Annual Report — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K Annual Report 20 103K
6: EX-10.10 Material Contract 2 11K
7: EX-10.11 Material Contract 4 23K
8: EX-10.12 Material Contract 4 17K
9: EX-10.13 Material Contract 5 24K
2: EX-10.6 Material Contract 10 40K
3: EX-10.7 Material Contract 14 51K
4: EX-10.8 Material Contract 13 49K
5: EX-10.9 Material Contract 13 45K
18: EX-28.10 Information from a Report Furnished to State 1 10K
Insurance Regulatory Authorities
10: EX-28.2 Information from a Report Furnished to State 19 62K
Insurance Regulatory Authorities
11: EX-28.3 Information from a Report Furnished to State 2 12K
Insurance Regulatory Authorities
12: EX-28.4 Information from a Report Furnished to State 1 10K
Insurance Regulatory Authorities
13: EX-28.5 Information from a Report Furnished to State 2± 11K
Insurance Regulatory Authorities
14: EX-28.6 Information from a Report Furnished to State 4 19K
Insurance Regulatory Authorities
15: EX-28.7 Information from a Report Furnished to State 1 10K
Insurance Regulatory Authorities
16: EX-28.8 Information from a Report Furnished to State 2 12K
Insurance Regulatory Authorities
17: EX-28.9 Information from a Report Furnished to State 1 9K
Insurance Regulatory Authorities
EX-10.9 — Material Contract
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THIS AGREEMENT made as of the 31st day of May, 1996 between
DESPINA PATSIANIS of Yiannitsa, Greece ("Patsianis") and STRATFORD
ACQUISITION CORP., a corporation incorporated under the laws of the
State of Minnesota, 5420 North Service Road, 5th Floor, Burlington,
Ontario, Canada, L7L 6C7 ("Stratford").
WHEREAS:
1. Stratford is the manufacturer of NovaCRETE additive and
finished products (the "Products");
2. Stratford has developed unique, valuable and secret
manufacturing formulae, know-how, patents, trade marks and other
information and data with respect to the Products;
3. Patsianis has land and funds and desires Stratford to joint
venture with it to manufacture the Products, and Stratford is willing
to joint venture with Patsianis in the production of the Products in
Greece upon the terms and conditions set forth below;
4. The joint venture will manufacture the NovaCRETE additive
and have exclusive supply rights in Europe, Africa and the Middle
East (the "Territory").
5. The joint venture will manufacture the NovaCRETE finished
products and have the exclusive marketing and distribution rights for
the countries of Greece and the Former Yugoslav Republic of Macedonia
(FYROM).
NOW THEREFORE the parties have agreed as follows:
1. Scope of the Joint Venture
The joint venture shall set up the organization to manufacture
Stratford Products and sell the Products so manufactured in the
Territory, shall provide maintenance service after the sale of the
Products and shall study and develop new products. Stratford and
Patsianis shall be the initial parties to the joint venture. The
organizational form of the joint venture company shall be a limited
liability company. Each party to the joint venture is liable to the
joint venture within the limit of the capital subscribed by it. The
profits, risks and losses of the joint venture shall be shared by the
parties in proportion to their contributions of the issued capital.
2. Formation of Corporation
A corporation under the name of Newco or such other name as may
be mutually agreed upon by the parties (the "Corporation") shall be
organized under the laws of Greece, with the principal object of
manufacturing and selling the Products. The legal address of the
Corporation shall be [address]
3. Issued Capital
The Corporation initially shall issue 100 common shares with no
par value as follows:
(a) Stratford, 49 shares, being 49%.
(b) Patsianis, 51 shares, being 51%
4. Purchase of Shares and Capitalization
(1) Stratford shall pay for the shares by carrying out the
following:
(a) providing to the Corporation the formulae,
know-how, patents, trade marks, Technology and all other information
and data with respect to the Products;
(b) supplying the specifications for the
preparation by Patsianis' engineers and architects of necessary
blueprints or design drawings of the building to be constructed for
carrying on the business of the Corporation;
(c) providing a list of the equipment capable of
manufacturing the NovaCRETE additive and finished products, its cost
in U.S. dollars and the sources of such equipment;
(d) providing training to the personnel of the
Corporation relating to the production of the NovaCRETE additive and
finished products to enable the Corporation to commence production of
the said NovaCRETE products;
(e) providing copies of all existing and future test
results from independent laboratories for NovaCRETE additive and
finished products;
(f) providing the Corporation with one (1) container
(approximately 800 bags @ 25kg per bag) of NovaCRETE finished product
to be given as free samples to various distributors and end
users in Greece and FYROM to assist in initial market research.
(2) Patsianis shall pay for its shares by:
(a) depositing in cash the amount of $200,000.00 U.S.
in a bank designated by the Corporation for working capital of the
Corporation;
(b) buying the equipment capable of producing the
NovaCRETE additive and NovaCRETE finished products;
(c) constructing the building in which the said
NovaCRETE products will be manufactured;
(d) purchasing the land on which the building is to
be built;
(e) conducting the market research for Greece and
FYROM involving interviews with distributors and end users to
determine technical requirements, performance specifications, price
levels, market volumes and total market share;
5. Corporate Documents
The Memorandum of Association and Articles of Association of the
Corporation shall give full effect to the terms of this agreement and
shall be in a form satisfactory to both parties. In particular, and
without in any way limiting or derogating from the generality of the
foregoing, the Articles of Association shall provide that the
following items of business for approval shall require a one hundred
(100%) percent vote of the shareholders;
(a) capital investment in excess of each party's
contribution hereinbefore set out;
(b) long-term indebtedness;
(c) disposition of major assets;
(d) investments in unrelated businesses;
(e) granting of licenses;
(f) merger or consolidation with other businesses
(g) liquidation; and
(h) increase of issued share capital.
6. Board of Directors
(1) The board of directors of the Corporation shall be
composed of four (4) persons. Stratford shall have the right to
appoint two (2) directors and Patsianis shall appoint two (2)
directors. The chairman of the board shall be appointed by
Patsianis, and its vice-chairman by Stratford. The term of office for
the directors shall be five (5) years.
(2) The chairman of the board shall be the legal
representative of the Corporation. Should the chairman be unable to
exercise his responsibilities for some reason, he shall authorize the
vice-chairman or any other directors to represent the Corporation
temporarily.
(3) The board of directors shall convene at least one
meeting every year. The meeting shall be called and presided over by
the chairman of the board. The chairman may convene an interim
meeting based on a proposal made by any director.
(4) The highest authority of the Corporation shall be its
board of directors. It shall decide all major issues, except as
provided otherwise in this agreement.
(5) The board shall, in addition to its statutory
functions:
(a) appoint members of the management, designate
their primary tasks, their salaries, and their standard of expense
reimbursement;
(b) establish the signing authority of the management
members to represent and bind the Corporation;
(c) establish the terms and conditions of each
management member's employment, sign the contract of employment
between the Corporation and each management member, and represent the
Corporation in case of dispute between the Corporation and a
management member;
(d) approve the Corporation's operating and
investment budget;
(e) approve any borrowing;
(f) approve or disapprove decisions of management
regarding all matters transcending the ordinary course of the
Corporation's day-to-day business; and
(g) consider and resolve any other matter which the
management submits for its consideration, and supervise the
management's activities, including review of the Corporation's annual
financial statements.
7. Management
(1) The Board of Directors ("the board") shall appoint the
members of the Management, considering their capabilities and
usefulness to the successful operation of the Corporation, and
without regard to their nationality.
(2) The management shall be entrusted with the day-to-day
business operation of the Corporation, in accordance with the
provisions of this agreement, the articles, the guidelines to be
established by the board and good business practice. The primary task
of each member shall be designated by the board.
8. Projections, Plans, Schedule of Implementation
(1) The business projections and plans for the Corporation
for the first five years shall be established by the Corporation
within six months from the signing of this agreement. Such
projections shall be updated each year by the Corporation.
(2) Within thirty days following signing of this
agreement, the parties shall prepare a schedule setting forth the
division of responsibilities and resulting time schedule. Each party
agrees to complete each action required of it on or before the
designated time schedule.
9. Additional Provisions
Notwithstanding the specific functions of the board of directors
and management:
(1) Patsianis shall provide for the following:
(a) applications for approval, registration, business
license and other matters concerning the establishment of the joint
venture from relevant Creek governmental authorities;
(b) applying for the right to the use of a site to
the governmental authority in charge of the land;
(c) the design and construction of the premises and
other engineering facilities of the Corporation, subject to the
provisions of paragraph 4;
(d) providing cash, machinery and equipment and
premises in accordance with its capital contributions as set out in
this agreement.
10. Labour
Labour contracts covering the recruitment, employment, dismissal
and resignation, wages, labour insurance, welfare, rewards, penalty
and other matters concerning the staff and workers of the Corporation
shall be drawn up in accordance with the labour regulations of
Greece.
11. Undertaking by Patsianis
Patsianis undertakes on behalf of itself and its affiliates that
it shall not during the continuance of this agreement, manufacture or
have manufactured for it for resale or for its own use, nor shall it
sell or offer for sale, any products similar to the Products, without
the prior written permission of Stratford.
12. Conflicting Use
(1) For the protection of the business of the Corporation,
Patsianis agrees on behalf of itself and its affiliates that it will
not buy, make or sell, for resale or for its own use, items which
incorporate or utilize in any way the patents or know-how owned by
Stratford, nor will it directly or indirectly (except through the
Corporation), make use of any specifications, blueprints, know-how
or engineering methods to be furnished to the Corporation pursuant to
the aforesaid license agreement.
(2) The term "affiliates" shall mean Patsianis and any
corporation or non-incorporated business, 20% or more of whose shares
are owned directly or indirectly by Patsianis and shall also mean a
corporation or non-incorporated business, 20% or more of whose shares
are owned directly or indirectly by a shareholder or owner who also
owns directly or indirectly 20% or more of the shares of a party to
this agreement. For the purposes of this agreement, an individual
shall be considered as owning the stock owned, directly or
indirectly, by or for his spouse, children, grandchildren, parents,
grandparents, brothers, sisters, nieces, nephews and other relatives
by blood or marriage of himself or his spouse to the degree of a
first cousin or closer, or nominees of any one or more of them.
13. Compliance with Laws of Greece
The parties agree to take all necessary steps to ensure that the
Corporation does not engage or participate, directly or indirectly,
in any transaction whatsoever with respect to the Products to be
manufactured or sold by it, if such transaction is prohibited by the
laws and regulations of Greece.
14. Taxes, Finance, Audit and Record Keeping
(1) The Corporation shall pay taxes in accordance with the
laws of Greece or any other country to which it must pay taxes.
(2) The fiscal year of the Corporation shall be from
January 1st to December 31st.
(3) The Corporation shall keep all accounts and records
required by law and practice applicable in its domicile. The
Corporation shall also keep books of account, and prepare quarterly
and annual financial statements, including a balance sheet, income
statement and such additional statements as either party may
reasonably request. These accounts and statements shall control in
determining the performance of the Corporation, the amount of profits
available for distribution, and all other financial questions or
matters. The essential books of account, and such other important
records as may be designated by the Parties, shall be kept in the
Greek and English language according to the laws of Greece and
European Community.
(4) One independent certified international public
accounting firm as the parties may designate, shall set up the
accounts and records of the Corporation, and shall resolve all
questions of proper accounting and financial reporting. The
independent certified international public accounting firm will be
chosen by the Board of Directors or by the General Assembly of the
Shareholders.
(5) In the first three months of each fiscal year, the
management shall prepare the previous year's balance sheet, profit
and loss statement and proposal regarding the disposal of profits,
and shall submit same to the board of directors for examination and
approval.
15. Insurance
Insurance policies of the Corporation on various kinds of risks
shall be underwritten. Types, values and duration of insurance shall
be decided by the board of directors.
16. Transfer of Shares
(1) Patsianis shall not sell to unrelated third parties
any part of the common shares owned by it in the Corporation unless
approved by Stratford. Stratford shall have the same obligations with
respect to Patsianis. Nothing contained in this agreement shall be
deemed to prevent Stratford or Patsianis from selling, transferring
or assigning to any subsidiary or affiliated corporation any or all
of the shares owned by it in the Corporation.
(2) Right of Sale: Stratford shall have the right to sell
its equity interest in the Corporation to Patsianis at the close of
any fiscal year ending twenty (20) or more years after the
Corporation commences actual operations, upon giving Patsianis twelve
months' prior notice, whereupon Patsianis shall be obligated to
purchase the same, for value of the Corporation with no amount
included for goodwill, calculated at the close of the year.
(3) Governmental Approval: Prior to any sale by either
party of all or part of its shares in the Corporation, approval from
the appropriate governmental authority shall be required.
17. Distribution of Profits
(1) Stratford will receive 10k of the gross sales made by
the Corporation until Stratford has received US$2.0 million.
(2) Unless the parties agree otherwise, at the annual
shareholders' meeting following the close of each year, they shall
cause the Corporation to distribute to the parties, in proportion to
their equity ownership, an amount equal to 50% of the total net
after-tax profits for the year less any accumulated losses from prior
years and less current contributions to reserves approved by the
Board, provided that no distribution of dividends shall be effected
by the Corporation until its aggregate reserves amount to US$1
million.
(3) Upon distribution of dividends by the Corporation, or
should the Corporation be liquidated, or should Stratford sell all or
part of its equity interest in the Corporation to Patsianis or some
other enterprise, the ordinary dividends, liquidation distributions
or sale proceeds (as the case may be) shall be freely transferrable
from Greece to Stratford in U.S. dollars or other convertible
currency, without imposition or withholding of any taxes on the
amounts transferred.
(4) Ordinary dividends, liquidation distributions and
proceeds from the sale of all or part of Stratford' a equity interest
in the Corporation, shall be converted from Greek currency into U.S.
dollars prior to their transfer to Stratford, at the rate of exchange
most favorable to Stratford at the date of the transfer, but not less
favorable to Stratford than the exchange rate applied to Stratford's
capital contribution to the Corporation.
18. Governmental Approval
Stratford may at its sole option terminate this agreement in the
event that approval is not obtained from the government of Greece of
the terms and conditions contained in this agreement and/or any
modifications thereof agreed to by the parties within three months
from the date of the execution of this agreement.
19. Duration of Corporation
The duration of the joint venture is twenty years. The
establishment of the joint venture shall start from the date on which
the business license of the Corporation is issued. An application
for the extension of the duration, proposed by one party and
unanimously approved by the board of directors, shall be submitted to
the government of Greece six months prior to the expiry date of the
joint venture.
20. Liquidation of Corporation upon Expiration of Duration
Upon the expiration of the duration or termination before the
date of expiration of the joint venture, liquidation shall be carried
out according to the relevant law. The liquidated assets shall be
distributed in accordance with the proportion of investment
contributed by Stratford and Patsianis.
21. Confidentiality
(1) Confidential Information: All information other than
information generally known in the cementitious products industry or
information made known by a third party to either party other than a
consequence of the relationship between the parties supplied by or on
behalf of either party pursuant to this agreement ("Confidential
Information") shall be treated as confidential by the other party.
(2) Duty Not to Disclose: The parties covenant and agree
that no Confidential Information shall be disclosed to anyone outside
the organization of such party without the prior written consent of
the other.
(3) Reasonable Efforts: The parties agree to use all
reasonable efforts to take such action as may be appropriate to
prevent the unauthorized use and disclosure of, and to keep
confidential all such confidential Information. including:
(a) ensuring that such Confidential Information is
disclosed only to responsible management, directors and employees of
the parties who have first entered into Confidentiality Agreements
and been properly instructed to maintain such Confidential
Information in confidence;
(b) not disclosing to any third party the terms and
conditions of this agreement;
(c) not disclosing methods of manufacture or sale of
the Products including production and marketing plans; and
(d) safeguarding all documents against theft, damage
or access by unauthorized persons.
22. Termination
(1) This agreement shall terminate upon:
(a) expiration and non-renewal of this agreement;
(b) liquidation of the Corporation;
(c) acquisition by Patsianis of Stratford's equity
interest in the Corporation;
(d) mutual agreement of the parties;
(e) final decision by the arbitrators appointed
pursuant to this agreement that this agreement shall terminate; or
(f) an event which substantially prevents the
Corporation from achieving its objectives. A failure by one of the
parties to fulfil its obligations under this agreement shall be
considered as an event entitling the other party to terminate this
agreement only when such failure substantially prevents the
Corporation from achieving its objectives.
(2) The provisions of paragraph 21 shall survive
termination and continue to bind the parties.
(3) Whether the party has terminated or has the right to
terminate this agreement shall be arbitrable issues. Therefore,
notice of termination given by one party to the other, if Iiot
accepted by the other, shall not relieve the notifying party of its
obligations to submit the question to arbitration.
23. Dispute Resolution
Any dispute arising out of or in connection with this contract
shall be finally settled in accordance with the arbitration
provisions of the Rules of conciliation, arbitration and expertise of
the Creek-American Chamber of Commerce which resides in Athens, by
one or more arbitrator(s) appointed in accordance with the said
Rules.
24. Costs Incurred for this Agreement
Each party shall bear its own costs incurred in preparing and
negotiating this agreement, and obtaining government approvals. All
costs incurred in taking the formal legal steps required to establish
the Corporation shall be borne by the Corporation.
25. Representations and Warranties
(1) Each party represents and warrants that it has the full
legal power and authority to enter into this agreement, and to
perform its obligations (subject only to obtaining certain
governmental licenses and authorizations as referred to in this
agreement), and that this agreement when signed by both parties will
be binding and enforceable according to its terms.
(2) Patsianis represents and warrants:
(a) that it has the ability to fulfil its obligations
as set forth in this agreement, and
(b) that it has not entered into a similar agreement
with any other entity for the same purposes.
(3) Stratford warrants that it has the sole ownership of
the Technology referred to in Premise number 2.
26. Excusable Delay
Upon the occurrence of any excusable delay, the party
experiencing such occurrence shall promptly notify the other party of
the occurrence, and estimate the duration of said occurrence
Thereupon, the time within which the party experiencing such
occurrence shall have to perform its obligations under this agreement
shall, to the extent necessitated by such occurrence and for the
duration of such occurrence, be appropriately delayed.
27. Assignment
This agreement is not assignable by either party, either
directly or indirectly, without the written consent of the other,
which may be arbitrarily withheld.
28. Language
Upon execution, this agreement may be translated into the
language of Greece provided, however, that in the event of any
diversion between the English version and any other version, the
English version shall prevail.
29. Extended Meanings
Words importing the singular number include the plural and vice
versa and words importing gender include all genders.
30. Interpretation not Affected by Headings
The division of this agreement into paragraphs and the insertion
of headings are for convenience of reference only and shall not
affect the construction or interpretation of this agreement.
31. Applicable Law
This Agreement is made, executed, and delivered in Greece, and
any controversy arising hereunder or in relation to this Agreement
shall be governed by and construed in accordance with the domestic
laws of Greece and, where applicable, the laws of the European
Community.
32. Entire Agreement
This Agreement constitutes the entire agreement of all the
parties with respect to the subject-matter hereof and, except as
herein stated and in the instruments and documents to be executed and
delivered pursuant hereto, contains all of the representations,
undertakings and agreements of all parties hereto respecting the
subject-matter hereof. There are no representations, undertakings, or
agreements of any kind between all the parties hereto respecting the
subject-matter hereof except those contained herein.
33. Severability
The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any
other provision.
34. Currency
Unless otherwise specifically provided herein, all references to
dollar amounts herein or other money amount are expressed in terms of
lawful money of the U.S.A.
35. Notices
(1) Any notice or other documents required or permitted to
be given hereunder shall be in writing and shall be delivered, mailed
by pre-paid registered mail, return receipt requested or sent by
facsimile transmission addressed to the party or parties to whom it
is to be given at the address shown below or at such other address or
addresses as the party or parties to whom such writing or document is
to be given shall have last notified all other parties hereto in
accordance with the provisions of this section:
(a) if to Patsianis at: Flour Mills of Yiannitsa
1 Egnatia Str
P.O. Box 29 58100
Yiannitsa, Greece
Fax: 011 0382 27.655
(b) if to Stratford at: F5 - 5420 North Service Road
Burlington, Ontario L7L 6C7
Canada
Fax: (905) 319-6414
(2) Any such notice or other document shall:
(a) if delivered, be deemed to have been given and
received at the place of receipt on the date of the delivery,
provided that if such date is a day other than a business day in the
place of receipt, such notice or document shall be deemed to have
been given and received at the place of receipt on the first business
day in the place of receipt, thereafter;
(b) if transmitted by facsimile transmission, be
deemed to have been given and received at the place of receipt on the
next business day in the country of receipt, following the day of
sending, provided that the sender has received telephone confirmation
from the recipient of receipt of same on or before the date
transmission is deemed to have been received as above; and
(c) if mailed, be deemed to have been given and
received at the place of receipt on the date of actual receipt.
(3) In the event of postal disruption, such notices or
documents must either be delivered personally or sent by facsimile
transmission.
36. Amendment of Agreement
None of the terms, conditions or provisions of this agreement
shall be held to have been changed, waived, varied, modified or
altered by any act or knowledge of either party, their respective
agents, servants or employees unless done so in writing signed by
both parties.
37. Waiver of Breach
No waiver on behalf of any part of any breach of the provisions
of this agreement shall be effective or binding on such party unless
the same shall be expressed in writing and any waiver so expressed
shall not limit or affect such party's rights with respect to any
future breach of any of the provisions.
38. Further Assurances
Each of the parties covenants and agrees that he, his heirs,
executors, administrators, successors and permitted assigns will
execute such further documents and do and perform or cause to be done
and performed such further and other acts as may be necessary or
desirable from time to time in order to give full effect to the
provisions of this agreement.
39. Successors and Assigns
This agreement shall be binding on and enure to the benefit of
the successors and assigns of both parties and all persons or
corporations succeeding to or acquiring the business now carried on
by Stratford or Patsianis.
40. Coming into Force; Effective Date
(1) This agreement shall come into force on the date of
execution by both parties.
(2) Each party shall use its best efforts to obtain from
its own government the authorizations, permissions and licenses
required under this agreement, and shall bear all expenses incurred
therein. If the foregoing has not come into force within six months
of its signature either Party may give notice to the other of its
intention to terminate if it does not come into force within thirty
days following such notice.
(3) This agreement shall be executed only in the English
language.
IN WITNESS WHEREOF the parties have duly executed this agreement
as of the date first above written.
STRATFORD ACQUISITION CORP.
per:
/s/ ARTHUR L. SMITH, President
DESPINA PATSIANIS
per :
______________________________________
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