EXHIBIT 10.2
FAI INSURANCES LIMITED
FAI HOME SECURITY PTY LIMITED
SHAREHOLDERS AGREEMENT
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Reference MAP 10664498
TABLE OF CONTENTS
1. DEFINITIONS 1
2. OBJECTIVES 3
2.1 Objectives 3
2.2 Carrying out objectives 3
3. EQUITY FUNDING OF THE COMPANY 4
3.1 Additional equity capital 4
3.2 Issue of Shares 4
3.3 Acceptance of offers 4
3.4 Conditional acceptance 4
3.5 Apportionment of issue 5
3.6 Notification 5
3.7 Completion 5
4. BOARD OF DIRECTORS OF THE COMPANY AND SUBSIDIARIES 5
4.1 Number of Directors 5
4.2 Nominees 5
4.3 Votes 6
4.4 Chairman 6
4.5 Alternate Directors 6
4.6 Board meetings 6
4.7 Directors' fees and expenses 7
4.8 Quorum 7
4.9 Quorum not present 7
4.10 Subsidiaries 7
5. DECISION MAKING 7
5.1 Powers of the Board 7
5.2 Voting generally 7
5.3 Shareholder decisions by Unanimous Vote 8
5.4 Board decisions by 8
6. MANAGEMENT 9
6.1 Day to day control 9
6.2 Chief Executive Officer 9
7. BUSINESS PLAN, BUDGET AND FINANCIAL REPORTS 9
7.1 Business Plan 9
7.2 Budget 9
7.3 Reporting 10
8. ACCOUNTS AND AUDIT 10
8.1 Account and records 10
8.2 Access to records 10
8.3 Audit committee 11
9. DIVIDEND POLICY 11
10. COMPANY DEBT 11
12. WESTPAC RECEIVABLES PURCHASE AGREEMENT 12
13. TRANSFER OF SHARES 12
13.1 Transfers 12
13.2 Encumbrances 12
13.3 Restrictions on transfers 13
14. CHANGE IN EFFECTIVE CONTROL OF A SHAREHOLDER 13
14.1 Meaning of change in effective control 13
15. DEED OF ACCESSION 14
16. COMPULSORY OFFER 14
16.1 Controlling Shareholder 14
16.2 Independent valuation 14
16.3 Offer 14
16.4 Completion 15
17. DEADLOCK 15
17.1 When a Deadlock arises 15
17.2 Deadlock under clause 17.1(a) 15
17.3 Deadlock under clause 17.1(b) 16
17.4 Notice 16
17.5 Acceptance or rejection of Offer 16
17.6 Obligation to sell 16
17.7 Completion of transfer 16
17.8 Two offers on the same day 17
18. RIGHTS TO INFORMATION 17
18.1 Rights to information 17
18.2 Confidentiality 17
18.3 Exceptions 17
19. TERMINATION 18
19.1 Termination 18
19.2 Without prejudice 18
19.3 Continuing obligations 18
20. DEFAULT 18
20.1 Events of default 18
20.2 Consequence of default 19
20.3 Independent valuation 19
20.4 Right of first refusal 19
20.5 Other remedies 19
21. ACKNOWLEDGEMENT AND WARRANTIES 20
21.1 Representations & warranties 20
21.2 Disclaimer 20
22. CONFLICT WITH MEMORANDUM AND ARTICLES 20
23. RELATIONSHIP BETWEEN PARTIES 21
24. FURTHER ACTION 21
25. COSTS 21
26. ASSIGNMENT 21
27. WAIVER 21
28. GOVERNING LAW AND JURISDICTION 21
29. NOTICE 22
30. SEVERABILITY 22
31. ALTERATION 23
32. ATTORNEYS 23
33. CALL OPTION 23
35. INTERPRETATION 25
SCHEDULE 1 28
SCHEDULE 2 60
SCHEDULE 3 62
SHAREHOLDERS AGREEMENT
AGREEMENT dated 1997
BETWEEN FAI INSURANCES LIMITED (ACN 004 304 545) of ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ('FAI')
AND FAI HOME SECURITY PTY LIMITED (ACN ▇▇▇ ▇▇▇ ▇▇▇) of ▇▇▇▇▇ ▇, ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ('FHS')
RECITALS
A. Pursuant to a share sale agreement dated 31 December 1997 ('Share Sale
Agreement'), FAI agreed to sell to FHS 25,001 shares in the Company.
B. Upon completion of the Share Sale Agreement, the issued capital of the
Company will be held as follows:
FAI - 25,001 Shares
FHS - 25,001 Shares
C. The parties wish to record the commercial terms of their agreement for the
funding, activities and management of the Company in this agreement.
AGREEMENT
In consideration of the mutual promises contained in this agreement, FAI and FHS
agree as follows:
1. DEFINITIONS
In this agreement:
'Articles' means the proposed articles of association of the Company set
out in Schedule1, to be adopted in accordance with clause 2.3.
'associate' has the meaning given in Division 2 of Part 1.2 of the
Corporations Law.
'ASX' means Australian Stock Exchange Limited.
'Board' means the board of Directors of the Company.
'Budget' means the annual budget for the Company adopted by the Board in
accordance with clause 7.2 (Budget).
'Business' means the business conducted by the Company, including the
business of the provision of consumer finance products.
'Business Day' means a day on which banks (as defined in the Banking ▇▇▇
▇▇▇▇ (Cth)) are open for general banking business in New South Wales,
excluding Saturdays and Sundays.
'Business Plan' means the business plan for the Company adopted by
Directors from time to time and as amended by the parties in accordance
with clause 7.1 (Business Plan).
'Chief Executive Officer' means the chief executive officer for the time
being of the Company.
'Company' means FAI Finance Corporation Pty Limited (ACN 053 262 561).
'Director' means a director for the time being of the Company.
'encumbrance' means an interest or power.
(a) reserved in or over any interest in any asset including, without
limitation, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset
under a ▇▇▇▇ of sale, mortgage, charge, lien, pledge, trust or
power, and whether existing or agreed to be granted or created.
'Financial Year' means each period of 12 months commencing on 1 July and
ending on 30 June or such other period as the Board determines and
includes:
(a) the period commencing on the date of execution of this agreement and
ending 30 June 1998; and
(b) the period commencing on the last 1 July before the date of
termination of this agreement and ending on that date of
termination.
'FFC NZ' means FAI Finance Corporation (NZ) Limited, a wholly owned
subsidiary of the Company.
'General' means FAI General Insurance Company Limited (ACN 000 327 855).
'Independent Valuer' means an independent valuer appointed to value any
Shares in accordance with the requirements of schedule 3 (Independent
valuation).
'Party' means a party to this agreement and any other Person that executes
a Deed of Accession and becomes a party to this agreement from time to
time.
'Related Body Corporate' has the meaning given in the Corporations Law.
'Respective Proportion' in relation to a party means the proportion that
the number of shares from time to time held or beneficially owned by that
party bears to the total number of all the issued Shares from time to
time.
'RPA' means the Receivables Purchase Agreement entered into between the
Company, General and Westpac dated 28 June 1996, as amended from time to
time.
'Share' means a share in the Company.
'Shareholder' means the holder of at least one Share.
'Simple Majority Vote' means a vote or resolution passed by:
(a) in the case of a vote or resolution of Shareholders, Shareholders
who together hold more than 50% of the Shares in the Company; and
(b) in the case of a resolution of the Board, Directors who together
represent Shareholders who hold more than 50% of the Shares in the
Company.
'subsidiary' has the meaning given in Division 6 of Part 1.2 of the
Corporations Law
and, in relation to the Company, includes FFC NZ.
'Trade ▇▇▇▇ License' means the license to use the FAI name and logo to be
granted by FAI to the Company on or about the date of this agreement.
'Unanimous Vote' means a vote or resolution passed by:
(a) in the case of a vote or resolution of Shareholders, all
Shareholders; and
(b) in the case of a resolution of the Board, all Directors.
'Westpac' means Westpac Banking Corporation ARBN 007 457 141
2. OBJECTIVES
2.1 Objectives
The objectives of the Shareholders in entering this agreement are:
(a) to use their respective business skills, knowhow and experience and
expertise to manage and conduct the Business;
(b) to outline the decision making procedures for the Company; and
(c) to ensure that the Business is managed to maximise the value of the
Company.
2.2 Carrying out objectives
To carry out the objectives, each Shareholder must:
(a) be just and faithful and provide full information to each other in
relation to the affairs and activities of the Business;
(b) do or cause to be done all things necessary or desirable to carry
out this agreement including casting votes as Shareholders and
causing their nominees to the Board to carry out this agreement; and
(c) not unreasonably delay any action, approval, direction,
determination or decision required under this agreement.
2.3 Each Shareholder must, as soon as practicable after the execution of
this agreement, procure the passing of a special resolution to adopt the
Articles.
3. EQUITY FUNDING OF THE COMPANY
3.1 Additional equity capital
Subject to clause 3.3 (Issue of Shares), the Company must not issue any
additional shares or other securities of the Company without the approval
of Shareholders by Unanimous Vote.
3.2 Issue of Shares
The Company may issue additional Shares on the following terms:
(a) the issue must have the prior approval of the Shareholders by
Unanimous Vote;
(b) the additional Shares may only be offered to existing Shareholders
in the Respective Proportions;
(c) the offer must be in writing and must be dated;
(d) the date of the offer must not be earlier than the date on which the
offer is sent;
(e) the offer must remain open for acceptance by each Shareholder for at
least 30 days from the date of the offer; and
(f) the offer price for each Share must be no less than the value of
each Share determined by an Independent Valuer in accordance with
schedule 3 (Independent valuation).
3.3 Acceptance of offers
Each Shareholder may accept the offer to subscribe for all or part of the
Shares offered by giving written notice to the Board on or before the
closing date of the offer. Subject to clause 3.4 (Conditional
acceptance), each acceptance is unconditional and irrevocable. A
Shareholder who accepts the offer to subscribe for a stated number of
Shares is also deemed to have accepted the offer to subscribe for a lesser
number of Shares allocated to it under this clause 3 (Equity funding of
the Company). If no acceptance is received by the expiry of the closing
date of the offer, the Shareholder will be deemed to have rejected the
offer.
3.4 Conditional acceptance
A Shareholder may accept the offer to subscribe for a specified number of
Shares under clause 3.3 (Acceptance of offers) subject to the condition
that on completion of the issue of Shares under clause 3.7 (Completion),
the Respective Proportion of that Shareholder will not exceed a percentage
specified by that Shareholder in the acceptance. The Board must reduce the
number of Shares which would otherwise be issued to that Shareholder under
clause 3.7 (Completion) to fulfill the condition.
3.5 Apportionment of issue
If there are insufficient Shares to satisfy acceptances from all accepting
Shareholders, the Shares offered will be apportioned between the accepting
Shareholders in their Respective Proportions. If such an apportionment
would result in a Shareholder receiving a greater number of Shares than
the Shareholder has accepted the excess must be reallocated amongst the
other Shareholders who have lodged acceptances as nearly as may be in
proportion to their Respective Proportions. This clause 3.5 applies to
that re-apportionment and if necessary the process must be repeated until
all of the Shares offered have been allocated. The apportionment must
comply with the requirements of
clause 3.8 (No obligation to contribute additional funds).
3.6 Notification
Within 5 Business Days of the expiry of the period referred to in clause
3.2(e), the Board must notify each Shareholder who has accepted an offer
to subscribe for Shares of the number of Shares allocated to each
Shareholder.
3.7 Completion
Completion of the issue of additional Shares must take place within 10
Business Days of the expiry of the period referred to in clause 3.2(e) at
the Company's registered office. At completion:
(a) each accepting Shareholder must subscribe for the Shares allocated
to that Shareholder under clause 3.5 (Apportionment of issue) by
delivering a bank cheque in payment of the subscription price for
the Shares to the Company; and
(b) the Company must deliver to each accepting Shareholder the
certificates relating to the additional Shares.
4. BOARD OF DIRECTORS OF THE COMPANY AND SUBSIDIARIES
4.1 Number of Directors
The parties agree that the maximum number of Directors will be four.
4.2 Nominees
Each Shareholder may appoint two Directors and require the removal or
substitution of any Director so appointed.
4.3 Votes
The Directors nominated by each Shareholder (whether or not both present)
are collectively entitled to cast that proportion of the total number of
votes that may be cast at a Board meeting as is equal to the proportion of
Shares held by the Shareholder who nominated the Director to the total
number of shares on issue at the time the vote is taken.
4.4 Chairman
The parties agree that:
(a) the Chairman of the Board will be elected annually by the Board;
(b) the initial Chairman will be ▇▇▇▇▇▇▇ ▇▇▇▇▇▇; and
(c) the Chairman will not have a casting vote.
4.5 Alternate Directors
Each Director may appoint an alternate Director.
4.6 Board meetings
The parties agree that:
(a) at least 4 meetings of the Board will take place each Financial
Year;
(b) additional Board meetings will be convened at the written request of
any Shareholder;
(c) meetings of the Board, other than those conducted as described in
paragraph (d), will be located in Sydney;
(d) Board meetings may be conducted by telephone conference, video
conference or any similar means of audio or audio-visual
communication;
(e) at least 3 Business Days prior written notice of Board meetings
together with an agenda must be given to all Directors, unless
otherwise unanimously agreed by the Directors;
(f) the agenda for Board meetings must be determined by the Chairman,
except for Board meetings convened at the request of a Shareholder
where the agenda may be determined by that Shareholder; and
(g) no resolution of the Board can be passed in respect of any matter of
which notice was not given in the agenda for that meeting, unless
otherwise unanimously agreed by all of the Directors.
4.7 Directors' fees and expenses
Unless the Shareholders otherwise determine by Unanimous Vote:
(a) no Director will be paid director's fees; and
(b) Directors will not be reimbursed for expenses incurred by the
Director in attending Board meetings.
4.8 Quorum
A quorum for meetings of the Board will be constituted by the attendance
(in person or by alternate) of:
(a) the nominee Directors appointed by Shareholders holding more than
50% of the Shares on issue; and
(b) a minimum of two Directors.
4.9 Quorum not present
If a quorum is not present within 30 minutes of the time specified for a
meeting of the Board the meeting will be adjourned to a date and time 7
days after the original time of the meeting and at the same place as the
original meeting by written notice to all Directors. If a quorum is not
present at the adjournment of the meeting, the meeting lapses.
4.10 Subsidiaries
The parties agree that the maximum number of directors of each subsidiary
will be four. Each Shareholder may appoint two directors to each
subsidiary and require the removal or substitution of any director so
appointed.
5. DECISION MAKING
5.1 Powers of the Board
Except as otherwise specified in this agreement, the articles of
association of the Company or the Corporations Law, the Board will have
full power to direct the activities of the Company.
5.2 Voting generally
Except as otherwise specified in this agreement, the articles of
association of the Company or the Corporations Law, all decisions of the
Shareholders and all decisions of the Board will be made by Simple
Majority Vote.
5.3 Shareholder decisions by Unanimous Vote
The parties agree that the following decisions can be made only by a
Unanimous Vote of the Shareholders:
(a) amendment to the memorandum or articles of association of the
Company;
(b) winding up the Company;
(c) reorganisation, reclassification, reconstruction, consolidation or
subdivision of the capital of the Company or the creation of any
different class of securities in the capital of the Company;
(d) any buyback, redemption, reduction or cancellation of shares or
share capital;
(e) any change to the dividend and distribution policy of the Company;
(f) the issue or allotment of any bonus Shares in the capital of the
Company; or
(g) offering any securities in the capital of the Company for
subscription.
5.4 Board decisions by Unanimous Vote
The parties agree that the following decisions can be made only by a
Unanimous Vote of the Board:
(a) approval or amendment of the Budget;
(b) approval or amendment of the Business Plan;
(c) the purchase or agreement to the purchase by the Company of any
asset or the making of any investment with a value of $250,000 or
more or a commitment to purchase in any one year a number of assets
or make a number of investments with an aggregate value of
$1,000,000 or more;
(d) the sale or agreement to the sale of the major undertaking of the
Company including any asset with a value of $500,000 or more or a
commitment to sell in any one year a number of assets with an
aggregate value of $2,000,000 or more;
(e) the Company entering into, amending or terminating any long term
contract or a contract with a value (taking account of gross
payments or receipts over the life of the contract) of $250,000 or
more;
(f) entering into, overriding or terminating any agreement between the
Company, and any Shareholder or an associate of a Shareholder;
(g) any change in strategic direction of the Company or the commencement
by
the Company of any new business other than the Business;
(h) the appointment or removal of the auditors of the Company;
(i) the delegation of any power of any board of the Company including,
without limitation, delegations to the Chief Executive Officer and
the establishment by the Board of a committee;
(j) the Company entering into any arrangement to borrow money;
(k) entering into any arrangement to give any guarantee, mortgage,
charge or other security over the assets of the Company; or
(l) the incorporation or establishment of any subsidiaries of the
Company.
6. MANAGEMENT
6.1 Day to day control
Subject to clause 5 (Decision making), the Business will be managed on a
day to day basis by the Chief Executive Officer in accordance with the
Business Plan and Budget, who will report and be responsible to the Board
for the activities and operations of the Business.
6.2 Chief Executive Officer
The Chief Executive Officer will be appointed by the Board by Unanimous
Vote and may only be removed by the Board by Unanimous Vote.
7. BUSINESS PLAN, BUDGET AND FINANCIAL REPORTS
7.1 Business Plan
The Business Plan for the period from the date of execution of this
agreement to 30 June 1999 will be put before the Board within two months
of the date of execution of this agreement. The parties must review the
Business Plan on an annual basis at the same time as the Budget. The
parties must procure that the management of the Company implements the
Business Plan.
7.2 Budget
The Budget for the period from the date of execution of this agreement to
30 June 1999 will be put before the Board within two months of the date of
execution of this
agreement. The parties will procure that for each subsequent Financial
Year, the Board considers and adopts a Budget (including budgeted capital
expenditure) in accordance with the following procedure:
(a) at least 3 months before the relevant Financial Year, the Chief
Executive Officer must submit to the Board a draft Budget;
(b) the Board must consider and seek to approve the Budget (with or
without amendments) by Unanimous Vote before the commencement of the
relevant Financial Year.
If the Board fails to adopt a Budget before the commencement of any
Financial Year, the parties agree that the Budget from the previous
Financial Year will continue to apply until the Board adopts a new Budget.
7.3 Reporting
The Chief Executive Officer must provide the Board with sufficient
management and financial information and reports to allow the Directors to
monitor the conduct of the Business, including:
(a) monthly management and financial reports incorporating an unaudited
profit and loss statement, cash flow statement and balance sheet;
(b) within three months after the end of each Financial Year:
(i) a profit and loss statement and cash flow statement for that
Financial Year;
(ii) a balance sheet as at the end of that Financial Year,
audited by the Company's auditors; and
(c) any other reports or statements that the Board may reasonably
require.
8. ACCOUNTS AND AUDIT
8.1 Account and records
The Chief Executive Officer must ensure that the accounts, records and
accounting information of the Company are:
(a) maintained in accordance with the Corporations Law and all other
applicable laws;
(b) reviewed every six months by the Company's auditor;
(c) audited annually by the Company's auditor; and
(d) reflect generally accepted accounting principles, procedures and
practices in Australia which have been consistently applied.
8.2 Access to records
Each Shareholder is entitled to full access during normal business hours
and at its own cost to inspect all the books, accounts and records of the
Company. Access may be exercised through an employee of, or consultant or
adviser to, the Shareholder, subject to the requirements of
confidentiality set out in clause 18 (Rights to information).
8.3 Audit committee
The Shareholders agree to procure that the Board establishes an audit
committee with appropriate terms of reference.
9. DIVIDEND POLICY
9.1 The parties must procure that the Board adopts a policy of distributing to
the parties, all distributable profits of the Company generated by the
operations of the Business, consistent with prudent financial management
and having regard to the Business Plan, the taxation, working capital,
banking covenants and operational requirements of the Company and the
terms of all loan agreements under which the Company has borrowed.
9.2 FAI warrants to FHS that the consolidated earnings before interest and
income tax for the Company and FFC NZ for the Financial Year ending 30
June 1998 will be at least $5,500,000.
10. COMPANY DEBT
10.1 FHS must use its reasonable endeavours on its part to:
(a) procure the passing of a special resolution by the Company for the
purposes of section 205(10) of the Corporations Law that approves
the granting by the Company and FFC NZ of security (in the form of a
charge acceptable to FAI and General acting reasonably) to FAI and
General in respect of all debts owed by the Company and FFC NZ to
FAI and General ('Charges');
(b) undertake all other necessary procedures under section 205(10) of
the Corporations Law to permit the granting of the Charges within 3
months of the
date of this agreement; and
(c) procure the granting of the Charges within 3 months of the date of
this agreement.
10.2 FAI and FHS must use their reasonable endeavours:
(a) to procure the refinancing of the loans owed by the Company to FAI
and General as soon as possible after the date of this agreement;
and
(b) to refinance the Subordinated Loan (as defined under the RPA).
11. PREFERRED LENDER
FHS agrees to use all reasonable efforts to ensure that the Company will
be the preferred lender to transactions entered into by FHS's distributors
and agrees to use its reasonable endeavours to ensure that the Company
will be the preferred lender to transactions entered into by Home Security
International, Inc's distributors and those of its related bodies
corporate where the Company carries on business from time to time.
12. WESTPAC RECEIVABLES PURCHASE AGREEMENT
12.1 FAI agrees to use its reasonable endeavours to facilitate an increase in
the Purchase Limit (as defined in the RPA) from $30,000,000 to
$60,000,000.
12.2 FAI agrees to assist FFC NZ to enter into a facility agreement with
Westpac on equivalent terms to the RPA, but with a Purchase Limit (as
defined in the RPA) of $30,000,000.
12.3 FAI and FHS agree to use their reasonable endeavours to release General
from its obligations, representations and warranties under the RPA, either
by negotiation with Westpac or by entering into a facility on terms
similar to the RPA with another party but without an obligation on any
party other than the Company to provide ongoing representations or
warranties to the purchaser.
12.4 Subject to this agreement, FAI agrees to provide:
(a) on behalf of General, a Subordinated Loan (as defined under the RPA)
to Westpac for the purposes of clause 2.2 of the RPA; and
(b) a subordinated loan to Westpac under any equivalent clause contained
in a facility to be entered with FFC NZ, as contemplated by clause
12.2,
up to a maximum of $20,000,000 in aggregate for a maximum period of six
years from
the date of this agreement.
12.5 FAI and FHS must use their reasonable endeavours to refinance the
Subordinated Loan (as defined under the RPA) as soon as possible after the
date of this agreement.
13. TRANSFER OF SHARES
13.1 Transfers
A Shareholder must not sell or transfer any legal or beneficial interest
in its Shares except:
(a) in accordance with clause 14 (Change in effective control of a
shareholder), clause 16 (Compulsory offer), clause 22 (Default) or
clause 33 (Call Option);
(b) with the written approval of all Shareholders; or
(c) to a body corporate that is a wholly owned subsidiary of that
Shareholder.
13.2 Encumbrances
A Shareholder must not provide its Shares as security or create any
encumbrance over them in favour of any person, except one to the other or
to a Related Body Corporate or with the written approval of all other
Shareholders.
13.3 Restrictions on transfers
A Shareholder must not transfer any legal or beneficial interest in its
Shares if the transfer would breach or be an event of default under any
provision of the Company's lending facilities. Each Shareholder
indemnifies and holds harmless all other Shareholders from and against any
claims, damages, expenses (including legal costs on a solicitor and own
client basis) or losses of any kind whatever arising out of a breach of
this clause 13.3.
14. CHANGE IN EFFECTIVE CONTROL OF A SHAREHOLDER
14.1 Meaning of change in effective control
In this clause 14 (Change in effective control of a Shareholder), a change
in the effective control of a Shareholder occurs if:
(a) any single person who held directly or indirectly more than 50% of
the issued capital of that Shareholder on the date that the
Shareholder first became
a Shareholder, ceases to hold the beneficial interest in at least 50%
of the issued capital;
(b) any person who on the date that the Shareholder first become a
Shareholder was not entitled to more than 50% of the issued share
capital of the Shareholder, becomes entitled to more than 50% of the
issued share capital of the Shareholder;
(c) ▇▇▇▇▇▇ ▇▇▇▇▇ ceases to be the Chief Executive Officer of FAI before
the fourth anniversary of the date of this agreement; or
(d) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ceases to be the Chief Executive Officer of Home
Security International, Inc before the fourth anniversary of the
date of this agreement,
In this clause, 'entitled' has the meaning given by section 609 of the
Corporations Law.
14.2 Change in Effective Control of FAI
If the effective control of FAI changes, FHS may declare that there has
been a Deadlock and, for the purposes of clause 17.2, such a declaration
will be deemed to constitute a Deadlock that has arisen under clause
17.1(a) occurring 30 days after service of the declaration on FAI.
14.3 Change in Effective Control of FHS
If the effective control of FHS changes, FAI may declare that there has
been a Deadlock and, for the purposes of clause 17.3, such a declaration
will be deemed to constitute a Deadlock that has arisen under clause
17.1(a) occurring 30 days after service of the declaration on FHS.
15. DEED OF ACCESSION
The Shareholders must procure that the Board does not register a person
(who at the time of registration is not a Shareholder) as a Shareholder
whether pursuant to:
(a) an issue of additional Shares;
(b) a transfer of Shares; or
(c) otherwise,
unless that person has first entered into a Deed of Accession in the form
of schedule 2 agreeing to be bound by this agreement as a Shareholder of
the Company.
16. COMPULSORY OFFER
16.1 Controlling Shareholder
If at any time ('Relevant Time') a party ('Controlling Shareholder')
becomes entitled to 70% or more of the issued Shares in the Company, the
Controlling Shareholder must:
(a) immediately notify the Board in writing; and
(b) offer to acquire all of the issued Shares in the Company held by the
other Shareholders on the terms set out in this clause 16
(Compulsory offer).
In this clause, 'entitled' has the meaning given by section 609 of the
Corporations Law.
16.2 Independent valuation
On receiving notification under clause 16.1(a) (Controlling Shareholder)
or otherwise becoming aware that a party has become a Controlling
Shareholder, the parties must cause the Board to:
(a) immediately notify all other Shareholders in writing; and
(b) comply with the requirements of Schedule 3 (Independent valuation)
to obtain an independent valuation of the Shares no later than 2
months after the Relevant Time.
Immediately on receiving the independent valuation, the Board must
provide a copy to the Controlling Shareholder and all other Shareholders.
16.3 Offer
The offer must be made by the Controlling Shareholder on or before the
later of:
(a) 3 months after the Relevant Time; and
(b) 1 month after receiving a copy of the independent valuation from the
Board,
and on the following terms:
(i) the offer must be in writing and must remain open for at least 1
month;
(ii) the consideration payable for the Shares must be paid in cash
within 14 days of acceptance of the offer; and
(iii) the consideration per Share must be equal to the value of the Shares
determined by the Independent Valuer in accordance with clause 16.2
(Independent valuation).
16.4 Completion
The Controlling Shareholder must complete the acquisition of Shares under
this clause in accordance with any acceptances received.
17. DEADLOCK
17.1 When a Deadlock arises
If :
(a) at any time before the fourth anniversary of the date of this
agreement:
(i) the Directors are unable to agree on a matter with regard to the
operation of the Company or the Business and are unable to
resolve the disagreement within 30 days of it first arising; or
(ii) a meeting of directors lapses for want of a quorum and no
further meeting of directors is convened within 30 days of the
lapsed meeting to deal with the matters set out in the agenda
for the lapsed meeting; or
(b) at any time on or after the fourth anniversary of the date of this
agreement, either party elects in writing that this clause is to
apply;
then a deadlock will be presumed to have arisen between them ('Deadlock').
17.2 Deadlock under clause 17.1(a)
If a Deadlock arises under clause 17.1(a), a period of 30 days must elapse
during which FHS may elect to exercise its call option granted by FAI under
clause 33. If FHS does not exercise its call option within 30 days, then
the following clauses 17.4 to 17.8 apply and the Shares to be sold under
those provisions will be sold on the terms set out in clauses 33.3, 33.4,
33.5 and 33.6. If the purchaser is FHS and the provisions of clauses 12.3
and 12.5 have not been satisfied, then:
(a) FAI must procure the continuation by General of the provision of the
representations and warranties that it has provided under the RPA and
must comply with clause 12.4, so that the Company may continue to
utilise the RPA up to the Purchase Limit (as defined under the RPA)
for a maximum of six years from the date of this agreement; and
(b) FAI may appoint an independent auditor to review the accounts of
the Company on a monthly basis. The cost of the auditor is to be
born by the Company.
17.3 Deadlock under clause 17.1(b)
If a Deadlock arises under clause 17.1(b), the following clause 17.4 to
17.8 will apply. If the purchaser is FHS and the provisions of clauses
12.3 and 12.5 have not been satisfied, then:
(a) FAI must procure the continuation by General of the provision of the
representations and warranties that it has provided under the RPA and
must comply with clause 12.4, so that the Company may continue to
utilise the RPA up to the level at that time of the Receivables Pool
(as defined under the RPA) for a maximum of six years from the date
of this agreement; and
(b) FHS must procure that the Company does not issue any further Sales
Notices (as defined under the RPA) under the RPA; and
(c) FAI may appoint an independent auditor to review the accounts of the
Company on a monthly basis. The cost of the auditor is to be born by
the Company.
17.4 Notice
Within the period of 31 to 60 days after a Deadlock arises a party
('Offeror') may serve notice on the other party ('Recipient') making an
unconditional and irrevocable offer to sell all of the Offeror's Shares to
the Recipient at a cash price per Share specified by the Offeror in that
notice.
17.5 Acceptance or rejection of Offer
Within 30 days after the date of service of the notice by the Offeror
('Notice Period') the Recipient must elect to accept or reject the offer
made by the Offeror.
17.6 Obligation to sell
If the Recipient rejects or fails to accept the offer made by the Offeror
within the Notice Period the Recipient must sell all of the Shares held by
it to the Offeror unconditionally and at the same cash price per Share
specified in the offer made by the Offeror.
17.7 Completion of transfer
Completion of the transfer of Shares will take place at 10.00am on the
14th day after the
expiration of the Notice Period at the Company's registered office. At
completion the selling party must deliver to and in favour of the
purchasing party duly executed transfers of the selling party's Shares
together with the certificate(s) for those Shares and, subject to clause
17.2, the purchasing party must deliver to the selling party a bank cheque
for the purchase price.
17.8 Two offers on the same day
If both parties make offers under clause 17.4, the first in point of time
to be served on the other will be deemed to be the only valid offer for
the purpose of clause 17.4.
18. RIGHTS TO INFORMATION
18.1 Rights to information
Subject to clause 18.2 (Confidentiality) the parties agree that each
Shareholder is entitled to copies of any information in relation to the
Business received by the Director nominated by that Shareholder
('Shareholder Information').
18.2 Confidentiality
The parties agree that the Shareholder Information is confidential and
each Shareholder must:
(a) keep confidential the Shareholder Information;
(b) use the Shareholder Information solely in relation to or in the best
interests of the Business; and
(c) disclose the Shareholder Information only to those of its employees,
advisors, related bodies corporate and shareholders who have a need
to know (and only to the extent each has a need to know) and who are
aware and agree that the Shareholder Information must be kept
confidential.
18.3 Exceptions
The obligations of confidentiality under this agreement do not extend to
information that (whether before or after this agreement is executed):
(a) is disclosed to a party under this agreement, but at the time of
disclosure is rightly known to that party and not subject to an
obligation of confidentiality on that party;
(b) at the time of disclosure is within the public domain or after
disclosure
comes into the public domain other than by a breach or breaches of
any obligation under this clause 18 (Rights to information); or
(c) is required by law or the rules of any securities exchange (whether
in Australia or elsewhere) to be disclosed and the party required to
make the disclosure ensures that information is disclosed only to
the extent required.
19. TERMINATION
19.1 Termination
This agreement will terminate:
(a) by agreement of all Shareholders;
(b) in respect of a Shareholder when it does not hold any Shares except
in the case of FAI where the provisions of clauses 12.3 and 12.5
have not been satisfied;
(c) if the Company is wound up by resolution of Shareholders or an order
of a Court; or
(d) if the Company is listed on ASX.
19.2 Without prejudice
Termination of this agreement under clause 19.1 (Termination) will be
without prejudice to any accrued rights of the parties.
19.3 Continuing obligations
Each party agrees after termination of this agreement, the obligations
under clause 18 (Rights to information) will remain in force.
20. DEFAULT
20.1 Events of default
An event of default occurs in relation to a party if:
(a) the party breaches any provision of this agreement and:
(i) does not remedy that breach within 30 days after receiving a
notice of that
breach from another party requesting the breach to be
remedied; or
(ii) the breach is incapable of being remedied; or
(b) the party has:
(i) a petition presented against it (that is not discharged or
withdrawn within 10 Business Days of its presentation), an
order made, a resolution passed or a meeting summoned or
convened to consider a resolution for its winding up;
(ii) a receiver appointed over its assets or undertaking or any
part of them;
(iii) any execution or other process of any Court or authority
issued against or levied upon any of its assets in any amount
in excess of 10% of its shareholders funds and that execution
or process is not discharged or withdrawn within 60 Business
Days of the date of issue;
(iv) ceased to pay its debts or suspended payment generally or
would cease or threaten to cease to carry on its business or
become insolvent or become or be unable to pay its debts
within the meaning of section 460 of the Corporations Law, as
and when they become due
(v) an administrator, trustee, voluntary administrator, liquidator
or provisional liquidator appointed for all or any part of its
assets or undertaking; or
(vi) entered into or resolved to enter into an arrangement,
composition or compromise with or assignment for the benefit
of its creditors generally or any class of creditors or
proceedings are commenced to sanction such an arrangement,
composition or compromise other than for the purposes of a
bona fide scheme of solvent reconstruction or amalgamation.
20.2 Consequence of default
If any event of default occurs in relation to a party ('Defaulting
Party'), at the election of any other party by giving written notice to
all parties:
(a) all rights attaching to Shares held by the Defaulting Party will be
suspended until the default is remedied (and, if the default is not
capable of remedy, will be suspended indefinitely); and
(b) the Defaulting Party will be deemed to have notified the Board that
it wishes
to transfer the Shares held by it at the value of the Shares as
determined by an Independent Valuer in accordance with schedule 3
(Independent valuation).
20.3 Independent valuation
Within 10 Business Days of receiving notice from a party that an event of
default has occurred in relation to the Defaulting Party, the Board must
comply with the requirements of schedule 3 (Independent valuation) to
obtain an independent valuation of the Shares held by the Defaulting
Party.
20.4 Right of first refusal
On receiving the determination by the Independent Valuer of the
independent valuation of the Shares, the Board must offer the Shares held
by the Defaulting Party to all other Shareholders at a price equal the
independent valuation of the Shares
20.5 Other remedies
Clause 20.2 (Consequence of default) is in addition to and not to the
exclusion of any other rights or remedies that the other parties may have
against a Defaulting Party.
21. ACKNOWLEDGEMENT AND WARRANTIES
21.1 Representations & warranties
Each party represents and warrants to the others that:
(a) (incorporation) it is a company duly incorporated and validly
existing under the laws of the country of its incorporation;
(b) (corporate power) it has the corporate power to enter into and
perform its obligations under this agreement and to carry out the
transaction contemplated in this agreement;
(c) (corporate action) it has taken all necessary corporate action to
authorise the entry into and performance of this agreement and to
carry out the transaction contemplated by this agreement;
(d) (binding obligation) this document is its valid and binding
obligation; and
(e) (no contravention) neither the execution and performance by it of
this agreement nor any transaction contemplated under this agreement
will violate in any respect any provision of:
(i) its constituent documents; or
(ii) any other document, agreement or other arrangement binding
upon it or its assets.
21.2 Disclaimer
Each party acknowledges that:
(a) it has relied on its own enquiries in respect of all matters
relating to this agreement and has not relied on any representation,
warranty, condition or statement made by or on behalf of any other
party other than as set out in this agreement;
(b) any conditions or warranties which may otherwise be implied by law
into this agreement are expressly excluded to the extent permitted
by law; and
(c) each party releases the other party from all actions, claims,
demands and liability which it may have or claim to have, or but for
this release, it might have had against the other party arising out
of any representation, warranty, covenant or provision not set out
or referred to in this agreement.
22. CONFLICT WITH MEMORANDUM AND ARTICLES
If there is any conflict between the provision of this agreement and the
memorandum and articles of association of the Company, the provisions of
this agreement prevail. On receipt of a written request from any party,
all parties must take all necessary steps to amend any inconsistency in
the memorandum or articles of association of the Company.
23. RELATIONSHIP BETWEEN PARTIES
Nothing contained or implied in this agreement will create or constitute,
or be deemed to create or constitute, a partnership between the parties
for the purposes of any law of any jurisdiction. A party shall not act,
represent or hold itself out as having authority to act as the agent of or
in any way bind or commit the other party to any obligation.
24. FURTHER ACTION
24.1 Each party must:
(a) use reasonable efforts to do all things necessary or desirable to
give full effect to this agreement; and
(b) refrain from doing anything that might hinder performance of this
agreement.
25. COSTS
Each party must bear its own costs for the preparation and execution of
this agreement.
26. ASSIGNMENT
A party must not assign or otherwise deal with this agreement or any right
under this agreement without the prior written consent of the other
party.
27. WAIVER
The failure of a party at any time to require performance of any
obligation under this agreement is not a waiver of that party's right:
(a) to insist on performance of, or claim damages for breach of, that
obligation unless that party acknowledges in writing that the
failure is a waiver; and
(b) at any other time to require performance of that or any other
obligation under this agreement.
28. GOVERNING LAW AND JURISDICTION
28.1 This agreement is governed by the law applicable in New South Wales.
28.2 Each party submits to the non-exclusive jurisdiction of the courts of New
South Wales.
29. NOTICE
29.1 A party giving notice or notifying under this agreement must do so in
writing:
(a) directed to the recipient's address specified in this clause, as
varied by any notice; and
(b) hand delivered or sent by prepaid post or facsimile to that address.
The parties' addresses and facsimile numbers are:
FAI Insurances Limited
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Address: ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇
Facsimile No: 9274-9900
FAI Home Security Pty Limited
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Address: ▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
Facsimile No: 9936 2355
or such other address as may from time to time be notified by one party to
the other.
29.2 A notice given in accordance with clause 29.1 is taken to be received:
(a) if hand delivered, on delivery;
(b) if sent by prepaid post, 3 days after the date of posting; or
(c) if sent by facsimile, when the sender's facsimile system generates a
message confirming successful transmission of the total number of
pages of the notice unless, within eight Business Hours after that
transmission, the recipient informs the sender that it has not
received the entire notice.
30. SEVERABILITY
30.1 The parties agree that a construction of this agreement that results in
all provisions being enforceable is to be preferred to a construction that
does not so result.
30.2 If, despite the application of clause 30.1, a provision of this agreement
is illegal or unenforceable:
(a) if the provision would not be illegal or unenforceable if a word or
words were omitted, that word or those words are severed; and
(b) in any other case, the whole provision is severed,
and the remainder of this agreement continues in force.
31. ALTERATION
This agreement may be altered only in writing signed by each party.
32. ATTORNEYS
Where this agreement is executed on behalf of a party by an attorney, that
attorney by executing declares and warrants that the attorney has been duly
appointed and has no notice of the revocation of the power of attorney
under the authority of which the attorney executes the agreement on behalf
of that party.
33. CALL OPTION
33.1 FAI grants FHS an option ('Option') to acquire the Shares held by FAI on
the following terms:
(a) the purchase price ('Purchase Price') will be $10,750,000 subject to
adjustment under paragraph (b) below and payable in accordance with
clauses 33.3, 33.4 and 33.5;
(b) either the retained profits of the Company must be paid as a dividend
immediately prior to the sale, or the Purchase Price will be increased
by 50% of retained profits of the Company;
(c) the Option may be exercised at any time before the fourth anniversary
of the date of this agreement by FHS providing written notice to FAI;
33.2 If at the time the Option is exercised by FHS, General has not been
released from its obligations, representations and warranties as
contemplated under clause 12.3, and/or the Subordinated Loan has not been
refinanced as contemplated under clause 12.5, then:
(a) FAI must procure the continuation by General of the provision of the
representations and warranties that it has provided under the RPA and
must comply with clause 12.4, so that the Company may continue to
utilise the RPA up to the Purchase Limit (as defined under the RPA)
for a maximum of six years from the date of this agreement; and
(b) and at FAI's option, either:
(i) the Directors nominated by FAI may continue in office, be removed
or be replaced by FAI; or
(ii) FAI may, at its cost, appoint an independent auditor to review
the accounts of the Company on a monthly basis.
33.3 The Purchase Price will be payable as follows:
Payment Dates Payment Amounts
-----------------------------------------------------------------
On exercise or date of agreement arising 10% of Purchase Price
under clause 17 ('Event')
-----------------------------------------------------------------
First anniversary of Event 15% of Purchase Price
-----------------------------------------------------------------
Second anniversary of Event 20% of Purchase Price
-----------------------------------------------------------------
Third anniversary of Event 25% of Purchase Price
-----------------------------------------------------------------
Fourth anniversary of Event 30% of Purchase Price
-----------------------------------------------------------------
33.4 Interest will be payable monthly in arrears on the outstanding balance of
the Purchase Price at the rate for Australian Government four year bonds
plus 150 basis points.
33.5 The outstanding balance will be secured by a mortgage over the Shares
acquired by the buyer granted by the buyer to the seller on terms
satisfactory to the seller, acting reasonably.
33.6 If the option is exercised or this clause applies by virtue of clause 17.2,
then, unless otherwise agreed, the Trade ▇▇▇▇ Licence will terminate on the
third anniversary of the date of exercise of the Option or completion of
the transfer of shares under clause 17.7 (as the case may be).
34. INDEPENDENT AUDITOR
If an auditor is appointed in accordance with clause 14, 17 or 33 of this
agreement:
(a) FHS must procure that FAI is provided with a copy of each document the
Company provides to Westpac pursuant to the RPA, within two business
days following its provision to Westpac.
(b) FHS must procure that a copy of the latest audit scope referred to in
Clause 8.1(u)(ii)(B) of the RPA is provided to FAI within five
business days of FAI providing written notice to FHS that an auditor
has been appointed.
(c) FHS must procure the Company to instruct the auditor to provide an
unqualified opinion as to whether:
(i) the Company's systems and operating procedures are adequate to
enable the Company to comply with its material obligations under the
Transaction Documents (as defined under the RPA); and
(ii) in accordance with the audit scope agreed by Westpac and the
Company from time to time, the Company has complied with its
material obligations under the Transaction Documents.
(d) If the auditor issues a qualified opinion:
(i) a copy of the report must be provided to FHS within 7 days
('Report');
(ii) FHS must prepare a response to the report within 7 days
('Response');
(iii) the parties must then negotiate in good faith to resolve any
differences between them;
(iv) if the differences cannot be resolved within 7 days of the
receipt of the Response, the matter will be referred to an
independent accountant to opine on the Report and Response as
to whether there is compliance with the Company's material
obligations under the Transaction Documents;
(v) the cost of the independent accountant will be borne by the
Company;
(vi) the independent accountant will act as an expert and not an
arbitrator and his decision will be final and binding on the
parties;
(e) If there is any material failure by the Company or FHS to comply with
the audit scope, systems or operating procedures as determined or
approved by Westpac as at the date of Westpac's last review, FAI may
direct the Company and FHS to comply with those requirements. If there
is no such compliance within 30 days of the direction, the Company
must not issue any further Sales Notices (as defined under the RPA.)
pursuant to the terms of the RPA.
35. INTERPRETATION
In this agreement, unless the contrary intention appears:
(a) headings are for ease of reference only and do not affect the meaning
of this agreement;
(b) the singular includes the plural and vice versa and words importing a
gender include other genders;
(c) other grammatical forms of defined words or expressions have
corresponding meanings;
(d) a reference to a clause, paragraph, schedule or annexure is a
reference to a clause or paragraph of or schedule or annexure to this
agreement and a reference to this agreement includes any schedules and
annexures;
(e) a reference to a document or agreement, including this agreement,
includes a reference to that document or agreement as novated, altered
or replaced from time to time;
(f) a reference to 'A$', '$A', 'dollar' or '$' is a reference to
Australian currency;
(g) a reference to a specific time for the performance of an obligation is
a reference to that time in the State, Territory or other place where
that obligation is to be performed;
(h) a reference to a party includes its executors, administrators,
successors and permitted assigns;
(i) words and expressions importing natural persons include partnerships,
bodies corporate, associations, governments and governmental and local
authorities and agencies; and
(j) a reference to any legislation or statutory instrument or regulation
is construed in accordance with the Acts Interpretation ▇▇▇ ▇▇▇▇ (Cth)
or the equivalent State legislation, as applicable.
(k) words and expressions defined in the Corporations Law as at the date
of this agreement have the meanings given to them in the Corporations
Law at that date;
EXECUTED as an agreement.
SIGNED for and on behalf of FAI ) FAI Insurances Limited by its Attorney who
INSURANCES LIMITED by being its duly ) states that at the time of executing this instrument
constituted Attorney in the presence of ) the Attorney has not notice of the revocation of
) the Power of Attorney dated 1997 under the
) authority of which the Attorney has executed
] this agreement
Signature of witness Attorney
Name of witness (print)
SIGNED for and on behalf of FAI HOME ) FAI Home Security Pty Limited by its Attorney
SECURITY PTY LIMITED by being its duly ) who states that at the time of executing this
constituted attorney in the presence of ) instrument the Attorney has not notice of the
) revocation of the Power of Attorney dated
) 1997 under the authority of which the
] Attorney has executed this agreement
Signature of witness
Attorney
Name of witness (print)
SCHEDULE 1
ARTICLES OF ASSOCIATION OF THE COMPANY
1. PRELIMINARY
1.1 In these Articles:
'Alternate Director' means a person appointed as an alternate director
under Article 61;
'Articles' means the articles of association of the Company as amended
from time to time;
'Auditor' means the Company's auditor, if any;
'Board' means the board of Directors of the Company;
'business day' has the same meaning as in the Corporations Law;
'Company' means FAI Finance Corporation Pty Limited ACN 053 262 561;
'Director' includes any person occupying the position of director of the
Company and, where appropriate, includes an Alternate Director;
'Directors' means all or some of the Directors acting as a board;
'dividend' includes bonus;
'Executive Director' means a person appointed as an executive director
under Article 68.1;
'Managing Director' means a person appointed as managing director under
Article 68.1;
'Member' means a person entered in the Register or any branch register as
the holder of shares;
'Office' means the Company's registered office;
'Register' means the register of Members of the Company;
'registered address' means the last known address of a Member as noted in
the Register;
'Representative' means a person authorised by a Member to act as its
representative under Article 48.1;
'Seal' means the Company's common seal;
'Secretary' means any person appointed by the Directors to occupy the
position of a secretary of the Company;
'Shareholders Agreement' means the Shareholders agreement dated #1# between
#2#;
'Shareholder' means any person being the registered holder of shares;
'shares' means shares in the capital of the Company;
'Simple Majority Vote' means a vote or resolution passed by:
(a) in the case of a vote or resolution of the Board, a majority of the
Board; or
(b) in the case of a vote or resolution of the Shareholders, those
Shareholders who together hold more than 50% of the total voting
rights of all Shareholders present and entitled to vote;
'Unanimous Vote' means a vote or resolution passed by:
(a) in the case of a vote or resolution of the Board, all members of the
Board; or
(b) in the case of a vote or resolution of Shareholders, all of the
Shareholders.
1.2 In these Articles, unless the context otherwise requires, headings are for
ease of reference only and do not affect the construction of these
Articles.
1.3 Division 10 of Part 1.2 of the Corporations Law applies in relation to
these Articles as if they were an instrument made under the Corporations
Law as in force on the day when these Articles become binding on the
Company.
1.4 An expression in an Article has the same meaning as in a provision of the
Corporations Law that deals with the same matter as the Article, unless the
contrary intention appears in these Articles.
1.5 The provisions of the Shareholders Agreement prevail over any inconsistent
article and the Members agree that these Articles shall be amended to
remove any inconsistency.
1.6 The regulations contained in Table A in Schedule 1 to the Corporations Law
do not apply to the Company.
2. PROPRIETARY COMPANY
The Company is a proprietary company and accordingly:
(a) the number of members of the Company (counting joint holders of shares
as one person and not counting a person who is employed by the Company
or any of its subsidiaries or a person who was, while so employed, and
thereafter has continued to be, a member of the Company) is limited to
50;
(b) any invitation to the public to subscribe for, and any offer to the
public to accept subscriptions for, any shares in, or debentures of,
the Company is prohibited; and
(c) any invitation to the public to deposit money with, and any offer to
the public to accept deposits of money with, the Company for fixed
periods or payable at call, whether or not bearing interest, is
prohibited.
3. CAPITAL AND SHARES - RIGHTS
Subject to these Articles, the Shareholders Agreement and to the terms of
issue of shares, all shares in the capital of the Company attract the
following rights, privileges and conditions:
(a) the right to receive notice of and to attend and vote at all general
meetings of the Company at one vote per share;
(b) the right to receive dividends;
(c) in a winding up or reduction of capital, the right:
(i) to repayment of the capital paid up on the share; and
(ii) to participate in the distribution of the surplus assets (if
any) of the Company.
4. CAPITAL AND SHARES - ISSUE OF SHARES
4.1 Subject to these Articles and the Shareholders Agreement, all unissued
shares are under the control of the Directors who may issue and allot, or
dispose of, the shares to persons:
(a) on terms determined by the Directors; and
(b) at par or, subject to the Corporations Law, at a premium or discount.
4.2 Subject to the Corporations Law and the Shareholders Agreement, the
Directors' power under Article 4.1 includes the power to issue options over
unissued shares and the power to issue and allot preference shares that
are, or at the option of the Company are, liable to be redeemed.
4.3 Subject to the Corporations Law and the Shareholders Agreement, the
Directors may issue and allot shares with:
(a) any preferential, deferred or special rights, privileges or
conditions; or
(b) any restrictions in regard to dividend, voting, return of capital or
otherwise.
5. CAPITAL AND SHARES - COMMISSION AND BROKERAGE
5.1 The Directors may exercise the power conferred by the Corporations Law to
make payments by way of brokerage or commission in respect of subscriptions
for shares in the Company.
5.2 Payments in accordance with this Article may be made in cash, by the
allotment of shares, by the grant of options over shares, or by a
combination of any of those methods, or otherwise.
6. CAPITAL AND SHARES - TRUSTS NOT RECOGNISED
6.1 Except as required by law, the Company will not recognise any person as
holding a share on trust and the Company will not recognise any equitable,
contingent, future or partial interest or any other right in respect of a
share except the registered holder's absolute right of ownership.
6.2 Subject to the other Articles, this Article 6 applies even if the Company
has notice of the relevant trust, interest or right.
7. CAPITAL AND SHARES - JOINT HOLDERS
7.1 If two or more persons are registered as the holders of a share, they are
taken to hold the share as joint tenants with benefits of survivorship and
the person whose name appears first on the Register is the only joint
holder entitled to receive notices from the Company.
7.2 Any one of the joint holders of a share may give effectual receipts for
any dividend or return of capital payable to the joint holders.
8. CAPITAL AND SHARES - RIGHT TO CERTIFICATE
8.1 Subject to the conditions of allotment of any shares or any class of
shares:
(a) every Member is entitled free of charge to one certificate for all
shares registered in its name; and
(b) a Member may request several certificates in reasonable
denominations for different portions of its holding.
8.2 Subject to the conditions of allotment of any shares or any class of
shares, joint holders are entitled to a single certificate in their joint
names in respect of each portion of their holding. The certificate will
be sent to the joint holder whose name appears first in the Register.
8.3 The Company must issue a replacement certificate for shares in accordance
with the Corporations Law if:
(a) the holder of the shares is entitled to a certificate for those
shares;
(b) satisfactory evidence has been received by the Company that the
certificate for shares previously issued has been stolen, lost or
destroyed and has not been pledged, charged, sold or otherwise
disposed of; and
(c) the Member has undertaken in writing to the Company to return the
certificate to the Company if it is found or received by the Member.
8.4 Every certificate for shares must be issued and despatched in accordance
with the Corporations Law.
9. CAPITAL AND SHARES - REPLACEMENT OF CERTIFICATE
The Directors may order worn out or defaced certificates to be cancelled
and replaced by new certificates.
10. CAPITAL AND SHARES - VARIATION OF CLASS RIGHTS
10.1 Subject to the Shareholders Agreement, the rights attached to any class of
shares may, unless their terms of issue state otherwise, be varied:
(a) with the written consent of the holders of 75% of the issued shares
of the class; or
(b) with the sanction of a special resolution passed at a separate
general meeting of the holders of shares of the class.
10.2 The provisions of these Articles relating to general meetings apply, with
necessary changes, to separate class meetings as if they were general
meetings except that:
(a) a quorum is two persons holding or representing by proxy at least
one-third of the issued shares of the class or, if there is one
holder of shares in a class, that person; and
(b) any holder of shares of the class, present in person or by proxy,
may demand a poll.
10.3 The rights conferred on the holders of shares which are not ordinary
shares and which have preferential or other special rights will, unless
otherwise expressly provided by their respective terms of issue, be taken
to be varied by:
(a) the issue of more shares; or
(b) the conversion of securities to new securities,
which rank equally with or in priority to those shares.
11. CALLS
11.1 Subject to the terms on which partly paid shares are issued, the Directors
may make calls on the holders of the shares for any money unpaid on them
(whether on account of the nominal value of the shares or by way of
premium on the shares or both).
11.2 A call is made when the resolution of the Directors authorising it is
passed. The Directors may require it to be paid by instalments.
11.3 The Directors may revoke or postpone a call before its due date for
payment.
11.4 At least 10 business days before the due date for payment of a call the
Company must send to Members on whom the call is made a notice specifying:
(a) the amount of the call;
(b) the due date for payment; and
(c) the place for payment.
11.5 A Member to whom notice of a call is given in accordance with this Article
11 must pay to the Company the amount called in accordance with the
notice.
11.6 Failure to send a notice of a call to any Member or the non-receipt of a
notice by any Member does not invalidate the call.
11.7 Joint holders of shares are jointly and severally liable to pay all calls
in respect of their shares.
12. CALLS - INSTALMENTS
Where the Directors require a call to be payable by instalments:
(a) the amount of an instalment is payable as if it were a call made by
the Directors and as if they had given notice of it; and
(b) the consequences of late payment or non-payment of an instalment are
the
same as the consequences of late payment or non-payment of a
call.
13. CALLS - INTEREST AND EXPENSES ON CALLS
If an amount called is not paid on or before the due date, the person
liable to pay the amount must also pay:
(a) interest on the amount from the due date to the time of actual
payment at a rate determined by the Directors (not exceeding 20% per
annum); and
(b) all expenses incurred by the Company as a consequence of the non-
payment,
but the Directors may waive payment of the interest and expenses in whole
or in part.
14. CALLS - RECOVERY OF AMOUNTS DUE
On the hearing of any action for the recovery of money due for any call,
proof that:
(a) the name of the person sued was, when the call was made, entered in
the Register as a holder or the holder of shares in respect of which
the call was made;
(b) the resolution making the call is duly recorded in the Directors'
minute book; and
(c) notice of the call was given to the person sued,
will be conclusive evidence of the debt.
15. CALLS - DIFFERENTIATION
The Directors may, on the issue of shares, differentiate between the
holders as to the amount of calls to be paid and the times of payment.
16. CALLS - PAYMENT OF CALLS IN ADVANCE
16.1 The Directors may accept from a Member the whole or part of the amount
unpaid on a share before the amount accepted has been called.
16.2 The Company may:
(a) pay interest on any amount accepted, until the amount is payable
under a call
and at a rate (not exceeding 20% per annum) agreed between the
Member and the Directors; and
(b) subject to any contract between the Company and the Member, repay
all or any of the amount accepted in excess of the amount called on
the share.
16.3 Payment of an amount in advance of a call does not entitle the paying
Member to any dividend, benefit or advantage, other than the payment of
interest under this Article 16, to which the Member would not have been
entitled if it had paid the amount when it became due.
17. LIEN AND FORFEITURE - LIEN
17.1 The Company has a first and paramount lien on every partly paid share for
all money:
(a) due and unpaid to the Company at a fixed time, in respect of the
share;
(b) presently payable by the holder of the share, or the holder's
estate, to the Company in respect of the share; or
(c) which the Company is required by law to pay in respect of the share.
17.2 The Company's lien extends to all dividends payable in respect of the
share.
17.3 Unless the Directors determine otherwise, the registration of a transfer
of a share operates as a waiver of the Company's lien on the share.
17.4 The Directors may declare a share to be wholly or partly exempt from a
lien.
18. LIEN AND FORFEITURE - LIEN SALE
If:
(a) the Company has a lien on a share for money presently payable; and
(b) the Company has given the Member who holds the share written notice
demanding payment of the money,
then 14 or more days after giving the notice, the Directors may sell the
share in any manner determined by them.
19. LIEN AND FORFEITURE - FORFEITURE NOTICE
19.1 The Directors may at any time after a call or instalment becomes payable
and remains unpaid by a Member, serve a notice on the Member requiring the
Member to pay:
(a) the unpaid amount;
(b) any interest that has accrued; and
(c) all expenses incurred by the Company as a consequence of the non-
payment.
19.2 The notice under Article 19.1 must:
(a) specify a day (not earlier than 14 days after the date of the
notice) on or before which the payment required by the notice must
be made; and
(b) state that if a Member does not comply with the notice, the shares
in respect of which the call was made or instalment is payable will
be liable to be forfeited.
20. LIEN AND FORFEITURE - FORFEITURE
20.1 If a Member does not comply with a notice served under Article 19, then
any or all of the shares in respect of which the notice was given may be
forfeited pursuant to a resolution of the Directors.
20.2 Dividends declared and unpaid in respect of forfeited shares will also be
forfeited.
20.3 On forfeiture, shares become the property of the Company and forfeited
shares may be sold, disposed of, or cancelled on terms determined by the
Directors.
20.4 The Directors may, at any time before a forfeited share is sold, disposed
of or cancelled, annul the forfeiture of the share on conditions
determined by them.
20.5 Promptly after a share has been forfeited:
(a) notice of the forfeiture must be given to the Member in whose name
the share was registered immediately before its forfeiture; and
(b) the forfeiture and its date must be noted in the Register.
21. LIEN AND FORFEITURE - LIABILITY OF FORMER MEMBER
21.1 The interest of a person who held shares which are forfeited is
extinguished but the
former Member remains liable to pay:
(a) all money (including interest and expenses) that was payable by the
Member to the Company at the date of forfeiture in respect of the
forfeited shares; and
(b) interest from the date of forfeiture until payment at a rate
determined by the Directors (not exceeding 20% per annum).
21.2 A former Member's liability to the Company ceases if and when the Company
receives payment in full of all money (including interest and expenses)
payable by the person in respect of the shares.
22. LIEN AND FORFEITURE - SALE
22.1 The Company may:
(a) receive the consideration (if any) given for a forfeited share on
any sale or disposition of the share; and
(b) execute a transfer of the share in favour of a person to whom the
share is sold or disposed of.
22.2 The purchaser of the share:
(a) is not bound to check the regularity of the sale or the application
of the purchase price;
(b) obtains title to the share despite any irregularity in the sale; and
(c) will not be subject to complaint or remedy by the former holder of
the share in respect of the purchase.
22.3 A statement signed by a Director and the Secretary that the share has been
regularly forfeited and sold or re-allotted, or regularly sold without
forfeiture to enforce a lien, is conclusive evidence of the matters stated
as against all persons claiming to be entitled to the share.
22.4 The net proceeds of any sale made to enforce a lien or on forfeiture must
be applied by the Company in the following order:
(a) in payment of the costs of the sale;
(b) in payment of all amounts secured by the lien or all money that was
payable in respect of the forfeited share; and
(c) in payment of any surplus to the former Member whose share was sold.
23. TRANSFER OF SHARES - TRANSFER
23.1 Shares may be transferred by:
(a) a written transfer instrument in any usual or common form; or
(b) any other form approved by the Directors.
23.2 A written transfer instrument referred to in Article 23.1 must be executed
by or on behalf of the transferor and the transferee.
23.3 A transferor of shares remains the holder of the shares transferred until
the transfer is registered and the name of the transferee is entered in
the Register in respect of the shares. A transfer of shares does not pass
the right to any dividends declared on the shares until such registration.
24. TRANSFER OF SHARES - TRANSFER PROCEDURE
24.1 For a transfer of shares:
(a) the written transfer instrument must be left at the Office or the
office of the Company's share registrar;
(b) the instrument must be accompanied by a certificate for the shares
dealt with in the transfer, unless the Directors waive production of
the certificate on receiving satisfactory evidence of the loss or
destruction of the certificate; and
(c) the Directors may require other evidence of the transferor's right
to transfer the shares.
24.2 Subject to the powers vested in the Directors by these Articles and the
Shareholders Agreement, the Company must register all registrable transfer
forms and issue certificates without charge.
25. TRANSFER OF SHARES - RIGHT TO REFUSE REGISTRATION
25.1 The Directors may only refuse to register any transfer of shares or other
securities:
(a) where the registration of the transfer would result in a
contravention or
failure to observe the provisions of a law of a
State or Territory or of the Commonwealth;
(b) where the Company has a lien on the shares or other securities the
subject of the transfer;
(c) where the transfer is in respect of a partly paid security in
respect of which a call has been made and is unpaid;
(d) where more than 3 persons are to be registered as joint holders
except in the case of executors or trustees of a deceased
shareholder;
(e) on which stamp duty is payable but unpaid; or
(f) as otherwise prohibited under the Shareholders Agreement.
26. TRANSFER OF SHARES - PRE-EMPTIVE RIGHTS
A Member is prohibited from disposing of any of its shares without
complying with the provisions of the Shareholders Agreement.
27. TRANSFER OF SHARES - CLOSURE OF REGISTER
The transfer books and the Register may be closed for up to 30 days in
each year.
28. TRANSMISSION OF SHARES - TITLE ON DEATH
28.1 The legal personal representative of a deceased Member who was the sole
holder of shares is the only person whom the Company will recognise as
having any title to the deceased Member's shares.
28.2 If a deceased Member was a joint holder of shares, the other joint holder
is the only person whom the Company will recognise as having any title to
the deceased Member's shares.
28.3 The estate of the deceased Member will not be released from any liability
to the Company in respect of the shares.
28.4 The Company may register a transfer to a transferee who dies before the
transfer is registered.
29. TRANSMISSION OF SHARES - TRANSMISSION
29.1 A person who becomes entitled to a share in consequence of the death or
lunacy of a Member may, subject to producing to the Directors evidence of
its entitlement which is satisfactory to the Directors, elect to:
(a) be registered as the holder of the share; or
(b) transfer the share to some other person nominated by it.
29.2 If the person who has become entitled to a share:
(a) elects to be registered as the holder, then the person must deliver or
send to the Company a written notice of election signed by it; or
(b) elects to transfer the share, then the person must execute a transfer
of the share.
29.3 An election to be registered as a holder of a share under Article 29.1(a)
or a transfer of a share from a Member or deceased Member under this
Article 29 is subject to the same limitations, restrictions and provisions
of these Articles as would apply if the election were a transfer or the
transfer were made by the Member or deceased Member itself.
29.4 A person who:
(a) has become entitled to a share by operation of law; and
(b) has produced evidence of its entitlement which is satisfactory to the
Directors,
is entitled to the dividends and other rights of the registered holder of
the share.
29.5 Where two or more persons are jointly entitled to any share in consequence
of the death of the registered holder, they will be considered to be joint
holders of the share.
29.6 Any person who is registered under this clause must indemnify the Company
against all liabilities, costs, losses and expenses incurred by the Company
as a result of registering the person.
30. CHANGES TO SHARE CAPITAL - CHANGES TO SHARE CAPITAL
30.1 Subject to the Shareholders Agreement, the Company may by resolution:
(a) increase its authorised share capital by creating new shares of the
amount specified in the resolution;
(b) consolidate and divide all or any of its share capital into shares of
larger amount than its existing shares;
(c) convert, or provide for the conversion of, all or any of its fully
paid shares into stock, or reconvert or provide for the reconversion
of that stock into paid up shares of any denomination;
(d) subdivide its shares or any of them into shares of smaller amount than
its existing shares but so that, in the subdivision, the proportion
between the amount paid and the amount (if any) unpaid on each share
of a smaller amount is the same as it was in the case of the share
from which the share of the smaller amount is derived; and
(e) cancel shares that, at the date of the resolution, no person has taken
or agreed to take or that have been forfeited, and reduce the amount
of its share capital by the amount of the shares cancelled.
30.2 For the purpose of giving effect to a consolidation or subdivision of all
or any of the share capital of the Company, the Directors may settle any
difficulty which arises as they think expedient and in particular may:
(a) issue fractional certificates;
(b) vest any fractions of shares in trustees on such trusts for the
persons entitled to the fractions of shares as may seem expedient to
the Directors; or
(c) sell the shares representing the fractions for the best price
reasonably obtainable to any person and distribute the net proceeds of
sale (subject to retention by the Company of small amounts where the
cost of distribution would be disproportionate to the amounts
involved) in due proportion among those Members and, for such sale,
any Director may execute an instrument of transfer of the shares to
the purchaser.
30.3 Subject to the Corporations Law and the Shareholders Agreement, the Company
may by special resolution reduce its share capital, any capital redemption
reserve or any share premium account.
31. CHANGES TO SHARE CAPITAL - NEW SHARES
Subject to their terms of issue and these Articles, new shares are
considered part of the original capital and are subject to these Articles.
32. GENERAL MEETINGS - CONVENING GENERAL MEETING
A general meeting may be convened at any time by the Directors or any
Shareholder.
33. GENERAL MEETINGS - NOTICE OF GENERAL MEETING
33.1 At least 21 days written notice (exclusive of the day on which the notice
is served or taken to be served and of the day for which notice is given)
must be given to Members of any general meeting at which a special
resolution or a resolution that requires Unanimous Vote will be considered.
At least 14 days written notice (exclusive of the day on which the notice
is served or taken to be served and of the day for which notice is given)
must be given to Members of all other general meetings.
33.2 A notice convening a general meeting must:
(a) specify the place, date and hour of the meeting; and
(b) state the general nature of the business to be transacted at the
meeting.
33.3 A notice of an annual general meeting need not state that the business to
be transacted at the meeting includes:
(a) the consideration of accounts and the reports of the directors and
auditors;
(b) the election of directors in the place of those retiring; or
(c) the appointment and fixing of the remuneration of the Auditor.
33.4 The Directors may postpone or cancel any general meeting whenever they
think fit (other than a meeting convened by a Shareholder under Article
32). The Directors must give notice of the postponement or cancellation to
all persons entitled to receive notices from the Company.
34. PROCEEDINGS AT GENERAL MEETINGS - MEMBER
In Articles 35, 36, 38 and 41, 'Member' includes a Member present in person
or by proxy, attorney or Representative.
35. PROCEEDINGS AT GENERAL MEETINGS - QUORUM
35.1 No business may be transacted at a general meeting unless a quorum of
Members is present when the meeting proceeds to business.
35.2 A quorum for general meetings will require the attendance (in person, by
representative, by proxy or by attorney) of at least 2 Shareholders.
36. PROCEEDINGS AT GENERAL MEETINGS - CHAIRPERSON
36.1 The chairperson, or in the chairperson's absence the deputy chairperson, of
Directors' meetings will be the chairperson at every general meeting.
36.2 If:
(a) there is no chairperson or deputy chairperson; or
(b) neither the chairperson nor deputy chairperson is present within 15
minutes after the time appointed for holding the meeting; or
(c) the chairperson and deputy chairperson are unwilling to act as
chairperson of the meeting,
the Members present may elect a chairperson.
36.3 If there is a dispute at a general meeting about a question of procedure,
the chairperson may determine the question.
37. PROCEEDINGS AT GENERAL MEETINGS - ADJOURNMENT
37.1 The chairperson of a meeting at which a quorum is present:
(a) in his or her discretion may adjourn a meeting with the meeting's
consent; and
(b) must adjourn a meeting if the meeting directs him or her to do so.
37.2 An adjourned meeting may take place at a different venue to the initial
meeting.
37.3 The only business that can be transacted at an adjourned meeting is the
unfinished business of the initial meeting.
37.4 If a general meeting has been adjourned for more than 21 days, at least 3
days written notice (exclusive of the day on which the notice is served or
taken to be served and of the day for which notice is given) of the
adjourned meeting must be given to Members.
38. PROCEEDINGS AT GENERAL MEETINGS - DECISION OF QUESTIONS
38.1 Subject to the Corporations Law and the Shareholders Agreement, a
resolution is carried if it is passed by Simple Majority Vote.
38.2 A resolution put to the vote of a meeting is decided on a show of hands
unless a poll is demanded, before or on the declaration of the result of
the show of hands, by:
(a) the chairperson;
(b) any Member or Members who can vote not less than 5% of all votes held
by Members who have the right to vote at the meeting; or
(c) any Member or Members who can vote shares on which an amount has been
paid up equal to not less than 5% of the total amount paid up on all
shares conferring the right to vote at the meeting.
38.3 The demand for a poll may be withdrawn.
39. PROCEEDINGS AT GENERAL MEETINGS - TAKING A POLL
39.1 A poll will be taken when and in the manner that the chairperson directs.
39.2 The result of the poll will be the resolution of the meeting at which the
poll was demanded.
39.3 A poll demanded on the election of the chairperson or the adjournment of a
meeting must be taken immediately.
39.4 After a poll has been demanded at a meeting, the meeting may continue for
the transaction of business other than the question on which the poll was
demanded.
40. PROCEEDINGS AT GENERAL MEETINGS - WRITTEN RESOLUTIONS
40.1 Subject to the Corporations Law and the Shareholders Agreement, if all the
Members have signed a document containing a statement that they are in
favour of a resolution in terms set out in the document, then a resolution
in those terms is taken to have been passed at a general meeting held on
the day on which the document was last signed by a Member.
40.2 For the purposes of Article 40.1, two or more identical documents, each of
which is signed by one or more Members, together constitute one document
signed by those
Members on the days on which they signed the separate documents.
40.3 Any document referred to in this Article may be in the form of a telex or
facsimile transmission.
41. VOTES OF MEMBERS - ENTITLEMENT TO VOTE
Subject to these Articles and the Shareholders Agreement, and to any
rights or restrictions attaching to any class of shares:
(a) every Member may vote;
(b) subject to Article 44.2, on a show of hands every Member has one vote;
and
(c) on a poll every Member has:
(i) one vote for each fully paid share; and
(ii) voting rights pro rata to the amount of par value and any
premium paid up on each partly paid share held by the Member.
42. VOTES OF MEMBERS - UNPAID CALLS
A Member is not entitled to vote or to be counted in a quorum unless all
calls and other sums payable by the Member in respect of shares have been
paid.
43. VOTES OF MEMBERS - JOINT HOLDERS
If two or more joint holders purport to vote, the vote of the joint holder
whose name appears first in the Register will be accepted, to the exclusion
of the other joint holder or holders.
44. VOTES OF MEMBERS - VOTES BY PROXY
44.1 If a Member appoints one proxy, that proxy may vote on a show of hands.
44.2 If a Member appoints two proxies, neither proxy may vote on a show of
hands.
44.3 A proxy may demand or join in demanding a poll.
45. VOTES OF MEMBERS - INSTRUMENT APPOINTING PROXY
45.1 A natural person may appoint one or two proxies by a written appointment
signed by the appointor or the appointor's attorney.
45.2 A corporation may appoint one or two proxies by a written appointment under
the appointor's common seal or signed by a director, secretary or attorney
of the appointor.
45.3 A proxy need not be a Member.
45.4 If a Member appoints two proxies, that appointment is of no effect unless
each proxy is appointed to represent a specified proportion of the
appointor's voting rights.
45.5 An appointment of a proxy must be in a form approved by the Directors.
Schedule 1 sets out a form which will be taken to be approved by the
Directors unless they resolve to use a different form.
45.6 A proxy may vote or abstain as he or she chooses except to the extent that
an appointment of the proxy indicates the manner in which the proxy will
vote on any resolution. The proxy must vote or abstain on a poll or show of
hands in accordance with any instructions on the appointment.
45.7 A proxy's appointment is valid at an adjourned meeting.
46. VOTES OF MEMBERS - LODGMENT OF PROXY
46.1 The written appointment of a proxy or attorney must be deposited at the
Office, or another address nominated by the Company, not less than 48 hours
(unless otherwise specified in the notice of meeting to which the proxy
relates) before:
(a) the time for holding the meeting or adjourned meeting at which
the appointee proposes to vote; or
(b) the taking of a poll on which the appointee proposes to vote.
46.2 If the appointment purports to be executed under a power of attorney or
other authority, then the original document, or an office copy or a
notarially certified copy of it, must be deposited with the appointment.
46.3 A facsimile of a written appointment of a proxy is invalid.
47. VOTES OF MEMBERS - VALIDITY
A vote cast in accordance with an appointment of proxy or power of attorney
is valid even if before the vote was cast the appointor:
(a) died;
(b) became of unsound mind;
(c) revoked the proxy or power; or
(d) transferred the shares in respect of which the vote was cast,
unless any written notification of the death, unsoundness of mind,
revocation or transfer was received at the Office before the relevant
meeting or adjourned meeting.
48. VOTES OF MEMBERS - REPRESENTATIVES OF CORPORATIONS
48.1 Any Member which is a corporation may authorise a natural person to act as
its representative at any general meeting of the Company or any class of
Members. If a Member corporation does so:
(a) its representative may exercise at the relevant general meeting all
the powers which the Member corporation could exercise if it were a
natural person; and
(b) when its representative is present at a meeting, the Member
corporation will be considered to be personally present at the
meeting.
48.2 A certificate under the common seal of the corporation is rebuttable
evidence of the appointment or of the revocation of the appointment (as
appropriate) of the Representative.
49. APPOINTMENT AND REMOVAL OF DIRECTORS - NUMBER OF DIRECTORS
There will be:
(a) a minimum of 2 Directors; and
(b) a maximum of 4 Directors.
50. APPOINTMENT AND REMOVAL OF DIRECTORS - QUALIFICATION
Neither a Director nor an Alternate Director is required to hold any
shares.
51. APPOINTMENT AND REMOVAL OF DIRECTORS - APPOINTMENT AND REMOVAL
The Company may only appoint and remove Directors in accordance with the
requirements of the Shareholders Agreement.
52. APPOINTMENT AND REMOVAL OF DIRECTORS - ADDITIONAL AND CASUAL DIRECTORS
The Directors must not appoint any person as a Director to fill a casual
vacancy or as an addition to the existing Directors except in accordance
with the Shareholders Agreement.
53. APPOINTMENT AND REMOVAL OF DIRECTORS - PERIOD OF OFFICE
A Director will continue to hold office until he or she dies or until his
or her office is vacated pursuant to Article 54.
54. APPOINTMENT AND REMOVAL OF DIRECTORS - VACATION OF OFFICE
The office of a Director immediately becomes vacant if the Director:
(a) is prohibited by the Corporations Law from continuing as a Director;
(b) becomes of unsound mind or a person whose estate is liable to be dealt
with in any way under the law relating to mental health;
(c) resigns by notice in writing to the Company;
(d) is removed by the Company in accordance with the Shareholders
Agreement; or
(e) subject to the Shareholders Agreement, the Shareholder who appointed
the Director ceases to hold shares in the Company other than by way of
transfer to a related body corporate.
55. REMUNERATION OF DIRECTORS - REMUNERATION OF DIRECTORS
55.1 Unless the Shareholders otherwise determine by Unanimous Vote, no Directors
will be paid directors' fees.
55.2 The Company may also pay a premium in respect of a contract insuring a
person who is or has been a Director against a liability incurred by the
person as a Director, except in circumstances prohibited by the
Corporations Law.
56. POWERS AND DUTIES OF DIRECTORS - DIRECTORS TO MANAGE COMPANY
56.1 The business of the Company is managed by the Directors who may exercise
all powers of the Company that the Shareholders Agreement, these Articles,
or, the Corporations Law do not require to be exercised by the Company in
general meeting.
56.2 Without limiting the generality of Article 56.1, the Directors may exercise
all the powers of the Company to:
(a) borrow money;
(b) charge any property or business of the Company or all or any of its
uncalled capital; and
(c) issue debentures or give any other security for a debt, liability or
obligation of the Company or of any other person.
56.3 Every Director and other agent or officer of the Company must:
(a) keep secret all aspects of all transactions of the Company, except:
(i) to the extent necessary to enable the person to perform his or
her duties to the Company;
(ii) as required by law;
(iii) when requested to disclose information by the Directors, to
the auditors of the Company or a general meeting of the
Company;
(b) if requested by the Directors, sign and make a declaration that he or
she will not disclose or publish any aspect of any transaction of the
Company.
56.4 All cheques, promissory notes, bankers drafts, bills of exchange and other
negotiable instruments, and all receipts for money paid to the Company,
must be signed, drawn, accepted, endorsed or otherwise executed, as the
case may be, by any two Directors or in such other manner as the Directors
determine.
57. PROCEEDINGS OF DIRECTORS - DIRECTORS' MEETINGS
57.1 At least 4 Directors' meetings must take place in each period of 12 months
commencing on 1 January and ending on 31 December in each year, or such
other period the Directors may determine.
57.2 Additional Directors' meetings may be convened at the written request of a
Shareholder.
57.3 Directors' meetings will be located in Sydney, Australia but the Directors
may determine that specific meetings will be held elsewhere including
outside Australia.
57.4 Directors' meetings may be conducted by telephone conference.
57.5 At least 3 business days prior written notice of Directors' meetings
together with an agenda must be given to all directors, unless otherwise
agreed by all of the Directors.
57.6 The agenda for Directors' meetings must be determined by the Chairperson
in consultation with the Managing Director, except for Directors' meetings
convened at the request of a Shareholder where the agenda may be
determined by that Shareholder.
57.7 The Directors need not all be physically present in the same place for a
Directors' meeting to be held.
57.8 A Director who participates in a meeting held in accordance with this
Article 57 is taken to be present and entitled to vote at the meeting.
57.9 This Article 57 applies to meetings of Directors' committees as if all
committee members were Directors.
57.10 Subject to the provisions of this Article 57 and the Shareholders
Agreement, the Directors may meet together, adjourn and regulate their
meetings as they think fit.
58. PROCEEDINGS OF DIRECTORS - QUORUM
At a meeting of Directors, a quorum will be constituted in accordance with
the Shareholders Agreement.
59. PROCEEDINGS OF DIRECTORS - DECISION OF QUESTIONS
59.1 Subject to these Articles and to the Shareholders Agreement, questions
arising at a
meeting of Directors are to be decided by Simple Majority
Vote.
59.2 The chairperson of a meeting does not have a casting vote in addition to
his or her deliberative vote if there is an equality of votes.
59.3 An Alternate Director has the same voting power as the Director for whom
he or she is an alternate. If the Alternate Director is a Director, he or
she also has a vote as a Director.
60. PROCEEDINGS OF DIRECTORS - DIRECTORS' INTERESTS
60.1 A Director and any firm, body or entity in which a Director has a direct
or indirect interest may in any capacity:
(a) enter into any contract or arrangement with the Company;
(b) be appointed to and hold any office or place of profit under the
Company, other than the office of auditor; and
(c) act in a professional capacity, other than as auditor, for the
Company,
and may receive and retain for his or her own benefit any remuneration,
profits or benefits as if he or she were not a Director.
60.2 Each Director must disclose his or her interests to the Company in
accordance with the Corporations Law and the Secretary must record all
declarations in the minutes of the relevant Directors' meeting.
60.3 A Director's failure to make disclosure under this Article does not render
void or voidable a contract or arrangement in which the Director has a
direct or indirect interest.
60.4 A Director may be counted in a quorum in respect of any vote and may vote
in respect of a contract or arrangement or proposed contract or
arrangement in which the Director has a direct or indirect interest,
whether material or otherwise.
60.5 For the purposes of Article 60.2, a Director does not have a direct or
indirect interest in a contract or arrangement or proposed contract or
arrangement if the contract or arrangement or proposed contract or
arrangement is:
(a) for giving a Director any security or indemnity in respect of money
lent by the Director to the Company or obligations undertaken by the
Director for the benefit of the Company;
(b) with another corporation in which the Director's only interest is as
an officer
or director of that other corporation;
(c) subject to the approval of a resolution of the Company in general
meeting;
(d) with a company listed on a public stock exchange where the
Director's only interest is as a holder of not more than 10% of the
issued capital of shareholder in the listed company; or
(e) a transfer of shares in the Company.
60.6 A Director may attest the affixing of the Seal to any document relating to
a contract or arrangement or proposed contract or arrangement in which the
Director has an interest.
61. PROCEEDINGS OF DIRECTORS - ALTERNATE DIRECTORS
61.1 Each Director may appoint an Alternate Director.
61.2 An Alternate Director is entitled to notice of Directors' meetings and, if
the appointor is not present at a meeting, is entitled to attend, be
counted in a quorum and vote as a Director.
61.3 An Alternate Director is an officer of the Company and is not an agent of
the appointor.
61.4 The provisions of these Articles which apply to Directors also apply to
Alternate Directors.
61.5 The appointment of an Alternate Director may be revoked at any time by the
appointor. An Alternate Director's appointment ends automatically when his
or her appointor ceases to be a Director.
61.6 Any appointment or revocation under this Article must be effected by
written notice delivered to the Secretary.
62. PROCEEDINGS OF DIRECTORS - REMAINING DIRECTORS
62.1 The Directors may act even if there are vacancies on the Board.
63. PROCEEDINGS OF DIRECTORS - CHAIRPERSON
63.1 Subject to the Shareholders Agreement, the Chairperson of the Board shall
be
elected annually by the Board.
63.2 Subject to the Shareholders Agreement the Directors may elect a Director
as deputy chairperson to act as chairperson in the chairperson's absence.
63.3 If a chairperson or deputy chairperson is not elected or is not present at
any Directors' meeting within 10 minutes after the time appointed for the
meeting to begin, the Directors present must elect any other Director to
be chairperson of the meeting.
64. PROCEEDINGS OF DIRECTORS - DIRECTORS' COMMITTEES
64.1 The Directors may delegate any of their powers to a committee or
committees. A committee must include at least one Director representing
each Shareholder. The Directors may at any time revoke any delegation of
power to a committee.
64.2 A committee must exercise its powers in accordance with any directions of
the Directors and a power exercised in that way is taken to have been
exercised by the Directors.
64.3 A committee may be authorised to sub-delegate all or any of the powers for
the time being vested in it.
64.4 Meetings of any committee will be governed by the provisions of these
Articles and the Shareholders Agreement which deal with Directors'
meetings so far as they are applicable and are not inconsistent with any
directions of the Directors.
65. PROCEEDINGS OF DIRECTORS - WRITTEN RESOLUTIONS
65.1 If all the Directors who are eligible to vote on a resolution have signed
a document containing a statement that they are in favour of a resolution
in terms set out in the document, then a resolution in those terms is
taken to have been passed at a Directors' meeting held on the day on which
the document was last signed by a Director.
65.2 For the purposes of Article 65, two or more identical documents, each of
which is signed by one or more Directors, together constitute one document
signed by those Directors on the days on which they signed the separate
documents.
65.3 Any document referred to in this Article 65 may be in the form of a telex
or facsimile transmission.
65.4 This Article 65 applies to meetings of Directors' committees as if all
members of the committee were Directors.
66. PROCEEDINGS OF DIRECTORS - VALIDITY OF ACTS OF DIRECTORS
If it is discovered that:
(a) there was a defect in the appointment of a person as a Director,
Alternate Director or member of a Directors' committee; or
(b) a person appointed to one of those positions was disqualified;
all acts of the Directors or the Directors' committee before the discovery
was made are as valid as if the person had been duly appointed and was not
disqualified.
67. PROCEEDINGS OF DIRECTORS - MINUTES AND REGISTERS
67.1 The Directors must cause minutes to be made of:
(a) the names of the Directors present at all general meetings,
Directors' meetings and meetings of Directors' committees;
(b) all proceedings of general meetings, Directors' meetings and
meetings of Directors' committees;
(c) all orders made by the Directors and Directors' committees; and
(d) all disclosures of interests made pursuant to Article 60.
67.2 Minutes must be signed by the chairperson of the meeting or by the
chairperson of the next meeting of the relevant body.
67.3 The Company must keep all registers required by these Articles and the
Corporations Law.
68. MANAGING OR EXECUTIVE DIRECTOR - APPOINTMENT OF MANAGING OR EXECUTIVE
DIRECTOR
68.1 Subject to the Shareholders Agreement, the Directors may appoint a person
to the office of Managing Director or any other office (other than
auditor) or employment under the Company for any period (but not for life)
and on any terms as they think fit. A Director (other than a Managing
Director) so appointed is referred to in these Articles as an Executive
Director.
68.2 The Directors may, subject to the terms of a Managing Director's or
Executive
Director's employment contract, suspend, remove or dismiss him or her from
that office and appoint another Director in that place.
68.3 If a Managing or Executive Director ceases to be a Director, his or her
appointment as Managing or Executive Director terminates automatically.
68.4 If a Managing or Executive Director is suspended from office, he or she
will not be entitled to attend or vote at any meeting of Directors.
68.5 A Managing Director is subject to the same provisions as to resignation
and removal as the other Directors.
69. MANAGING OR EXECUTIVE DIRECTOR - POWERS
69.1 Subject to the Shareholders Agreement, the Directors may confer on a
Managing Director or Executive Director any powers exercisable by the
Directors, subject to any terms and restrictions determined by the
Directors.
69.2 The Managing Director and other Executive Directors are authorised to sub-
delegate all or any of the powers vested in them.
69.3 Any power conferred pursuant to this Article may be concurrent with or to
the exclusion of the Directors' powers.
69.4 The Directors may at any time in accordance with the Shareholders
Agreement withdraw or vary any of the powers conferred on a Managing
Director or Executive Director.
70. LOCAL MANAGEMENT - APPOINTMENT OF ATTORNEYS AND AGENTS
70.1 The Directors may from time to time by resolution or power of attorney
under the Seal appoint any person to be the attorney or agent of the
Company:
(a) for the purposes;
(b) with the powers, authorities and discretions (not exceeding those
exercisable by the Directors under these Articles and the
Shareholders Agreement);
(c) for the period; and
(d) subject to the conditions,
determined by the Directors.
70.2 A power of attorney may contain such provisions for the protection and
convenience of persons dealing with an attorney as the Directors think
fit.
70.3 The Directors may appoint attorneys or agents by telex, facsimile
transmission, telegraph or cable to act for and on behalf of the Company.
71. SECRETARY
71.1 There must be at least one secretary of the Company appointed by the
Directors for a term and at remuneration and on conditions determined by
them.
71.2 The Secretary is entitled to attend and be heard on any matter at all
Directors' and general meetings.
71.3 The Directors may, subject to the terms of the Secretary's employment
contract, suspend, remove or dismiss the Secretary.
72. SEALS - COMMON SEAL
72.1 The Directors must provide for the safe custody of the Seal.
72.2 The Seal must not be used without the authority of the Directors or a
Directors' committee authorised to use the Seal.
72.3 Every document to which the Seal is affixed must be signed by a Director
representing each Shareholder.
73. SEALS - OFFICIAL SEAL
73.1 The Company may have one or more official seals for use outside the State
or Territory where the Seal is kept.
73.2 Each official seal must be a facsimile of the Seal with the addition on
its face of the name of every place where it may be used.
73.3 An official seal must not be used except with the authority of the
Directors.
74. SEALS - SHARE SEAL
74.1 The Company may have a share seal which may be affixed to share
certificates.
74.2 The share seal must be a facsimile of the Seal with 'Share Seal' or
'Certificate Seal' on its face.
75. INSPECTION OF RECORDS - TIMES FOR INSPECTION
On reasonable notice to the Managing Director and at reasonable times,
each Shareholder is entitled to full access (through an accountant, agent
or employee of that Shareholder) to inspect all the books, accounts,
records and facilities of the Company for the purpose of auditing and
valuing the Company, making copies and any other reasonable purpose.
76. DIVIDENDS AND RESERVES - DECLARATION OF FINAL DIVIDEND
76.1 Subject to the Shareholders Agreement, the Directors may declare a
dividend.
76.2 A dividend is payable:
(a) on the date fixed by the Directors' resolution declaring it; or
(b) if the resolution did not fix a date, on the date fixed by the
Directors.
77. DIVIDENDS AND RESERVES - INTERIM DIVIDEND
Subject to the Shareholders Agreement, the Directors may authorise the
Company to pay an interim dividend which is payable on the date fixed by
the Directors.
78. DIVIDENDS AND RESERVES - INTEREST
The Company must not pay interest on any dividend.
79. DIVIDENDS AND RESERVES - RESERVES
79.1 Before declaring a dividend, the Directors may set aside out of profits an
amount by way of reserves as they think appropriate.
79.2 The Directors may apply the reserves for any purpose for which profits may
be properly applied.
79.3 Pending any such application, the Directors may invest or use the reserves
in the business of the Company or in other investments as they think fit.
79.4 The Directors may carry forward any undistributed profits without
transferring them to a reserve.
80. DIVIDENDS AND RESERVES - DIVIDEND ENTITLEMENT
80.1 Subject to the rights of persons (if any) entitled to shares with special
rights as to dividend, a dividend must be declared and paid according to
the amounts paid or credited as paid on the shares in respect of which the
dividend is paid.
80.2 All dividends must be apportioned and paid proportionately to the amounts
paid or credited as paid on the shares during any portion or portions of
the period in respect of which the dividend is paid, but, if a share is
issued on terms providing that it will rank for dividend as from a
particular date, that share ranks for dividend accordingly.
80.3 An amount paid or credited as paid on a share in advance of a call is not
to be taken as paid or credited as paid for the purposes of Articles 80.1
and 80.2.
80.4 A transfer of shares does not pass the right to any dividend declared in
respect of those shares before the registration of a transfer.
81. DIVIDENDS AND RESERVES - DEDUCTIONS FROM DIVIDENDS
The Directors may deduct from a dividend payable to a Member all sums
presently payable by the Member to the Company on account of calls or
otherwise in relation to shares in the Company.
82. DIVIDENDS AND RESERVES - DISTRIBUTION OF ASSETS
82.1 On declaring a dividend, the Directors may resolve that the dividend be
paid wholly or partly by the distribution of specific assets, including
fully paid shares in, or debentures of, any other corporation.
82.2 The Directors, when authorising the payment of an interim dividend, may
direct payment wholly or partly by the distribution of specific assets,
including fully paid shares in, or debentures of, any other corporation.
82.3 If a difficulty arises in making a distribution of specific assets, the
Directors may:
(a) deal with the difficulty as they consider expedient;
(b) fix the value of all or any part of the specific assets for the
purposes of the distribution;
(c) determine that cash will be paid to any Members on the basis of the
fixed value in order to adjust the rights of all the Members; and
(d) vest any such specific assets in trustees as the Directors consider
expedient.
82.4 If a distribution of specific assets to a particular Member or Members is
illegal or, in the Directors' opinion, impracticable, the Directors may
make a cash payment to the Member or Members on the basis of the cash
amount of the dividend instead of the distribution of specific assets.
83. DIVIDENDS AND RESERVES - PAYMENT
83.1 Any dividend or other money payable in respect of shares may be paid by
cheque sent through the mail directed to:
(a) the address of the Member shown in the Register or to the address of
the joint holder of shares shown first in the Register; or
(b) an address which the Member or joint holders has in writing notified
the Company as the address to which dividends should be sent.
83.2 Any joint holder may give an effectual receipt for any dividend or other
money paid in respect of shares held by holders jointly.
84. DIVIDENDS AND RESERVES - CAPITALISATION OF PROFITS
84.1 Subject to the Shareholders Agreement the Directors may resolve:
(a) to capitalise any sum, being the whole or part of the amount for the
time being standing to the credit of any reserve account or the
profit and loss account or otherwise available for distribution to
Members; and
(b) that the sum be applied, in any of the ways mentioned in Article
84.2, for the benefit of Members, or persons who have applied for
shares, in the proportions determined by the Company.
84.2 The ways in which a sum may be applied for the benefit of Members under
Article 84.1 are:
(a) in paying up any amounts unpaid on shares held or to be held by
Members;
(b) in paying up in full unissued shares or debentures to be issued to
Members as fully paid; or
(c) partly as mentioned in paragraph (a) and partly as mentioned in
paragraph (b).
84.3 The Directors must do all things necessary to give effect to a resolution
under Article 84.1 and, in particular, to the extent necessary to adjust
the rights of the Members among themselves, may:
(a) issue fractional certificates or make cash payments in cases where
shares or debentures become issuable in fractions; and
(b) authorise any person to make, on behalf of all the Members entitled
to a benefit on the capitalisation, an agreement with the Company
providing for:
(i) the issue to them, credited as fully paid up, of any such
further shares or debentures; or
(ii) the payment by the Company on their behalf of the amount or
any part of the amount remaining unpaid on their existing
shares by the application of their respective proportions of
the sum resolved to be capitalised,
and any agreement made under the authority of paragraph (b) is effective
and binding on all the Members concerned.
85. NOTICES - SERVICE OF NOTICES
85.1 Notice may be given by the Company to any person who is entitled to notice
under these Articles by:
(a) serving it on the person;
(b) sending it by post, telex or facsimile transmission to the person at
the person's address shown in the Register or the address supplied
by the person to the Company for sending notices to the person; or
(c) if the notice is to a Member and the Member has no registered
office, posting it on a notice board at the Office.
85.2 A notice sent by post is taken to be served:
(a) by properly addressing, prepaying and posting a letter containing
the notice; and
(b) on the day after the day on which it was posted.
85.3 A notice sent by telex or facsimile transmission is taken to be served:
(a) by properly addressing the telex or facsimile transmission and
transmitting it; and
(b) on the day after its despatch.
85.4 A notice posted on a notice board is taken to be served 24 hours after it
is posted on the board.
85.5 A notice may be given by the Company to joint holders by giving the notice
to the joint holder whose name appears first in the Register.
85.6 Every person who is entitled to a share by operation of law and who is not
registered as the holder of the share is taken to receive any notice
served in accordance with this Article on the person from whom it derives
its title.
85.7 A share certificate, cheque, warrant or other document may be delivered by
the Company either personally or by sending it:
(a) in the case of a Member who does not have a registered address in
Australia, by airmail post; and
(b) in any other case, by ordinary post,
and is at the risk of the addressee as soon as it is given or posted.
85.8 A Member whose registered address is not in Australia may specify in
writing an address in Australia as the Member's registered address within
the meaning of this Article.
85.9 A certificate in writing signed by a Director, Secretary or other officer
of the Company that a document or its envelope or wrapper was addressed
and stamped and was posted is conclusive evidence of posting.
85.10 Subject to the Corporations Law the signature to a written notice given by
the Company may be written or printed.
85.11 All notices sent by post outside Australia must be sent by prepaid airmail
post.
86. NOTICES - PERSONS ENTITLED TO NOTICE
86.1 Notice of every general meeting must be given to:
(a) every Member;
(b) every Director and Alternate Director; and
(c) any Auditor.
86.2 No other person is entitled to receive notice of a general meeting.
87. AUDIT AND ACCOUNTS - COMPANY TO KEEP ACCOUNTS
87.1 The Directors must cause the Company to keep accounts of the business of
the Company in accordance with the requirements of the Corporations Law.
87.2 The Company must ensure that its accounts and records and those of any
subsidiary of the Company are kept in accordance with all applicable laws
are audited yearly and reflect generally accepted Australian accounting
principles, procedures and practices consistently applied.
87.3 The Company's auditors must be appointed by the Directors or the
Shareholders (as required) by Unanimous Vote.
88. WINDING UP
88.1 Nothing in this Article 88 prejudices the rights of the holders of shares
issued on special terms and conditions.
88.2 Subject to section 490 of the Corporations Law, the Company may be wound
up voluntarily if the Company so resolves by Unanimous Vote of
Shareholders.
88.3 If the Company is wound up, the liquidator may, with the sanction of a
special resolution of the Company:
(a) divide among the Members in kind all or any of the Company's assets;
(b) for that purpose, determine how he or she will carry out the
division between the different classes of Members,
but may not require a Member to accept any shares or other securities in
respect of which there is any liability.
88.4 The liquidator may, with the sanction of a special resolution of the
Company, vest all or any of the Company's assets in a trustee on trusts
determined by the liquidator for the benefit of the contributories.
89. INDEMNITY BY COMPANY
89.1 To the extent permitted by law, the Company indemnifies every officer of
the Company against any liability incurred by that person:
(a) in his or her capacity as an officer of the Company; and
(b) to a person other than the Company or a related body corporate of
the Company,
unless the liability arises out of conduct on the part of the officer
which involves a lack of good faith.
89.2 The Company indemnifies every officer of the Company against any liability
for costs and expenses incurred by the person in his or her capacity as an
officer of the Company:
(a) in defending any proceedings, whether civil or criminal, in which
judgment is given in favour of the person or in which the person is
acquitted; or
(b) in connection with an application, in relation to those proceedings,
in which the Court grants relief to the person under the
Corporations Law.
SCHEDULE 2
DEED OF ACCESSION
DEED dated #53#
by
of
('Acceding Party')
RECITAL
This deed is supplemental to a Shareholders' Agreement dated in relation to FAI
Finance Corporation Pty Limited ACN 053 262 561 ('Company')
OPERATIVE PART
1. Acceding Party to be bound
The Acceding Party confirms that it has been supplied with a copy of the
Shareholders' Agreement and covenants with all present parties to the
Shareholders' Agreement (whether original or by accession) ('Parties') to
observe, perform and be bound by all the terms of the Shareholders'
Agreement so that the Acceding Party is deemed, from the date on which the
Acceding Party is registered as a holder of Shares in the Company, to be a
party to the Shareholders' Agreement.
2. Representations and warranties
The Acceding Party represents and warrants to the Parties that:
(a) (incorporation) it is a company duly incorporated and validly
existing under the laws of the country of its incorporation;
(b) (corporate power) it has the corporate power to enter into and
perform its obligations under this document and to carry out the
transactions contemplated by the Shareholders' Agreement;
(c) (corporate action) it has taken all necessary corporate action to
authorise the entry into and performance of this document and to
carry out the transactions contemplated by the Shareholders'
Agreement;
(d) (binding obligation) this document is its valid and binding
obligations;
(e) (no contravention) neither the execution and performance by it of
this
document nor any transaction contemplated under the Shareholders'
Agreement will violate in any respect any provision of:
(i) its constituent documents; or
(ii) any other document, agreement or other arrangement binding
upon it or its assets.
3. Address for notice
The address of the Acceding Party for the purposes of clause 29 (Notice)
of the Shareholders' Agreement is, until substituted in accordance with
clause 29 (Notice):
[ ]
4. This deed is governed by the laws applicable in New South Wales.
EXECUTED as a deed.
If Acceding Party is a Company
THE COMMON SEAL of [ ] is affixed )
in accordance with its articles of association )
in the presence of )
)
-------------------------------------------------------------------------------
Secretary Director
Name of secretary (print) Name of director (print)
-------------------------------------------------------------------------------
If Acceding Party is an individual
SIGNED SEALED and DELIVERED by )
[ ]in the presence of )
)
-------------------------------------------------------------------------------
Signature of witness #59#
Name of witness (print)
-------------------------------------------------------------------------------
SCHEDULE 3
INDEPENDENT VALUATION
1. Application of schedule
This schedule applies if the Board is required to obtain an independent
valuation of its Shares under clauses 3 (Equity funding of the Company),
14 (Change in effective control of a shareholder), 16 (Compulsory offer)
or 21 (Default) of this agreement.
2. Appointment of Independent Valuer
If this schedule applies, the Board by Unanimous Vote must appoint an
independent chartered accountant or an investment or merchant banker as an
Independent Valuer to determine the value of each Share in accordance with
this schedule. If the Board fails to agree on an independent chartered
accountant or an investment or merchant banker, the Independent Valuer
will be appointed by the President for the time being of the Institute of
Chartered Accountants in Australia. Neither:
(a) the Independent Valuer; nor
(b) any firm or company of which the Independent Valuer is an employee,
partner, director or consultant,
must have had any business dealings with any Shareholder in the 2 years
before the date of appointment.
3. Valuation
The Independent Valuer must be instructed to determine the fair market
value of the Shares by valuing the Company (including any subsidiary of
the Company) as a whole on a going concern basis as at the end of the
month before the month in which the Independent Valuer is appointed under
this schedule ('Valuation Date'). The fair market value of each Share
will be the proportionate amount of the value of the Company, without
regard to any premium for control or any restrictions placed on the
transfer of shares under the Shareholders Agreement.
4. Access to information
The Board must ensure that the Independent Valuer has a right of access at
all reasonable times to the accounting records and other records of the
Company (including
any subsidiary of the Company) and is entitled to require from any officer
of the Company such information and explanation as the Independent Valuer
requires to value the Company.
5. Period of determination
The Board must use its best endeavours to ensure that the Independent
Valuer makes a determination as soon as practicable and in any event
within 60 days after receiving instructions.
6. Process
The parties agree that, in determining a value for the Shares under this
schedule, the Independent Valuer:
(a) will act as an expert and not as an arbitrator;
(b) may obtain or refer to any documents, information or material and
undertake any inspections or enquiries as he or she determines
appropriate;
(c) must provide the parties with a draft of his or her determination
and must give the parties an opportunity to comment on the draft
determination before it is finalised; and
(d) may engage such assistance as or she reasonably believes is
appropriate or necessary to make a determination.
7. Final and binding
The Independent Valuer's determination will be final and binding on the
parties.
8. Costs
The Company must pay the reasonable costs and expenses of the Independent
Valuer.
