SHAREHOLDER'S DEED

RECORDING ISSUES BETWEEN SHAREHOLDERS OF
ALPINE ENERGY LIMITED

 

 

26^TH MAY, 1997

THIS DEED is made this 26^th day of May 1997

 

BETWEEN

      THE MACKENZIE DISTRICT COUNCIL at Fairlie,

 

THE TIMARU DISTRICT COUNCIL at Timaru,

 

THE WAIMATE DISTRICT COUNCIL at Waimate

 

THE SOUTH CANTERBURY POWER TRUST at Timaru

 

and ALPINE ENERGY LIMITED at Timaru

 

RECITAL

 

The parties enter into this deed to record the terms on which the Shareholders have agreed to:

1. Grant to the others of them a right of first refusal to purchase their shareholding in Alpine and;
2. The appointment of directors of Alpine.

And with the intention of it becoming a "Shareholder's Deed" in terms of Alpine's Constitution.

 

OPERATIVE PART

 

1.                    Interpretation

1.1.              In this deed, unless the context otherwise requires:

"Alpine" means Alpine Energy Limited.

"Business Day" means a day of the week other than:

(a).     Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, the Sovereigns Birthday, Labour Day, the Anniversary Day observed in South Canterbury and Waitangi Day; and

(b).     a day in the period commencing with the 25" of December in any year and ending with the 2nd day of January in the following year,

(c).     if the first day of January in any year falls on a Friday, the following Monday; and

(d).     if the first day of January in any year falls on a Saturday or Sunday, the following Monday and Tuesday

A business day shall be deemed to finish at 5.00pm.

"Director" means a director to be appointed to the board of directors of Alpine pursuant to its Constitution.

"Purchaser" shall mean a Shareholder named in a Purchaser's Notice.

"Related Company"-shall have the meaning set out in the Companies Act 1993

"Shareholders" means the parties to this Deed other than Alpine including their respective successors and assigns.

"Shares" means shares in Alpine.

"the Remaining Shareholders" shall mean the Shareholders other than the Vendor.

"the Trust" means the trust established by the South Canterbury Trust Deed dated the 15th'July 1993 ("the Trust Deed").

"Vendor" shall mean a shareholder giving a Vendor's notice

"Vendor's Notice" shall mean a notice given under Clause 2.2

1.2.              In this deed, unless the context otherwise requires:

(a).     References to clauses are references to clauses of this deed.

(b).     References to any statute or regulation are references to New Zealand Statutes and regulations, including any amendments or re-enactments.

(c).     References to persons include corporations, unincorporated bodies and government agencies.

(d).     Words importing the singular number include the plural and vice versa and references to any gender include every gender.

(e).     References to the Vendor include its successors and assigns and all its associated subsidiary and related companies that carry out all or part of the business.

(f).       "Sell" includes assign, transfer, alienate or otherwise dispose of.

 

2.                    Right of First Refusal

2.1.              If a shareholder shall contemplate the sale of all or part of its shares it shall endeavour to give as much notice as possible of its intention to the other shareholders and in particular will advise the other shareholders of

(a).     The outcome of any consultation process with its shareholders, constituents or consumers.

(b).     Any contemplated sale in terms of its annual plan.

(c).     Any decision to test the marketability of its shares by such means as a public or selective tender process.

(d).     Whether it has received an offer for all or any part of its shareholding and if so then (subject to any confidentiality restraints in the offer not prohibiting the release of this information until the issue of a vendor's notice)

·        the name of the offer or

·        the price offered;

·        the terms and conditions of the offer;

·        the shareholders attitude to the offer.

2.2.1         Subject to the provisions of Clause 2.1 if at any time a Shareholder ("Vendor') shall wish to sell all or any number of its shares it shall send to the Remaining Shareholders a written notice ("the Vendor's Notice") specifying:

(a)            the number of shares it wishes to sell; ("the parcel")

(b)           the minimum number of shares in the parcel which it will sell ("the minimum number) which may be all of the parcel or a lesser number;

(c)            the terms and conditions on which it will sell the parcel. Vendor shall not be obliged to state the price it will accept.

(d)           whether it has received an offer for the parcel or any part (being not less than the minimum number) and if so full details of such offer including, in particular:

·           the name of the offer or; the price offered;

·           the terms and conditions of the offer;

·           whether the offer has been conditionally accepted and if so the nature of the conditions;

·           if not accepted', the Vendor's attitude to the offer;

·           confirmation that the. offer is. subject to the rights of first refusal and other obligations contained in this deed and that the offeree is aware of these.

2.2.2         A copy of the Vendor's Notice shall also be sent to Alpine.

2.2.3         Any shareholder entering into a contract for sale of shares which are subject to the terms of this Deed shall include in the contract an acknowledgement by the intended purchaser that the sale is subject to the provisions contained in this Deed and the vendor is obligated to provide full details of the terms of contract to the Remaining Shareholders.

2.2.4         The Remaining Shareholders shall treat the terms advised to them in the Vendor's Notice or in the advice given under Clause 2.1 with as much confidentiality as is possible and shall only disseminate it on a "need to know' basis.

2.3.              The Remaining Shareholders shall be entitled to purchase the shares specified in the Vendor's Notice pari passu in accordance with their shareholding in Alpine but subject to the provisions of this clause.

2.4.               

2.4.1         On receipt of the Vendor's Notice Alpine shall forthwith issue a notice convening a meeting of the Remaining Shareholders (which meeting or any adjournment of it is referred to as "the meeting") to be held not sooner than 24 business days nor later than 30 business days after receipt of the Vendor's Notice at which:

(a)            The Chairman of the Board of Directors of Alpine or a director of Alpine nominated by the Chairman shall act as chairman of the meeting.

(b)           The Remaining Shareholders shall nominate whether they are interested in acquiring their proportionate entitlement or any greater or lesser number of the shares in the parcel, and;

(c)            The Vendor shall specify by notice in writing to the Chairman the price, terms and conditions which it will accept for the parcel ("the offer')

2.4.2         Each Remaining Shareholder shall prior to or at the commencement of the meeting give to Alpine a notice in writing appointing a person who will represent it at the meeting and confirming that the person so appointed has power to contractually bind it in relation to all matters which in terms of this Deed are to be considered at and/or decided at that meeting. A Remaining Shareholder who fails to give such a notice within the time specified shall be deemed not to have accepted the offer.

2.4.3         The person so appointed by a Remaining Shareholder to attend the meeting shall be deemed to have power to bind the principal in relation to all matters to be determined at the meeting in accordance with this Clause without further ratification.

2.4.4         A Remaining Shareholder may appoint any other persons to attend a meeting and they shall have the right to participate fully in the meeting but shall have no voting rights.

2.4.5         The Chairman shall on the request of a Remaining Shareholder adjourn the meeting for a period of ten business days or such earlier time as may be agreed upon by all Remaining Shareholders.

2.4.6         A Remaining Shareholder which is not represented at the meeting shall be deemed not to have accepted the offer.

2.5.               

2.5.1         At the meeting the Remaining Shareholders shall notify the Chairman in writing whether they decline the offer or whether they wish to accept it either:

(a)            in relation to all their proportionate entitlement; or

(b)           in relation to part only of their proportionate entitlement, or,

2.5.2         in relation to any number of shares beyond their proportionate entitlement. In the event that not all the Remaining Shareholders wish to accept the offer or their full proportionate entitlement, those who do so wish, may do so in relation to such numbers of shares which are consequently available for acquisition by them in such proportions as they may mutually agree upon between them (it being acknowledged that this may result in only one shareholder accepting the offer) but unless otherwise agreed the shares (subject to the provisions of Clause 2.5.1) shall be purchased by such of the Remaining Shareholders as wish to accept the offer pari passu in relation to the shares they hold in Alpine.

2.6.              Unless at the meeting the Remaining Shareholders among them agree to purchase at least the minimum number of shares, the offer shall be deemed not to have been accepted.

2.7.               

2.7.1         Before the conclusion of the meeting minutes of the proceedings shall be prepared and signed on behalf of such of the Remaining Shareholders as are represented and shall thereupon and without further ratification be binding on each of them.

2.7.2         Such minutes shall constitute Alpine the agent of each of the Purchasers to issue a written notice to the Vendor ("the Purchaser's Notice") summarising the proceedings of the meeting and advising the number of shares (being in total not less than the minimum number) agreed to be purchased by each Purchaser

2.7.3         The Purchaser's Notice shall be sent by Alpine to the Vendor immediately following the meeting but in any event not more than 5 business days after its conclusion.

2.7.4         The Purchaser's Notice shall constitute a binding contract between the Vendor and the individual Purchasers and shall be conclusive evidence of the matters contained in it and that all requirements under this deed have been complied with.

2.8.               

2.8.1         If a Purchasers Notice is not received within the time specified or if the Vendor is advised that the Remaining Shareholders do not wish to purchase at least the minimum number of shares, then the Vendor may sell either all of its shares or any number being not less than the minimum number to any other party provided that the terms and conditions of such sale are no more favourable than those which were specified in the Vendor's Notice. If the Vendor does decide to sell on more favourable terms it shall first re-offer the shares it wishes to sell to the Remaining Shareholders in accordance with the provisions of this Clause.

2.8.2         For the purposes of this clause a sale of less than the minimum number (as herein defined) shall be deemed to be "a more favourable term or condition".

2.8.3         If at any time the Vendor is required to offer more favourable terms and conditions of sale than those terms and conditions specified in the Vendor's Notice, then the Vendor shall by notice in writing re--offer the shares which it desires to sell to the Remaining Shareholders specifying the more favourable terms and conditions.

2.8.4         A copy of such notice shall be sent to Alpine.

2.8.5         The provisions of this deed (including this clause) shall relate in all respect to such re-offer and subsequent re-offer or re-offers but in this case the meeting shall be called not sooner than 10 nor later than 15 business days after receipt of the notice by Alpine.

2.9.              Notwithstanding the provisions of Clause 2.8.1, a Vendor if requested to do so by a Remaining Shareholder which has given an affirmative nomination to the meeting under Clause 2.4.1(b), shall endeavour to obtain agreement from the party to which it is selling the parcel, for the Vendor to sell to such Remaining Shareholder the number of shares which would otherwise have constituted its proportionate entitlement to the parcel.

2.10.         If the Vendor shall enter' into a contract to sell all or any number of its' shares to a party other than a Shareholder such sale shall be subject to the consent of the Board of Directors of Alpine pursuant to the terms of Alpine's Constitution and it shall be a condition precedent to such sale and the granting of consent by the Board that

·               The rights of first refusal contained in this Deed have been fully exhausted, and

·               the intending purchaser shall have covenanted to subscribe to this Deed and to be bound by it in all respects as if it were an original party and by so doing shall be deemed to have covenanted to obtain a similar covenant from any subsequent purchaser to the intent that this Deed shall be binding on all future shareholders whether purchasers from one of the existing shareholders or from a subsequent shareholder.

2.11.         The provisions of this Clause shall not apply to any disposal, allocation, re- settlement, vesting or other transfer of the shares held by the Trust to its beneficiaries pursuant to the terms of the Trust Deed.

2.12.          

2.12.1     The rights of first refusal given to Remaining Shareholders under this clause shall not arise on a transfer of shares by a shareholder which is either:

A Local Authority (as defined by the Local Government Act 1974)
or
a company

to a wholly owned subsidiary company of the transferor or by such wholly owned subsidiary company to a holding company of the transferor.

2.12.2     Such subsidiary or holding company shall be bound in all other respects by the terms of the Deed.

Appointment of Directors

3.1.              Notwithstanding the provisions of the Constitution (or Articles of Association) of the Company, while a Shareholder (or a related company of a shareholder) holds shares in the Company not less than the numbers set out opposite its name in Column A of this clause it shall be entitled to appoint the number of directors to the Board of Alpine set out in Column B.  

3.2.              Any appointment made in accordance with this Clause shall be made in writing to the Company by the shareholder or shareholders having that right and such shareholder or shareholders may remove any person so appointed and to appoint another person in place of the person so removed.

3.3.              Any vacancy caused by the death or disqualification of a Director pursuant to the Constitution or removal pursuant to Clause 3.2 of this Deed shall be filled by the Shareholder or Shareholders appointing such Director and the Director so appointed shall retire at the same time as the Director being replaced would have retired if that Director had served a full term.

3.4.              A director appointed in accordance with this Clause shall retire from office at the annual general meeting of the Company held on the third year following the year of appointment of such director. A director so retiring shall be eligible for reappointment for a further term or terms.

3.5.              The director to be jointly, appointed by the MacKenzie District Council and the Waimate District Council shall be a person to be mutually agreed upon between them.

3.6.              The following persons, being the present directors, shall retire from office at the annual meeting of the Company in the year set out opposite their names (if still then in office).

 

4.    Changes in shareholding.

4.1.              The parties acknowledge that the maximum number of directors shall be seven whilst the shareholding remains in the same proportions as set out in clause 3. I.

4.2.              Should these percentages alter then the parties agree to review the entitlement set out in Column B of Clause 3.1 and to adopt a variation which will recognise as near as may be practicable the changed percentages.

4.3.              Should the shares held by the Trust be disposed of in accordance with the terms of the Trust Deed then the transferee or transferees of those shares shall be entitled to the same right to appoint three directors as is given to the Trust under this Deed. If there shall be more than one transferee such right shall be exercised in such manner as those transferees may agree upon.

 

5.    Arbitration

5.1.              Should any dispute arise as to the reallocation of the right to appoint directors in accordance with Clause 4 or as to any other matter arising out of or incidental to the terms of this Deed then the same shall be referred to a person to be appointed by the President for the time being of the Canterbury District Law Society and the decision of such person shall be final and binding on all parties acceptable to parties.

5.2.              The President shall consult with the parties and prior to the actual appointment and shall use his best endeavours to appoint a person who is acceptable to all the parties.

5.3.              The provisions of Clause 4 and 5.1 shall be subject to the right of the shareholders to alter by unanimous resolution the provisions in the constitution of the Company relating to the appointment of directors.

 

6.    Previous Agreements

This agreement is intended to replace any previous agreements between the parties relating to shareholding in the Company or the Articles of Association of the Company or any Constitution adopted by it which other agreements are hereby declared to be extinguished and of no further effect.

 

7.    Shareholders Deed

7.1.              The parties record that this document in intended to be a 'Shareholder Deed' in terms of Alpine's Constitution.

7.2.              This deed shall constitute a separate binding and enforceable contract between the parties notwithstanding anything contained in Constitution.

8.    Miscellaneous

8.1.              Any notice to be given 4pder this deed shall be in writing and signed by the party giving the notice or by any officer of that party and shall given:

If to a Shareholder, at the address of that Shareholder in the Share Register of Alpine or to its publicly recorded facsimile number.

If to Alpine then at its registered office or to its publicly recorded facsimile number.

Any such notice shall be deemed to be duly given:

(a)            If delivered by hand, when so delivered.

(b)           If sent by facsimile, when receipt is confirmed by the recipient.

(c)            If sent by post, two business days following posting.

8.2.              This deed shall be governed by and construed in accordance with the laws of New Zealand and shall be subject to the jurisdiction of the High Court of New Zealand.

8.3.              No amendment to this deed shall be effective unless it is in writing and signed by all of the parties.

8.4.              No party shall assign its rights under this deed without the prior written consent of the other party.

8.5.              This deed may be signed in any number of counterparts, all of which taken together shall constitute one and the same instrument. Any party may enter into this deed by signing any counter part.

8.6.              This deed shall not be binding on any of the parties until all parties to it have executed it.

EXECUTED as a Deed