<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ACT OF 1934
DECEMBER 17, 1996
DATE OF REPORT
NATIONAL ENTERPRISES INC.
(NAME OF SMALL BUSINESS ISSUER IN ITS CHARTER)
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<S> <C> <C>
INDIANA 1-4799 35-0540454
(STATE OR OTHER JURISDICTION OF INCORPORATION) (COMMISSION FILE NUMBER) (IRS EMPLOYER IDENTIFICATION NO.)
</TABLE>
<TABLE>
<S> <C>
P.O. BOX 940846, PLANO TEXAS, USA 75094-0846
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
214-960-8844
(REGISTRANT'S TELEPHONE NUMBER)
<PAGE> 2
ITEM 1 - CHANGE IN CONTROL
On December 17, 1996 a change in control occurred the details of which are as
follows:
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<S> <C>
Description of Transaction: Mercury Immobilien und Verwaltungs AG acquired a
block of shares from Arendscor (Canada) Inc., both
companies are unrelated arms length parties.
Acquirer: Mercury Immobilien und Verwaltungs AG, a private
Swiss company.
Consideration Paid: U.S. $10,000 obtained from the general working
capital .
Acquired: 54,367,551 common shares of the Company
representing 77.7% of the 70,005,997 common shares
of the company outstanding.
Date Acquired: December 17, 1996
</TABLE>
ITEM 2 - ACQUISITION AND DISPOSITION OF ASSETS
DISPOSITION OF ASSETS
On November 28, 1996 the company was indebted to Arendscor (Canada) Inc. (the
controlling shareholder of the Company at that date) and its affiliates, in the
amount of U.S. $142,874. This debt was assumed by Danca Investments Inc., an
affiliate of Arendscor (Canada) Inc., the consideration for which assumption
was the transfer of the company's interests in its wholly owned subsidiaries:
NRC Inc., Arendswood Homes Inc., and National Building Systems Inc. The net
book value of these subsidiaries in the accounts of the company was NRC Inc.
U.S.$1,350, Arendswood Homes Inc. U.S.$245, and National Buildings Systems
Inc. U.S.$960, respectively. The aggregate market value of the subsidiaries
based on the review of the Company and its directors was not more than the debt
assigned. Attached hereto, are Exhibits 1 through III, are the agreements
pertaining to the subject transfer.
The assignment of the debt and transfer of the assets were undertaken in the
ordinary course of financial restructuring which the company has been
undertaking since it emerged from bankruptcy in 1992. Furthermore, such
assumption and transfer were approved by the shareholders during their last
meeting held on June 15, 1995.
<PAGE> 3
ACQUISITION OF ASSETS
On December 17, 1996 the company acquired from Argosy Mining Corp., an arms
length party, Argosy Mining G.m.b.H and its interests in nine gold prospecting
properties in Austria. The acquired properties comprise:
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<CAPTION>
Property Location sq. kms.
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Schellgaden North and South South Salzburg/North Carinthia 39.4 and 37.4 sq. kms.
Goldeck Siflitz South Carinthia 37.4 sq. kms.
Siflitz East South Carinthia 31.6 sq. kms.
Kreuzeck West
(Rabant-Gurskerkammer-Fundkofel South West Carinthia 31.6 sq. kms.
Kreuzeck East (Lengholz) South Carinthia 20.5 sq. kms.
Kliening and Kliening West (Buchbauer) East Carinthia 27.4 and 27.4 sq. kms.
Strasseck-Gasen North Styria 12.3 sq. kms.
</TABLE>
The consideration paid, established through arms length negotiation, for Argosy
Mining G.m.b.H. was Cdn. $250,000 paid by the company, and 1,000,000 common
shares of the company owned by Mercury Immobilien und Verwaltungs AG (the new
control shareholder).
All nine properties have been centers of gold mining activities dating back at
least 1,000 years with intermittently flourishing gold production continuing
into the late 19th century. Repeated attempts to explore and revive the areas'
gold potential during the first half of the 20th century were curtailed by the
two World Wars. Extensive underground workings from the old mining periods are
still accessible at the Schellgaden, Goldeck Siflitz and Kreuzeck gold
properties.
In 1995 Argosy conducted extensive underground channel sampling programs in old
mines on the Schellgaden and Goldeck Siflitz properties to test for the gold
potential of the in situ ore. Subsequently four diamond core drill holes were
made at the Schellgaden North property and three at the Goldeck Siflitz
property.
With a minute analysis of previous exploration data and the new information
generated by the channel sampling and core drilling, a new understanding of the
Schellgaden North gold property's geology and structural model reveals what NEI
believes to be significant potential for this ancient mining area. NEI plans a
new drilling program to be conducted over an area of 500 by 1500 meters, which
includes old workings.
Although the Schellgaden North property is the priority for further
exploration, an evaluation of the future exploration potential of the other
properties is ongoing under the direction of Dr. Hans R. Klob, General Manager.
Attached hereto as Exhibits IV is the agreements pertaining to the subject
acquisition. The December 31, 1995 audited financial statements of Argosy
Mining G.m.b.H. are attached as
<PAGE> 4
Exhibit V.
ITEM 6 - RESIGNATION OF DIRECTORS
Coincidental with the sale by Arendscor (Canada) Inc. of its 54,367,551 shares
described above, two of the four directors of the company resigned as their
interests lay with Arendscor (Canada) Inc. The two resigning directors were
John B. Overzet and Arthur W. Walker. Replacing them are Florian
Riedl-Riedenstein and Edward Jan Smith. Matthew Gazenbeek and D. Campbell
Deacon continue as directors. D. Campbell Deacon is Chief Executive Officer of
United Tri-Star Resources Ltd., a Canadian public company of which Mercury
Immobilien und Verwaltungs AG is a significant shareholder.
ITEM 7(C) - EXHIBITS
Attached hereto are the following exhibits:
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<CAPTION>
Exhibit Exhibit No.
<S> <C>
Share Purchase Agreement, dated November 28, 1996
among, National Enterprises Inc. and Danca
Investments Inc. pertaining to NRC Inc. I
Share Purchase Agreement, dated November 28, 1996
among, National Enterprises Inc. and Danca
Investments Inc. pertaining to
National Building Systems, Inc. II
Share Purchase Agreement, dated November 28, 1996
among, National Enterprises Inc. and Danca
Investments Inc. pertaining to Arendswood Homes,
Inc. III
Agreement, dated November 30, 1996 among, National
Enterprises Inc., Argosy Mining Corp. and Mercury
Immobilien und Verwaltungs AG pertaining to the
acquisition of Argosy Mining G.m.b.H. IV
Argosy Mining G.m.b.H., Audited Financial
Statements for the period ending December 31, 1995 V
Argosy Mining G.m.b.H., Un-audited Financial
Statements for the nine months ending
September 30, 1996 VI
</TABLE>
The acquisition of Argosy Mining G.m.b.H. as described in ITEM 2 - ACQUISITION
AND DISPOSITION OF ASSETS, ACQUISITION OF ASSETS and the disposition of the
three subsidiaries described in ITEM 2 - ACQUISITION AND DISPOSITION OF ASSETS,
DISPOSITION OF ASSETS, will be reflected in the December 31, 1996 audited
financial statements to be filed with the Company's Form 10-K for such fiscal
year.
<PAGE> 5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act, 1994, the
registrant had duly caused the report to be signed on its behalf by the
undersigned hereunto duly authorized.
DATED this 17 day of December, 1996
NATIONAL ENTERPRISES INC.
per: /s/ D. CAMPBELL DEACON
-----------------------------------
D. Campbell Deacon
President
per: /s/ C.W. LEIGH CASSIDY, CA
-----------------------------------
C.W. Leigh Cassidy, CA
Vice President, Secretary
<PAGE> 6
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
<S> <C>
1.I Share Purchase Agreement, dated November 28, 1996
among, National Enterprises Inc. and Danca
Investments Inc. pertaining to NRC Inc.
1.II Share Purchase Agreement, dated November 28, 1996
among, National Enterprises Inc. and Danca
Investments Inc. pertaining to National Building Systems, Inc.
1.III Share Purchase Agreement, dated November 28, 1996
among, National Enterprises Inc. and Danca
Investments Inc. pertaining to Arendswood Homes, Inc.
2.IV Agreement, dated November 30, 1996 among, National
Enterprises Inc., Argosy Mining Corp. and Mercury
Immobilien und Verwaltungs AG pertaining to the
acquisition of Argosy Mining G.m.b.H.
13.V Argosy Mining G.m.b.H., Audited Financial
Statements for the period ending December 31, 1995
99.VI Argosy Mining G.m.b.H., Un-audited Financial
Statements for the nine months ending September 30, 1996
</TABLE>
<PAGE> 1
Exhibit 1.I
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the day of November , 1996.
BETWEEN:
NATIONAL ENTERPRISES, INC., a corporation incorporated pursuant to
the laws of the State of Indiana
(hereinafter called the "Vendor")
OF THE FIRST PART
- and -
DANCA INVESTMENTS, INC., a corporation incorporated pursuant to the
laws of the State of Texas
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS the Vendor desires to sell and the Purchaser desires to purchase
certain of the property and assets of the Vendor, hereinafter called the
"Transferred Assets", on the terms and subject to the conditions hereinafter
set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of other
valuable consideration and the sum of one dollar ($1.00) of lawful money of the
United States of America now paid by the Purchaser to the Vendor (receipt and
sufficiency whereof are hereby acknowledged), the Parties have agreed and do
hereby agree with each other as follows:
ARTICLE 1
INTERPRETATION
Section 1.01 Definitions. Where used in this Agreement, unless the context or
subject matter otherwise requires, the following words and phrases will have
the meanings set forth below:
"Closing" means the closing of the sale and purchase of the Transferred
Assets contemplated by this Agreement.
"Closing Date" means December 11, 1996 or as mutually agreed between the
Parties.
"Company" means NRC, Inc., a corporation incorporated pursuant to the
laws of the State of Texas.
"Fair Market Value" means, when used in relation to assets being
purchased by the Purchaser hereunder, the fair market value of the assets
in question at the Time of Closing.
"NEI Advance" means the advance made by the Vendor to the Company shown
on the financial statements annexed as a Schedule to this Agreement.
<PAGE> 2
"Parties" means the Purchaser and the Vendor, and their respective
successors and permitted assigns; and
"Party" means either of the Parties.
"Person" means an individual, a partnership, a corporation, a government
or any department or agency thereof, a trustee, any unincorporated
organization and the heirs, executors, administrators or other legal
representatives of an individual; and words importing "Person" have
similar meanings.
"Purchase Price" means the aggregate price for the Transferred Assets as
determined in Section 2.02.
"Purchaser" means the party of the second part.
"Time of Closing" means the opening of business on the Closing Date.
"Transferred Assets" means all of the issued and outstanding shares of
the Company and the NEI Advance.
"Vendor" means the party of the first part.
"Vendor's Book and Records" means all documents, files, records and other
data and information of the Company or of the Vendor relating to the
Transferred Assets or the Company.
Section 1.02. Currency. All sums of money which are referred to in this
Agreement are, unless the context or subject matter otherwise permits,
expressed in lawful money of the United States of America.
Section 1.03. Division of Agreement. The division of this Agreement into
articles, sections, paragraphs and subparagraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement. The terms "this Agreement", "hereof",
"herein", "hereunder" and similar expressions refer to this Agreement and not
to any particular article, section or other portion thereof and include any
agreement or instrument supplementary of ancillary hereto.
Section 1.04. Number and Gender. Words importing the singular number only
shall include the plural and vice versa, words importing the use of any gender
shall include all genders.
ARTICLE II
PURCHASE AND SALE OF TRANSFERRED ASSETS
Section 2.01. Purchase and Sale. Subject to the terms and provisions hereof
and based upon the warranties and representations herein contained, the Vendor
hereby sells, transfers, assigns and conveys to the Purchaser and the Purchaser
hereby purchases and accepts assignments of from the Vendor, at the Time of
Closing on the Closing Date, free and clear of any and all liens, pledges,
charges, mortgages, claims, security interests and other encumbrances, the
Transferred Assets.
Section 2.02. Purchase Price. The Purchase Price payable by the Purchaser for
the Transferred Assets (the "Purchase Price") shall be the sum of $120,874.20,
being the Fair Market Value of the Transferred Assets on the Closing Date. Of
such amount, the sum of $119,874.20 shall be allocated to the NEI Advance and
the balance to the remainder of the Transferred Assets.
Section 2.03. Payment of Purchase Price. The Purchase Price shall be paid and
satisfied by the Purchaser at the Time of Closing on the Closing Date in the
following manner:
<PAGE> 3
(a) The Purchaser shall assume the debt outstanding to Arends
(U.S.) Holdings, Inc. by the Vendor in the amount of $46,355.96 and
the debt outstanding to Arendscor (Canada) Inc. by the Vendor up to
the sum of $74,518.24 as part of the Purchase Price by issuing to
the Vendor its demand non-interest bearing promissory notes in the
principal amounts of $46,355.96 and $74,518.24 which will
immediately be assigned to Arends (U.S.) Holdings, Inc and Arendscor
(Canada) Inc., respectively.
(b) In the event that the Purchase Price is greater than the debt
outstanding by the Vendor to Arends (U.S.) Holdings, Inc. And
Arendscor (Canada) Inc. the Purchaser shall pay the balance of the
Purchase Price in cash or cheque.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VENDOR
The Vendor represents and warrants, subject to Section 5.03 and 6.01, to
the Purchaser as follows and acknowledges that the Purchaser is relying upon
such representations and warranties in connection with the entering into of
this Agreement and the purchase by the Purchaser of the Transferred Assets:
Section 3.01. Corporate Status of the Vendor. The Vendor is a corporation
duly incorporated, organized and validly subsisting under the laws of the State
of Indiana; the Vendor has the corporate power and capacity to own its property
and to carry on the business now being conducted by it and to carry out the
transactions contemplated hereby.
Section 3.02. Corporate Status of the Company. The Company is a corporation
duly incorporated and validly subsisting under the laws of the State of Texas;
the Company has the corporate power and capacity to own its property and to
carry on the business now being conducted by it and to carry on the
transactions contemplated hereby.
Section 3.03. Sale Permitted by Charter, Agreements, etc. The execution and
delivery by the Vendor of, and the performance of its obligations under, this
Agreement and the completion by the Vendor of the transactions contemplated
hereby will not result in the violation of any of the terms and provisions of
the constating documents or by-laws of the Vendor or the Company.
Section 3.04. Sale Permitted by Laws. The execution and delivery by the
Vendor of and the performance of its obligations under this Agreement and the
completion by the Vendor of the transactions contemplated hereby will not
result in the violation of any law or regulation of the United States of
America, the State of Indiana, or any order or decree of any court or tribunal
to which the Vendor or the Company is subject.
Section 3.05. Agreement Binding on Vendor. This Agreement has been duly
authorized, executed and delivered by the Vendor and is a valid and binding
obligation of the Vendor enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other laws of
general application affecting the rights of creditors and except that specific
performance is an equitable remedy which may only be awarded in the discretion
of the Court.
Section 3.06. Income Tax Returns. The Vendor has duly and finally filed all
consolidated tax returns which include the accounts of the Company, except the
1995 federal consolidated tax return, required to be filed by it. The Vendor
remains obligated to file the 1995 federal consolidated tax return which
includes the accounts of the Company for the fiscal year ended December 31,
1995 and will file the 1995 federal consolidated tax return.
Section 3.07. Title, etc. The Vendor will be the owner of the Transferred
Assets at the Time of Closing free and
<PAGE> 4
clear of any and all liens, pledges, charges, mortgages, security interests,
claims and other encumbrances, except as may be disclosed to the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying upon such representations and
warranties in connections with the entering into of this Agreement and the sale
by the Vendor of the Transferred Assets:
Section 4.01. Corporate Status. The Purchaser is a corporation duly
continued, organized and validly subsisting under the laws of the State of
Texas and has the corporate power and capacity to own its property and to carry
out the transactions contemplated hereby.
Section 4.02. Purchaser Permitted by Charter, Agreements, etc. The execution
and delivery by the Purchaser of, and the performance of its obligations under,
this Agreement and the completion by the Purchaser of the transactions
contemplated hereby will not result in the violation of any of the terms and
provisions of the constating documents or by-laws of the Purchaser or of any
indenture or other agreement, written or oral, to which the Purchaser is a
party or by which it is bound.
Section 4.03. Purchase Permitted by Laws. The execution and delivery by the
Purchaser of and the performance of its obligations under this Agreement and
the completion by the Purchaser of the transactions contemplated hereby will
not result in the violation of any law or regulations of the United States of
America, the State of Indiana or any order or decree of any court or tribunal
to which the Purchaser is subject.
Section 4.04. Agreement Binding on Purchaser. This Agreement has been duly
authorized, executed and delivered by the Purchaser and is valid and binding
obligation of the Purchaser enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other laws of
general application affecting the rights of creditors and except that specific
performance is an equitable remedy which may only be awarded in the discretion
of the Court.
ARTICLE V
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 5.01. Survival of Vendor's Covenants, etc. The covenants,
representations and warranties of the Vendor contained in this Agreement shall
survive the Closing, and, notwithstanding such Closing, nor any investigation
made by or on behalf of the Purchaser, shall continue in full force and effect
for the benefit of the Purchaser for a period of six months only and at the end
of such six month period such covenants, representations and warranties shall
expire and be null and void except with respect to claims made in relation
thereto during such six month period.
Section 5.02. Survival of Purchaser's Covenants, etc. The covenants,
representations and warranties of the Purchaser contained in this Agreement
shall survive the Closing, and, notwithstanding such Closing, nor any
investigation made by or on behalf of the Vendor, shall continue in full force
and effect for the benefit of the Vendor for a period of six months only and at
the end of such six month period such covenants, representations and warranties
shall expire and be null and void except with respect to claims made in
relation thereto during such six month period..
Section 5.03. Indemnity. The Vendor and the Purchaser each covenant and agree
to indemnify and save harmless the other of and from any loss whatsoever
suffered by the other directly or indirectly as a result of or arising out of
<PAGE> 5
any breach of representation, warranty or covenant of the other contained in
this Agreement, and all claims, demands, costs and expenses in respect of the
foregoing, up to a limit of $500.00. The foregoing limitation does not apply to
any breach pursuant to Section 3.06.
ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES
Section 6.01. Preliminary Investigations. The Vendor shall forthwith make
available to the Purchaser all Vendor's Books and Records. The Purchaser
acknowledges that there are no express or implied representations, warranties
or covenants by the Vendor with respect to the completeness or accuracy of the
financial statements annexed as a Schedule to this Agreement. The Purchaser
further acknowledges that the Vendor is making no representations, warranties
or covenants with respect to any actions, suits or proceedings which may create
a lien on the assets of the Company.
Section 6.02. Commission, Legal Fees, etc. All negotiations relative to this
Agreement and the transaction contemplated hereby have been conducted between
the Parties without the intervention of any other Person so that no valid claim
will arise against either of the Parties for a brokerage commission, finder's
fee or other like payment. The Vendor and the Purchaser will each bear the
fees and disbursements of the respective lawyers, accountants, brokers or
consultants engaged by them respectively in connection with the preparation of
this Agreement and the transactions contemplated hereby.
ARTICLE VII
CLOSING ARRANGEMENTS
Section 7.01. Closing. The Closing of the purchase and sale of the
Transferred Assets shall occur at the Time of Closing on the Closing Date at
the offices of the Purchaser at 132 McKee Ave., North York, Ontario, M2N 4C4.
At or before the Time of Closing, upon fulfilment of all the conditions set out
in Article VIII which have not been waived in writing by the Purchaser:
(a) The Vendor shall deliver to the Purchaser all necessary
deeds, conveyances, bills of sale, assurances, transfers,
assignments and any other documents necessary or reasonably required
to transfer the Transferred Assets to the Purchaser with a good and
marketable title, free and clear of all mortgages, liens, charges,
pledges, claims, security interests or encumbrances whatsoever;
(b) The Vendor shall deliver physical possession of the
Transferred Assets, including without limitation share certificates
representing all of the outstanding shares of the Company duly
endorsed in blank for transfer and any promissory note evidencing
the NEI Advance together with duly executed assignment thereof, to
the Purchaser;
(c) The Vendor shall take or cause to be taken by itself and the
Company all necessary or desirable actions, steps and corporate
proceedings to approve or authorized validly and effectively the
transfer of the Transferred Assets to the Purchaser and the
execution and delivery of this Agreement and other agreements and
documents contemplated hereby and shall cause all necessary meetings
of directors and shareholders of the Vendor and the Company to be
held for such purpose;
(d) The Vendor shall, if and to the extent requested, cause the
directors, officers and accountants of the Company to resign in
favour of nominees of the Purchaser; and
<PAGE> 6
(e) The Vendor shall deliver to the Purchaser the Vendor's Books
and Records, which shall become the property of the Purchaser. The
Purchaser agrees that it will preserve the Vendor's Books and
Records so delivered to it for such period as is required by any
applicable law, and will permit the Vendor or its authorized
representative(s) reasonable access thereto and the Purchaser shall
not destroy any of such Vendor' Books and Records either before or
after such period without giving the Vendor opportunity to take back
such Vendor' Books and Records, but the Purchaser shall not be
responsible or liable to the Vendor as a result of any accidental
loss or destruction of or damage to any such Vendor's Books and
Records.
Section 7.02. Purchase Price. On the Closing Date, the Purchaser shall make
payment to the Vendor of the Purchase Price.
ARTICLE VIII
CONDITIONS OF CLOSING
Section 8.01. Conditions for Purchaser's Benefit. The sale and purchase of
the Transferred Assets is subject to the following terms and conditions for the
exclusive benefit of the Purchaser to be fulfilled and/or performed at or prior
to the Time of Closing:
(a) the representations and warranties of the Vendor contained in
this Agreement shall be true and correct as of the Time of Closing,
and the Closing of the transaction of purchase and sale herein
provided for shall not be nor be deemed to be a waiver of the
covenants, representations and warranties contained in this
Agreement, which covenants, representations and warranties shall
continue in full force and effect for the benefit of the Purchaser
as provided in Article V hereof;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the Vendor at or before the Time
of Closing shall have been complied with or performed;
(c) there shall have been obtained from all appropriate federal,
state, provincial, local, municipal or other governmental or
administrative bodies such approvals or consents as are required to
permit the change of ownership of the Transferred Assets
contemplated hereby;
(d) no action or proceeding in Canada or the United States by law
or in equity shall be pending or threatened by any Person to enjoin,
restrict or prohibit the purchase and sale of the Transferred Assets
contemplated hereby.
In case any of the foregoing terms and conditions shall not have been
fulfilled or performed at or prior to the Time of Closing, the Purchaser may
terminate this Agreement by notice in writing to the Vendor and in such event
the Purchaser shall be released from all obligations hereunder, and, unless the
Purchaser can show that the condition or conditions for the non-performance of
which the Purchaser has terminated this Agreement are reasonably capable of
being performed or caused to be performed by the Vendor, then the Vendor shall
also be released from all obligations hereunder; however, that the Purchaser
shall be entitled to waive compliance with any such terms and conditions in
whole or in part if it sees fit to do so without prejudice to any of its rights
of termination in the event of non-performance or non-fulfilment of any other
term or condition in whole or in part.
Section 8.02. Conditions for Vendor's Benefit. The sale and purchase of the
Transferred Assets is subject to the following terms and conditions for the
exclusive benefit of the Vendor to be fulfilled and/or performed at or prior to
the Time of Closing:
(a) the representations and warranties of the Purchaser contained
in Article IV hereof shall be true
<PAGE> 7
and correct as of the Time of Closing, and the Closing of the
transaction of purchase and sale herein provided for shall not be
nor be deemed to be a waiver of the covenants, representations and
warranties contained in this Agreement, which covenants,
representations and warranties shall continue in full fore and
effect for the benefit of the Vendor as provided in Article V
hereof;
(b) the Purchaser shall have complied with all terms, covenants,
conditions and agreements herein agreed to be performed or caused to
be performed by it; and
(c) no action or proceeding in Canada or in the United States by
law or in equity shall be pending or threatened by any Person to
enjoin or prohibit the purchase and sale of the Transferred Assets
contemplated hereby or contest the authority of the Purchaser to
executed and deliver this Agreement or to consummate the transaction
contemplated hereby.
In case any of the foregoing terms and conditions shall not have been
fulfilled or performed at or prior to the Time of Closing, the Vendor may
terminate this Agreement by notice in writing tot he Purchaser and in such
event the Vendor shall be released from all obligations hereunder, and, unless
the Vendor can show that the condition or conditions for the non-performance of
which the Vendor has terminated this Agreement are reasonably capable of being
performed or caused to be performed by the Purchaser, then the Purchaser shall
also be released from all obligations hereunder; provided, however, that the
Vendor shall be entitled to waive compliance with any such terms and conditions
in whole or in part if it sees fit to do so without prejudice to any of its
rights or termination in the event of non-performance of any other term or
condition in whole or part.
ARTICLE IX
NOTICES
Section 9.01. Notices. All notices, demands, requests, consents, agreements
and approvals (collectively, "notices") which may or are required to be given
pursuant to any provision of this Agreement shall be given or made in writing
and if mailed by first class registered mail shall be deemed to have been
received seven (7) business days after the post-marked date thereof and if
telegraphed or telexed, shall be followed forthwith by letter and shall be
deemed to have been received on the business day following the dispatch thereof
and, if delivered by hand, shall be deemed to have been received on the day of
delivery. Notices shall be addressed as follows:
(a) if to the Vendor:
P.O. Box 940846,
Plano, TX, 75094-0846
USA
Attention: Secretary
(b) if to the Purchaser:
132 McKee Ave.,
North York, Ontario
Canada, M2N 4C4
Fax: (416)-229-2126
Attention: Secretary
or to such other address or in case of such other officers as the Parties may
from time to time advise each other by
<PAGE> 8
notice in writing.
ARTICLE X
MISCELLANEOUS
Section 10.01. Time of the Essence. Time shall be of the essence of this
Agreement.
Section 10.02. Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter of this
Agreement, and supersedes all prior agreements and understanding between the
Parties with respect thereto. There are no representations, warranties,
undertakings or agreements between the Parties with respect to the subject
matter of this Agreement except as set forth herein and this Agreement may not
be amended or modified in any respect except by written instrument signed by
the Parties.
Section 10.03. Further Assurances. The Vendor and the Purchaser will each
execute and deliver such further documents and instruments and do such acts and
things as may before or after the Closing Date be reasonably required by the
other to carry out the intent and meaning of this Agreement and to assure to
the Purchaser the Transferred Assets.
Section 10.04. Applicable Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the Parties shall be governed by, the
laws of the State of Texas. The Parties attorn to the jurisdiction of the
courts of the State of Texas.
Section 10.05. Binding Agreement. This Agreement shall enure to the benefit
of and be binding upon the Parties and their respective successors and
permitted assigns.
Section 10.06. Assignment. Neither Party may assign this Agreement without
the prior written consent of the other Party.
IN WITNESS WHEREOF the Parties have executed this Agreement.
Vendor: NATIONAL ENTERPRISES, INC.
By: _____________________
Name: Jack Wrobel
Title: Secretary
Purchaser: DANCA INVESTMENTS, INC.
By: _____________________
Name: John B. Overzet
Title: President
<PAGE> 1
Exhibit 1.II
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the day of November , 1996.
BETWEEN:
NATIONAL ENTERPRISES, INC., a corporation incorporated pursuant to
the laws of the State of Indiana
(hereinafter called the "Vendor")
OF THE FIRST PART
- and -
DANCA INVESTMENTS, INC., a corporation incorporated pursuant to the
laws of the State of Texas
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS the Vendor desires to sell and the Purchaser desires to purchase
certain of the property and assets of the Vendor, hereinafter called the
"Transferred Assets", on the terms and subject to the conditions hereinafter
set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of other
valuable consideration and the sum of one dollar ($1.00) of lawful money of the
United States of America now paid by the Purchaser to the Vendor (receipt and
sufficiency whereof are hereby acknowledged), the Parties have agreed and do
hereby agree with each other as follows:
ARTICLE 1
INTERPRETATION
Section 1.01 Definitions. Where used in this Agreement, unless the context or
subject matter otherwise requires, the following words and phrases will have
the meanings set forth below:
"Closing" means the closing of the sale and purchase of the Transferred
Assets contemplated by this Agreement.
"Closing Date" means December 11, 1996 or as mutually agreed between the
Parties.
"Company" means National Building Systems, Inc., a corporation
incorporated pursuant to the laws of the State of Nevada.
"Fair Market Value" means, when used in relation to assets being
purchased by the Purchaser hereunder, the fair market value of the assets
in question at the Time of Closing.
<PAGE> 2
"NEI Advance" means the advance made by the Vendor to the Company shown
on the financial statements annexed as a Schedule to this Agreement.
"Parties" means the Purchaser and the Vendor, and their respective
successors and permitted assigns; and
"Party" means either of the Parties.
"Person" means an individual, a partnership, a corporation, a government
or any department or agency thereof, a trustee, any unincorporated
organization and the heirs, executors, administrators or other legal
representatives of an individual; and words importing "Person" have
similar meanings.
"Purchase Price" means the aggregate price for the Transferred Assets as
determined in Section 2.02.
"Purchaser" means the party of the second part.
"Time of Closing" means the opening of business on the Closing Date.
"Transferred Assets" means all of the issued and outstanding shares of
the Company and the NEI Advance.
"Vendor" means the party of the first part.
"Vendor's Book and Records" means all documents, files, records and other
data and information of the Company or of the Vendor relating to the
Transferred Assets or the Company.
Section 1.02. Currency. All sums of money which are referred to in this
Agreement are, unless the context or subject matter otherwise permits,
expressed in lawful money of the United States of America.
Section 1.03. Division of Agreement. The division of this Agreement into
articles, sections, paragraphs and subparagraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement. The terms "this Agreement", "hereof",
"herein", "hereunder" and similar expressions refer to this Agreement and not
to any particular article, section or other portion thereof and include any
agreement or instrument supplementary of ancillary hereto.
Section 1.04. Number and Gender. Words importing the singular number only
shall include the plural and vice versa, words importing the use of any gender
shall include all genders.
ARTICLE II
PURCHASE AND SALE OF TRANSFERRED ASSETS
Section 2.01. Purchase and Sale. Subject to the terms and provisions hereof
and based upon the warranties and representations herein contained, the Vendor
hereby sells, transfers, assigns and conveys to the Purchaser and the Purchaser
hereby purchases and accepts assignments of from the Vendor, at the Time of
Closing on the Closing Date, free and clear of any and all liens, pledges,
charges, mortgages, claims, security interests and other encumbrances, the
Transferred Assets.
Section 2.02. Purchase Price. The Purchase Price payable by the Purchaser for
the Transferred Assets (the "Purchase Price") shall be the sum of $10,000.00
(Ten Thousand Dollars), being the Fair Market Value of the Transferred Assets
on the Closing Date. Of such amount, the sum of $9,000.00 (Nine Thousand
Dollars) shall be allocated to the NEI Advance and the balance to the remainder
of the Transferred Assets.
<PAGE> 3
Section 2.03. Payment of Purchase Price. The Purchase Price shall be paid and
satisfied by the Purchaser at the Time of Closing on the Closing Date in the
following manner:
(a) The Purchaser shall assume the debt outstanding to Arends
(U.S.) Holdings, Inc. by the Vendor up to the sum of $10,000.00 (Ten
Thousand Dollars) as part of the Purchase Price by issuing to the
Vendor its demand non-interest bearing promissory note in the
aggregate principal amount of $10,000.00 (Ten Thousand Dollars)
which will immediately be assigned to Arends (U.S.) Holdings, Inc.
(b) In the event that the Purchase Price is greater than the debt
outstanding by the Vendor to Arends (U.S.) Holdings, Inc. the
Purchaser shall pay the balance of the Purchase Price in cash or
cheque.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VENDOR
The Vendor represents and warrants, subject to Section 5.03 and 6.01, to
the Purchaser as follows and acknowledges that the Purchaser is relying upon
such representations and warranties in connection with the entering into of
this Agreement and the purchase by the Purchaser of the Transferred Assets:
Section 3.01. Corporate Status of the Vendor. The Vendor is a corporation
duly incorporated, organized and validly subsisting under the laws of the State
of Indiana; the Vendor has the corporate power and capacity to own its property
and to carry on the business now being conducted by it and to carry out the
transactions contemplated hereby.
Section 3.02. Corporate Status of the Company. The Company is a corporation
duly incorporated and validly subsisting under the laws of the State of Nevada;
the Company has the corporate power and capacity to own its property and to
carry on the business now being conducted by it and to carry on the
transactions contemplated hereby.
Section 3.03. Sale Permitted by Charter, Agreements, etc. The execution and
delivery by the Vendor of, and the performance of its obligations under, this
Agreement and the completion by the Vendor of the transactions contemplated
hereby will not result in the violation of any of the terms and provisions of
the constating documents or by-laws of the Vendor or the Company.
Section 3.04. Sale Permitted by Laws. The execution and delivery by the
Vendor of and the performance of its obligations under this Agreement and the
completion by the Vendor of the transactions contemplated hereby will not
result in the violation of any law or regulation of the United States of
America, the State of Indiana, or any order or decree of any court or tribunal
to which the Vendor or the Company is subject.
Section 3.05. Agreement Binding on Vendor. This Agreement has been duly
authorized, executed and delivered by the Vendor and is a valid and binding
obligation of the Vendor enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other laws of
general application affecting the rights of creditors and except that specific
performance is an equitable remedy which may only be awarded in the discretion
of the Court.
Section 3.06. Income Tax Returns. The Vendor has duly and finally filed all
consolidated tax returns which include the accounts of the Company, except the
1995 federal consolidated tax return, required to be filed by it. The Vendor
remains obligated to file the 1995 federal consolidated tax return which
includes the accounts of the Company for the fiscal year ended December 31,
1995 and will file the 1995 federal consolidated tax return.
<PAGE> 4
Section 3.07. Title, etc. The Vendor will be the owner of the Transferred
Assets at the Time of Closing free and clear of any and all liens, pledges,
charges, mortgages, security interests, claims and other encumbrances, except
as may be disclosed to the Purchaser.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying upon such representations and
warranties in connections with the entering into of this Agreement and the sale
by the Vendor of the Transferred Assets:
Section 4.01. Corporate Status. The Purchaser is a corporation duly
continued, organized and validly subsisting under the laws of the State of
Texas and has the corporate power and capacity to own its property and to carry
out the transactions contemplated hereby.
Section 4.02. Purchaser Permitted by Charter, Agreements, etc. The execution
and delivery by the Purchaser of, and the performance of its obligations under,
this Agreement and the completion by the Purchaser of the transactions
contemplated hereby will not result in the violation of any of the terms and
provisions of the constating documents or by-laws of the Purchaser or of any
indenture or other agreement, written or oral, to which the Purchaser is a
party or by which it is bound.
Section 4.03. Purchase Permitted by Laws. The execution and delivery by the
Purchaser of and the performance of its obligations under this Agreement and
the completion by the Purchaser of the transactions contemplated hereby will
not result in the violation of any law or regulations of the United States of
America, the State of Indiana or any order or decree of any court or tribunal
to which the Purchaser is subject.
Section 4.04. Agreement Binding on Purchaser. This Agreement has been duly
authorized, executed and delivered by the Purchaser and is valid and binding
obligation of the Purchaser enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other laws of
general application affecting the rights of creditors and except that specific
performance is an equitable remedy which may only be awarded in the discretion
of the Court.
ARTICLE V
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 5.01. Survival of Vendor's Covenants, etc. The covenants,
representations and warranties of the Vendor contained in this Agreement shall
survive the Closing, and, notwithstanding such Closing, nor any investigation
made by or on behalf of the Purchaser, shall continue in full force and effect
for the benefit of the Purchaser for a period of six months only and at the end
of such six month period such covenants, representations and warranties shall
expire and be null and void except with respect to claims made in relation
thereto during such six month period.
Section 5.02. Survival of Purchaser's Covenants, etc. The covenants,
representations and warranties of the Purchaser contained in this Agreement
shall survive the Closing, and, notwithstanding such Closing, nor any
investigation made by or on behalf of the Vendor, shall continue in full force
and effect for the benefit of the Vendor for a period of six months only and at
the end of such six month period such covenants, representations and warranties
shall expire and be null and void except with respect to claims made in
relation thereto during such six month period..
Section 5.03. Indemnity. The Vendor and the Purchaser each covenant and agree
to indemnify and save harmless
<PAGE> 5
the other of and from any loss whatsoever suffered by the other directly or
indirectly as a result of or arising out of any breach of representation,
warranty or covenant of the other contained in this Agreement, and all claims,
demands, costs and expenses in respect of the foregoing, up to a limit of
$500.00. The foregoing limitation does not apply to any breach pursuant to
Section 3.06.
ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES
Section 6.01. Preliminary Investigations. The Vendor shall forthwith make
available to the Purchaser all Vendor's Books and Records. The Purchaser
acknowledges that there are no express or implied representations, warranties
or covenants by the Vendor with respect to the completeness or accuracy of the
financial statements annexed as a Schedule to this Agreement. The Purchaser
further acknowledges that the Vendor is making no representations, warranties
or covenants with respect to any actions, suits or proceedings which may create
a lien on the assets of the Company.
Section 6.02. Commission, Legal Fees, etc. All negotiations relative to this
Agreement and the transaction contemplated hereby have been conducted between
the Parties without the intervention of any other Person so that no valid claim
will arise against either of the Parties for a brokerage commission, finder's
fee or other like payment. The Vendor and the Purchaser will each bear the
fees and disbursements of the respective lawyers, accountants, brokers or
consultants engaged by them respectively in connection with the preparation of
this Agreement and the transactions contemplated hereby.
ARTICLE VII
CLOSING ARRANGEMENTS
Section 7.01. Closing. The Closing of the purchase and sale of the
Transferred Assets shall occur at the Time of Closing on the Closing Date at
the offices of the Purchaser at 132 McKee Ave., North York, Ontario, M2N 4C4.
At or before the Time of Closing, upon fulfilment of all the conditions set out
in Article VIII which have not been waived in writing by the Purchaser:
(a) The Vendor shall deliver to the Purchaser all necessary
deeds, conveyances, bills of sale, assurances, transfers,
assignments and any other documents necessary or reasonably required
to transfer the Transferred Assets to the Purchaser with a good and
marketable title, free and clear of all mortgages, liens, charges,
pledges, claims, security interests or encumbrances whatsoever;
(b) The Vendor shall deliver physical possession of the
Transferred Assets, including without limitation share certificates
representing all of the outstanding shares of the Company duly
endorsed in blank for transfer and any promissory note evidencing
the NEI Advance together with duly executed assignment thereof, to
the Purchaser;
(c) The Vendor shall take or cause to be taken by itself and the
Company all necessary or desirable actions, steps and corporate
proceedings to approve or authorized validly and effectively the
transfer of the Transferred Assets to the Purchaser and the
execution and delivery of this Agreement and other agreements and
documents contemplated hereby and shall cause all necessary meetings
of directors and shareholders of the Vendor and the Company to be
held for such purpose;
(d) The Vendor shall, if and to the extent requested, cause the
directors, officers and accountants of the Company to resign in
favour of nominees of the Purchaser; and
<PAGE> 6
(e) The Vendor shall deliver to the Purchaser the Vendor's Books
and Records, which shall become the property of the Purchaser. The
Purchaser agrees that it will preserve the Vendor's Books and
Records so delivered to it for such period as is required by any
applicable law, and will permit the Vendor or its authorized
representative(s) reasonable access thereto and the Purchaser shall
not destroy any of such Vendor' Books and Records either before or
after such period without giving the Vendor opportunity to take back
such Vendor' Books and Records, but the Purchaser shall not be
responsible or liable to the Vendor as a result of any accidental
loss or destruction of or damage to any such Vendor's Books and
Records.
Section 7.02. Purchase Price. On the Closing Date, the Purchaser shall make
payment to the Vendor of the Purchase Price.
ARTICLE VIII
CONDITIONS OF CLOSING
Section 8.01. Conditions for Purchaser's Benefit. The sale and purchase of
the Transferred Assets is subject to the following terms and conditions for the
exclusive benefit of the Purchaser to be fulfilled and/or performed at or prior
to the Time of Closing:
(a) the representations and warranties of the Vendor contained in
this Agreement shall be true and correct as of the Time of Closing,
and the Closing of the transaction of purchase and sale herein
provided for shall not be nor be deemed to be a waiver of the
covenants, representations and warranties contained in this
Agreement, which covenants, representations and warranties shall
continue in full force and effect for the benefit of the Purchaser
as provided in Article V hereof;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the Vendor at or before the Time
of Closing shall have been complied with or performed;
(c) there shall have been obtained from all appropriate federal,
state, provincial, local, municipal or other governmental or
administrative bodies such approvals or consents as are required to
permit the change of ownership of the Transferred Assets
contemplated hereby;
(d) no action or proceeding in Canada or the United States by law
or in equity shall be pending or threatened by any Person to enjoin,
restrict or prohibit the purchase and sale of the Transferred Assets
contemplated hereby.
In case any of the foregoing terms and conditions shall not have been
fulfilled or performed at or prior to the Time of Closing, the Purchaser may
terminate this Agreement by notice in writing to the Vendor and in such event
the Purchaser shall be released from all obligations hereunder, and, unless the
Purchaser can show that the condition or conditions for the non-performance of
which the Purchaser has terminated this Agreement are reasonably capable of
being performed or caused to be performed by the Vendor, then the Vendor shall
also be released from all obligations hereunder; however, that the Purchaser
shall be entitled to waive compliance with any such terms and conditions in
whole or in part if it sees fit to do so without prejudice to any of its rights
of termination in the event of non-performance or non-fulfilment of any other
term or condition in whole or in part.
Section 8.02. Conditions for Vendor's Benefit. The sale and purchase of the
Transferred Assets is subject to the following terms and conditions for the
exclusive benefit of the Vendor to be fulfilled and/or performed at or prior to
the Time of Closing:
(a) the representations and warranties of the Purchaser contained
in Article IV hereof shall be true
<PAGE> 7
and correct as of the Time of Closing, and the Closing of the
transaction of purchase and sale herein provided for shall not be
nor be deemed to be a waiver of the covenants, representations and
warranties contained in this Agreement, which covenants,
representations and warranties shall continue in full fore and
effect for the benefit of the Vendor as provided in Article V
hereof;
(b) the Purchaser shall have complied with all terms, covenants,
conditions and agreements herein agreed to be performed or caused to
be performed by it; and
(c) no action or proceeding in Canada or in the United States by
law or in equity shall be pending or threatened by any Person to
enjoin or prohibit the purchase and sale of the Transferred Assets
contemplated hereby or contest the authority of the Purchaser to
executed and deliver this Agreement or to consummate the transaction
contemplated hereby.
In case any of the foregoing terms and conditions shall not have been
fulfilled or performed at or prior to the Time of Closing, the Vendor may
terminate this Agreement by notice in writing tot he Purchaser and in such
event the Vendor shall be released from all obligations hereunder, and, unless
the Vendor can show that the condition or conditions for the non-performance of
which the Vendor has terminated this Agreement are reasonably capable of being
performed or caused to be performed by the Purchaser, then the Purchaser shall
also be released from all obligations hereunder; provided, however, that the
Vendor shall be entitled to waive compliance with any such terms and conditions
in whole or in part if it sees fit to do so without prejudice to any of its
rights or termination in the event of non-performance of any other term or
condition in whole or part.
ARTICLE IX
NOTICES
Section 9.01. Notices. All notices, demands, requests, consents, agreements
and approvals (collectively, "notices") which may or are required to be given
pursuant to any provision of this Agreement shall be given or made in writing
and if mailed by first class registered mail shall be deemed to have been
received seven (7) business days after the post-marked date thereof and if
telegraphed or telexed, shall be followed forthwith by letter and shall be
deemed to have been received on the business day following the dispatch thereof
and, if delivered by hand, shall be deemed to have been received on the day of
delivery. Notices shall be addressed as follows:
(a) if to the Vendor:
P.O. Box 940846,
Plano, TX, 75094-0846
USA
Attention: Secretary
(b) if to the Purchaser:
132 McKee Ave.,
North York, Ontario
Canada, M2N 4C4
Fax: (416)-229-2126
Attention: Secretary
or to such other address or in case of such other officers as the Parties may
from time to time advise each other by notice in writing.
<PAGE> 8
ARTICLE X
MISCELLANEOUS
Section 10.01. Time of the Essence. Time shall be of the essence of this
Agreement.
Section 10.02. Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter of this
Agreement, and supersedes all prior agreements and understanding between the
Parties with respect thereto. There are no representations, warranties,
undertakings or agreements between the Parties with respect to the subject
matter of this Agreement except as set forth herein and this Agreement may not
be amended or modified in any respect except by written instrument signed by
the Parties.
Section 10.03. Further Assurances. The Vendor and the Purchaser will each
execute and deliver such further documents and instruments and do such acts and
things as may before or after the Closing Date be reasonably required by the
other to carry out the intent and meaning of this Agreement and to assure to
the Purchaser the Transferred Assets.
Section 10.04. Applicable Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the Parties shall be governed by, the
laws of the State of Texas. The Parties attorn to the jurisdiction of the
courts of the State of Texas.
Section 10.05. Binding Agreement. This Agreement shall enure to the benefit
of and be binding upon the Parties and their respective successors and
permitted assigns.
Section 10.06. Assignment. Neither Party may assign this Agreement without
the prior written consent of the other Party.
IN WITNESS WHEREOF the Parties have executed this Agreement.
Vendor: NATIONAL ENTERPRISES, INC.
By: _____________________
Name: Jack Wrobel
Title: Secretary
Purchaser: DANCA INVESTMENTS, INC.
By: _____________________
Name: John B. Overzet
Title: President
<PAGE> 1
Exhibit 1.III
SHARE PURCHASE AGREEMENT
THIS AGREEMENT made as of the day of November , 1996.
BETWEEN:
NATIONAL ENTERPRISES, INC., a corporation incorporated pursuant to
the laws of the State of Indiana
(hereinafter called the "Vendor")
OF THE FIRST PART
- and -
DANCA INVESTMENTS, INC., a corporation incorporated pursuant to the
laws of the State of Texas
(hereinafter called the "Purchaser")
OF THE SECOND PART
WHEREAS the Vendor desires to sell and the Purchaser desires to purchase
certain of the property and assets of the Vendor, hereinafter called the
"Transferred Assets", on the terms and subject to the conditions hereinafter
set forth;
NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of other
valuable consideration and the sum of one dollar ($1.00) of lawful money of the
United States of America now paid by the Purchaser to the Vendor (receipt and
sufficiency whereof are hereby acknowledged), the Parties have agreed and do
hereby agree with each other as follows:
ARTICLE 1
INTERPRETATION
Section 1.01 Definitions. Where used in this Agreement, unless the context or
subject matter otherwise requires, the following words and phrases will have
the meanings set forth below:
"Closing" means the closing of the sale and purchase of the Transferred
Assets contemplated by this Agreement.
"Closing Date" means December 11, 1996 or as mutually agreed between the
Parties.
"Company" means Arendswood Homes, Inc., a corporation incorporated
pursuant to the laws of the State of Texas.
"Fair Market Value" means, when used in relation to assets being
purchased by the Purchaser hereunder, the fair market value of the assets
in question at the Time of Closing.
"NEI Advance" means the advance made by the Vendor to the Company shown
on the financial statements annexed as a Schedule to this Agreement.
<PAGE> 2
"Parties" means the Purchaser and the Vendor, and their respective
successors and permitted assigns; and
"Party" means either of the Parties.
"Person" means an individual, a partnership, a corporation, a government
or any department or agency thereof, a trustee, any unincorporated
organization and the heirs, executors, administrators or other legal
representatives of an individual; and words importing "Person" have
similar meanings.
"Purchase Price" means the aggregate price for the Transferred Assets as
determined in Section 2.02.
"Purchaser" means the party of the second part.
"Time of Closing" means the opening of business on the Closing Date.
"Transferred Assets" means all of the issued and outstanding shares of
the Company and the NEI Advance.
"Vendor" means the party of the first part.
"Vendor's Book and Records" means all documents, files, records and other
data and information of the Company or of the Vendor relating to the
Transferred Assets or the Company.
Section 1.02. Currency. All sums of money which are referred to in this
Agreement are, unless the context or subject matter otherwise permits,
expressed in lawful money of the United States of America.
Section 1.03. Division of Agreement. The division of this Agreement into
articles, sections, paragraphs and subparagraphs and the insertion of headings
are for convenience of reference only and shall not affect the construction or
interpretation of this Agreement. The terms "this Agreement", "hereof",
"herein", "hereunder" and similar expressions refer to this Agreement and not
to any particular article, section or other portion thereof and include any
agreement or instrument supplementary of ancillary hereto.
Section 1.04. Number and Gender. Words importing the singular number only
shall include the plural and vice versa, words importing the use of any gender
shall include all genders.
ARTICLE II
PURCHASE AND SALE OF TRANSFERRED ASSETS
Section 2.01. Purchase and Sale. Subject to the terms and provisions hereof
and based upon the warranties and representations herein contained, the Vendor
hereby sells, transfers, assigns and conveys to the Purchaser and the Purchaser
hereby purchases and accepts assignments of from the Vendor, at the Time of
Closing on the Closing Date, free and clear of any and all liens, pledges,
charges, mortgages, claims, security interests and other encumbrances, except
as disclosed herein, the Transferred Assets.
Section 2.02. Purchase Price. The Purchase Price payable by the Purchaser for
the Transferred Assets (the "Purchase Price") shall be the sum of $12,000.00
(Twelve Thousand Dollars), being the Fair Market Value of the Transferred
Assets on the Closing Date. Of such amount, the sum of $11,000.00 (Eleven
Thousand Dollars) shall be allocated to the NEI Advance and the balance to the
remainder of the Transferred Assets.
Section 2.03. Payment of Purchase Price. The Purchase Price shall be paid and
satisfied by the Purchaser at the Time of Closing on the Closing Date in the
following manner:
<PAGE> 3
(a) The Purchaser shall assume the debt outstanding to Arends
(U.S.) Holdings, Inc. by the Vendor up to the sum of $12,000.00
(Twelve Thousand Dollars) as part of the Purchase Price by issuing
to the Vendor its demand non-interest bearing promissory note in the
aggregate principal amount of $12,000.00 (Twelve Thousand Dollars)
which will immediately be assigned to Arends (U.S.) Holdings, Inc.
(b) In the event that the Purchase Price is greater than the debt
outstanding by the Vendor to Arends (U.S.) Holdings, Inc. the
Purchaser shall pay the balance of the Purchase Price in cash or
cheque.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF VENDOR
The Vendor represents and warrants, subject to Section 5.03 and 6.01, to
the Purchaser as follows and acknowledges that the Purchaser is relying upon
such representations and warranties in connection with the entering into of
this Agreement and the purchase by the Purchaser of the Transferred Assets:
Section 3.01. Corporate Status of the Vendor. The Vendor is a corporation
duly incorporated, organized and validly subsisting under the laws of the State
of Indiana; the Vendor has the corporate power and capacity to own its property
and to carry on the business now being conducted by it and to carry out the
transactions contemplated hereby.
Section 3.02. Corporate Status of the Company. The Company is a corporation
duly incorporated and validly subsisting under the laws of the State of Texas;
the Company has the corporate power and capacity to own its property and to
carry on the business now being conducted by it and to carry on the
transactions contemplated hereby.
Section 3.03. Sale Permitted by Charter, Agreements, etc. The execution and
delivery by the Vendor of, and the performance of its obligations under, this
Agreement and the completion by the Vendor of the transactions contemplated
hereby will not result in the violation of any of the terms and provisions of
the constating documents or by-laws of the Vendor or the Company.
Section 3.04. Sale Permitted by Laws. The execution and delivery by the
Vendor of and the performance of its obligations under this Agreement and the
completion by the Vendor of the transactions contemplated hereby will not
result in the violation of any law or regulation of the United States of
America, the State of Indiana, or any order or decree of any court or tribunal
to which the Vendor or the Company is subject.
Section 3.05. Agreement Binding on Vendor. This Agreement has been duly
authorized, executed and delivered by the Vendor and is a valid and binding
obligation of the Vendor enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other laws of
general application affecting the rights of creditors and except that specific
performance is an equitable remedy which may only be awarded in the discretion
of the Court.
Section 3.06. Income Tax Returns. The Vendor has duly and finally filed all
consolidated tax returns which include the accounts of the Company, except the
1995 federal consolidated tax return, required to be filed by it. The Vendor
remains obligated to file the 1995 federal consolidated tax return which
includes the accounts of the Company for the fiscal year ended December 31,
1995 and will file the 1995 federal consolidated tax return.
Section 3.07. Title, etc. The Vendor will be the owner of the Transferred
Assets at the Time of Closing free and clear of any and all liens, pledges,
charges, mortgages, security interests, claims and other encumbrances, except
as
<PAGE> 4
may be disclosed to the Purchaser. The Vendor hereby states to the Purchaser
that the Transferred Assets are subject to a charge to Arends (U.S.) Holdings,
Inc.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants to the Vendor as follows and
acknowledges that the Vendor is relying upon such representations and
warranties in connections with the entering into of this Agreement and the sale
by the Vendor of the Transferred Assets:
Section 4.01. Corporate Status. The Purchaser is a corporation duly
continued, organized and validly subsisting under the laws of the State of
Texas and has the corporate power and capacity to own its property and to carry
out the transactions contemplated hereby.
Section 4.02. Purchaser Permitted by Charter, Agreements, etc. The execution
and delivery by the Purchaser of, and the performance of its obligations under,
this Agreement and the completion by the Purchaser of the transactions
contemplated hereby will not result in the violation of any of the terms and
provisions of the constating documents or by-laws of the Purchaser or of any
indenture or other agreement, written or oral, to which the Purchaser is a
party or by which it is bound.
Section 4.03. Purchase Permitted by Laws. The execution and delivery by the
Purchaser of and the performance of its obligations under this Agreement and
the completion by the Purchaser of the transactions contemplated hereby will
not result in the violation of any law or regulations of the United States of
America, the State of Indiana or any order or decree of any court or tribunal
to which the Purchaser is subject.
Section 4.04. Agreement Binding on Purchaser. This Agreement has been duly
authorized, executed and delivered by the Purchaser and is valid and binding
obligation of the Purchaser enforceable in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency or other laws of
general application affecting the rights of creditors and except that specific
performance is an equitable remedy which may only be awarded in the discretion
of the Court.
ARTICLE V
SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 5.01. Survival of Vendor's Covenants, etc. The covenants,
representations and warranties of the Vendor contained in this Agreement shall
survive the Closing, and, notwithstanding such Closing, nor any investigation
made by or on behalf of the Purchaser, shall continue in full force and effect
for the benefit of the Purchaser for a period of six months only and at the end
of such six month period such covenants, representations and warranties shall
expire and be null and void except with respect to claims made in relation
thereto during such six month period.
Section 5.02. Survival of Purchaser's Covenants, etc. The covenants,
representations and warranties of the Purchaser contained in this Agreement
shall survive the Closing, and, notwithstanding such Closing, nor any
investigation made by or on behalf of the Vendor, shall continue in full force
and effect for the benefit of the Vendor for a period of six months only and at
the end of such six month period such covenants, representations and warranties
shall expire and be null and void except with respect to claims made in
relation thereto during such six month period..
Section 5.03. Indemnity. The Vendor and the Purchaser each covenant and agree
to indemnify and save harmless the other of and from any loss whatsoever
suffered by the other directly or indirectly as a result of or arising out of
<PAGE> 5
any breach of representation, warranty or covenant of the other contained in
this Agreement, and all claims, demands, costs and expenses in respect of the
foregoing, up to a limit of $500.00. The foregoing limitation does not apply to
any breach pursuant to Section 3.06.
ARTICLE VI
CERTAIN COVENANTS OF THE PARTIES
Section 6.01. Preliminary Investigations. The Vendor shall forthwith make
available to the Purchaser all Vendor's Books and Records. The Purchaser
acknowledges that there are no express or implied representations, warranties
or covenants by the Vendor with respect to the completeness or accuracy of the
financial statements annexed as a Schedule to this Agreement. The Purchaser
further acknowledges that the Vendor is making no representations, warranties
or covenants with respect to any actions, suits or proceedings which may create
a lien on the assets of the Company.
Section 6.02. Commission, Legal Fees, etc. All negotiations relative to this
Agreement and the transaction contemplated hereby have been conducted between
the Parties without the intervention of any other Person so that no valid claim
will arise against either of the Parties for a brokerage commission, finder's
fee or other like payment. The Vendor and the Purchaser will each bear the
fees and disbursements of the respective lawyers, accountants, brokers or
consultants engaged by them respectively in connection with the preparation of
this Agreement and the transactions contemplated hereby.
ARTICLE VII
CLOSING ARRANGEMENTS
Section 7.01. Closing. The Closing of the purchase and sale of the
Transferred Assets shall occur at the Time of Closing on the Closing Date at
the offices of the Purchaser at 132 McKee Ave., North York, Ontario, M2N 4C4.
At or before the Time of Closing, upon fulfilment of all the conditions set out
in Article VIII which have not been waived in writing by the Purchaser:
(a) The Vendor shall deliver to the Purchaser all necessary
deeds, conveyances, bills of sale, assurances, transfers,
assignments and any other documents necessary or reasonably required
to transfer the Transferred Assets to the Purchaser with a good and
marketable title, free and clear of all mortgages, liens, charges,
pledges, claims, security interests or encumbrances whatsoever;
(b) The Vendor shall deliver physical possession of the
Transferred Assets, including without limitation share certificates
representing all of the outstanding shares of the Company duly
endorsed in blank for transfer and any promissory note evidencing
the NEI Advance together with duly executed assignment thereof, to
the Purchaser;
(c) The Vendor shall take or cause to be taken by itself and the
Company all necessary or desirable actions, steps and corporate
proceedings to approve or authorized validly and effectively the
transfer of the Transferred Assets to the Purchaser and the
execution and delivery of this Agreement and other agreements and
documents contemplated hereby and shall cause all necessary meetings
of directors and shareholders of the Vendor and the Company to be
held for such purpose;
(d) The Vendor shall, if and to the extent requested, cause the
directors, officers and accountants of the Company to resign in
favour of nominees of the Purchaser; and
(e) The Vendor shall deliver to the Purchaser the Vendor's Books
and Records, which shall become
<PAGE> 6
the property of the Purchaser. The Purchaser agrees that it will
preserve the Vendor's Books and Records so delivered to it for such
period as is required by any applicable law, and will permit the
Vendor or its authorized representative(s) reasonable access
thereto and the Purchaser shall not destroy any of such Vendor'
Books and Records either before or after such period without giving
the Vendor opportunity to take back such Vendor' Books and Records,
but the Purchaser shall not be responsible or liable to the Vendor
as a result of any accidental loss or destruction of or damage to
any such Vendor's Books and Records.
Section 7.02. Purchase Price. On the Closing Date, the Purchaser shall make
payment to the Vendor of the Purchase Price.
ARTICLE VIII
CONDITIONS OF CLOSING
Section 8.01. Conditions for Purchaser's Benefit. The sale and purchase of
the Transferred Assets is subject to the following terms and conditions for the
exclusive benefit of the Purchaser to be fulfilled and/or performed at or prior
to the Time of Closing:
(a) the representations and warranties of the Vendor contained in
this Agreement shall be true and correct as of the Time of Closing,
and the Closing of the transaction of purchase and sale herein
provided for shall not be nor be deemed to be a waiver of the
covenants, representations and warranties contained in this
Agreement, which covenants, representations and warranties shall
continue in full force and effect for the benefit of the Purchaser
as provided in Article V hereof;
(b) all of the terms, covenants and conditions of this Agreement
to be complied with or performed by the Vendor at or before the Time
of Closing shall have been complied with or performed;
(c) there shall have been obtained from all appropriate federal,
state, provincial, local, municipal or other governmental or
administrative bodies such approvals or consents as are required to
permit the change of ownership of the Transferred Assets
contemplated hereby;
(d) no action or proceeding in Canada or the United States by law
or in equity shall be pending or threatened by any Person to enjoin,
restrict or prohibit the purchase and sale of the Transferred Assets
contemplated hereby.
In case any of the foregoing terms and conditions shall not have been
fulfilled or performed at or prior to the Time of Closing, the Purchaser may
terminate this Agreement by notice in writing to the Vendor and in such event
the Purchaser shall be released from all obligations hereunder, and, unless the
Purchaser can show that the condition or conditions for the non-performance of
which the Purchaser has terminated this Agreement are reasonably capable of
being performed or caused to be performed by the Vendor, then the Vendor shall
also be released from all obligations hereunder; however, that the Purchaser
shall be entitled to waive compliance with any such terms and conditions in
whole or in part if it sees fit to do so without prejudice to any of its rights
of termination in the event of non-performance or non-fulfilment of any other
term or condition in whole or in part.
Section 8.02. Conditions for Vendor's Benefit. The sale and purchase of the
Transferred Assets is subject to the following terms and conditions for the
exclusive benefit of the Vendor to be fulfilled and/or performed at or prior to
the Time of Closing:
(a) the representations and warranties of the Purchaser contained
in Article IV hereof shall be true and correct as of the Time of
Closing, and the Closing of the transaction of purchase and sale
<PAGE> 7
herein provided for shall not be nor be deemed to be a waiver of
the covenants, representations and warranties contained in this
Agreement, which covenants, representations and warranties shall
continue in full fore and effect for the benefit of the Vendor as
provided in Article V hereof;
(b) the Purchaser shall have complied with all terms, covenants,
conditions and agreements herein agreed to be performed or caused to
be performed by it; and
(c) no action or proceeding in Canada or in the United States by
law or in equity shall be pending or threatened by any Person to
enjoin or prohibit the purchase and sale of the Transferred Assets
contemplated hereby or contest the authority of the Purchaser to
executed and deliver this Agreement or to consummate the transaction
contemplated hereby.
In case any of the foregoing terms and conditions shall not have been
fulfilled or performed at or prior to the Time of Closing, the Vendor may
terminate this Agreement by notice in writing tot he Purchaser and in such
event the Vendor shall be released from all obligations hereunder, and, unless
the Vendor can show that the condition or conditions for the non-performance of
which the Vendor has terminated this Agreement are reasonably capable of being
performed or caused to be performed by the Purchaser, then the Purchaser shall
also be released from all obligations hereunder; provided, however, that the
Vendor shall be entitled to waive compliance with any such terms and conditions
in whole or in part if it sees fit to do so without prejudice to any of its
rights or termination in the event of non-performance of any other term or
condition in whole or part.
ARTICLE IX
NOTICES
Section 9.01. Notices. All notices, demands, requests, consents, agreements
and approvals (collectively, "notices") which may or are required to be given
pursuant to any provision of this Agreement shall be given or made in writing
and if mailed by first class registered mail shall be deemed to have been
received seven (7) business days after the post-marked date thereof and if
telegraphed or telexed, shall be followed forthwith by letter and shall be
deemed to have been received on the business day following the dispatch thereof
and, if delivered by hand, shall be deemed to have been received on the day of
delivery. Notices shall be addressed as follows:
(a) if to the Vendor:
P.O. Box 940846,
Plano, TX, 75094-0846
USA
Attention: Secretary
(b) if to the Purchaser:
132 McKee Ave.,
North York, Ontario
Canada, M2N 4C4
Fax: (416)-229-2126
Attention: Secretary
or to such other address or in case of such other officers as the Parties may
from time to time advise each other by notice in writing.
<PAGE> 8
ARTICLE X
MISCELLANEOUS
Section 10.01. Time of the Essence. Time shall be of the essence of this
Agreement.
Section 10.02. Entire Agreement. This Agreement constitutes the entire
agreement between the Parties with respect to the subject matter of this
Agreement, and supersedes all prior agreements and understanding between the
Parties with respect thereto. There are no representations, warranties,
undertakings or agreements between the Parties with respect to the subject
matter of this Agreement except as set forth herein and this Agreement may not
be amended or modified in any respect except by written instrument signed by
the Parties.
Section 10.03. Further Assurances. The Vendor and the Purchaser will each
execute and deliver such further documents and instruments and do such acts and
things as may before or after the Closing Date be reasonably required by the
other to carry out the intent and meaning of this Agreement and to assure to
the Purchaser the Transferred Assets.
Section 10.04. Applicable Law. This Agreement shall be construed and enforced
in accordance with, and the rights of the Parties shall be governed by, the
laws of the State of Texas. The Parties attorn to the jurisdiction of the
courts of the State of Texas.
Section 10.05. Binding Agreement. This Agreement shall enure to the benefit
of and be binding upon the Parties and their respective successors and
permitted assigns.
Section 10.06. Assignment. Neither Party may assign this Agreement without
the prior written consent of the other Party.
IN WITNESS WHEREOF the Parties have executed this Agreement.
Vendor: NATIONAL ENTERPRISES, INC.
By: _____________________
Name: Jack Wrobel
Title: Secretary
Purchaser: DANCA INVESTMENTS, INC.
By: ______________________
Name: John B. Overzet
Title: President
<PAGE> 1
Exhibit 2.IV
This Agreement made the day of November, 1996.
A M O N G :
NATIONAL ENTERPRISES INC.,
a Company incorporated under the laws of the State of Indiana,
(hereinafter referred to as the "Purchaser")
OF THE FIRST PART
- - AND -
ARGOSY MINING CORP,
a Company incorporated under the laws of the Province of
British Columbia,
(hereinafter referred to as the "Vendor")
OF THE SECOND PART
- - AND -
MERCURY IMMOBILIEN UND VERWALTUNGS AG,
a Company incorporated pursuant to the laws of Switzerland,
(hereinafter referred to as "Mercury")
OF THE THIRD PART
WHEREAS the Vendor is the beneficial owner of all of the issued and
outstanding equity in the capital of Argosy Mining G.m.b.H. (the "Company"), an
entity established and operating under the laws of Austria;
AND WHEREAS the Company has a right to purchase or is the sole registered
holder and beneficial owner of various assets, principally mineral exploration
leases situated in Austria (collectively "Properties"), all as set out and more
particularly described in Schedule A attached hereto;
AND WHEREAS the Vendor has agreed to sell, assign and transfer to the
Purchaser all of the equity in the capital of the Company and the Purchaser has
agreed to purchase the same upon the terms and conditions contained herein;
AND WHEREAS Mercury has received from each of the Vendor and Purchaser the
sum of $100 and other valuable consideration the receipt and sufficiency of
which is hereby confirmed, Mercury agree to the terms and conditions contained
herein.
NOW THEREFORE this Agreement witnesseth that in consideration of the
covenants, agreements, warranties and payments herein set out and provided for,
the parties hereto hereby respectively covenant and agree as follows:
<PAGE> 2
1. DEFINITIONS
Where used herein or any amendments hereto, the following terms shall have
the following meanings respectively:
1.1 Banking Statements" means the reconciled banking statements for the
Company for the last twelve months attached hereto as Schedule "B";
1.2 "Closing Date" means the 6th day of December, 1996 or such earlier or later
date as may be mutually agreed upon by the parties hereto;
1.3 "Time of Closing" means 11:00 a.m. (Vancouver time) on the closing date;
1.4 The terms "Purchased Shares" and "Purchase Price" shall have the respective
meanings attributed hereto and in Articles 2 and 3 respectively ;
1.5 All dollar amounts referred to in this Agreement are in Canadian funds.
2. PURCHASED SHARES
Subject to the terms and conditions hereof, the Vendor covenants and
agrees to sell, assign and transfer to the Purchaser and the Purchaser
covenants and agrees to purchase from the Vendor all (but not less than all) of
the issued and outstanding equity in the capital of the Company (the "Purchased
Shares") for an aggregate purchase price consisting of the sum of $250,000 and
the transfer to the Vendor of 1,000,000 common shares in the capital of the
Purchaser (hereinafter referred to as the "NEI Shares"), to be paid and
satisfied as set out hereunder.
3. PURCHASE PRICE
The purchase price shall be satisfied as follows:
(a) By the deposit by the Purchaser of the amount of $50,000 in cash or by
certified cheque upon signing this Agreement, to be held in a trust
account by McCullough, O'Conner, Irwin, Solicitors, of Suite 1100, 888
Dunsmuir Street, Vancouver, British Columbia, Canada, V6C 3K4 (hereinafter
referred to as the "Escrow Agent"), as a deposit to be refunded only to
the Purchaser in the event that the Vendor fails to comply with paragraphs
5.8 or 9.7 hereof;
(b) By a payment from the Purchaser to the Vendor of $200,000 in cash or by
certified cheque payable at the Time of Closing to or to the order of the
Vendor;
(c) By the delivery to the Vendor, by Mercury, of certificates representing
the NEI Shares, endorsed in the name of the Vendor, or as it may direct;
(d) By the delivery at closing of an additional of 1,000,000 shares in the
capital of the Purchaser (hereinafter referred to as the "Additional
Shares") to be held in trust by the Escrow Agent, and to be delivered to
the Vendor in the event that the covenant of Mercury contained in
paragraph 7.3 hereof has not be duly completed in accordance with the
terms thereof and in accordance with the terms and conditions set forth in
the Escrow Agreement, attached hereto as Schedule "C", to be signed by the
parties to this Agreement and the Escrow Agreement.
<PAGE> 3
4. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE VENDOR
I. The Vendor makes no representations or warranties with regard to the type,
quantity or quality of any ore deposits on the Properties. The Vendor further
makes no representations or warranties as to the appropriate exploration or
mining processes to adopt in the exploration and/or development of any deposits
or whether the approvals of the authorities will be given to explore for or
develop any ore deposits present on the Properties. In addition, the Vendor
does not represent that the validity of the Properties will remain so without
the submission of an exploration program to the appropriate mining authority
and the execution of such a program following its approval.
II. The Vendor covenants, represents and warrants as follows and acknowledge
that the Purchaser and Mercury is relying upon such covenants, representations
and warranties in connection with the purchase by the Purchaser of the
Purchased Shares:
4.1 The Company has been duly created and organized and is validly subsisting
and in good standing under the laws of Austria, having all requisite power to
own or lease its property and to carry on its business as now being conducted
by it and is duly qualified as a corporation to do business and is in good
standing in each jurisdiction which the nature of its business or the property
owned or leased by it makes such qualification necessary;
4.2 Equity of the capital in the Company consists of the Purchased Shares,
representing 100% control with no outstanding liens or obligations against the
capital;
4.3 All of the Purchased Shares are owned by the Vendor as the beneficial owner
of record, with a good and reputable title thereto, free and clear of all
mortgages, liens, charges, security interests, adverse claims, pledges,
encumbrances and demands whatsoever;
4.4 No person, firm or corporation has any agreement or option or any right or
privilege (whether by law, pre-emptive or contractual) capable of becoming an
agreement or option for the purchase from the Vendor of any of the Purchased
Shares or for the purchase, subscription, allotment or issue of any unissued
equity in the capital of the Company or of any securities of the Company;
4.5 The Company has no subsidiaries or agreements of any nature to acquire any
subsidiary or to acquire or lease any other business operations and will not
prior to the Time of Closing acquire or agree to acquire, any subsidiary or
business, without the prior written consent of the Purchaser;
4.6 The Company is not a party to or bound by any agreement of guaranty,
indemnification, assumption or endorsement or any other like commitment of the
obligations, liabilities (contingent or otherwise) or indebtedness of any other
person, firm or corporation;
4.7 The books and records of the Company and the Banking Statements fairly and
correctly set out and disclose in all material respects, the financial position
of the Company as of the date hereof and all material financial transactions of
the Company relating to its business have been accurately recorded in such
books and records;
4.8 The corporate records and minute books of the Company contain complete and
accurate minutes of all meetings of the directors and shareholders of the
Company held since its incorporation, all such meetings were duly called and
held, the share certificate books, register of shareholders, register of
transfers, and register of directors of the Company are complete and accurate
and all exigible security transfer taxes payable in connection with the
transfer of any securities of the Company have been duly paid;
4.9 The entering into of this Agreement and the transactions contemplated
hereby will not result in the violation of any of the terms and provisions of
the constating documents or By-laws of the Company, or of any indenture or
other agreement written or oral, to which the Company or the Vendor may be a
party, nor will it result in the violation of any law or regulation of Austria;
<PAGE> 4
4.10 This Agreement has been duly executed and delivered by the Vendor and is a
valid and binding obligation of the Vendor enforceable in accordance with its
terms;
4.11 Except as set out in Schedule "D" hereto the Company does not have
outstanding any bonds, debentures, mortgages, notes or other indebtedness and
is not under any agreement to create or issue any bonds, debentures, mortgages,
notes or other indebtedness;
4.12 The Company has a good and marketable title to its undertaking, property
and assets, free and clear of any and all mortgages, liens, pledges, charges,
security interests, encumbrances, actions, claims or demands of any nature
whatsoever or howsoever arising, with the exception of those commitments with
respect to the Schellgaden North Property as set forth in Schedule "E" hereto;
4.13 There are no actions, suits or proceedings (whether or not purportedly on
behalf of the Company) pending or threatened against or affecting the Company
or the Vendor, at law or in equity or before any Federal, or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, and the Vendor is not now aware of any existing grounds on which any
such action, suit or proceeding might be commenced with any reasonable
likelihood of success;
4.14 The Company is not in default or breach of any contracts, agreements,
written or oral, indentures or other instruments to which it is a party and
there exists no state of facts which after notice or lapse of time or both
would constitute such default or breach and all such contracts, agreements,
indentures or other instruments are now in good standing and the Company is
entitled to all benefits thereunder;
4.15 The Company is conducting its business in compliance with all applicable
laws, rules and regulations of each jurisdiction in which the business is
carried on, is not in breach of any such laws, rules or regulations and is duly
licensed, registered or qualified in each jurisdiction in which the Company
owns or leases property or carried on the business, to enable the business to
be carried on is now conducted and its property and assets to be owned, leased
and operated, and all such licences, registrations and qualifications are valid
and subsisting and in good standing and none of the same contains any
burdensome term, provision, or limitation which has or may have an adverse
effect on the operation of the business;
4.16 The Company has duly and finally filed all tax returns required to be
filed by it and has paid all taxes which are due and payable, and has paid all
assessments and reassessments, and all other taxes, government charges,
penalties, interests and fines due and payable by it on or before the date
hereof, with the exception of any transfer taxes brought about by the
transactions contemplated hereby;
4.17 There are no material liabilities of the Company of any kind whatsoever,
whether or not accrued and whether or not determined or determinable, in
respect of which the Company or the Purchaser may become liable on or after the
consummation of the transaction contemplated by this Agreement other than
liabilities disclosed in Schedule "E" attached hereto.
5. COVENANTS OF THE VENDOR
The Vendor covenants and agrees with the Purchaser and Mercury that on or
before the Closing Date, it will do or will cause to be done the following:
5.1 Permit the Purchaser, prior to the closing date, through its
representatives, to make such investigation of the properties and assets of the
Company and of its financial and legal condition as the Purchaser deems
necessary or advisable to familiarize itself with such properties, assets and
other matters. Such investigation shall not, however,
<PAGE> 5
affect of mitigate the Vendors' covenants, representations and warranties
hereunder which shall continue in full force and effect as provided in
Article 8;
5.2 Take all necessary steps and proceedings as approved by counsel for the
Purchaser to permit all of the Purchased Shares to be duly and regularly
transferred to the Purchaser or its nominee;
5.3 Cause such officers and directors of the Company as the Purchaser may
specify to resign in favour of nominees of the Purchaser, such resignations to
be effective as at the Time of Closing;
5.4 Execute and deliver, and cause such officers and directors of the Company
as the Purchaser may specify to execute and deliver, at the Time of Closing, a
release in form and substance satisfactory to counsel for the Purchaser;
5.5 Cause the present auditors or accountants of the Company to resign, such
resignation to be effective as at the Time of Closing;
5.6 Cause to be delivered to the Purchaser the originals, or copies
satisfactory to counsel for the Purchaser, of all books and records of the
Company, including without limitation, the financial books and records and the
corporate records and minute books of the Company, all agreements, licences and
authorizations issued to, held or maintained by the Company, together with all
documents pertaining to title to the Properties and any and all bank accounts
operated by the Company;
5.7 Co-operate and assist the Purchaser in order that financial statements of
the Company be produced which will be in accordance with United States
generally accepted accounting principals;
5.8 Make all necessary and appropriate applications to the Vancouver Stock
Exchange for approval of the proposed transaction and have received
confirmation from such stock exchange that the transaction of purchase and sale
contemplated hereby may take place.
6. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser covenants, represents and warrants as follows and
acknowledges that the Vendor and Mercury are relying on such covenants,
representations and warranties in connection with the sale by the Vendor of the
Purchased Shares:
6.1 The Purchaser has been duly incorporated and organized and is validly
subsisting and in good standing under the laws of the State of Indiana, with
full corporate power and authority to enter into this Agreement;
6.2 The Purchaser has securities registered pursuant to Section 12 of the
United States Securities Exchange act of 1934, as amended, has been subject to
reporting requirements of that Act, and has filed, in a timely manner, all the
material required to be filed thereunder for a period of at least 12 calendar
months prior to the date hereof, and will continue to file such reports in a
timely manner;
6.3 As of the date hereof, the Purchaser has approximately 72,205,997 shares
outstanding on a fully diluted basis, of which the NEI Shares will represent
1.42% of the issued and outstanding capital on a fully diluted basis;
6.4 The execution and delivery of this Agreement by the Purchaser and its
completion will not conflict with any applicable laws or with its charter
documents, nor does it conflict with, nor result in a breach of any contract or
other commitment to which the Purchaser is a party or by which the Purchaser is
bound;
<PAGE> 6
6.5 The Purchaser undertakes and agrees that, immediately following the
Closing, it shall take such steps as may be necessary to change the name of the
Company so that the word "Argosy" or any variation thereof does not appear in
the name of the Company;
6.6 This Agreement has been duly executed and delivered by the Purchaser and is
a valid and binding obligation of the Purchaser in accordance with its terms;
6.7 The Purchaser agrees that it will not consolidate its share capital prior
to closing or for a period of two years from the Closing Date without the
advance written approval of the Vendor, which will not be unreasonably
withheld.
7. COVENANTS, REPRESENTATIONS AND WARRANTIES OF MERCURY
Mercury covenants, represents and warrants as follows and acknowledges
that the Purchaser and the Vendor are relying upon such covenants,
representations and warranties in connection with the Purchase and sale of the
Purchased Shares:
7.1 Mercury has been duly incorporated and organized and is validly subsisting
and in good standing under the laws of Switzerland, and has full corporate
power and authority to enter into this Agreement;
7.2 The NEI Shares and the Additional Shares are held by Mercury, and will be
transferred to the Vendor pursuant to the terms of this agreement, free of any
liens or encumbrances whatsoever, saving and accepting any restrictions upon
the sale and transfer of such shares imposed by securities regulatory
authorities;
7.3 Mercury and the Purchaser will use their best efforts and endeavours to
register the NEI Shares within three months following the Closing Date for sale
and transfer in the United States pursuant to the appropriate regulatory
requirements so that the NEI Shares may be sold, transferred or assigned by the
Vendor at any time free and clear of any restrictions on transferability.
Failing such registration within the period set out above, the Vendor will be
paid the additional shares out of escrow by the Escrow Agent in accordance with
the terms and conditions set forth in Clause 3(d) of this Agreement and the
terms and conditions of the Escrow Agreement;
7.4 This Agreement has been duly executed and delivered by Mercury and is a
valid and binding obligation of Mercury in accordance with its terms.
8. SURVIVAL OF COVENANTS, REPRESENTATIONS AND WARRANTIES
The covenants, representations and warranties of the Vendor, the Purchaser
and Mercury contained in this Agreement and contained in any document or
certificate given pursuant hereto shall survive the closing of the purchase and
sale of the Purchased Shares herein provided for a period of two years from the
Closing Date and, not withstanding such closing, nor any investigation made by
or on behalf of any party shall continue in full force and effect for the
benefit of the appropriate Party or Parties.
9. CONDITIONS OF CLOSING
The sale and purchase of the Purchased Shares is subject to the following
terms and conditions for the benefit of the Purchaser, the Vendor or Mercury,
as their interests may appear, to be fulfilled and or performed at or prior to
the Time of Closing:
9.1 The covenants, representations and warranties of the Vendor, the Purchaser
and/or Mercury contained herein shall be true and correct as of the date
hereof, each and every one of which is hereby deemed to be a condition, and the
<PAGE> 7
Vendor shall deliver a certificate to such effect acceptable to counsel to the
Purchaser and the Purchaser shall deliver a certificate to such effect
acceptable to counsel to the Vendor, on the Closing Date;
9.2 The Vendor, the Purchaser and Mercury shall have complied with all
covenants and agreements herein agreed to be performed or cause to be performed
by each of them respectively;
9.3 The title of the Company to its assets and undertaking, the legality of the
incorporation and organization of the Company, the due creation and issuance as
fully paid of all the equity of the Company and all corporate proceedings of
the Company, its shareholders and directors and all other matters which in the
opinion of counsel for the Purchaser are material in connection with the
transaction of purchase and sale herein contemplated shall be subject to the
favourable opinion of such counsel and all relevant records and information
shall be supplied to such counsel for that purpose;
9.4 At or before the Time of Closing there shall have been obtained from all
appropriate bodies all such approvals and consents in form and terms
satisfactory to counsel for the Purchaser as may be required in order to permit
the change of ownership of the Purchased Shares provided for herein to be
completed without affecting or resulting in cancellation or termination of any
property interest, licence or permit held by the Company;
9.5 No action or proceeding in Canada or Austria by law or in equity shall be
pending or threatened and no legislation shall have been enacted or introduced
which, in the opinion of the Purchaser, adversely effects the operations of the
Company and its ability to conduct its business or the right of the Purchaser
to own the Purchased Shares;
9.6 In case any of the foregoing conditions shall not be fulfilled and/or
performed by the Vendor at or before the Closing Date to the satisfaction of
the Purchaser, the Purchaser may rescind this Agreement by notice to the Vendor
and in such event the Purchaser shall be released from all obligations
hereunder and unless the Purchaser can show that the condition or conditions
for the non-performance of which the Purchaser has rescinded such Agreement are
reasonably capable of being performed or caused to be performed by the Vendor,
then the Vendor shall also be released, in part or in whole, from all
obligations hereunder; provided that any of the said conditions may be waived
or in whole by the Purchaser without prejudice to its rights of recision in the
event of the non-fulfillment of any other condition or conditions, any such
waiver to be binding on the Purchaser only if the same is in writing;
9.7 In case any of the foregoing conditions shall not be fulfilled and/or
performed by the Purchaser at or before the Closing Date to the satisfaction of
the Vendor, the Vendor may rescind this Agreement by notice to the Purchaser
and in such event the Vendor shall be released from all obligations hereunder
and unless the Vendor can show that the condition or conditions for the
non-performance of which the Vendor has rescinded such Agreement are reasonably
capable of being performed or caused to be performed by the Purchaser, then the
Purchaser shall also be released, in part or in whole, from all obligations
hereunder; provided that any of the said conditions may be waived or in whole
by the Vendor without prejudice to its rights of recision in the event of the
non-fulfillment of any other condition or conditions, any such waiver to be
binding on the Vendor only if the same is in writing;
9.8 The completion of the transaction contemplated by this Agreement is
conditional on the parties hereto receiving written approval from Erzbergbau
Radhausberg Gesellschaft G.m.b.H. of A-5645 Bockstein, Badgastein, Austria
("ERG") to the assignment to the Purchaser of the outstanding obligations
pursuant through the purchase and sale of the Shellgaden North Property as set
forth in Schedule "D" as well as a written release being provided to the Vendor
by ERG, releasing the Vendor from any further liabilities, payments, share
payments or obligations of any sort whatsoever relating to the purchase and
sale of the Shellgaden North Property.
<PAGE> 8
10. CLOSING ARRANGEMENTS
10.1 The closing shall take place at 11:00 a.m. (the "Time of Closing") on the
6th day of December, 1996 (the "Closing Date") at the offices of the Escrow
Agent, 888 Dunsmuir Street, Vancouver, British Columbia, Canada, or at such
later place and time as may be agreed upon in writing between the Vendor, the
Purchaser and Mercury.
10.2 At the Time of Closing on the Closing Date, upon fulfillment upon all of
the conditions set out in Article 9 which have not been waived in writing by
the Purchaser, the Vendor shall deliver to the Purchaser documents properly
transferring the equity of the Company with all exigible security transfer
taxes paid and will cause transfers of such equity to be duly and regularly
recorded in the name of the Purchaser, or its nominee, and will cause a meeting
of the board of directors of the Company to be held at which all the directors
and officers of the Company will resign in favour of nominees of the Purchaser
whereupon, subject to all other terms and conditions hereof being complied
with, payment of the Purchase Price shall be paid and satisfied in the manner
provided in Article 3.
11. ANNOUNCEMENTS
Any announcement with respect to this Agreement by any party shall be
submitted in advance for the comments of the other parties.
12. NOTICES
Any notice, direction or other instrument required or permitted to be
given to Mercury hereunder shall be in writing and may be given by mailing the
same, postage pre-paid, or delivering the same addressed to Mercury personally
or by facsimile at Eleonorenstrausse, Post Fach, 324, Zurich, Switzerland,
8028, fax: 011-41-1-252-3841. Attention: Managing Director, Walter Gahwiliew.
Any notice, direction or other instrument required or permitted to be
given to the Vendor hereunder shall be in writing and may be given by mailing
the same, postage pre-paid, or delivering the same addressed to the Vendor
personally or by facsimile at Suite 1715, 750 West Pender Street, Vancouver,
British Columbia V6C 2T8, fax: (614) 689-5079, Attention: Yale R. Simpson,
President.
Any notice, direction or other instrument required or permitted to be
given to the Purchaser hereunder shall be in writing and may be given by
mailing the same, postage pre-paid, or delivering the same addressed to the
Purchaser personally or by facsimile at Suite 300, 90 Adelaide Street West,
Toronto, Ontario M5H 3V9, fax: (416) 350-2333, Attention: Mr. D. Campbell
Deacon.
Any notice, direction or other instrument aforesaid, if delivered
personally or by facsimile, shall be deemed to have been given or made on the
date on which it was delivered or if mailed shall be deemed to have been given
or made on the third business day following the day on which it was mailed.
The Purchaser, the Vendor or Mercury may change its address for service from
time to time by Notice given in accordance with the foregoing.
13. TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
14. EXECUTION IN COUNTERPARTS
This Agreement may be executed in one or more counterparts, each of which
so executed shall constitute an original and all of which together shall
constitute one and the same Agreement.
<PAGE> 9
15. ENTIRE AGREEMENT
This Agreement, including the schedules hereto, constitutes the entire
Agreement between the Parties hereto. There are not and shall not be any
verbal statements, representations, warranties, undertakings or agreements
between the parties and this Agreement may not be amended or modified in any
respect except by written instruments signed by the Parties hereto.
16. PROPER LAW OF CONTRACT
This Agreement shall be construed and enforced in accordance with, and the
rights of the Parties shall be governed by, the laws of the Province of British
Columbia. Each of the Parties hereto hereby irrevocably attorns to the
jurisdiction of the courts of the Province of British Columbia.
17. ASSIGNMENT
The Purchaser shall not have the right to assign all or any part of its
interest in the Company and the properties during the first year following the
Closing Date without the prior written consent of the Vendor. The Purchaser
shall have the right to assign its rights and privileges hereunder to a
wholly-owned subsidiary by giving notice of such intention to the Vendors and
Mercury.
18. WAIVER
A Waiver by any Party of any breach of this Agreement shall only be
binding upon that Party if evidenced in writing and executed by that Party.
Any waiver shall extend only to the particular breach so waived and shall not
limit any rights with respect to any future breach.
19. FURTHER DOCUMENTATION
The Parties hereto shall, respectively and without further consideration,
from time to time, execute and deliver such further instruments and assurances
as may be reasonably required to carry out the intent of this Agreement.
20. ENTIRE AGREEMENT
This Agreement terminates and replaces all prior agreements, either
written, oral or implied, among the Parties hereto, and constitutes the entire
Agreement among the Parties regarding the subject matter hereof.
IN WITNESS WHEREOF this Agreement has been executed by the parties hereto
as of the day and year first above written.
ARGOSY MINING CORP.
______________________________
Per:
______________________________ ______________________________
Witness YALE R. SIMPSON
Trustee for Argosy Mining Corp.
<PAGE> 10
NATIONAL ENTERPRISES INC.
______________________________
Per:
MERCURY IMMOBILIN UND
VERWALTUNGS AG
______________________________
Per:
AGREEMENT BETWEEN
NATIONAL ENTERPRISES INC., ARGOSY MINING CORP. AND MERCURY IMMOBILIEN UND
VERWALTUNGS AG
LIST OF SCHEDULES TO AGREEMENT
SCHEDULE "A"
Properties
SCHEDULE "B"
Banking Statements
SCHEDULE "C"
Escrow Agreement
SCHEDULE "D"
Release of ERG\
SCHEDULE "E"
List all liabilities of the company as at closing
This should be nil
<PAGE> 1
Exhibit 13.V
INDEPENDENT AUDITOR'S REPORT
To the shareholder of
ARGOSY MINING GMBH
Salzburg
Austria
We have audited the accompanying balance sheet as of December 31, 1995 of
Argosy Mining GmbH and the related statement of operations, retained earnings
and cash flows for the eight-months period then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit. As Argosy Mining GmbH was set up as of May 4, 1995 no prior year
comparative figures can be stated.
We conducted our audit in accordance 7with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Argosy Mining GmbH as of
December 31, 1995, and the results of its operations and its cash flows for the
eight-months period then ended in conformity with accounting principles
generally accepted in the United States.
Vienna, December 6, 1996
ERNST & YOUNG
WIRTSCHAFTSPRUFUNGS- UND
STEUERBERATUNGSGMBH
<PAGE> 2
BALANCE SHEET
<TABLE>
<CAPTION>
TATS
Dec. 31, 1995
-------------
<S> <C>
ASSETS
Cash 111
-----
SUBTOTAL 111
-----
Other accounts receivable 254
Other current assets 2
-----
TOTAL ACCOUNTS RECEIVABLE 256
-----
TOTAL CURRENT ASSETS 367
Machinery and equipment 162
Accumulated depreciation (50)
-----
MACHINERY AND EQUIPMENT 112
-----
Mining Right 1,158
Accumulated amortization (115)
-----
INTANGIBLE ASSETS 1,043
-----
TOTAL NON CURRENT ASSETS 1,155
-----
TOTAL ASSETS 1,522
=====
TATS
Dec. 31, 1995
-------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Other accounts payable and accrued expenses 78
-----
TOTAL CURRENT LIABILITIES 78
-----
Common stock 250
Capital reserves 1,912
Retained earnings (718)
-----
TOTAL SHAREHOLDERS` FUNDS 1,444
-----
TOTAL FUNDS EMPLOYED 1,522
-----
STATEMENT OF RETAINED EARNING
Retained earnings as of May 4, 1995 0
Net loss (718)
-----
Retained earnings as of Dec. 31, 1995 (718)
=====
</TABLE>
See notes to the financial statements
<PAGE> 3
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
TATS
Eight-months
period ending
Dec. 31, 1995
-------------
<S> <C>
TOTAL SALES AND REVENUES
Net sales 0.00
Other operating revenue 2,280
------
2,280
------
Research and development costs (2,132)
General administrative expenses (876)
------
(3,008)
------
LOSS FROM OPERATIONS (728)
Interest income 17
------
OTHER INCOME 17
LOSS BEFORE TAXATION (711)
------
Income taxes 7
LOSS AFTER TAXATION (718)
======
</TABLE>
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
TATS
Eight-months
period ending
Dec. 31, 1995
-------------
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss (718)
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 165
Change in other accounts receivable (254)
Change in other current assets (2)
Change in current liabilities 78
------
Net cash used for operating activities (731)
------
INVESTING ACTIVITIES:
Expenditures for machinery and equipment (162)
Expenditures for intangible assets (1,158)
------
Net cash used in investing activities (1,320)
------
FINANCING ACTIVITIES:
Capital paid-in, shareholder contribution 2,162
------
Net cash provided by financing activities 2,162
------
Increase in cash and cash equivalents 111
Cash at beginning of period 0
------
CASH AT END OF THE YEAR 111
======
</TABLE>
See notes to the financial statements
<PAGE> 4
Notes to the Financial Statements year ended December 31, 1995
- -------------------------------------------------------------------------------
SUMMARY OF SIGNIFICANT ACCOUNTING STANDARDS
- - Basis of presentation:
Argosy Mining GmbH was set up in Salzburg, Austria on May 4, 1995 and is
engaged in research and mining of minerals in Austria. The company maintains
its records and prepares its financial statements in Austrian currency (ATS).
- - Cash:
The balance only includes cash hold in current bank accounts.
- - Foreign currency translation:
No transactions in foreign currency were carried out in fiscal year 1995.
- - Machinery and equipment:
Machinery and equipment is recorded at cost, less accumulated depreciation.
Depreciation which begins when assets are placed in service, is calculated on a
straight-line basis over estimated service lives.
The range of estimated useful lives for the different tangible asset
categories are as follows:
<TABLE>
<S> <C>
Machinery 5 years
Office equipment 10 years
Vehicles 3 years
</TABLE>
- - Intangible assets:
The mining right is also recorded at cost, less accumulated amortization.
Amortization is calculated on a straight-line basis over a period of 10 years.
- - Other operating revenue, related party transactions
Other operating revenue consists of income for technical advice. Technical
advice on mining research was rendered to Argosy Mining Corp. Vancouver,
Canada.
- - Research and development costs
Material exploring costs have already been incurred.
- - Income Taxes
The balance shown includes the current minimum corporate tax paid in 1995.
Due to a 100 % valuation allowance built up for the deferred tax asset (TATS
244) arising from the tax loss (TATS 718) no deferred taxes have to be allowed
for in the financial statements 1995.
<PAGE> 1
Exhibit 99.VI
<TABLE>
<CAPTION>
BALANCE SHEET
000.s of USD
Sept. 30, 1996
--------------
<S> <C>
ASSETS
Cash 2
----
Subtotal 2
----
Other accounts receivables 4
Other current assets 0
----
Total accounts receivable 4
----
Total current assets 6
Machinery and equipment 15
Accumulated depreciation (11)
----
Machinery and equipment 4
----
Mining Right 108
Accumulated amortization (19)
----
Intangible assets 89
----
Total non current assets 93
----
TOTAL ASSETS 99
====
LIABILITIES AND
SHAREHOLDER'S EQUITY
Other accounts payable
and accrued expenses 4
----
Total current liabilities 4
----
Common stock 25
Capital reserves 196
Retained earnings (126)
----
Total shareholders' funds 95
----
TOTAL FUNDS EMPLOYED 99
====
STATEMENT OF RETAINED EARNINGS
Retained earnings as of Jan.1, 1996 (71)
Net loss (47)
Foreign exchange differences (8)
----
Retained earnings as of Sept, 30 1996 (126)
====
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS
000's of USD
Nine-months
period ending
Sept. 30, 1996
--------------
<S> <C>
Total Sales and Revenues 0
Research and development costs (4)
General administrative expenses (41)
---
(45)
---
Loss from operations (45)
Loss before taxation (45)
Income taxes 2
---
Loss after taxation (47)
===
STATEMENT OF CASH FLOWS
Cash Flows from
Operating Activities:
Net loss (47)
Adjustments to reconcile
net income to net
cash provided by operating activities:
Depreciation 14
Change in other
accounts receivable 21
Change in current liabilities (4)
Net cash provided for
---
Operating activities (16)
---
Financing Activities:
Capital paid-in,
shareholder contribution 7
Net cash provided by
---
Financing activities 7
---
Increase in cash and
cash equivalents (8)
Cash at beginning of period 10
---
CASH AT END OF THE PERIOD 2
===
</TABLE>
