in
schedule 3.
8.6 DISCLOSURE
No trade secret or confidential information of the Company Group has been
disclosed or made available to any person except in the ordinary course of
business.
PART 9 PROPERTIES
9.1 COMPANY GROUP'S INTEREST
No member of the Company Group has an interest in land except for its
interest in the Properties.
-50-
9.2 FREEHOLD PROPERTIES
The Company Group has good title to the Freehold Properties free of all
Security Interests and other third party interests or rights
9.3 OCCUPATION
(a) The Company Group has exclusive occupation and quiet enjoyment of the
Properties and holds all easements, rights, interests and privileges
necessary or appropriate for the conduct of the Business.
(b) All properties occupied or used by the Company Group are:
(1) owned by the Company Group; or
(2) leased or licensed by the Company Group under the Property
Leases.
9.4 TITLE DOCUMENTS
All documents constituting or affecting title to the Properties or true
copies of them have been made available to the Buyer.
9.5 NO BREACH
No member of the Company Group is not in breach of or in default under any
agreement or covenant affecting the Properties.
9.6 NO NOTICES
The Company Group has not received notice from any third party in respect
of any of the Properties and, so far as it is aware, no proposal has been
made:
(a) in respect of the compulsory acquisition or resumption of any part of
any of the Properties;
(b) requiring work to be done or expenditure to be made on or in respect
of any of the Properties; or
(c) which may adversely affect any part of any of the Properties or the
Company Group's use of them.
9.7 CONDITION OF BUILDINGS
All buildings or other improvements on the Properties are in a good
condition and state of repair having regard to their age and the use to
which they are put.
-51-
9.8 DEFECTS
To the Knowledge of the Sellers, the Properties are not subject to any
material defect or other thing which will or might materially decrease
their ability to be used in the Business.
9.9 ENVIRONMENTAL LIABILITIES
(a) There are no Environmental Liabilities affecting any of the
Properties.
(b) There are no factors affecting any of the Properties which are likely
to give rise to any Environmental Liability.
PART 10 RECEIVABLES
10.1 COLLECTABILITY
All debts owing to and amounts due to the Company Group are:
(a) collectable for their full amounts in accordance with their terms; or
(b) covered by provisions in the Accounts,
and are not subject to any counter claim or set-off.
PART 11 SECURITY INTERESTS
11.1 LIST COMPLETE
The Company Group has granted or created, or agreed to grant or create, and
is a party to only those loans, guarantees, letters of comfort,
indemnities, finance leases, hire purchase agreements, or Security
Interests disclosed in the Accounts or listed in schedule 2.
PART 12 CONTRACTS
12.1 NATURE OF CONTRACTS
Any agreement for the installation of refrigeration equipment binding on
the Company Group:
(a) is within the ordinary course of ordinary business of the Company
Group;
(b) is at arm's length;
(c) is capable of complete performance or termination without payment of
damages, within 12 months after the date of this agreement; and
-52-
(d) is not with the Sellers, a Related Corporation or associate, as that
term is defined in the Corporations Law, of the Sellers,
except as otherwise disclosed in schedule 4.
12.2 FOREIGN CURRENCY TRANSACTIONS
The Company Group is not party to any foreign currency transaction except
as disclosed in the Disclosure Letter.
12.3 NO RESTRICTIVE COVENANTS
Other than as provided by the agreements referred to in schedule 3 and the
Indonesian Joint Venture, the Company Group is not party to any agreement
which restricts its freedom to engage in any activity or business in any
area.
12.4 CHANGE OF CONTROL
The Company Group is not party to any agreement under which any third party
is entitled or likely, as a result of a change in ownership of the Rights
or the issue of the shares in the Company to be made pursuant to the
Rights:
(a) to terminate the agreement; or
(b) to require the adoption of terms which are substantially less
favourable to the Company Group than the current terms.
12.5 NO DEFAULT
To the Knowledge of the Sellers, no party to any agreement with the Company
Group (including the Company Group) is in default under it or would be in
default, but for the requirements of notice or lapse of time, or both that
could have a material adverse effect on the Business.
12.6 NO NOTICES
The Company Group has not received any notice which might materially affect
any rights of the Company Group in respect of any agreement.
12.7 LICENSING AGREEMENTS
(a) The Company Group is in compliance with all terms of the Licensing
Agreements.
(b) To the Knowledge of the Sellers, there is no reason to believe that,
subject to usual negotiations, the Licensing Agreements will not be
renewed by the parties to those agreements other than the Company
Group upon expiration of those agreements.
-53-
PART 13 DELEGATIONS AND OFFERS
13.1 OFFERS OUTSTANDING
Any offer, tender or quotation made by the Company Group in respect of the
Business which is outstanding and capable of acceptance by a third party,
was made in the ordinary course of ordinary business.
PART 14 OUTSTANDING NOTES
14.1 OUTSTANDING NOTES
No cheque, promissory note or bill of exchange drawn, accepted or endorsed
by the Company Group is still outstanding, other than those drawn to pay
for obligations incurred by the Company Group in the ordinary course of its
ordinary business.
PART 15 SHAREHOLDINGS AND MEMBERSHIPS
15.1 SHAREHOLDINGS
The Company Group is the holder and the beneficial owner of the shares and
other capital and securities convertible into shares or other capital
listed in schedule 7.
15.2 MEMBERSHIPS
The Company Group is not a member of any joint venture, partnership or
unincorporated association (other than a recognised trade association) and
the Indonesian Joint Venture.
15.3 PERMANENT ESTABLISHMENT
The Company Group does not have any permanent establishment (as that
expression is defined in any relevant double taxation agreement to which
Australia is a party) outside Australia.
15.4 OFFICERS
The details of the present directors, secretary, auditor and public officer
of the Company Group are as shown in schedule 7.
PART 16 EMPLOYEES
16.1 SUPERANNUATION ALLOWANCES
Other than contributions to superannuation funds or otherwise required by
law, no member of the Company Group is liable to pay any allowance,
-54-
annuity, benefit, lump sum, pension, premium or other payment in respect of
the death, disability, retirement, resignation or dismissal of any Employee
other than arising in the ordinary course of its ordinary business.
16.2 WRITTEN CONTRACTS
No member of the Company Group is a party to any written employment or
service agreement other than those listed in schedule 5.
16.3 TERMINATION
Other than as may be required by law or pursuant to the agreements listed
in schedule 5, the employment of each employee of any member of the Company
Group can be lawfully terminated on 3 months' notice or less without
payment of any damages or compensation, including any severance or
redundancy payments.
16.4 INDUSTRIAL DISPUTES
No member of the Company Group has been involved in any material industrial
dispute with its employees or any trade union at any time within the 5
years preceding the date of this agreement and the Sellers do not know of
any circumstances likely to give rise to any material industrial dispute.
16.5 PROFIT SHARING AND BONUS PLANS
No member of the Company Group has any formal profit sharing, bonus plans
or any other similar agreements with the Employees but has adopted a
practice of ex gratia payments related to profitability and performance.
PART 17 SUPERANNUATION SCHEMES
17.1 LIST COMPLETE
Schedule 9 contains a complete list of all superannuation funds to which
any member of the Company Group is obliged to make contributions in respect
of any employees.
17.2 FUNDING
With respect to superannuation, there are no outstanding and unpaid
contributions on the part of any member of the Company Group or any
employee other than in the ordinary course of ordinary business.
17.3 APPROVALS
Where the superannuation funds listed in Schedule 9 require approval from
any taxation authority, to the Knowledge of the Sellers, the approval has
been obtained and is still current and the Sellers have no reason to
believe that it may be revoked.
-55-
PART 18 UNIONS
18.1 AGREEMENTS
No member of the Company Group is a party to any agreement with a union or
industrial organisation in respect of the employees outside the
determinations of the Industrial Relations Commission.
PART 19 COMPLIANCE WITH LAWS
19.1 RESTRICTIVE TRADE PRACTICES
No member of the Company Group is a party to any agreement, contract,
arrangement or understanding whether legally enforceable or not which is in
breach of any restrictive trade practices legislation and has not engaged
in any conduct or practice in breach of that legislation.
19.2 LAWS
The Company Group has complied with all laws applicable to the Company
Group and the conduct of the Business including, without limitation, any
Environmental Law.
19.3 LICENCES OBTAINED
(a) Each member of the Company Group has all necessary licences, consents,
permissions, authorities and permits required to conduct its business
and has paid all fees due in relation to them and complied with all
conditions under them.
(b) The Sellers do not know of any factor which might prejudice the
continuance or renewal of any licence, consent, permission, authority
or permit required under Warranty 19.3(a).
PART 20 LITIGATION
20.1 COMPANY GROUP NOT A PARTY TO ANY LITIGATION
No member of the Company Group is, or has in the last 2 years been:
(a) a party to any prosecution;
(b) a party to any litigation, arbitration proceedings or any other form
of mediation or dispute resolution involving a claim exceeding
$100,000; or
(c) subject to any investigation by any Government Agency,
in respect of the Business, the assets of the Company Group or the
Properties.
-56-
20.2 NO LITIGATION PENDING OR THREATENED
No investigation, prosecution, litigation, proceeding or any other form of
mediation or dispute resolution referred to in Warranty 20.1 is pending or,
to the Knowledge of the Sellers, threatened.
20.3 NO CIRCUMSTANCES
To the Knowledge of the Sellers, there are no circumstances which might
give rise to any investigation, prosecution, litigation, proceeding or any
other form of mediation referred to in Warranty 20.1.
PART 21 SOLVENCY
21.1 NO LIQUIDATION OR WINDING-UP
Other than the members' voluntary winding up of Austral C-Stores Pty
Limited, no member of the Company Group has gone into liquidation or passed
a winding-up resolution nor received a notice under sections 572 or 573 of
the Corporations Law.
21.2 NO PETITION
No petition or other process for winding-up has been served on or
threatened against any member of the Company Group and, to the Knowledge of
the Sellers, there are no circumstances justifying a petition or other
process.
21.3 NO WRIT OF EXECUTION
No writ of execution has been served on or enforced against any member of
the Company Group or the property of any member of the Company Group and,
to the Knowledge of the Sellers, there are no circumstances justifying a
writ.
21.4 NO RECEIVER
No receiver or receiver and manager of any part of the undertaking or
assets of any member of the Company Group, has been appointed or is
threatened or expected to be appointed and, to the Knowledge of the
Sellers, there are no circumstances justifying an appointment.
PART 22 RECORDS AND CONSTITUENT DOCUMENTS
22.1 RECORDS
All accounts, books, ledgers and financial and other records of each member
of the Company Group:
-57-
(a) are up-to-date;
(b) have been fully and accurately maintained;
(c) comply with all legal requirements; and
(d) are in the possession or under the control of the relevant member of
the Company Group.
22.2 MEMORANDUM AND ARTICLES
The Company has supplied accurate and up-to-date copies of the Memorandum
and Articles of Association of each member of the Company Group to the
Buyer.
22.3 REGISTER OF MEMBERS
The Company Group has not received notice of any application or intended
application for the rectification of its register of members or any other
register which it is required by law to maintain.
PART 23 TAXES AND DUTIES
23.1 TAX PAID
Any Tax due and payable under any Tax Law in respect of any transaction,
income or asset of the Company Group has been paid.
23.2 PROVISION IN ACCOUNTS
Adequate provision has been made in the Accounts for any Tax on the Company
Group which the Sellers are or the Company Group is aware is payable or may
become payable but which is unpaid.
23.3 WITHHOLDING TAX
Any obligation under any Tax Law to withhold amounts at source for
withholding tax, PAYE tax, Prescribed Payments System tax and royalties has
been complied with.
23.4 NO CAPITAL GAINS TAX RELIEF
No member of the Company Group has sought capital gains tax relief under
section 16OZZO of the Tax Act with respect to any asset acquired by that
member and which is still owned by that member of the Company Group at
Completion.
-58-
23.5 DOCUMENTS STAMPED
Any Duty payable in respect of any Tax Law in relation to any transaction
or agreement to which any member of the Company Group is or has been a
party or by which any member of the Company Group derives, or has derived a
substantial benefit has been paid.
23.6 RECORDS
Each member of the Company Group has maintained proper and adequate records
to enable it to comply with its obligations to:
(a) prepare and submit any information, notices, computations, returns and
payments required in respect of any Tax Law;
(b) prepare any accounts necessary for the compliance of any Tax Law; and
(c) retain necessary records as required by any Tax Law.
23.7 RETURNS SUBMITTED
Each member of the Company Group has submitted any necessary information,
notices, computations and returns to the relevant Government Agency in
respect of any Tax or any Duty relating to that member of the Company
Group.
23.8 RETURNS ACCURATE
Any information, notice, computation and return which has been submitted by
any member of the Company Group to a Government Agency in respect of any
Tax or Duty:
(a) discloses all material facts that should be disclosed under any Tax
Law;
(b) is not misleading; and
(c) has been submitted on time.
23.9 COPIES ACCURATE
All copies of any information, notice, computation or return submitted by
any member of the Company Group in respect of any Tax or Duty which have
been supplied by the Sellers or their advisers are true and complete copies
of the originals.
23.10 PUBLIC OFFICER
The office of public officer of each member of the Company Group as
required under any Tax Law has always been occupied.
-59-
23.11 NO TAX AUDIT
No member of the Company Group is aware of any pending or threatened Tax or
Duty audit.
23.12 NO DISPUTES
There are no disputes between any member of the Company Group and any
Government Agency in respect of any Tax or Duty.
23.13 AVAILABILITY OF FUTURE INCOME TAX BENEFITS
To the Knowledge of the Sellers, no event has occurred which may prevent
any member of the Company Group obtaining the benefit of any future income
tax benefit provided for in the Accounts.
23.14 ANTI-AVOIDANCE
The Company Group has not entered into or been a party to any transaction
which contravenes the anti-avoidance provisions of any Tax Law.
23.15 NO PREJUDICIAL ACTION
To the Knowledge of the Sellers, no member of the Company Group has taken
any action which has or might alter or prejudice any arrangement, agreement
or tax ruling which has previously been negotiated with or obtained from
the relevant Government Agency under any Tax Law.
23.16 NO THIRD PARTY LIABILITY
No member of the Company Group is and will become liable to pay, reimburse
or indemnify any person in respect of any Tax or Duty relating to any act
or omission occurring before Completion because of the failure of any other
person to discharge that Tax or Duty.
23.17 EVENTS SINCE ACCOUNTS DATE
(a) Since the Accounts Date, no member of the Company Group has:
(1) made or incurred or committed to make or incur any payment or
expenditure other than in the ordinary course of its ordinary
business;
(2) disposed of any asset or supplied any service or business
facility (including a loan of money or the letting, hiring or
licensing of any property) other than in the ordinary course of
its ordinary business; and
(3) acquired any asset or received any service or business facility
other than in the ordinary course of its ordinary business.
-60-
23.18 DISCLOSURE
To the Knowledge of the Sellers, all information necessary for the
calculation of any Tax liabilities of any member of the Company Group:
(a) up to the Accounts Date, has been disclosed to the Buyer before
the date of this agreement; and
(b) between the date of this agreement and the Completion Date, has
been or will be made available to the Buyer at its request before
the Completion Date.
PART 24 INSURANCE
24.1 CURRENT INSURANCES
Schedule 10 contains complete and accurate particulars of all current
insurances and cover notes taken out in respect of the Company Group.
24.2 POLICIES
All insurances listed in schedule 10 are currently in full force and
effect, all premiums due under them have been paid and, to the Knowledge of
the Sellers, nothing has been done or omitted to be done which would make
any of them void, voidable or unenforceable.
24.3 CLAIMS
To the Knowledge of the Sellers, there are no claims outstanding, pending
or threatened against any member of the Company Group in respect of any
accident or injury which are not fully covered by insurance but such claims
may be subject to customary excess provisions.
24.4 ADEQUACY OF COVER
To the Knowledge of the Sellers, each member of the Company Group has, and
at all material times has had, valid and adequate insurance cover in
respect of the Business, its employees and assets:
(a) against all risks normally insured against by companies carrying on
the same type of business as the Company Group or having similar
assets;
(b) for the full amount required by legislation;
(c) for the full replacement value of its assets; and
(d) from a well-established and reputable insurer.
-61-
EXECUTED by the parties as an agreement:
THE COMMON SEAL of
LOBIKE PTY LTD
was affixed to this document
in the presence of:
/S/ I.A. MCLENNAN /S/ D.J. MCINTOSH
Director
I.A. MCLENNAN D.J. MCINTOSH
Name (please print) Name (please print)
THE COMMON SEAL of
LOCANA PTY LTD
was affixed to this document
in the presence of:
/S/ I.A. MCLENNAN /S/ K.J. MOON
I.A. MCLENNAN PERSON AUTHORIZED K.J. MOON PERSON AUTHORIZED
Name (please print) Name (please print)
THE COMMON SEAL of
LOFIVA PTY LTD
was affixed to this document
in the presence of:
/S/ DAVID J. MCINTOSH /S/ K.J. MOON
Person Authorized Director
DAVID J. MCINTOSH K.J. MOON
Name (please print) Name (please print)
-62-
THE COMMON SEAL of
LOGELA PTY LTD
was affixed to this document
in the presence of:
/S/ I.A. MCLENNAN /S/ L.O. MILLER
Director
I.A. MCLENNAN PERSON AUTHORIZED L.O. MILLER
Name (please print) Name (please print)
SIGNED by DAVID JAMES
MCINTOSH in the presence of:
/S/ I.A. MCLENNAN /S/ DAVID JAMES MCINTOSH
Witness David James McIntosh
I.A. MCLENNAN
Name (please print)
SIGNED by JOHN RALPH
ROGAN by his Joint Attorneys in
the presence of:
/S/ I.A. MCLENNAN /S/ LESLIE OWEN MILLER
Witness John Ralph Rogan
/s/ D.J. McIntosh
David J. McIntosh
I.A. MCLENNAN
Name (please print)
SIGNED by KENNETH JOHN
MOON in the presence of:
/S/ I.A. MCLENNAN /S/ K.J. MOON
Witness Kenneth John Moon
I.A. MCLENNAN
Name (please print)
-63-
SIGNED by LESLIE OWEN
MILLER in the presence of:
/S/ I.A. MCLENNAN /S/ LESLIE OWEN MILLER
Witness Leslie Owen Miller
I.A. MCLENNAN
Name (please print)
SIGNED for KYSOR INDUSTRIAL
CORPORATION by its attorney in the
presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ JOHN O'SULLIVAN
Witness Attorney
BRADLEY THOMAS RUSSELL JOHN O'SULLIVAN
Name (please print) Name (please print)
-64-
EXHIBIT 2.2
SHAREHOLDERS AGREEMENT
Lobike Pty Ltd
(A.C.N. 001 874 380)
Locana Pty Ltd
(A.C.N. 001 874 317)
Lofiva Pty Ltd
(A.C.N. 001 876 982)
Logela Pty Ltd
(A.C.N. 001 876 820)
Refrigeration Investment (MBO) Limited
Kysor Industrial Corporation
Hill Young & Associates Limited
(A.C.N. 003 977 106)
T & M Lawrence Nominees Pty Ltd
(A.C.N. 071 527 010)
David James McIntosh
John Ralph Rogan
Kenneth John Moon
Leslie Owen Miller
Terry John Lawrence
and
Austral Refrigeration Pty Ltd
(A.C.N. 001 702 594)
THIS SHAREHOLDERS AGREEMENT is made on 14 FEBRUARY 1996 between the
following parties:
1. LOBIKE PTY LTD (A.C.N. 001 874 380) of 13 Hugh Street, Belmore New
South Wales it its own capacity and as trustee for the Vernon Avenue
Trust ("Lobike");
2. LOCANA PTY LTD (A.C.N. 001 874 317) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for the Leumeah Road
Trust ("Locana");
3. LOFIVA PTY LTD (A.C.N. 001 876 982) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for the Sunset Place
Trust ("Lofiva");
4. LOGELA PTY LTD (A.C.N. 001 876 820) of 13 Hugh Street, Belmore New
South Wales in its own capacity and as trustee for the Cairnes Road
Trust ("Logela");
Lobike, Logela, Lofiva and Locana being jointly referred to as "the
Founding Shareholders";
5. REFRIGERATION INVESTMENT (MBO) LIMITED, a company incorporated under
the laws of the British Virgin Islands, of Trident Chambers, P.O. Box
146, Road Town, Tortola, British Virgin Islands ("MBO");
6. KYSOR INDUSTRIAL CORPORATION, a company incorporated under the laws of
Michigan, of One Madison Avenue, Cadillac, Michigan, United States of
America ("Kysor");
7. HILL YOUNG & ASSOCIATES LIMITED (A.C.N. 003 977 106) of Level 21,
Governor Phillip Tower, 1 Farrer Place, Sydney, New South Wales ("Hill
Young");
8. T & M LAWRENCE NOMINEES PTY LTD (A.C.N. 071 527 010) of 42 Edinburgh
Road, Lilydale, Victoria in its own capacity and as trustee for the
Lawrence Family Trust ("Lawrence Nominees");
9. DAVID JAMES MCINTOSH of 36 The Grand Parade, Brighton-Le-Sands, New
South Wales ("McIntosh");
10. JOHN RALPH ROGAN of 50 Huntingdale Drive, Denham Court, New South
Wales ("Rogan");
11. KENNETH JOHN MOON of 12 Fairway Drive, Kellyville, New South Wales
("Moon");
12. LESLIE OWEN MILLER of Unit 1303, The Connaught, 187 Liverpool Street,
Sydney, New South Wales ("Miller"),
McIntosh, Rogan, Moon and Miller together jointly and severally
referred to as "the Guarantors";
13. TERRY JOHN LAWRENCE of 42 Edinburgh Road, Lilydale, Victoria
("Lawrence"); and
14. AUSTRAL REFRIGERATION PTY LTD (A.C.N. 001 702 594) of 13 Hugh Street,
Belmore, New South Wales ("the Company").
RECITALS:
A. The Company Group carries on the Business.
B. The Founding Shareholders have sold certain shares in the Company to
MBO and Kysor.
C. Hill Young and Lawrence Nominees also hold shares in the Company.
D. The parties have agreed to conduct their relationship as shareholders
in the Company and to operate the Company and the Business in
accordance with this agreement.
E. The Guarantors agree to guarantee the obligations of the Founding
Shareholders under this agreement.
F. Lawrence agrees to guarantee the obligations of Lawrence Nominees
under this agreement.
THE PARTIES AGREE, in consideration of, among other things, the mutual
promises contained in this agreement:
PART 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
"APPLICABLE PERCENTAGE" means, in respect of a Shareholder, the percentage
of the total number of Shares represented by the number of Shares owned by
that Shareholder as at the date of this agreement and thereafter as varied
in accordance with this agreement;
"ASX" means the Australian Stock Exchange Limited or any of its
Subsidiaries;
"AUDITOR" means the Company's auditor determined under clause 6.5(13);
"BOARD" means the board of directors of the Company;
"BUDGET" means the budget adopted under clause 8.1;
"BUSINESS" means the business of the Company described in clause 2.1;
-2-
"BUSINESS DAY" means a day on which banks are open for business in Sydney,
excluding a Saturday or a Sunday or a public holiday;
"CAIRNES ROAD TRUST" means the trust constituted by the Cairnes Road Trust
Deed;
"CAIRNES ROAD TRUST DEED" means the Deed of Trust dated 11 April 1979
between Robcharta Nominees (NSW) Pty Limited and Robert James Laurence;
"COMMENCEMENT DATE" means the day which is the "Completion Date" as defined
in the Share Purchase Agreements;
"COMPANY GROUP" means the Company and any Subsidiary of the Company and any
one or more of them;
"COMPETITOR" means a person who carries on whether:
(a) alone; or
(b) through a partnership, corporation, trust, joint venture or any other
entity that directly or indirectly controls, or is controlled by, or
is under common control with, the person; or
(c) through any other associated or affiliated person,
a business which is principally the manufacture of refrigerated cases for
similar applications to those made by the Company Group;
"CONFIDENTIAL INFORMATION" means any information regarding:
(a) the Business;
(b) the assets or affairs of the Company Group;
(c) this agreement and the transaction contemplated by it; and
(d) the Shareholders;
"CORPORATIONS LAW" means the Corporations Law of New South Wales;
"DISPOSE" includes, without limitation, in respect of a Share, either
directly or indirectly or through any other entities:
(a) to sell, assign or transfer;
(b) to grant an option or rights of pre-emption over;
(c) to create trusts in respect of;
-3-
(d) to create or grant any relevant interest, as defined in section 34 of
the Corporations Law, in;
(e) to otherwise alienate; or
(f) to grant the power (defined to include the matters set out in section
30 of the Corporations Law) to do any of the matters set out in
paragraphs (a) to (e) in respect of,
the Share, an interest in the Share or the right to exercise the vote
attached to the Share or to enter into any transaction having the same
result as the matters set out in paragraphs (a) to (e) above;
"DISPOSING SHAREHOLDER" means a Shareholder which proposes to Dispose of
Shares to the Majority Purchaser;
"EBIT" means earnings before interest and tax;
"ENCUMBRANCE" means an interest or power:
(a) reserved in or over any interest in any asset including, but not
limited to, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset
under a bill of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt, any other monetary obligation
or the performance of any other obligation, and includes, but is not
limited to, any agreement to grant or create any of the above;
"EXERCISING SHAREHOLDER" means a Shareholder which exercises the option
specified in clause 16.1;
"GOVERNMENTAL AGENCY" means any government or any governmental,
semi-governmental, administrative, fiscal or judicial body, department,
commission, authority, tribunal, agency or entity;
"HOLDING COMPANY" has the same meaning as in the Corporations Law;
"KYSOR AGREEMENT" means the Share Purchase Agreement dated 16 December 1995
between the Founding Shareholders, the Guarantors and Kysor;
"LAWRENCE FAMILY TRUST" means the trust constituted by the Lawrence Family
Trust Deed;
"LAWRENCE FAMILY TRUST DEED" means the Deed of Settlement dated 20 October
1995 between Neville Richard John and T & M Lawrence Nominees Pty Ltd;
"LEUMEAH ROAD TRUST" means the trust constituted by the Leumeah Road Trust
Deed;
-4-
"LEUMEAH ROAD TRUST DEED" means the Deed of Trust dated 25 April 1979
between Robcharta Nominees (NSW) Pty Limited and Brian Harding;
"LISTING" means the listing of the Shares for official quotation on the
main board of the ASX or any other agreed recognised stock exchange under
part 20;
"MAJORITY PURCHASER" means a person who would acquire or move to a majority
interest in the Company under clause 16.5;
"MBO AGREEMENT" means the Share Purchase Agreement dated 16 December 1995
between the Founding Shareholders, the Guarantors and MBO Partners;
"MBO PARTNERS" means MBO Partners Limited, a company incorporated under the
laws of the British Virgin Islands, of Trident Chambers, P.O. Box 146, Road
Town, Tortola, British Virgin Islands, as general partner for and on behalf
of The Asian MBO Fund, L.P., an exempted limited partnership under the
Exempted Limited Partnership Law of 1991 of the Cayman Islands;
"MINORITY SHAREHOLDER" means a Shareholder holding a minority interest in
the Company referred to in clause 16.5(a);
"NOTICE OF ACCEPTANCE" means a notice of acceptance of the issue of
Securities in the Company under clause 4.2;
"NOTICE OF EXERCISE" means a notice of exercise under clause 16.1;
"NOTICE OF ISSUE" means a notice of issue of Securities in the Company
under clause 4.1;
"NOTICE OF NON-EXERCISE" means a notice under clause 15.4;
"NOTICE OF SALE" means a notice of sale of Shares given under clause 14.1;
"OFFERED SECURITIES" means the total number of Securities to be issued by
the Company as specified in a Notice of Issue;
"OFFEREE SHAREHOLDER" means a Shareholder which exercises the option
granted by a Notice of Sale;
"POWER" means any right, power, authority, discretion or remedy conferred
by this agreement or any applicable law;
"QUARTER" means each period of 3 months commencing on each of:
(a) 1 July;
(b) 1 October;
(c) 1 January; and
-5-
(d) 1 April;
"RELATED CORPORATION" means a "related body corporate" as that expression
is defined in the Corporations Law and includes a body corporate which is
at any time after the date of this agreement a "related body corporate" but
ceases to be a "related body corporate" because of an amendment,
consolidation or replacement of the Corporations Law;
"RESTRICTED PERIOD" means the period commencing on the Commencement Date
and ending 14 days after the date of the adoption by the directors of the
Company of the audited accounts of the Company for the financial year
ending 30 June 1997;
"SALE PERCENTAGE" means, in respect of a Seller Shareholder, the percentage
of the total number of Shares of the Seller Shareholder represented by the
number of the Sale Shares;
"SALE SHARES" means the Shares a Seller Shareholder wishes to sell as
specified in the Notice of Sale;
"SALE SHARE PRICE" means the price for each Share specified in a Notice of
Sale;
"SECURITIES" means shares, debentures, convertible notes, options or other
equity or debt securities;
"SELLER SHAREHOLDER" means a Shareholder which serves a Notice of Sale;
"SHARES" means the issued ordinary shares of $1.00 each in the capital of
the Company;
"SHAREHOLDERS" means each Founding Shareholder, MBO, Kysor, Hill Young and
Lawrence Nominees;
"SHARE PURCHASE AGREEMENTS" means:
(a) the MBO Agreement; and
(b) the Kysor Agreement;
"SUBSIDIARY" has the following meanings:
(a) the meaning given to that expression in the Corporations Law;
(b) a corporation is a Subsidiary of another corporation if that other
corporation has appointed or is in a position to appoint a director or
directors who are in a position to cast, or control the casting of,
more than one-half of the maximum number of votes that might be cast
at a meeting of the board of directors of the first-mentioned
corporation;
-6-
(c) a corporation is a Subsidiary of another corporation if at any time
after the date of this agreement it is a Subsidiary but ceases to be a
subsidiary as defined in the Corporations Law because of an amendment,
consolidation or replacement of the Corporations Law;
"SUNSET PLACE TRUST" means the trust constituted by the Sunset Place Trust
Deed;
"SUNSET PLACE TRUST DEED" means the Deed of Trust dated 11 April 1979
between Robcharta Nominees (NSW) Pty Limited and Doris May Byrne;
"THIRD PARTY" means a person who wants to buy the Shares of the Seller
Shareholder as specified in a Notice of Sale;
"VERNON AVENUE TRUST" means the trust constituted by the Vernon Avenue
Trust Deed; and
"VERNON AVENUE TRUST DEED" means the Deed of Trust dated 11 April 1979
between Robcharta Nominees (NSW) Pty Limited and Sarah Doris Mulhall.
1.2 INTERPRETATION
In this agreement, headings and underlinings are for convenience only and
do not affect the interpretation of this agreement and, unless the context
otherwise requires:
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include any gender;
(c) where a word or phrase is defined in this agreement, other parts of
speech and grammatical forms of that word or phrase have a
corresponding meaning;
(d) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body
corporate and any Governmental Agency;
(e) a reference to any thing (including, but not limited to, any right)
includes a part of that thing;
(f) a reference to a part, clause, party, annexure, exhibit or schedule is
a reference to a part and clause of, and a party, annexure, exhibit
and schedule to, this agreement and a reference to this agreement
includes any annexure, exhibit and schedule;
-7-
(g) a reference to any statute, regulation, proclamation, ordinance or by-law
includes all statutes, regulations, proclamations, ordinances or
by-laws varying, consolidating or replacing them, and a reference to a
statute includes all regulations, proclamations, ordinances and by-laws
issued under that statute;
(h) a reference to a document includes an amendment or supplement to, or
replacement or novation of, that document;
(i) a reference to a party to a document includes that party's successors
and permitted assigns;
(j) no provision of this agreement will be construed adversely to a party
solely on the ground that the party was responsible for the
preparation of this agreement or that provision;
(k) a covenant or agreement on the part of two or more persons binds them
jointly and severally;
(l) a reference to an agreement includes an undertaking, deed, agreement
or legally enforceable arrangement or understanding whether or not in
writing;
(m) a reference to an asset includes all property of any nature,
including, but not limited to, a business, and all rights, revenues
and benefits;
(n) a reference to a document includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind;
(o) a reference to a month is a reference to a calendar month;
(p) a reference to a body (including without limitation, an institute,
association or authority), whether statutory or not:
(1) which ceases to exist; or
(2) whose powers or functions are transferred to another body,
is a reference to the body which replaces it or which substantially
succeeds to its powers or functions;
(q) a reference to "the Founding Shareholders" is a reference to Lobike,
Locana, Lofiva and Logela jointly and severally; and
(r) a reference to "the Guarantors" is a reference to McIntosh, Rogan,
Moon and Miller jointly and severally.
-8-
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done is not a Business Day,
that thing must be done on or by the next following Business Day.
1.4 INCONSISTENCY WITH ARTICLES
(a) If there is any inconsistency between this agreement and the articles
of association of the Company, this agreement prevails.
(b) If at any time there is an inconsistency between this agreement and
the articles of association of the Company, the Shareholders must
amend the articles of association to conform the articles of
association to this agreement.
PART 2
COMPANY'S BUSINESS AND ARTICLES
2.1 DESCRIPTION OF BUSINESS
The business of the Company Group is:
(a) the manufacture, sale, installation and servicing of refrigeration
equipment; and
(b) any other business determined by the directors under clause 6.4 or by
the Shareholders.
2.2 ARTICLES
On the Commencement Date, the parties must ensure that the form of articles
of association of the Company agreed by the Founding Shareholders, MBO
Partners and Kysor under clause 2.1(f) of the MBO Agreement and clause
2.1(f) of the Kysor Agreement is adopted as the Company's articles of
association.
PART 3
SHARES
3.1 OWNERSHIP OF SHARES
The Shareholders acknowledge that on and from the Commencement Date the
Shares are legally and beneficially owned in accordance with the details
contained in schedule 1.
3.2 FURTHER ISSUE OF SECURITIES
No further issue of Securities in the Company may take place other than in
accordance with part 4.
-9-
3.3 RIGHTS OF SHARES
Subject to this agreement, each Share confers the same rights.
3.4 DISPOSAL OF SHARES
(a) Subject to clause 3.4(b), a Shareholder must not Dispose of any Share
other than in accordance with parts 14, 15 or 16.
(b) Despite clause 3.4(a), a Shareholder may Dispose of Shares:
(1) to a wholly-owned Subsidiary of the Shareholder or to a
partnership, corporation, trust or other entity that directly or
indirectly controls, or is controlled by, or is under common
control with, the Shareholder;
(2) subject to clause 3.4(e), if the Shareholder is a Founding
Shareholder, to:
(A) any other Founding Shareholder or Lawrence Nominees;
(B) Lawrence, McIntosh, Miller, Moon or Rogan;
(C) any members of the families of the persons listed in clause
3.4(b)(2)(B); or
(D) any trusts established for the benefit of the persons listed
in clauses 3.4(b)(2)(B) or 3.4(b)(2)(C); or
(3) if Shareholders holding no less than 80% of the Shares give prior
written consent.
(c) The consent of a Shareholder referred to in clause 3.4(b)(3) may be
withheld in the absolute discretion of the Shareholder.
(d) Despite any other provision of this agreement, a Shareholder may not
Dispose of any Share to a Competitor.
(e) Despite any other provision of this agreement, a Founding Shareholder
may not Dispose of any Share to any person during the Restricted
Period.
3.5 ENCUMBRANCE OVER SHARES
(a) No Shareholder may create an Encumbrance over a Share unless:
(1) Shareholders holding no less than 80% of the Shares give prior
written consent; and
-10-
(2) the person to whom the Encumbrance is granted enters into an
agreement with all Shareholders not to Dispose of the Share
unless that person complies with parts 14, 15 and 16.
(b) The consent of a Shareholder referred to in clause 3.5(a) may be
withheld in the absolute discretion of the Shareholder.
3.6 REFUSAL TO REGISTER
(a) The Company may refuse to register the issue or transfer of any Shares
if clauses 3.4 or 3.5 has not been complied with.
(b) The Company must register any transfer of Shares arising from a
Disposal of Shares pursuant to clause 3.4(b).
PART 4
FURTHER ISSUES OF SECURITIES
4.1 NOTICE OF ISSUE
If:
(a) the Company proposes to issue any Securities other than in connection
with the Listing; and
(b) approval has been given under clause 6.5(b)(12),
the Company must give notice in writing to each Shareholder of the proposed
issue specifying:
(c) the Offered Securities;
(d) the total number of Securities the Shareholder is entitled to
purchase, being the Applicable Percentage of the Offered Securities;
and
(e) the issue price of each Security.
4.2 NOTICE OF ACCEPTANCE
Within 10 Business Days of receipt of a Notice of Issue, a Shareholder
which wants to purchase all or part of its entitlement to the Securities
specified in the Notice of Issue must give notice in writing to the Company
specifying:
(a) the percentage of the Shareholder's entitlement to the Offered
Securities specified in the Notice of Issue that the Shareholder wants
to purchase; and
-11-
(b) the number of Offered Securities in excess of those specified in
paragraph (a) that the Shareholder wants to purchase.
4.3 FAILURE TO GIVE A NOTICE OF ACCEPTANCE
Failure by a Shareholder to give a Notice of Acceptance within the period
specified in clause 4.2 will constitute a waiver of the Shareholder's right
to participate in the purchase of the Offered Securities.
4.4 ALLOCATION OF OFFERED SECURITIES
(a) If a Shareholder declines to purchase all of its Applicable Percentage
of the Offered Securities, the Company must allocate those Securities
not purchased to the Shareholders which specified a desire in their
Notices of Acceptance to purchase in excess of their Applicable
Percentage of the Offered Securities.
(b) If the total number of excess Securities is less than the number that
Shareholders want to purchase, the excess Securities must be allocated
to the Shareholders pro rata based upon their Applicable Percentages.
4.5 ISSUE OF EXCESS TO THIRD PARTIES
If the Shareholders do not purchase all the Offered Securities under clause
4.4, the Company may offer the remaining Offered Securities to such third
parties and on such terms as the directors may determine.
PART 5
APPOINTMENT AND REMOVAL OF DIRECTORS
5.1 NUMBER OF DIRECTORS
The Company must have 6 directors.
5.2 APPOINTMENT OF DIRECTORS
(a) The Founding Shareholders and Lawrence Nominees are entitled to
appoint and must at all times appoint a total of 3 directors, being 2
executive directors and 1 non-executive director.
(b) MBO is entitled to appoint and must at all times appoint 1 director,
being a non-executive director.
(c) Kysor is entitled to appoint and must at all times appoint 1 director,
being a non-executive director.
(d) One non-executive director must be appointed by majority agreement
between the Founding Shareholders, MBO and Kysor.
-12-
(e) For the purposes of clause 5.2(d), there will be a total of 3 votes
and the Founding Shareholders, MBO and Kysor will each have 1 vote.
(f) The Founding Shareholders, MBO and Kysor must ensure that at all times
a director is appointed under clause 5.2(d).
(g) Hill Young is not entitled to appoint any directors.
5.3 INITIAL NOMINEES OF THE FOUNDING SHAREHOLDERS
The Shareholders acknowledge that the 3 nominees of the Founding
Shareholders and Lawrence Nominees as initial directors under clause 5.2(a)
are:
(a) Neild Alfred McIntosh as an executive director;
(b) Lawrence as an executive director; and
(c) Moon as a non-executive director.
5.4 NOMINATION OF DIRECTORS
Before the Commencement Date:
(a) MBO must nominate 1 nominee as an initial director under clause
5.2(b);
(b) Kysor must nominate 1 nominee as an initial directors under clause
5.2(c); and
(c) the Shareholders must agree the nominee as initial director under
clause 5.2(d) in accordance with clauses 5.2(d) and 5.2(e).
5.5 REMOVAL AND REPLACEMENT OF DIRECTORS
(a) A Shareholder may remove and replace its nominees as directors.
(b) A director appointed by the Founding Shareholders and Lawrence
Nominees under clause 5.2(a) may only be removed by a majority of the
Founding Shareholders and Lawrence Nominees.
(c) A director appointed by MBO under clause 5.2(b) may only be removed by
MBO.
(d) A director appointed by Kysor under clause 5.2(c) may only be removed
by Kysor.
(e) A director appointed by the Founding Shareholders, MBO and Kysor under
clause 5.2(d) may only be removed by majority agreement between the
Founding Shareholders, MBO and Kysor.
-13-
(f) For the purposes of clause 5.5(e), there will be a total of 3 votes
and the Founding Shareholders, MBO and Kysor will each have 1 vote.
5.6 DIRECTOR AN EMPLOYEE
If the Company terminates the employment of an employee of the Company who
is also a director:
(a) the person's appointment as a director also terminates; and
(b) the Shareholder which nominated that person may not re-appoint that
person as a director.
5.7 CHAIRPERSON
(a) The chairperson of directors must be the director appointed under
clause 5.2(d).
(b) The chairperson may be removed by majority agreement between the
Founding Shareholders, MBO and Kysor.
(c) For the purposes of clause 5.7(b), there will be a total of 3 votes
and the Founding Shareholders, MBO and Kysor will each have 1 vote.
(d) If the chairperson is absent from a meeting of directors, or is
unwilling to act, the directors present at the meeting may elect one
of their number to act as chairperson of the meeting.
5.8 MANAGING DIRECTOR
(a) Any managing director must be approved by the directors in accordance
with clause 6.5(b)(7).
(b) The initial managing director will be Neild McIntosh.
5.9 WRITTEN APPOINTMENTS AND REMOVALS
(a) A party making an appointment or removal under this part 5 must do so
by giving written notice of the appointment or removal to the Company.
(b) On delivery of the notice the appointment or removal takes effect
immediately.
5.10 ALTERNATE DIRECTORS
(a) Subject to clauses 5.10(b) to (e), a director may appoint a person to
be the director's alternate director with all the powers and rights of
the director and for such period as the director thinks fit.
-14-
(b) An alternate director may only be appointed by any director appointed
under clause 5.2(a) with the prior consent of a majority of the
Founding Shareholders and Lawrence Nominees.
(c) An alternate director may only be appointed by a director appointed
under clause 5.2(b) with the prior consent of MBO.
(d) An alternate director may only be appointed by a director appointed
under clause 5.2(c) with the prior consent of Kysor.
(e) An alternate director may only be appointed by a director appointed
under clause 5.2(d) with the prior consent of a majority of the
Founding Shareholders, MBO and Kysor.
(f) For the purposes of clause 5.10(e), there will be a total of 3 votes
and the Founding Shareholders, MBO and Kysor will each have 1 vote.
5.11 INSURANCE
The Company must, to the extent permitted by law:
(a) purchase and maintain insurance; or
(b) pay or agree to pay a premium for insurance,
for each director of the Company against any liability incurred by the
director as an officer of either the Company or any member of the Company
Group including, but not limited to, a liability for negligence or for
reasonable costs and expenses incurred in defending proceedings, whether
civil or criminal and whatever their outcome.
PART 6
MEETINGS AND RESOLUTIONS OF DIRECTORS
6.1 FREQUENCY OF MEETINGS
(a) The directors must meet at least once every 3 months.
(b) The directors must agree the dates for meetings of directors for each
calendar year before the beginning of that calendar year.
6.2 QUORUM
(a) The quorum for a meeting of directors is 3 directors of whom:
(1) 1 director is the director nominated by MBO under clause 5.2(b);
and
(2) 1 director is the director nominated by Kysor under clause
5.2(c).
-15-
(b) If a quorum is not present at a meeting of directors within 30 minutes
from the time of the meeting specified in the relevant notice of
meeting, the meeting is adjourned to the same time and place on the
next Business Day.
(c) If a quorum is not present at the adjourned meeting under clause
6.2(b), the quorum at the adjourned meeting will be 2 directors
regardless of which directors are present.
(d) Subject to the other sub-clauses of this clause 6.2, the
contemporaneous linking together by telephone or other method of audio
or audio visual communication of a number of the directors is
sufficient to constitute a quorum.
(e) A director participating in a meeting by telephone or audio or audio
visual communication is to be taken to be present in person at the
meeting.
6.3 VOTING ENTITLEMENTS
The voting entitlements of the directors are as follows:
(a) each director, including the chairperson, has one vote; and
(b) in the case of an equality of votes, the chairperson has a casting
vote.
6.4 BOARD RESOLUTIONS
All resolutions at meetings of the directors must be decided by a simple
majority, except those decisions listed in clause 6.5(b).
6.5 MAJORITY DECISIONS
(a) The resolutions of the directors listed in clause 6.5(b) only require
the affirmative vote of:
(1) the non-executive director nominated by the Founding Shareholders
and Lawrence Nominees under clause 5.2(a); and
(2) the director nominated by MBO under clause 5.2(b); and
(3) the director nominated by Kysor under clause 5.2(c),
to be passed as resolutions of the directors and clauses 6.3 and 6.4
do not apply.
(b) The following resolutions of the directors require the affirmative
vote set out in clause 6.5(a).
-16-
(1) THIS AGREEMENT: any variation, amendment or modification to this
agreement;
(2) MEMORANDUM AND ARTICLES OF THE COMPANY: any alteration to the
memorandum of association or the articles of association of any
of the members of the Company Group;
(3) CAPITAL EXPENDITURES: capital expenditures in any year exceeding
$4,000,000 in aggregate;
(4) FINANCIAL ACCOMMODATION AND GUARANTEES: the Company Group or any
member of the Company Group in any year:
(A) raising any financial accommodation resulting in the total
indebtedness of the Company Group exceeding the total
indebtedness of the Company Group at the end of the previous
financial year by more than $3,000,000;
(B) entering into or becoming liable under any guarantee or
indemnity, or similar arrangement under which the Company
Group or any member of the Company Group may incur liability
in respect of the financial obligation of any other person
such that the total amount guaranteed by the Company Group
exceeds the total amount guaranteed by the Company Group at
the end of the previous financial year by more than
$3,000,000;
(5) ACQUISITION: any acquisition or other business combination by the
Company Group or any member of the Company Group by:
(A) the purchase of assets in excess of $2,000,000 in the
aggregate;
(B) the purchase of equity or security convertible into equity
in excess of $2,000,000 in the aggregate;
(C) any merger or consolidation;
(6) CHANGE IN BUSINESS: any substantial alteration in the strategic
direction of the Business or the entry into any new business;
(7) MANAGERS: the appointment or removal of the persons who fill the
following positions:
(A) the Managing Director - Austral Group;
(B) the Managing Director - Lawrence Refrigeration;
(C) General Manager (Manufacturing);
-17-
(D) Group Marketing Manager;
(E) Group Financial Controller; and
(F) General Manager, Austral Refrigeration;
(8) REMUNERATION OF INDEPENDENT DIRECTOR AND MANAGERS: the
remuneration of:
(A) the director appointed under clause 5.2(d); and
(B) the persons who fill the positions referred to in clause
6.5(b)(7);
(9) LIQUIDATOR AND WINDING UP: the appointment of a liquidator to any
member of the Company Group or any proposal to wind up any member
of the Company Group;
(10) ASSETS: any sale, lease, exchange or other disposition of all or
a substantial part of the assets of the Company Group or any
member of the Company Group;
(11) AUTHORISED CAPITAL: any alteration to the authorised share
capital of any member of the Company Group;
(12) ISSUES OF SECURITIES: the issue and terms of issue of any
Securities in any member of the Company Group;
(13) AUDITOR: the appointment or removal of the Auditor;
(14) DIVIDEND POLICY: any alteration or change to the dividend policy
of the Company specified in clause 9.1; and
(15) DISPOSAL OF BUSINESS: the disposal of the Business or any
substantial part of it.
6.6 ACTION BY COMPANY AGAINST A SHAREHOLDER
If certain Shareholders determine that an action should be brought by the
Company against any other Shareholder for breach of any agreement between
the Company and that other Shareholder:
(a) the directors other than the directors nominated by the other
Shareholder have the power to cause the Company to bring that action;
and
(b) the directors nominated by the other Shareholder must abstain from
voting on all questions concerning that action.
-18-
6.7 OBSERVERS AT BOARD MEETINGS
If any Shareholder has not exercised its right to appoint under clause 5.2
at least 1 director who is in office the Shareholder may, by notice in
writing to the Company, appoint an observer to attend and speak, but not
vote, at meetings of the directors.
6.8 NOTICE OF MEETINGS
(a) Unless all the directors agree otherwise, they must receive at least 5
Business Days notice of a meeting.
(b) Unless all the directors agree otherwise, they cannot pass a
resolution unless notice of the subject of that resolution was
included in the notice of meeting.
6.9 EXPENSES
(a) All directors are entitled to be paid all travel, accommodation and
other expenses properly incurred by them in connection with the
affairs of the Company including, without limitation, attending and
returning from meetings of the directors or of committees of
directors.
(b) Any representatives of MBO or Kysor who, with the prior approval of
the Board, provide assistance or services to the Company Group are
entitled to be paid all travel, accommodation and other expenses
properly incurred by them in connection with the affairs of the
Company Group.
(c) Any reference to travel expenses in this clause 6.9 includes, without
limitation, any international travelling expenses.
6.10 WRITTEN RESOLUTIONS
(a) Subject to the satisfaction of any requirements of clause 6.5, if:
(1) any of the directors assent to a document containing a statement
to the effect that an act, matter or thing has been done or
resolution has been passed; and
(2) the directors who assent to the document would have constituted a
quorum under clause 6.2 at a meeting of directors held to
consider that act, matter, thing or resolution,
then that act, matter, thing or resolution is to be taken as having
been done at or passed by a meeting of the directors.
(b) For the purposes of article 6.10(a):
-19-
(1) the meeting is to be taken as having been held:
(A) if the directors assented to the document on the same day,
on the day on which the document was assented to and at the
time at which the document was last assented to by a
director; or
(B) if the directors assented to the document on different days,
on the day on which, and at the time at which, the document
was last assented to by a director;
(2) 2 or more separate documents in identical terms each of which is
assented to by one or more directors are to be taken as
constituting one document; and
(3) a director may signify assent to a document by signing the
document or by notifying the company of the director's assent in
person or by post, telex, facsimile transmission, telephone or
other method of written, audio or audio visual communication.
(c) Where a director signifies assent to a document otherwise than by
signing the document, the director must by way of confirmation sign
the document at the next meeting of the directors attended by that
director, but failure to do so does not invalidate the act, matter,
thing or resolution to which the document relates.
(d) Where a document is assented to in accordance with clause 6.10(a), the
document is to be taken as a minute of a meeting of directors.
6.11 DEADLOCK
If the directors fail to agree under clause 6.5(b)(8) on any annual changes
to the remuneration of the director appointed under clause 5.2(d) and the
persons who fill the positions referred to in clause 6.5(b)(7), the
remuneration for those persons must be increased by a percentage equal to
the percentage increase during the 12 month period ending on the date of
the review in the All Groups Consumer Price Index for Sydney published by
the Australian Bureau of Statistics.
PART 7
IMPLEMENTATION OF BOARD DECISIONS
7.1 IMPLEMENTATION OF BOARD DECISIONS
Despite any contrary provision in this agreement or the Company's articles
of association, the Shareholders must adopt and implement decisions of the
Board and must not act otherwise than in accordance with a decision of the
Board.
-20-
PART 8
BUDGET AND BUSINESS PLAN
8.1 ANNUAL BUDGET
The Company and each Shareholder must use all reasonable endeavours to
ensure that, before the end of each financial year, the directors adopt an
annual budget for the following financial year.
8.2 BUSINESS PLAN
The Company and each Shareholder must use all reasonable endeavours to
ensure that, before the end of each financial year, the directors adopt a
business plan for the Company Group which must include, but is not limited
to, information relating to the following:
(a) business strategy;
(b) product and service strategy;
(c) pricing policy;
(d) personnel policy and hiring plans;
(e) financing requirements for working capital, investment and expansion;
(f) profit objectives; and
(g) a marketing plan.
PART 9
DIVIDEND POLICY
9.1 DIVIDEND POLICY
Subject to a decision of the directors under clause 6.5(b)(14) to the
contrary, the Company must distribute 50% of the consolidated net income
after tax and minority interests of the Company as a dividend to the
Shareholders.
PART 10
MANAGEMENT OF THE COMPANY GROUP
10.1 MANAGING DIRECTOR'S RESPONSIBILITIES
The managing director of the Company is responsible for the day to day
management of the Company, subject to clause 6.5 and to the instructions of
the Board.
-21-
10.2 GENERAL MANAGEMENT - BOARD
(a) Subject to clause 6.5, decisions which are not part of the day to day
management of the Company must be made at meetings of the directors.
(b) Any director may make a submission to the Board specifying matters
which are not within the day to day management of the Company.
10.3 CONDUCT OF BUSINESS
The Company must ensure that, and each Shareholder must use its reasonable
endeavours to ensure that, the Company Group:
(a) MAINTAINS PROPERTY: keeps its property in good working order and
condition (reasonable fair wear and tear excepted) and makes any
necessary repairs and replacements;
(b) COMPLY WITH AGREEMENTS: complies with all agreements to which it is a
party;
(c) INSURANCE:
(1) insures and keeps insured the assets of the Company Group which
are of an insurable nature against damage, destruction and any
other risk the Shareholders may require, to their full
replacement value and on a re-instatement basis;
(2) takes out and keeps in force workers' compensation, public risk,
business interruption and any other risk insurance to the extent
and for the amounts the Shareholders may reasonably require; and
(3) if the Shareholders do not make any requirement of the Company
Group under clauses 10.3(c)(1) or (2), takes out and keeps in
force insurance in amounts and against risks that a company
holding assets and carrying on a business similar to that of the
Company Group would prudently insure for and against;
(d) GOVERNMENT REQUIREMENTS: complies with the requirements of any
Governmental Agency relating to the conduct of the Business and its
assets;
(e) CORPORATE EXISTENCE: maintains its corporate existence; and
(f) BUDGET AND BUSINESS PLAN: conducts the Business in accordance with the
Budget and the current business plan adopted under clause 8.2.
10.4 MAINTENANCE OF RECORDS
The Company must ensure that, and each Shareholder must use its reasonable
endeavours to ensure that, the Company Group:
-22-
(a) BOOKS AND RECORDS: maintains books and records in accordance with
applicable law including, but not limited to, the Corporations Law and
the Income Tax Assessment Act 1936 (Cth);
(b) CONSOLIDATION OF ACCOUNTS: maintains books and records which enable a
Shareholder to incorporate the Company Group's financial results in
its accounts so as to comply with any applicable law and generally
accepted accounting practices and principles; and
(c) PROVIDE FOR TAXES: makes, to the extent it is lawfully able to do so,
provision in its accounts for all taxes payable under the Income Tax
Assessment Act 1936 (Cth) as they are incurred after deducting any
taxation credits arising from losses and adjustments in previous
years, so that no provision is required in the accounts of the Company
Group for losses to be carried forward or set-off against profits in
future years.
10.5 UNITED STATES FOREIGN CORRUPT PRACTICES ACT
(a) The Company must ensure that, and each Shareholder must use its
reasonable endeavours to ensure that, neither:
(1) the Company;
(2) any member of the Company Group;
(3) any officer, director, employee or agent of the Company; nor
(4) any officer, director, employee or agent of any member of the
Company Group,
either:
(5) offers a gift, promises to pay or authorises the payment of money
or anything of value to:
(A) any officer, employee or agent of any Government Agency;
(B) any political party;
(C) any officer, official or member of a political party;
(D) any candidate for elected office; or
(E) any person knowing that all or a portion of such gift, money
or thing of value would be given directly or indirectly to
any person referred to in paragraphs (A) to (D),
-23-
for the purposes of influencing any act or decision of that
officer, employee, agent, political party, official, member,
candidate or person in his or her official position.
(b) The Shareholders must not offer a gift, promise to pay or authorise
the payment of money or anything of value to:
(1) any officer, employee or agent of any Government Agency;
(2) any political party;
(3) any officer, official or member of a political party;
(4) any candidate for elected office; or
(5) any person knowing that all or a portion of such gift, money or
thing of value would be given directly or indirectly to any
person referred to in paragraphs (1) to (4).
for the purposes of influencing any act or decision of that officer,
employee, agent, political party, official, member, candidate or
person in his or her official position.
(c) Clauses 10.5(a) and 10.5(b) do not apply:
(1) if anything of value is given to any of the persons listed in
clauses 10.5(a)(5)(A) to (E) or clauses 10.5(b)(1) to (5) to
facilitate, expedite or secure the performance of a routine
action by a Governmental Agency including, without limitation,
the granting of permits or licences or processing of papers but
does not include the awarding of any new business;
(2) if anything of value is given to any of the persons listed in
clauses 10.5(a)(5)(A) to (E) or clauses 10.5(b)(1) to (5), if it
is lawful in the jurisdiction in which it occurs; or
(3) to the payment of any bona fide travel and other expense for
promotional services.
(d) If there are any amendments to the United States Foreign Corrupt
Practices Act, the Shareholders must negotiate in good faith to agree
an amendment to this clause 10.5 to conform this clause 10.5 with the
amendments to the United States Foreign Corrupt Practices Act.
-24-
PART 11
PERSONNEL AND EQUIPMENT
11.1 COMPANY DECISIONS
Subject to clause 6.5 and to any decision of the Board to the contrary, the
Company may arrange for the Company Group as it considers necessary for:
(a) the acquisition of goods and services (whether by lease or purchase or
from a Shareholder); and
(b) the hiring of personnel.
11.2 EQUITY INCENTIVE PLAN
The Company must adopt and implement an equity incentive plan for senior
managers employed by the Company Group on the terms agreed by the Founding
Shareholders, MBO Partners and Kysor under clause 2.1(d) of the MBO
Agreement and clause 2.1(d) of the Kysor Agreement prior to the
Commencement Date.
PART 12
PROVISION OF INFORMATION
12.1 PERIODIC REPORTS
The Company must ensure that, and each Shareholder must use its reasonable
endeavours to ensure that, the Company Group makes available for inspection
by the directors and any Shareholder that has not appointed a director who
is in office, all information concerning the Business and the operations of
the Company Group including, but not limited to, the following reports in
reasonable detail:
(a) as soon as practicable but in any event no later than 75 days after
the end of each financial year, a profit and loss statement and
balance sheet for the Company for that financial year audited by the
Auditors;
(b) as soon as practicable but in any event no later than 75 days after
the end of each financial year, a consolidated profit and loss
statement and balance sheet for the Company Group for that financial
year audited by the Auditors;
(c) within 21 days after the end of each month which is the last month in
a Quarter and within 30 days after the end of each other month during
the period from the Commencement Date to 30 June 1996:
(1) for the Company and each of its wholly owned Subsidiaries other
than Lawrence Refrigeration Pty Limited and QAL National
Refrigeration Pty Limited:
-25-
(A) an unaudited consolidated income statement for that month;
(B) an unaudited consolidated income statement for the current
financial year to date;
(C) an unaudited consolidated balance sheet as at the end of
that month; and
(D) a brief narrative explanation of the results for that month;
and
(2) for the Company's partially owned Subsidiaries and Lawrence
Refrigeration Pty Limited and QAL National Refrigeration Pty
Limited:
(A) summary financial information including sales, estimated
EBIT and estimated net income for that month; and
(B) summary financial information including sales, estimated
EBIT and estimated net income for the current financial year
to date,
each prepared in accordance with generally accepted accounting
principles consistently applied;
(d) within 21 days after the end of each month which is the last month in
a Quarter and within 30 days after the end of each other month during
the period from 1 July 1996 to 30 June 1997, monthly consolidated
management accounts for the Company and its wholly owned and partially
owned Subsidiaries including the following:
(1) an unaudited income statement for that month with a comparison to
the Budget for that month;
(2) an unaudited income statement for the current financial year to
date with a comparison to the Budget for that period;
(3) an unaudited balance sheet as at the end of that month;
(4) if the month is the last month of a Quarter, an unaudited cash
flow statement; and
(5) a brief narrative explanation of the results for that month,
each prepared in accordance with generally accepted accounting
principles consistently applied;
(e) within 21 days after the end of each month which is the last month in
a Quarter and within 30 days after the end of each other month
commencing with the month of July 1997, monthly consolidated
-26-
management accounts for the Company and its wholly owned and partially
owned Subsidiaries including the following:
(1) an unaudited income statement for that month with a comparison
to:
(A) the same month in the prior financial year; and
(B) the Budget for that month;
(2) an unaudited income statement for the current financial year to
date with a comparison to:
(A) the same year to date period in the prior financial year;
and
(B) the Budget for that period;
(3) an unaudited balance sheet as at the end of that month;
(4) if the month is the last month of a Quarter, an unaudited cash
flow statement; and
(5) a brief narrative explanation of the results for that month,
each prepared in accordance with generally accepted accounting
principles consistently applied; and
(f) any information requested by a director to enable the Company or any
Shareholder (at its cost) to satisfy any local or overseas reporting
requirement to any Governmental Agency or regulatory body which has
jurisdiction over the Company or Shareholder.
12.2 AUDIT
The Company must ensure that the accounts of each member of the Company
Group are audited annually by the Auditor as soon as practicable but in any
event no later than 75 days after the end of the financial year of the
relevant member.
12.3 ACCESS TO INFORMATION
At all reasonable times and as often as is reasonable, the Company must
procure the Company Group upon reasonable notice to permit any director,
Shareholder or Shareholder's representative to:
(a) inspect any property of the Company Group;
(b) inspect and take copies of any document relating to the Business,
including its accounts; and
-27-
(c) discuss the Company Group's affairs, finances and accounts with the
Company Group's officers and Auditor.
PART 13
CONFIDENTIALITY AND PUBLICITY
13.1 CONFIDENTIALITY
Subject to clause 13.2, no party may:
(a) disclose any Confidential Information;
(b) use any Confidential Information in any manner which may cause or be
calculated to cause loss to the Company or the other Shareholders; or
(c) make any public announcement or issue any press release regarding this
agreement or the transactions contemplated by it,
and each party must use its best endeavours to ensure that none of its
auditors, officers, employees or agents:
(d) disclose any Confidential Information;
(e) use any Confidential Information in any manner which may cause or be
calculated to cause loss to the Company or the other Shareholders; or
(f) make any public announcement or issue any press release regarding this
agreement or the transaction contemplated by it.
13.2 PERMITTED DISCLOSURE
A party may disclose, and may permit its auditor, officers, employees and
agents to disclose, any Confidential Information:
(a) with the prior written consent of all the other parties;
(b) if it is required to do so by law or any agreement binding on the
party or by any recognised stock exchange on which its or its Holding
Company's shares are listed;
(c) if the Confidential Information has come within the public domain,
other than by a breach of this part 13 by any party;
(d) subject to clause 13.3, to the party's banker or professional
advisers;
(e) subject to clause 13.3, to a prospective purchaser of any Shares; and
(f) if it is required to do so by a Governmental Agency,
-28-
but in the case of public announcements and press releases only, to the
extent possible, it must consult with the other parties before making the
disclosure and use reasonable endeavours to agree on the form and content
of the disclosure.
13.3 DISCLOSURE TO PROSPECTIVE PURCHASER
Any party that makes or permits a disclosure of Confidential Information
under clauses 13.2(e) must ensure that the prospective purchaser first
enters into a deed or an agreement with the parties whereby it agrees to
comply with provisions similar to those contained in this part 13, amended
as required.
13.4 DISCLOSURE BY DIRECTOR
A director may disclose Confidential Information to the Shareholder or
Shareholders that appointed the director.
PART 14
NOTICE OF SALE
14.1 NOTICE OF SALE
A Shareholder which wants to Dispose of any Shares other than under clause
3.4 must serve a Notice of Sale on each Shareholder specifying:
(a) the number of Sale Shares and the sale price per share in Australian
dollars;
(b) if an offer has been made to the Seller Shareholder by a Third Party,
the name of the Third Party;
(c) any other terms of the proposed Disposal; and
(d) a statement to the effect that each Shareholder has an option either:
(1) to purchase the Sale Shares on the terms set out in the Notice of
Sale if the Shareholder complies with clause 15.1; or
(2) if an offer has been made to the Seller Shareholder by a Third
Party and no Shareholder exercises the option set out in clause
14.1(d)(1), to require the Seller Shareholder to procure the
Third Party to purchase the Sale Percentage of the Shareholder's
Shares if the Shareholder complies with part 16.
14.2 THIRD PARTY
A Third Party must not be a Competitor.
-29-
PART 15
RIGHT OF FIRST REFUSAL
15.1 EXERCISE OF SHAREHOLDER'S OPTION TO PURCHASE SALE SHARES
(a) Each Shareholder may exercise its option referred to in clause
14.1(d)(1) to purchase the Sale Shares by giving notice to the Company
and the Seller Shareholder of the number of Sale Shares it wishes to
buy within 10 Business Days after the date of service of the Notice of
Sale.
(b) If a Shareholder exercises its option to purchase Sale Shares then the
Seller Shareholder must sell to that Shareholder the number of Sale
Shares allocated to that Shareholder under clause 15.2 and the
Shareholder must purchase them on the terms set out in the Notice of
Sale.
15.2 ALLOCATION OF SALE SHARES
(a) If the Seller Shareholder receives offers for equal to or less than
the number of Sale Shares the Seller Shareholder must sell to each
Offeree Shareholder the number of Sale Shares that Offeree Shareholder
has offered to buy.
(b) If the Seller Shareholder receives offers to acquire more Shares than
the number of Sale Shares, then subject to clause 15.2(d) the number
of Sale Shares each Offeree Shareholder is entitled to acquire is:
ONS x SS = N
TNS
where:
"ONS" means the number of Shares held by the Offeree Shareholder
immediately before the service of the Notice of Sale;
"TNS" means the number of Shares held by all Offeree Shareholders
immediately before the service of the Notice of Sale;
"SS" means the number of Sale Shares; and
"N" means the number of Shares that each Offeree Shareholder is
entitled to acquire.
(c) Any remaining Sale Shares that have not been allocated after the
application of clause 15.2(b) because an individual Offeree
Shareholder does not wish to buy the full number of Shares allocated
to that Offeree Shareholder under clause 15.2(b), are allocated,
subject to clause 15.2(d) as follows:
-30-
ONS x RSS = N
TNS
where:
"ONS" means the number of Shares held by the Offeree Shareholder
immediately before the service of the Notice of Sale;
"TNS" means the number of Shares held immediately before the service
of the Notice of Sale by all Offeree Shareholders which have been
allocated less than the number of Sale Shares indicated in the Offeree
Shareholder's notice;
"RSS" means the remaining number of Sale Shares which have not been
already allocated to Offeree Shareholders after the application of the
formula set out in clause 15.2(b); and
"N" means the number of Shares that each Offeree Shareholder is
entitled to acquire.
(d) If the number of Sale Shares to be acquired by an Offeree Shareholder
calculated by applying the formula is more than the number of Sale
Shares that Offeree Shareholder has offered to buy then that Offeree
Shareholder will acquire only the number of Sale Shares that it has
offered to buy.
(e) The Company must apply the formulae in clauses 15.2(b) and 15.2(c) to
determine the entitlement of each Offeree Shareholder.
(f) The Company must repeat the application of the formula in clause
15.2(c) until all Sale Shares are allocated.
(g) If a fraction results from the application of the formulae in clauses
15.2(b) or 15.2(c) the fraction will be rounded up or down as
determined by the Company.
(h) The Company must notify in writing the Seller Shareholder and each
Offeree of the number of Sale Shares to which each Offeree is
entitled.
(i) Within 20 Business Days after the date of service of the Notice of
Sale:
(1) the Seller Shareholder must give:
(A) each Offeree Shareholder a transfer of the relevant number
of Sale Shares executed by the Seller Shareholder; and
(B) the Company the share certificates for the Sale Shares; and
-31-
(2) in exchange for the transfer referred to in clause 15.2(i)(1)(A),
the Offeree Shareholder must pay to the Seller Shareholder the
purchase price for the relevant Sale Shares.
15.3 SALE SHARES NOT PURCHASED BY SHAREHOLDERS
(a) The Seller Shareholder may sell any Sale Shares not purchased by the
other Shareholders to the Third Party or any other third party.
(b) The Seller Shareholder must not sell the Sale Shares:
(1) for a purchase price less than the price specified in the Notice
of Sale; or
(2) on terms more beneficial to the buyer than those set out in the
Notice of Sale.
(c) The Seller Shareholder must give a copy of any agreement with the
buyer named in the Notice of Sale relating to the Sale Shares to each
Shareholder within 3 days after execution of the agreement.
15.4 NOTICE OF NON-EXERCISE
If all the Shareholders fail to exercise the option referred to in clause
14.1(d)(1) within the period specified in clause 15.1, the Company must
give notice to the Shareholders of that failure to exercise.
PART 16
TAG ALONG RIGHTS
16.1 EXERCISE OF SHAREHOLDER'S OPTION TO PURCHASE SALE SHARES
(a) Subject to clause 16.1(b), each Shareholder may exercise its option
referred to in clause 14.1(d)(2) to require the Seller Shareholder to
procure the Third Party to purchase the Sale Percentage of the
Shareholder's Shares by giving notice to the Company and the Seller
Shareholder of exercise within 10 Business Days after the date of
service of the Notice of Non-Exercise.
(b) The option referred to in clause 14.1(d)(2) is only exercisable by a
Shareholder upon receipt of a Notice of Non-Exercise.
16.2 OBLIGATION OF THE SELLER SHAREHOLDER
(a) If an Exercising Shareholder gives a Notice of Exercise, the Seller
Shareholder must use its best endeavours to procure the Third Party to
purchase the Sale Percentage of the Exercising Shareholder's Shares at
the Sale Share Price for each Share.
-32-
(b) If the Third Party refuses to purchase the Shares of the Exercising
Shareholder, then the Seller Shareholder must not sell the Sale Shares
to the Third Party.
16.3 FAILURE TO TRANSFER SHARES
If for any reason the Exercising Shareholder does not transfer its Shares
to the Third Party, then:
(a) the Notice of Exercise is deemed to be withdrawn by the Exercising
Shareholder; and
(b) each party is in the position it would have been in if the Notice of
Exercise was never issued.
16.4 COMPLETION OF SALE TO THIRD PARTY
(a) The Exercising Shareholder must complete any sale to the Third Party
at the time and in the manner agreed with the Third Party.
(b) The Seller Shareholder must ensure that the Third Party gives to the
Exercising Shareholder the full details of the settlement requirements
in writing.
(c) If there is more than one Exercising Shareholder, completion of the
sale of the Shares by each Exercising Shareholder to the Third Party
must occur at the same time as each other and at the same time as that
of the Seller Shareholder.
16.5 MAJORITY PURCHASER
(a) Despite any other provision of this agreement, if as a result of a
proposed Disposal of any Shares to a person:
(1) that person;
(2) a Related Corporation of that person; or
(3) a person associated with that person,
would acquire or take that person to a majority interest in the
Company, each Shareholder grants an irrevocable option to each other
Shareholder to permit each Shareholder which holds a minority interest
in the Company to require the Shareholder which proposes to Dispose of
any Shares to the Majority Purchaser to procure the Majority Purchaser
to purchase all the Shares of the Minority Shareholder.
(b) The Disposing Shareholder must give notice to each Shareholder of any
proposed Disposal of Shares to the Majority Purchaser.
-33-
(c) The Minority Shareholder may exercise the option referred to in clause
16.5(a) by giving a notice of exercise to the Company and the
Disposing Shareholder within 10 Business Days of receipt of the notice
under clause 16.5(b).
(d) If a Minority Shareholder gives a notice of exercise under clause
16.5(c), the Disposing Shareholder must use its best endeavours to
procure the Majority Purchaser to purchase all the Shares of the
Minority Shareholder at a price per share equal to the highest price
per share paid at any time by the Majority Purchaser, any Related
Corporation of the Majority Purchaser or any person associated with
the Majority Purchaser for any Shares.
(e) If the Majority Purchaser refuses to purchase all the Shares of the
Minority Shareholder, then the Disposing Shareholder must not Dispose
of any Shares to the Majority Purchaser.
(f) If for any reason the Minority Shareholder does not transfer its
Shares to the Majority Purchaser, then:
(1) the notice of exercise referred to in clause 16.5(c) is deemed to
be withdrawn by the Minority Shareholder; and
(2) each party is in the position it would have been in if the notice
of exercise was never issued.
(g) The Minority Shareholder must complete any sale to the Majority
Purchaser at the time and in the manner agreed with the Majority
Purchaser.
(h) The Disposing Shareholder must ensure that the Majority Purchaser
gives to the Minority Shareholder the full details of the settlement
requirements in writing.
(i) If there is more than one Minority Shareholder which exercises the
option under clause 16.5(a), completion of the sale of the Shares by
each Minority Shareholder to the Majority Purchaser must occur at the
same time as each other and at the same time as that of the Disposing
Shareholder.
PART 17
NEW SHAREHOLDERS
17.1 DISPOSAL OF SHARES
A Shareholder which Disposes of Shares to anyone other than another
Shareholder must ensure that the transferee, before registration of the
transfer of the Shares, enters into an agreement with the other parties
agreeing to be bound by this agreement as if named as a party and a
Shareholder, amended as reasonably required by the other Shareholders.
-34-
17.2 ISSUE OF SECURITIES
If the Company issues any Securities to anyone other than another
Shareholder it must, before issue, ensure that the person to whom the
Securities are issued enters into an agreement with the other parties
agreeing to be bound by this agreement as if named as a party and a
Shareholder, amended as reasonably required by the Shareholders.
17.3 EQUITY INCENTIVE PLAN
Clauses 17.1 and 17.2 apply to any Disposals of Shares or issues of
Securities under the equity incentive plan referred to in clause 11.2.
17.4 FOUNDING SHAREHOLDERS
A Shareholder which Disposes of Shares under clause 3.4(b) to anyone other
than a Shareholder must ensure that the transferee, before registration of
the transfer of the Shares, enters into an agreement with the other parties
agreeing to be bound by this agreement as if named as a party and a
Shareholder, amended as reasonably required by the other Shareholders.
PART 18
POWER OF ATTORNEY
18.1 PURPOSE OF POWER OF ATTORNEY
The appointments of attorneys in clause 18.2 are for the purposes only of
any of the transactions contemplated by parts 15 and 16 and take effect
from the Commencement Date.
18.2 POWER OF ATTORNEY
In consideration of, among other things, the mutual promises contained in
parts 15 and 16:
(a) each Shareholder irrevocably appoints the other Shareholders severally
as its attorney to complete and execute (under hand or under seal)
such instruments for and on its behalf as the attorney thinks
necessary or desirable to give effect to any of the transactions
contemplated by parts 15 and 16;
(b) each appointor agrees to ratify and confirm whatever the attorney
lawfully does, or causes to be done, under the appointment;
(c) each appointor agrees to indemnify the attorney against all claims,
demands, costs, charges, expenses, outgoings, losses and liabilities
arising in any way in connection with the lawful exercise of all or
any of the attorney's powers and authorities under that appointment;
and
-35-
(d) each appointor agrees to deliver to the Company on demand any power of
attorney, instrument of transfer or other instruments as the Company
may require for the purposes of any of the transactions contemplated
by parts 15 and 16.
PART 19
COMPETITION
19.1 UNDERTAKINGS
(a) For the purposes of clause 19.1(b) the expression "competitive with
the Business" includes (but is not limited to) competition in a small
part of the Business or mere competition in peripheral products or
lines of business.
(b) A Shareholder must not do, and must ensure that none of its Related
Corporations does, any of the following without first obtaining the
written consent of each other Shareholder:
(1) directly or indirectly carry on (whether alone or in partnership
or joint venture with anyone else) or otherwise be concerned with
or interested in (whether as trustee, principal, agent,
shareholder, unit holder or in any other capacity) any business
similar to or competitive with the Business in Australia for 3
years after the later of the Commencement Date or the party
ceasing to be a Shareholder;
(2) solicit or persuade any person or corporation which is a customer
or client of the Company Group, to cease doing business with the
Company Group or reduce the amount of business which the customer
or client would normally do with the Company Group for 3 years
after the later of the Commencement Date or the party ceasing to
be a Shareholder;
(3) accept from a customer or client referred to in clause 19.1(b)(2)
any business of the kind ordinarily forming part of the Business
for 3 years after the later of the Commencement Date or the party
ceasing to be a Shareholder; or
(4) at any time induce or attempt to induce any person who is at the
time of Completion or who later becomes an employee of the
Company Group to terminate his or her employment with the Company
Group.
19.2 SEPARATE UNDERTAKINGS
If any part of an undertaking in clause 19.1 is unenforceable, it may be
severed without affecting the remaining enforceability of that or the other
undertakings.
-36-
19.3 VALUE OF THE SHARES AND THE BUSINESS
Each Shareholder agrees that:
(a) any failure to comply with clause 19.1 would diminish the value of the
Shares and the Business; and
(b) the restrictive undertakings in clause 19.1(b) are reasonable and
necessary for the protection of the Shares and the Business and must
be given full effect.
19.4 LEGAL ADVICE
Each Shareholder acknowledges that in relation to this agreement and in
particular this part 19 it has received legal advice or has had the
opportunity of obtaining legal advice.
19.5 INJUNCTION
Each Shareholder acknowledges that monetary damages alone would not be
adequate compensation to the Company and each other Shareholder for a
breach of clause 19.1 and that the Company is entitled to seek an
injunction from a court of competent jurisdiction if:
(a) a Shareholder fails to comply or threatens to fail to comply with
clause 19.1; or
(b) the Company has reason to believe a Shareholder will not comply with
clause 19.1.
PART 20
PUBLIC LISTING
20.1 ASX APPROVAL FOR LISTING
The Shareholders must use their best endeavours to procure by no later than
5 years or such longer period as the Shareholders may agree from the
Commencement Date:
(a) a formal statement from the ASX of the terms and conditions upon and
subject to the satisfaction of which the ASX will approve:
(1) the admission of the Company to the official list of the ASX; and
(2) the listing of the Shares for official quotation on the main
board of the ASX; or
(b) an equivalent statement from any other recognised stock exchange
agreed by the Shareholders.
-37-
20.2 APPLICATION FOR ASX LISTING
If the Company receives a formal statement from the ASX under clause
20.1(a) or an equivalent statement from any other agreed recognised stock
exchange under clause 20.1(b), the Shareholders must do all acts, matters
and things within their power that may be necessary to satisfy the
reasonable terms and conditions for admission and listing prescribed by the
formal statement.
20.3 FAILURE TO LIST
If the Shareholders fail to obtain a formal statement from the ASX under
clause 20.1(a) or an equivalent statement from any other agreed recognised
stock exchange under clause 20.1(b) within 5 years from the Commencement
Date, the Shareholders must negotiate in good faith to determine, agree and
implement alternative mechanisms for the realisation of their investment in
the Company including, without limitation, a trade sale or a leveraged
recapitalisation.
20.4 TERMINATION OF THIS AGREEMENT
This agreement will automatically terminate upon the Company being notified
by the ASX or the agreed recognised stock exchange of the Listing.
PART 21
LOBIKE GUARANTEE AND INDEMNITY
21.1 GUARANTEE
McIntosh unconditionally and irrevocably guarantees to MBO and Kysor the
performance of the obligations under this agreement of Lobike and any of
its permitted assigns under clause 3.4(b).
21.2 PERFORMANCE
If Lobike fails to perform its obligations under this agreement when they
are due, McIntosh must immediately on demand from MBO or Kysor cause Lobike
to perform its obligations under this agreement.
21.3 INDEMNITY
(a) McIntosh indemnifies MBO against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by MBO in relation to:
(1) the failure of Lobike to perform its obligations under this
agreement; or
(2) the failure of McIntosh to cause Lobike to perform its
obligations under this agreement.
-38-
(b) McIntosh indemnifies Kysor against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by Kysor in relation to:
(1) the failure of Lobike to perform its obligations under this
agreement; or
(2) the failure of McIntosh to cause Lobike to perform its
obligations under this agreement.
21.4 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 21 applies:
(1) to the present and future obligations of Lobike under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the approval of McIntosh.
(b) The obligations of McIntosh under this part 21 extend to any change in
the obligations of Lobike as a result of any amendment, supplement,
renewal or replacement of any agreement to which McIntosh has agreed.
(c) This part 21 is not affected nor are the obligations of McIntosh under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
(d) This clause 21.4 applies:
(1) regardless of whether McIntosh is aware of or has consented to or
are given notice of any amendment, supplement, renewal or
replacement of any agreement or the occurrence of any other
thing; and
(2) irrespective of any rule of law or equity to the contrary.
21.5 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting any obligation of Lobike under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of McIntosh under this part 21 and any Power is the same
as if:
-39-
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 21.5(a)(3),
had not been made and McIntosh must immediately take all action and
sign all documents necessary or required by MBO or Kysor to restore to
MBO and Kysor this part 21 immediately before the payment, conveyance,
transfer or transaction.
(b) Clause 21.5(a) applies whether or not Lobike knew, or ought to have
known of, anything referred to in that clause.
21.6 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 21 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation.
(b) This part 21 is enforceable against McIntosh:
(1) without first having recourse to any collateral securities; and
(2) whether or not MBO or Kysor has:
(A) made demand upon Lobike; or
(B) given notice to Lobike or any other person in respect of any
thing; or
(C) taken any other steps against Lobike or any other person.
21.7 NO COMPETITION
(a) Subject to clause 21.7(b), until the obligations of Lobike under this
agreement have been fully performed and until this part 21 has been
finally discharged, McIntosh must not, either directly or indirectly
prove in, claim or receive the benefit of any distribution, dividend
or payment arising out of or relating to the liquidation of Lobike.
(b) If required by MBO or Kysor, McIntosh must prove in any liquidation of
Lobike for all amounts owed to McIntosh.
(c) All amounts recovered by McIntosh from any liquidation from Lobike
must be received and held in trust by McIntosh for MBO and Kysor to
the extent of the unsatisfied liability of McIntosh under this part
21.
-40-
21.8 CONTINUING GUARANTEE AND INDEMNITY
This part 21 is a continuing obligation of McIntosh, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) the obligations of Lobike under this agreement have been performed;
and
(d) this part 21 has been finally discharged by MBO and Kysor.
PART 22
LOCANA GUARANTEE AND INDEMNITY
22.1 GUARANTEE
Rogan unconditionally and irrevocably guarantees to MBO and Kysor the
performance of the obligations under this agreement of Locana and any of
its permitted assigns under clause 3.4(b).
22.2 PERFORMANCE
If Locana fails to perform its obligations under this agreement when they
are due, Rogan must immediately on demand from MBO or Kysor cause Locana to
perform its obligations under this agreement.
22.3 INDEMNITY
(a) Rogan indemnifies MBO against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by MBO in relation to:
(1) the failure of Locana to perform its obligations under this
agreement; or
(2) the failure of Rogan to cause Locana to perform its obligations
under this agreement.
(b) Rogan indemnifies Kysor against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by Kysor in relation to:
(1) the failure of Locana to perform its obligations under this
agreement; or
-41-
(2) the failure of Rogan to cause Locana to perform its obligations
under this agreement.
22.4 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 22 applies:
(1) to the present and future obligations of Locana under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the approval of Rogan.
(b) The obligations of Rogan under this part 22 extend to any change in
the obligations of Locana as a result of any amendment, supplement,
renewal or replacement of any agreement to which Rogan has agreed.
(c) This part 22 is not affected nor are the obligations of Rogan under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
(d) This clause 22.4 applies:
(1) regardless of whether Rogan is aware of or has consented to or
are given notice of any amendment, supplement, renewal or
replacement of any agreement or the occurrence of any other
thing; and
(2) irrespective of any rule of law or equity to the contrary.
22.5 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting any obligation of Locana under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Rogan under this part 22 and any Power is the same as
if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 22.5(a)(3),
-42-
had not been made and Rogan must immediately take all action and sign
all documents necessary or required by MBO or Kysor to restore to MBO
and Kysor this part 22 immediately before the payment, conveyance,
transfer or transaction.
(b) Clause 22.5(a) applies whether or not Locana knew, or ought to have
known of, anything referred to in that clause.
22.6 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 22 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation.
(b) This part 22 is enforceable against Rogan:
(1) without first having recourse to any collateral securities; and
(2) whether or not MBO or Kysor has:
(A) made demand upon Locana; or
(B) given notice to Locana or any other person in respect of any
thing; or
(C) taken any other steps against Locana or any other person.
22.7 NO COMPETITION
(a) Subject to clause 22.7(b), until the obligations of Locana under this
agreement have been fully performed and until this part 22 has been
finally discharged, Rogan must not, either directly or indirectly
prove in, claim or receive the benefit of any distribution, dividend
or payment arising out of or relating to the liquidation of Locana.
(b) If required by MBO or Kysor, Rogan must prove in any liquidation of
Locana for all amounts owed to Rogan.
(c) All amounts recovered by Rogan from any liquidation from Locana must
be received and held in trust by Rogan for MBO and Kysor to the extent
of the unsatisfied liability of Rogan under this part 22.
22.8 CONTINUING GUARANTEE AND INDEMNITY
This part 22 is a continuing obligation of Rogan, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
-43-
(c) the obligations of Locana under this agreement have been performed;
and
(d) this part 22 has been finally discharged by MBO and Kysor.
PART 23
LOFIVA GUARANTEE AND INDEMNITY
23.1 GUARANTEE
Moon unconditionally and irrevocably guarantees to MBO and Kysor the
performance of the obligations under this agreement of Lofiva and any of
its permitted assigns under clause 3.4(b).
23.2 PERFORMANCE
If Lofiva fails to perform its obligations under this agreement when they
are due, Moon must immediately on demand from MBO or Kysor cause Lofiva to
perform its obligations under this agreement.
23.3 INDEMNITY
(a) Moon indemnifies MBO against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by MBO in relation to:
(1) the failure of Lofiva to perform its obligations under this
agreement; or
(2) the failure of Moon to cause Lofiva to perform its obligations
under this agreement.
(b) Moon indemnifies Kysor against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by Kysor in relation to:
(1) the failure of Lofiva to perform its obligations under this
agreement; or
(2) the failure of Moon to cause Lofiva to perform its obligations
under this agreement.
23.4 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 23 applies:
(1) to the present and future obligations of Lofiva under this
agreement; and
-44-
(2) to this agreement, as amended, supplemented, renewed or replaced
with the approval of Moon.
(b) The obligations of Moon under this part 23 extend to any change in the
obligations of Lofiva as a result of any amendment, supplement,
renewal or replacement of any agreement to which Moon has agreed.
(c) This part 23 is not affected nor are the obligations of Moon under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
(d) This clause 23.4 applies:
(1) regardless of whether Moon is aware of or has consented to or are
given notice of any amendment, supplement, renewal or replacement
of any agreement or the occurrence of any other thing; and
(2) irrespective of any rule of law or equity to the contrary.
23.5 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting any obligation of Lofiva under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Moon under this part 23 and any Power is the same as
if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 23.5(a)(3),
had not been made and Moon must immediately take all action and sign
all documents necessary or required by MBO or Kysor to restore to MBO
and Kysor this part 23 immediately before the payment, conveyance,
transfer or transaction.
(b) Clause 23.5(a) applies whether or not Lofiva knew, or ought to have
known of, anything referred to in that clause.
23.6 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 23 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation.
-45-
(b) This part 23 is enforceable against Moon:
(1) without first having recourse to any collateral securities; and
(2) whether or not MBO or Kysor has:
(A) made demand upon Lofiva; or
(B) given notice to Lofiva or any other person in respect of any
thing; or
(C) taken any other steps against Lofiva or any other person.
23.7 NO COMPETITION
(a) Subject to clause 23.7(b), until the obligations of Lofiva under this
agreement have been fully performed and until this part 23 has been
finally discharged, Moon must not, either directly or indirectly prove
in, claim or receive the benefit of any distribution, dividend or
payment arising out of or relating to the liquidation of Lofiva.
(b) If required by MBO or Kysor, Moon must prove in any liquidation of
Lofiva for all amounts owed to Moon.
(c) All amounts recovered by Moon from any liquidation from Lofiva must be
received and held in trust by Moon for MBO and Kysor to the extent of
the unsatisfied liability of Moon under this part 23.
23.8 CONTINUING GUARANTEE AND INDEMNITY
This part 23 is a continuing obligation of Moon, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) the obligations of Lofiva under this agreement have been performed;
and
(d) this part 23 has been finally discharged by MBO and Kysor.
-46-
PART 24
LOGELA GUARANTEE AND INDEMNITY
24.1 GUARANTEE
Miller unconditionally and irrevocably guarantees to MBO and Kysor the
performance of the obligations under this agreement of Logela and any of
its permitted assigns under clause 3.4(b).
24.2 PERFORMANCE
If Logela fails to perform its obligations under this agreement when they
are due, Miller must immediately on demand from MBO or Kysor cause Logela
to perform its obligations under this agreement.
24.3 INDEMNITY
(a) Miller indemnifies MBO against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by MBO in relation to:
(1) the failure of Logela to perform its obligations under this
agreement; or
(2) the failure of Miller to cause Logela to perform its obligations
under this agreement.
(b) Miller indemnifies Kysor against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by Kysor in relation to:
(1) the failure of Logela to perform its obligations under this
agreement; or
(2) the failure of Miller to cause Logela to perform its obligations
under this agreement.
24.4 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 24 applies:
(1) to the present and future obligations of Logela under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the approval of Miller.
(b) The obligations of Miller under this part 24 extend to any change in
the obligations of Logela as a result of any amendment, supplement,
renewal or replacement of any agreement to which Miller has agreed.
-47-
(c) This part 24 is not affected nor are the obligations of Miller under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
(d) This clause 24.4 applies:
(1) regardless of whether Miller is aware of or has consented to or
are given notice of any amendment, supplement, renewal or
replacement of any agreement or the occurrence of any other
thing; and
(2) irrespective of any rule of law or equity to the contrary.
24.5 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting any obligation of Logela under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Miller under this part 24 and any Power is the same
as if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 24.5(a)(3),
had not been made and Miller must immediately take all action and sign
all documents necessary or required by MBO or Kysor to restore to MBO
and Kysor this part 24 immediately before the payment, conveyance,
transfer or transaction.
(b) Clause 24.5(a) applies whether or not Logela knew, or ought to have
known of, anything referred to in that clause.
24.6 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 24 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation.
(b) This part 24 is enforceable against Miller:
(1) without first having recourse to any collateral securities; and
(2) whether or not MBO or Kysor has:
-48-
(A) made demand upon Logela; or
(B) given notice to Logela or any other person in respect of any
thing; or
(C) taken any other steps against Logela or any other person.
24.7 NO COMPETITION
(a) Subject to clause 24.7(b), until the obligations of Logela under this
agreement have been fully performed and until this part 24 has been
finally discharged, Miller must not, either directly or indirectly
prove in, claim or receive the benefit of any distribution, dividend
or payment arising out of or relating to the liquidation of Logela.
(b) If required by MBO or Kysor, Miller must prove in any liquidation of
Logela for all amounts owed to Miller.
(c) All amounts recovered by Miller from any liquidation from Logela must
be received and held in trust by Miller for MBO and Kysor to the
extent of the unsatisfied liability of Miller under this part 24.
24.8 CONTINUING GUARANTEE AND INDEMNITY
This part 24 is a continuing obligation of Miller, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) the obligations of Logela under this agreement have been performed;
and
(d) this part 24 has been finally discharged by MBO and Kysor.
PART 25
LAWRENCE NOMINEES GUARANTEE AND INDEMNITY
25.1 GUARANTEE
Lawrence unconditionally and irrevocably guarantees to MBO and Kysor the
performance of the obligations under this agreement of Lawrence Nominees
and any of its permitted assigns under clause 3.4(b).
-49-
25.2 PERFORMANCE
If Lawrence Nominees fails to perform its obligations under this agreement
when they are due, Lawrence must immediately on demand from MBO or Kysor
cause Lawrence Nominees to perform its obligations under this agreement.
25.3 INDEMNITY
(a) Lawrence indemnifies MBO against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by MBO in relation to:
(1) the failure of Lawrence Nominees to perform its obligations under
this agreement; or
(2) the failure of Lawrence to cause Lawrence Nominees to perform its
obligations under this agreement.
(b) Lawrence indemnifies Kysor against any claim, action, damage, loss,
liability, cost, charge, expense, outgoing or payment suffered, paid
or incurred by Kysor in relation to:
(1) the failure of Lawrence Nominees to perform its obligations under
this agreement; or
(2) the failure of Lawrence to cause Lawrence Nominees to perform its
obligations under this agreement.
25.4 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 25 applies:
(1) to the present and future obligations of Lawrence Nominees under
this agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced
with the approval of Lawrence.
(b) The obligations of Lawrence under this part 25 extend to any change in
the obligations of Lawrence Nominees as a result of any amendment,
supplement, renewal or replacement of any agreement to which Lawrence
has agreed.
(c) This part 25 is not affected nor are the obligations of Lawrence under
this agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
(d) This clause 25.4 applies:
-50-
(1) regardless of whether Lawrence is aware of or has consented to or
are given notice of any amendment, supplement, renewal or
replacement of any agreement or the occurrence of any other
thing; and
(2) irrespective of any rule of law or equity to the contrary.
25.5 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting any obligation of Lawrence Nominees under this agreement
is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim
is upheld, conceded or compromised in whole or in part,
the liability of Lawrence under this part 25 and any Power is the same
as if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 25.5(a)(3),
had not been made and Lawrence must immediately take all action and
sign all documents necessary or required by MBO or Kysor to restore to
MBO and Kysor this part 25 immediately before the payment, conveyance,
transfer or transaction.
(b) Clause 25.5(a) applies whether or not Lawrence Nominees knew, or ought
to have known of, anything referred to in that clause.
25.6 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 25 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation.
(b) This part 25 is enforceable against Lawrence:
(1) without first having recourse to any collateral securities; and
(2) whether or not MBO or Kysor has:
(A) made demand upon Lawrence Nominees; or
(B) given notice to Lawrence Nominees or any other person in
respect of any thing; or
-51-
(C) taken any other steps against Lawrence Nominees or any other
person.
25.7 NO COMPETITION
(a) Subject to clause 25.7(b), until the obligations of Lawrence Nominees
under this agreement have been fully performed and until this part 25
has been finally discharged, Lawrence must not, either directly or
indirectly prove in, claim or receive the benefit of any distribution,
dividend or payment arising out of or relating to the liquidation of
Lawrence Nominees.
(b) If required by MBO or Kysor, Lawrence must prove in any liquidation of
Lawrence Nominees for all amounts owed to Lawrence.
(c) All amounts recovered by Lawrence from any liquidation from Lawrence
Nominees must be received and held in trust by Lawrence for MBO and
Kysor to the extent of the unsatisfied liability of Lawrence under
this part 25.
25.8 CONTINUING GUARANTEE AND INDEMNITY
This part 25 is a continuing obligation of Lawrence, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) the obligations of Lawrence Nominees under this agreement have been
performed; and
(d) this part 25 has been finally discharged by MBO and Kysor.
PART 26
GENERAL
26.1 NOTICES
(a) Any notice or other communication including, but not limited to, any
request, demand, consent or approval, to or by a party to this
agreement:
(1) must be in legible writing and in English addressed as shown
below:
-52-
(A) if to Lobike:
Address: 36 The Grand Parade
Brighton-Le-Sands NSW 2216
Attention: Mr David McIntosh;
(B) if to Locana:
Address: 50 Huntingdale Drive
Denham Court NSW 2565
Attention: Mr John Rogan;
(C) if to Lofiva:
Address: P.O. Box 66
Kellyville NSW 2153
Attention: Mr Kenneth Moon;
(D) if to Logela:
Address: Unit 1303
The Connaught
187 Liverpool Street
Sydney NSW 2000
Attention: Mr Leslie Miller;
(E) if to MBO:
Address: Suite 2707
Lippo Tower
Lippo Centre
89 Queensway
Hong Kong
Attention: Mr Alexander Thomson
Facsimile: 0011 852 2523 7729;
(F) if to Kysor:
Address: One Madison Avenue
Cadillac Michigan USA
Attention: Mr Terry Murphy/Mr David Crooks
Facsimile: 0011 1 616 775 3950;
-53-
(G) if to Hill Young:
Address: Level 21
Governor Phillip Tower
1 Farrer Place
Sydney NSW 2000
Attention: Mr Jonathan Fennel
Facsimile: 252 2299;
(H) if to Lawrence Nominees:
Address: 42 Edinburgh Road
Lilydale VIC 3140;
Attention: Mr Terry Lawrence;
(I) if to McIntosh:
Address: 36 The Grand Parade
Brighton-Le-Sands NSW 2216;
(J) if to Rogan:
Address: 50 Huntingdale Drive
Denham Court NSW 2565;
(K) if to Moon:
Address: P.O. Box 66
Kellyville NSW 2153;
(L) if to Miller:
Address: Unit 1303
The Connaught
187 Liverpool Street
Sydney NSW 2000;
(M) if to Lawrence:
Address: 42 Edinburgh Road
Lilydale VIC 3140; and
-54-
(N) if to the Company:
Address: 1 Suttor Street
Silverwater NSW 2141
Attention: The Managing Director
Facsimile: To be advised,
or as specified to the sender by any party by notice;
(2) where the sender is a company, must be signed by an officer or
under the common seal of the sender;
(3) is regarded as being given by the sender and received by the
addressee:
(A) if by delivery in person, when delivered to the addressee;
(B) if by post, 5 Business Days from and including the date of
postage; or
(C) if by facsimile transmission, whether or not legibly
received, when received by the addressee,
but if the delivery or receipt is on a day which is not a
Business Day or is after 4.00 pm (addressee's time) it is
regarded as received at 9.00 am on the following Business Day;
and
(4) can be relied upon by the addressee and the addressee is not
liable to any other person for any consequences of that reliance
if the addressee believes it to be genuine, correct and
authorised by the sender.
(b) A facsimile transmission is regarded as legible unless the addressee
telephones the sender within 2 hours after transmission is received or
regarded as received under clause 26.1(a)(3) and informs the sender
that it is not legible.
(c) In this clause 26.1, a reference to an addressee includes a reference
to an addressee's officers, agents or employees.
(d) Notwithstanding any other paragraph of this clause 26.1, a notice will
be deemed to be given by or to the Founding Shareholders if it is
given by or to, as the case may be, the Managing Director of the
Company at the address for service for the Company specified in clause
26.1(a)(1)(M).
-55-
26.2 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of New South Wales.
(b) Each of the parties irrevocably submits to the exclusive jurisdiction
of the courts of New South Wales.
(c) Each of party irrevocably waives any objection to the venue of any
legal process in New South Wales on the basis that the process has
been brought in an inconvenient forum.
26.3 PROHIBITION AND ENFORCEABILITY
(a) Any provision of, or the application of any provision of, this
agreement or any Power which is prohibited in any jurisdiction is, in
that jurisdiction, ineffective only to the extent of that prohibition.
(b) Any provision of, or the application of any provision of, this
agreement which is void, illegal or unenforceable in any jurisdiction
does not affect the validity, legality or enforceability of that
provision in any other jurisdiction or of the remaining provisions in
that or any other jurisdiction.
(c) The application of this clause 26.3 is not limited by any other
provision of this agreement in relation to severability, prohibition
or enforceability.
26.4 WAIVERS
(a) A waiver, forbearance, abandonment, election or estoppel of, or
affecting:
(1) a term of this agreement (including this clause 26.4);
(2) a right, power, authority, discretion or remedy under this
agreement;
(3) a right, power, authority, discretion or remedy created or
arising on a breach of or default under this agreement; or
(4) the exercise of a right, power, authority, discretion or remedy
referred to in either paragraph (2) or (3),
must be in writing, or, in the case of estoppel, must be based on, a
written statement signed by the party against whom the waiver,
abandonment, election, forbearance or estoppel is claimed.
(b) A failure or delay in the exercise, or a partial exercise, of a right,
power, authority, discretion or remedy referred to in clause
-56-
26.4(a)(2) or (3) is not regarded as either a waiver, forbearance,
abandonment or election or the basis of an estoppel, of or affecting
any thing referred to in clause 26.4(a)(1), (2), (3) or (4).
26.5 VARIATION
A variation of any term of this agreement must be in writing and signed by
the parties.
26.6 CUMULATIVE RIGHTS
The Powers are cumulative and do not exclude any other right, power,
authority, discretion or remedy of the parties.
26.7 ASSIGNMENT
(a) Rights arising out of or under this agreement are not assignable by
one party without the prior written consent of every other party.
(b) A party must not withhold its consent in respect of an assignment of
rights arising out of or under this agreement related to a transfer of
Shares under clause 3.4.
26.8 FURTHER ASSURANCES
Each party must do all things and execute all further documents necessary
to give full effect to this agreement.
26.9 ENTIRE AGREEMENT
This agreement supersedes all previous agreements in respect of its subject
matter and embodies the entire agreement between the parties.
26.10 COUNTERPARTS
(a) This agreement may be executed in any number of counterparts.
(b) All counterparts, taken together, constitute one instrument.
(c) A party may execute this agreement by signing any counterpart.
26.11 STAMP DUTY
(a) A party must pay any stamp duty (including any fine or penalty) in
respect of:
(1) this agreement; and
(2) any document executed under it,
-57-
in proportion to its holding of the Shares set out in schedule 1.
(b) Each party indemnifies the other in respect of any stamp duty payable
under clause 26.11(a).
26.12 COSTS AND EXPENSES
Subject to clause 26.11, each party must pay its own costs and expenses in
respect of the negotiation, preparation, execution, delivery and
registration of this agreement, including, but not limited to, any legal
costs and expenses and any professional consultant's fees.
26.13 RELATIONSHIP OF PARTIES
No party is the partner, agent, employee or representative of any other
party and no party has the power to incur any obligations on behalf of, or
pledge the credit of, any other party.
26.14 SURVIVAL OF PARTS
Parts 13 and 19 survive termination of this agreement.
26.15 SHADOW DIRECTORS
(a) Subject to clause 26.15(b), if the directors of the Company make any
decisions in respect of the Company Group or any member of the Company
Group other than the Company, the Company must, to the extent
permitted by law, cause the directors of the relevant other members of
the Company Group to implement those decisions.
(b) Nothing in clause 26.15(a) requires the Company to do any act, matter
or thing that may render the Company or any directors of the Company
to be a director of any other members of the Company Group either at
law or under section 60 of the Corporations Law.
(c) Notwithstanding any other provision to the contrary, if the Company is
required under this agreement to procure any other member of the
Company Group to do any act, matter or thing, the Company must not do
any act, matter or thing that may render the Company or any directors
of the Company to be a director of any other members of the Company
Group either at law or under section 60 of the Corporations Law.
(d) Notwithstanding any other provision to the contrary, if any
Shareholder is required under this agreement to procure any member of
the Company Group to do any act, matter or thing, the Shareholder must
not do any act, matter or thing that may render the Shareholder or any
directors of the Shareholder to be a director of any member of the
Company Group either at law or under section 60 of the Corporations
Law.
-58-
SCHEDULE 1
SHARES
(Clauses 3.1 and 26.11)
<TABLE>
<CAPTION>
SHAREHOLDER NUMBER OF SHARES PERCENTAGE OF TOTAL SHARES
<S> <C> <C>
Lobike Pty Ltd 5,750 11.50%
(A.C.N. 001 874 380)
as trustee for The
Vernon Avenue Trust
Locana Pty Ltd 5,750 11.50%
(A.C.N. 001 874 317)
as trustee for The
Leumeah Road Trust
Lofiva Pty Ltd 5,750 11.50%
(A.C.N. 001 876 982)
as trustee for The
Sunset Place Trust
Logela Pty Ltd 5,750 11.50%
(A.C.N. 001 876 820)
as trustee for The
Cairnes Road Trust
T & M Lawrence Pty 2,500 5.00%
Ltd (A.C.N. 071 527
010) as trustee for
the T J Lawrence
Family Trust
FOUNDING SHAREHOLDERS 25,500 51.00%
AND LAWRENCE SUB-TOTAL
Refrigeration 12,127 24.254%
Investment (MBO)
Limited
Kysor Industrial 12,127 24.254%
Corporation
Hill Young & 246 0.492%
Associates
Limited (A.C.N.
003 977 106)
TOTAL 50,000 100.0%
</TABLE>
-59-
EXECUTED by the parties as an agreement:
THE COMMON SEAL of
LOBIKE PTY LTD
was affixed to this document
in the presence of:
/S/ C. MCINTOSH /S/ D.J. MCINTOSH
Director/Secretary Director
C. MCINTOSH D.J. MCINTOSH
Name (please print) Name (please print)
SIGNED for
LOCANA PTY LTD
by its attorneys
in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ J.R. ROGAN
Witness Attorney
BRADLEY THOMAS RUSSELL J.R. ROGAN
Name (please print) Name (please print)
SIGNED for
LOFIVA PTY LTD
by its attorneys
in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ K.J. MOON
Witness Attorney
BRADLEY THOMAS RUSSELL KENNETH JOHN MOON
Name (please print) Name (please print)
-60-
SIGNED for
LOGELA PTY LTD
by its attorneys
in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ LESLIE OWEN MILLER
Witness Attorney
BRADLEY THOMAS RUSSELL LESLIE OWEN MILLER
Name (please print) Name (please print)
SIGNED for REFRIGERATION INVESTMENT
(MBO) LIMITED
by its attorney in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ ALEXANDER THOMSON
Witness Attorney
BRADLEY THOMAS RUSSELL ALEXANDER THOMSEN
Name (please print) Name (please print)
SIGNED for KYSOR INDUSTRIAL
CORPORATION by its attorney in the
presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ TERRY M. MURPHY
Witness Attorney
BRADLEY THOMAS RUSSELL TERRY M. MURPHY
Name (please print) Name (please print)
-61-
THE COMMON SEAL of
HILL YOUNG & ASSOCIATES LIMITED
was affixed to this document
in the presence of
/S/ RICHARD HILL /S/ JON ANTHONY FENNEL
Director/Secretary Director
RICHARD HILL JON ANTHONY FENNEL
Name (please print) Name (please print)
SIGNED for
T & M LAWRENCE NOMINEES PTY LTD
by its attorney
in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ D.J. MCINTOSH
Witness Attorney
BRADLEY THOMAS RUSSELL
Name (please print) Name (please print)
SIGNED by DAVID JAMES
MCINTOSH in the presence of:
/S/ C. MCINTOSH /S/ D.J. MCINTOSH
Witness David James McIntosh
C. MCINTOSH
Name (please print)
SIGNED by JOHN RALPH
ROGAN in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ J.R. ROGAN
Witness John Ralph Rogan
BRADLEY THOMAS RUSSELL
Name (please print)
-62-
SIGNED by KENNETH JOHN
MOON in the presence of:
/S/ I.A. MCLENNAN /S/ K.J. MOON
Witness Kenneth John Moon
I.A. MCLENNAN
Name (please print)
SIGNED by LESLIE OWEN
MILLER in the presence of:
/S/ BRADLEY THOMAS RUSSELL /S/ LESLIE OWEN MILLER
Witness Leslie Owen Miller
BRADLEY THOMAS RUSSELL
Name (please print)
SIGNED for TERRY JOHN
LAWRENCE by its attorney
in the presence of:
/S/ D.J. McIntosh
/S/ BRADLEY THOMAS RUSSELL /S/ K.J. MOON
Witness Attorney
BRADLEY THOMAS RUSSELL
Name (please print)
THE COMMON SEAL of
AUSTRAL REFRIGERATION PTY LTD
was affixed to this document
in the presence of:
/S/ K.J. MOON /S/ J.R. ROGAN
Director/Secretary Director
KENNETH JOHN MOON J.R. ROGAN
Name (please print) Name (please print)
-63-
