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EXHIBIT 2.13
[▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LETTERHEAD]
INTERNET COMPANY OF NEW ZEALAND
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SHARE SALE AND PURCHASE AGREEMENT
AMONG
ASIA ONLINE - NEW ZEALAND LIMITED
AND
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[▇▇▇▇▇ & MC.KENZIE LETTERHEAD]
TABLE OF CONTENTS
Clauses and Headings Page
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1. Agreement to Sell and Purchase the Shares...........................................................1
1.1 Sale and Purchase of Shares from the Vendor................................................1
1.2 Purchase Price of Sale Shares..............................................................1
1.3 Closing....................................................................................1
1.4 Meetings of directors......................................................................3
2A. Retention from Purchase Price.......................................................................4
2. Representations and Warranties of the Vendor........................................................5
2.1 Organization; Good Standing and Qualification..............................................5
2.2 Certificate of Incorporation and Records...................................................6
2.3 Capitalization.............................................................................6
2.4 No Conflict................................................................................7
2.5 Proprietary Rights; Proprietary Information and Inventions Agreement.......................8
2.6 Actions Pending............................................................................9
2.7 Offering Valid.............................................................................9
2.8 Financial Position.........................................................................9
2.9 Title to Assets...........................................................................12
2.10 Bank Accounts.............................................................................13
2.11 Receivables...............................................................................14
2.12 Equipment, Etc............................................................................14
2.13 Real Property.............................................................................15
2.14 Proprietary Assets........................................................................15
2.15 Year 2000.................................................................................15
2.16 Contracts.................................................................................15
2.17 Liabilities...............................................................................17
2.18 Compliance with Legal Requirements........................................................18
2.19 Governmental Authorizations...............................................................19
2.20 Governmental Action.......................................................................20
2.21 Tax Matters...............................................................................20
2.22 Employee and Labor Matters................................................................23
2.23 Sale of Products; Performance of Services.................................................24
2.24 Insurance.................................................................................25
2.25 Related Party Transactions................................................................26
2.26 Certain Payments, Etc.....................................................................27
2.27 Proceedings...............................................................................27
2.28 Brokers...................................................................................28
2.29 The Vendor................................................................................28
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2.30 Full Disclosure...........................................................................29
2.31 Insolvency Events.........................................................................29
2.32 US Securities Laws Representations and Undertakings.......................................31
2.33 Restricted Securities.....................................................................32
3. Representations and Warranties of Purchaser........................................................32
3.1 Acquisition of Shares.....................................................................32
3.2 Authority; Binding Nature of Agreement....................................................32
4. Pre-Closing Covenants of the Vendor................................................................33
4.1 Access and Investigation..................................................................33
4.2 Operation of Business.....................................................................33
4.3 Filings and Consents......................................................................35
4.4 Notification..............................................................................36
4.5 Payment of Indebtedness by Related Parties................................................36
4.6 No Negotiation............................................................................36
4.7 Best Efforts..............................................................................37
4.8 Confidentiality...........................................................................37
5. Conditions Precedent to Purchaser's Obligation to Close............................................37
5.1 Satisfactory Completion of Pre-Acquisition Review.........................................37
5.2 Accuracy of Representations...............................................................38
5.3 Performance of Obligations................................................................38
5.4 Consents..................................................................................38
5.5 No Adverse Change.........................................................................38
5.6 Additional Documents......................................................................38
5.7 No Proceedings............................................................................39
5.8 No Claim Regarding Stock Ownership or Sale Proceeds.......................................39
5.9 No Prohibition............................................................................39
5.10 OIC Consent...............................................................................39
6. Conditions Precedent to the Vendor's Obligations to Close..........................................39
6.1 Accuracy of Representations...............................................................39
6.2 Purchaser's Performance...................................................................39
6.3 No Injunction.............................................................................40
7. Termination........................................................................................40
7.1 Termination Events........................................................................40
7.2 Termination Procedures....................................................................41
7.3 Effect of Termination.....................................................................41
7.4 Non-exclusivity of Termination Rights.....................................................41
8. Further Provisions Regarding Warranties............................................................41
8.1 Survival of Representation and Covenants..................................................41
8.2 Application of Vendor's Warranties........................................................42
8.3 Right of termination......................................................................42
8.4 Indemnity.................................................................................42
8.5 Notice of potential claim.................................................................43
8.6 Notice of claim...........................................................................43
8.7 Purchaser's Acknowledgments...............................................................43
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8.8 Vendor's Liability........................................................................44
8.9 Time limitations on Warranty Claims.......................................................46
8.10 Specific mitigation obligations...........................................................46
8.11 No Contribution...........................................................................47
8.12 Interest..................................................................................47
9A. Taxation...........................................................................................47
9. Restriction of the Vendor..........................................................................48
10A. Provisions relating to Capital Networks (Holdings) Limited ("CNHL")................................51
10. Miscellaneous Provisions...........................................................................51
10.1 Further Assurances........................................................................51
10.2 Fees and Expenses.........................................................................52
10.3 Attorneys' Fees...........................................................................52
10.4 Notices...................................................................................52
10.5 Time of the Essence.......................................................................53
10.6 Headings..................................................................................53
10.7 Counterparts..............................................................................53
10.8 Governing Law; Venue......................................................................53
10.9 Successors and Assigns....................................................................54
10.10 Remedies Cumulative; Specific Performance.................................................54
10.11 Waiver....................................................................................55
10.12 Amendments................................................................................55
10.13 Severability..............................................................................55
10.14 Parties in Interest.......................................................................56
10.15 Entire Agreement..........................................................................56
10.16 Construction..............................................................................56
10.17 Guarantee.................................................................................56
10.18 Legends...................................................................................57
10.19 Lock Up...................................................................................58
10.20 Indemnity.................................................................................58
Exhibits
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EXHIBIT A Certain Definitions......................................................................A-1
EXHIBIT B Rights Attaching to Asia Online Series C Non-Voting Common Stock.........................*
EXHIBIT C List of Shareholders.....................................................................C-1
EXHIBIT D Form of Agreement with Employees regarding Confidentiality and Proprietary Information...*
EXHIBIT E List of Consultants and Independent Contractors..........................................*
EXHIBIT F List of Governmental Licenses, Permits, Orders, Etc......................................*
EXHIBIT G Form of Employment Agreement.............................................................*
EXHIBIT H Designated Senior Officers and Employees.................................................*
EXHIBIT I Index of Disclosures.....................................................................*
* Exhibit omitted -- will be provided supplementally to the Commission upon
request.
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SHARE SALE AND PURCHASE AGREEMENT RELATING TO
INTERNET COMPANY OF NEW ZEALAND LIMITED (WN644268)
This Share Sale and Purchase Agreement (the "Agreement") is entered into as of
27 September 1999, by and among, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (the "Vendor") and ASIA ONLINE -
NEW ZEALAND LIMITED, a New Zealand Company AK/978316 (the "Purchaser").
RECITALS:
WHEREAS, the Vendor legally and beneficially owns the entire issued share
capital of INTERNET COMPANY OF NEW ZEALAND LIMITED (WN644268) (the "Company").
WHEREAS, the Vendor wishes to sell and the Purchaser wishes to purchase all the
issued shares in the capital of the Company (the "Sale Shares") on the terms
hereof.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE THE SHARES
1.1 Sale and Purchase of Shares from the Vendor
At the Closing, the Vendor shall sell, assign, transfer and
deliver to the Purchaser, and the Purchaser shall purchase,
all of the Sale Shares, on the terms and subject to the
conditions set forth in this Agreement.
1.2 Purchase Price of Sale Shares
The purchase price for the Sale Shares shall be paid and
satisfied at Closing as follows:
(a) EIGHT MILLION NEW ZEALAND DOLLARS (NZ$8,000,000) to
be paid as provided for in Section 1.3(c); and
(b) by the Purchaser causing the issue to the Vendor a
total of 327,625 Asia Online Ltd, Inc ("Asia
Online"), Series C Common Stock carrying the rights
set out in Exhibit B.
1.3 Closing
(a) The closing of the sale of the Sale Shares to the
Purchaser (the "Closing") shall take place at the
offices of the Purchaser's Australian counsel, ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, Level 26 A.M.P. Centre, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ or at such other
place as
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the Vendor and Purchaser agree at 10:00 a.m. (Sydney
Time) on the later of 7 Business Days after execution
of this Agreement, or the date two business days
following the satisfaction of the Closing Conditions
set forth in Section 5 and Section 6. For the
purposes of this Agreement "Scheduled Closing Time"
shall mean the time and date as of which the Closing
is required to take place pursuant to this Section
1.3(a); and "Closing Date" shall mean to the time and
date as of which the Closing actually takes place.
(b) At the Closing the Vendor shall:
(i) deliver to the Purchaser the certificates
representing the Sale Shares (if any) or a
certificate by a director of the Company
that no certificates have been issued for
the Sale Shares, and duly executed
instruments of transfer to transfer title to
the Sale Shares to the Purchaser (or its
nominees);
(ii) deliver to the Purchaser a duly executed
power of attorney (in deed form) in favor of
the Purchaser (or its nominee(s)) generally
in respect of the Sale Shares enabling the
Purchaser (or its nominee(s)) to attend and
vote at general meetings of the Company;
(iii) deliver to the Purchaser any waiver, consent
or other document necessary to give the
Purchaser (or its nominee(s)) full legal and
beneficial ownership of the Sale Shares
together with the Consents referred to in
Section 5.4;
(iv) deliver to the Purchaser the common seal (if
any) of the Company and any of its
subsidiaries, and each register, minute book
and other book required to be kept by the
Company and any of its subsidiaries under
any Legal Requirement up to the date of
Closing and each certificate of
incorporation of the Company and any of its
subsidiaries (including certificates issued
upon any change of name);
(v) deliver to the Purchaser employment
contracts in the forms of the drafts annexed
as Exhibit G, entered into between the
Company and each of the senior officers and
employees designated in Exhibit H;
(vi) procure that each of its nominees as the
Purchaser notifies to the Vendor resign from
their positions as directors and officers of
the Company and any subsidiary, in each case
formally resigning their respective office
(with effect from the end of the meetings
held pursuant to clause 1.4) and
acknowledging in a form reasonably
acceptable to the Purchaser that the writer
has
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no claim against the Company or any of its
subsidiaries for compensation for loss of
office or otherwise;
(vii) procure the revocation of the bank signing
mandates and authorities and power of
attorney given by the Company as the
Purchaser notifies to the Vendor; and
(viii) deliver to the Purchaser agreements
regarding confidentiality and proprietary
information substantially in the form of
Exhibit D entered into between the Company
and each of the employees referred to in
Section 2.5(b).
(c) Subject to the Vendor duly complying with the
requirements of clause 1.3(b), at the Closing, the
Purchaser shall pay the Vendor the amount referred to
in Section 1.2(a) (less the Retention Amount which
the Purchaser is entitled to retain pursuant to
Section 2A) by telegraphic transfer to the bank
account nominated by the Vendor in writing not less
than four business days prior to Closing and deliver
to the Vendor a total of 327,625 Asia Online Ltd.,
Inc. Series C Common Stock, as contemplated by
Section 1.2(a) and (b).
1.4 Meetings of directors
On or before Closing, the Vendor shall:
(a) cause to be held a meeting of the directors and/or
shareholders of the Company at which the following
resolutions are passed:
(i) approve the registration of the
transfers of the Sale Shares;
(ii) appoint persons nominated by the
Purchaser as directors (which,
unless otherwise advised, shall be
▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇
▇▇▇▇▇▇▇▇), secretary (which, unless
otherwise advised, shall be ▇▇
▇▇▇▇▇▇▇) and auditor of the Company
with effect from the end of the
meeting;
(iii) accept the resignations of directors
and secretaries received under
clause 1.3(b)(vi) with effect from
the end of the meeting;
(iv) appoint new signatories to the
Company's bank accounts and the
revocation of existing authorities
to operate those bank accounts, as
notified under clause 1.3(b)(vii);
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(v) cancel the existing share
certificates for the Sales Shares
(if any); and
(vi) issue new certificates for the Sale
Shares in favor of the Purchaser (or
its nominee(s)); and
(b) cause to be held a meeting of the directors of any
subsidiary of the Company at which the following
resolutions are passed:
(i) appoint persons nominated by the
Purchaser as directors, secretary
and auditor of the relevant
subsidiary with effect from the end
of the meeting;
(ii) accept the resignations of directors
and secretaries received under
clause 1.3(b)(vi); and
(iii) appoint new signatories to each
relevant subsidiary's bank accounts
and the revocation of existing
authorities to operate those bank
accounts, as notified under clause
1.3(b)(vii);
2A. RETENTION FROM PURCHASE PRICE
2A.1 The Purchaser shall retain from the Purchase Price the amount
of NZ$435,821 ("RETENTION AMOUNT") on the following terms and
conditions:
(a) the Purchaser must pay the Retention Amount to the
Company; and
(b) the Purchaser shall procure the Company to apply the
Retention Amount only for the purpose of fulfilling
the obligations of the Company under the Bonus Deeds
(which are contained in Part 2.22(h) of the
Disclosure Schedule) between the Company and each of
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ (each an
"Employee") if the conditions contained in each of
those Deeds are satisfied.
2A.2 If a condition contained in a Bonus Deed is not satisfied such
that the Company is not required to pay a cash bonus to the
Employee under that Bonus Deed, then the Purchaser shall, or
shall procure the Company to, forthwith, and in any case
within 5 Business Days, pay to the Vendor the portion of the
Retention Amount which is no longer required for the purpose
set out in Section 2A.1.
2A.3 If payment of a cash bonus to an Employee under a Bonus Deed
entitles the Company to a tax deduction, then the Purchaser
shall, or shall procure the Company, to pay to the Vendor an
amount equal to the amount of the tax deduction to which the
Company is entitled (other than any deduction which gives rise
to a tax loss, the benefit of which is forfeited) in respect
of any payments so made multiplied by the corporate tax rate,
by the earlier of:
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(a) the day which is 10 Business Days after the date on
which the Company lodges its 1999/2000 income tax
return with the Inland Revenue Department; and
(b) the day which is 10 Business Days after the date on
which the Company ought to have lodged such tax
return,
whether or not the Company has taxable income in that year.
2A.4 The Company shall not, and the Purchaser shall procure the
Company not to, amend or agree to amend, whether verbally or
in writing, any Bonus Deed without the Vendor's prior written
consent.
2. REPRESENTATIONS AND WARRANTIES OF THE VENDOR
The Vendor hereby represents and warrants, to and for the benefit of
the Purchaser, as follows:
2.1 Organization; Good Standing and Qualification
(a) The Company is a corporation duly incorporated,
validly existing and in good standing under the laws
of New Zealand. The Company has all requisite
corporate power and authority to own and operate its
properties and assets, to perform its obligations
under all material contracts, and to carry on its
business as presently conducted and as presently
proposed to be conducted.
(b) Except as disclosed in Part 2.1 of the Disclosure
Schedule, the Company has never conducted any
business under or otherwise used, for any purpose or
in any jurisdiction, any fictitious name, assumed
name, trade name or other name, other than the names
"Internet Services Limited", "Internet Company of New
Zealand", "The Internet Company of New Zealand
Limited" or "ICONZ".
(c) Except as disclosed in Part 2.1 of the Disclosure
Schedule, the Company is not required to be
qualified, authorized, registered or licensed to do
business as a foreign corporation in any jurisdiction
other than New Zealand.
(d) Part 2.1 of the Disclosure Schedule accurately sets
forth (i) the names of the members of the Company's
board of directors and (ii) the names and titles of
the Company's officers.
(e) Neither the Company nor any of its shareholders has
ever approved, or commenced any proceeding or made
any election contemplating, the dissolution or
liquidation of the Company or the winding up or
cessation of the Company's business or affairs.
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(f) Except as disclosed in Part 2.1 of the Disclosure
Schedule, the Company has no subsidiaries, and has
never owned, beneficially or otherwise, any shares or
other securities of, or any direct or indirect
interest of any nature in, any Entity, other than Web
NZ Web Services and Capital Networks (Holdings)
Limited.
2.2 Certificate of Incorporation and Records
(a) The Vendor has delivered to the Purchaser accurate
and complete copies of:
(i) the Company's certificate of incorporation;
(ii) the shareholding records of the Company; and
(iii) the minutes and other records of the
meetings and other proceedings (including
any actions taken by written consent or
otherwise without a meeting) of the
shareholders of the Company, and the board
of directors of the Company.
There have been no meetings or other proceedings of
the shareholders of the Company, or the board of
directors of the Company that are not fully reflected
in such minutes or other records.
(b) There has not been any violation of any resolution
adopted by the Company's shareholders or, the
Company's board of directors; and no event has
occurred, and no condition or circumstance exists,
that might (with or without notice or lapse of time)
constitute or result directly or indirectly in such a
violation.
(c) The books of account, shareholder records, minute
books and other records of the Company are accurate,
up-to-date and complete, and have been maintained in
accordance with sound and prudent business practices.
All of the records of the Company are in the actual
possession and control of the Company.
(d) The Company has filed all company notices or other
company filings required under the Companies ▇▇▇ ▇▇▇▇
and within the time frames required under that Act.
2.3 Capitalization
(a) The issued share capital of the Company, immediately
prior to the Closing, will consist of 1,000,000 fully
paid ordinary shares. All issued and outstanding
shares of the Company's issued capital (a) were
issued in compliance with all applicable Legal
Requirements concerning the issuance of securities
(b) are registered in the name of
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the Vendor and (c) are fully paid and non-assessable.
No taxable income has arisen from the capitalisation
whether directly or indirectly of any debt
outstanding.
(b) The Vendor warrants that it has, and the Purchaser
will acquire at the Closing, good and valid title to
the Sale Shares free and clear of any Encumbrances.
(c) The Vendor has delivered to the Purchaser accurate
and complete copies of the certificates evidencing
its title to the Sale Shares (if any).
(d) There is no:
(i) outstanding subscription, option, call,
warrant or right (whether or not currently
exercisable) to acquire any shares or other
securities of the Company;
(ii) outstanding security, instrument or
obligation that is or may become convertible
into or exchangeable for any shares or other
securities of the Company;
(iii) Contract under which the Company is or may
become obligated to sell or otherwise issue
any shares of its capital stock or any other
securities; or
(iv) condition or circumstance that may directly
or indirectly give rise to or provide a
basis for the assertion of a claim by any
Person to the effect that such Person is
entitled to acquire or receive any shares or
other securities of the Company;
(e) The Company has never repurchased, redeemed or
otherwise reacquired any shares or other securities.
2.4 No Conflict
Except as disclosed in Part 2.4 of the Disclosure Schedule,
neither the execution and delivery of this Agreement by the
Vendor nor the consummation by the Vendor of the transactions
contemplated by this Agreement will (i) result in a default
(or give rise to any right of termination, cancellation or
acceleration) under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, or other evidence of
indebtedness related to the Company or any material license
agreement, lease or other material contract, instrument or
obligation related to the Company to which it is a party or by
which it may be bound; (ii) violate any statute, rule,
regulation, order, writ, injunction, decree or arbitration
award applicable to the Company; (iii) result in the loss of,
or in a violation or breach of any Government Authorisation;
(iv) result in the creation or imposition of, or subject
Purchaser to any liability for, any conveyance or transfer tax
or any similar tax; or (v)
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result in the creation of any material (individually or in the
aggregate) lien, including any claims, mortgages, pledges,
liens, security interests, encumbrances or charges of any kind
(collectively, "Lien") on any of the assets owned or used by
the Company.
2.5 Proprietary Rights; Proprietary Information and Inventions
Agreement
(a) Except as disclosed in Part 2.5 of the Disclosure
Schedule, the Company has not received any
communications alleging that it has violated or, by
conducting its business as proposed would violate,
any proprietary rights of any other person, nor is
the Vendor aware of any basis for the foregoing.
(b) The employees of the Company which have executed an
agreement regarding confidentiality and proprietary
information substantially in the form or forms
attached as Exhibit D are:
(i) ▇▇▇▇▇ ▇▇▇▇▇;
(ii) ▇▇▇▇ ▇▇▇▇▇▇▇▇;
(iii) ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇;
(iv) ▇▇▇▇ ▇▇▇▇▇▇;
(v) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
(vi) ▇▇▇▇ ▇▇▇▇▇; and
(vii) ▇▇▇▇ ▇▇▇▇▇▇▇▇.
To the Vendor's Knowledge, none of those employees of
the Company is in violation thereof.
(c) The Vendor does not believe it is or will be
necessary for the Company to utilize any inventions,
trade secrets or proprietary information of any of
the Company's employees made prior to their
employment by the Company, except for inventions,
trade secrets or proprietary information that have
been assigned to the Company.
(d) Except as disclosed in part 2.5 of the Disclosure
Schedule, the Company owns, licenses or has rights to
all of the (i) patents, patent applications,
registrations and applications for registration
thereof; (ii) trademarks, trade names, service marks
and registrations and applications for registration
thereof; (iii) copyrights and registrations and
applications for registration thereof; (iv) computer
software, data and documentation; (v) trade secrets
and confidential business information, know-how,
research and development information, copyrightable
works, financial, marketing and business data,
pricing and cost information, marketing plans and
customer lists and information; and (vi) other
proprietary rights relating to any of the foregoing
owned or used by the Company (collectively,
"Intellectual Property").
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(e) Except as disclosed in Part 2.5 of the Disclosure
Schedule, the Company has conducted its business
without infringement or claim of infringement of any
license, patent, copyright, service ▇▇▇▇, trademark,
trade name, trade secret or other intellectual
property right of others in a manner that would have
a Material Adverse Effect on the business or assets
of the Company. To the Vendor's Knowledge there is no
claim of infringement by others of any license,
patent, copyright, service ▇▇▇▇, trademark, trade
name, trade secret or other Intellectual Property
right of the Company.
2.6 Actions Pending
Except as disclosed in Part 2.6 of the Disclosure Schedule,
there is no action, suit or proceeding pending or, to the
Vendor's Knowledge, threatened against or affecting the
Company or any of its respective properties or rights before
any court or by or before any governmental body or arbitration
board or tribunal.
2.7 Offering Valid
Neither the Vendor, nor any agent on its behalf, have
solicited or will solicit any offers to sell or has offered to
sell or will offer to sell all or any part of the Sale Shares
to any person or persons so as to bring the offer or sale of
the Sale Shares by the Vendor to the Purchaser (or its
nominee(s)) within the registration provisions of the United
States of America's Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (the
"Securities Act") or any US state securities laws or the
provisions of the Securities ▇▇▇ ▇▇▇▇ (New Zealand).
2.8 Financial Position
(a) The Vendor has delivered to the Purchaser the
following (collectively, "the Company Financial
Statements"):
(i) except as disclosed in Part 2.8 of the
Disclosure Schedule, for each of the Company
and its subsidiaries in respect of the
financial year ended 31 March 1999 (the
"Unaudited Accounts Date"), its unaudited
profit and loss statement for the financial
year ended on the Unaudited Accounts Date
and its unaudited balance sheet and
statement of cash flows as at the Unaudited
Accounts Date, together with all statements,
reports and notes attached to or intended to
be read with any or all of the profit and
loss statement, balance sheet or statement
of cash flows; and
(ii) for each of the Company and its subsidiaries
in respect of the quarter ended 30 June,
1999 (the "Unaudited Interim Accounts
Date"), its unaudited profit and loss
statement for the quarter
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ended on the Unaudited Interim Accounts Date
and its unaudited balance sheet ("Unaudited
Interim Balance Sheet") and statement of
cash flows as at the Unaudited Interim
Accounts Date.
(b) Except as disclosed in Part 2.8 of the Disclosure
Schedule, all of the Company Financial Statements are
true, fair and complete in all respects. The
financial statements and notes referred to in Section
2.8(a)(i) present fairly the financial position of
the Company since the inception of the Company (the
"Inception") and the results of operations, changes
in shareholders' equity and cash flows of the Company
for the year then ended. The financial statements and
notes referred to in Section 2.8(a)(ii) present
fairly the financial position of the Company as of
the respective dates thereof and the results of
operations, changes in shareholders' equity and cash
flows of the Company for the periods covered thereby.
The Company Financial Statements have been prepared
in accordance with GAAP, applied on a consistent
basis throughout the periods covered.
(c) Except as disclosed in Part 2.8(c) of the Disclosure
Schedule since the Unaudited Accounts Date:
(i) the Company has not entered into any
transaction which was not in the Ordinary
Course of its Business;
(ii) there has not been any material adverse
change in the Company's business, condition,
assets, Liabilities, operations, financial
performance, net income or prospects (or any
aspect or portion thereof), and no event has
occurred that might have a Material Adverse
Effect on the Company's business, condition,
assets, Liabilities, operations, financial
performance, net income or prospects (or any
aspect or portion thereof);
(iii) there has been no damage to, or destruction
or loss of, physical property (whether or
not covered by insurance) which may have a
Material Adverse Effect on the business or
operations of the Company;
(iv) the Company has not declared or paid any
dividend or made any distribution on its
securities, redeemed, purchased or otherwise
acquired any of its securities, granted any
options to purchase or subscribe for any
securities, or issued any securities;
(v) the Company has not effected or been a party
to any Acquisition Transaction,
recapitalisation, reclassification of
shares, share consolidation or division,
capital reduction, share buyback or similar
transaction;
-10-
15
(vi) the Company has not sold or otherwise issued
any shares or any other securities;
(vii) the Company has not increased the
compensation of any of its officers, or the
rate of pay of its employees as a group,
except as part of regular compensation
increases in the Ordinary Course of its
Business;
(viii) neither the number of subscribers for the
services offered by the Company nor the
revenues generated therefrom have materially
decreased;
(ix) there has been no resignation or termination
of employment of any officer or key employee
of the Company;
(x) there has been no labor dispute or
industrial disruption involving the Company
or its employees and none is pending or, to
the Vendor's Knowledge, threatened;
(xi) there has been no borrowing or agreement to
borrow by the Company or change in the
contingent obligations of the Company by way
of guarantee, endorsement, indemnity,
warranty or otherwise or grant of a mortgage
or security interest in any property of the
Company;
(xii) there have been no loans made by the Company
to any Person other than travel advances and
office advances made in the Ordinary Course
of Business;
(xiii) there has not been any payment of any
obligation or liability of the Company other
than current Liabilities paid in the
Ordinary Course of Business;
(xiv) the Company has not written off as
uncollectable or established any
extraordinary reserve with respect to, any
account receivable or other indebtedness;
(xv) there has been no sale, assignment, lease,
licence or transfer of any tangible asset of
the Company except in the Ordinary Course of
Business and no sale, assignment, lease,
licence or transfer of any patent,
trademark, trade secret or other intangible
asset of the Company;
(xvi) the Company has not purchased, leased,
licensed or otherwise acquired any asset
from any other Person except for supplies
acquired by the Company in the Ordinary
Course of Business;
-11-
16
(xvii) the Company has not entered into, and
neither the Company nor any of the assets
owned or used by the Company has become
bound by, any Contract that is not an
Excluded Contract;
(xviii) no Contract by which the Company or any of
the assets owned or used by the Company is
or was bound, or under which the Company has
or had any rights or interests, has been
amended or terminated;
(xix) the Company has not forgiven any debt or
otherwise released or waived any right or
claim except in the Ordinary Course of
Business;
(xx) the Company has not incurred any Liabilities
that individually exceed NZ$20,000.00;
(xxi) the Company has not pledged or hypothecated
any of its assets or otherwise permitted any
of its assets to become subject to any
Encumbrance;
(xxii) the Company has not paid any bonus or made
any profit-sharing or similar payment to, or
increased the amount of the wages, salary,
commissions, fringe benefits or other
compensation or remuneration payable to, any
of its directors, officers or employees;
(xxiii) the Company has not incurred, assumed or
otherwise become subject to any Liability,
other than accounts payable (of the type
required to be reflected as current
liabilities in the "liabilities" column of a
balance sheet prepared in accordance with
GAAP) incurred by the Company in the
Ordinary Course of Business;
(xxiv) the Company has not made any capital
expenditure that on any one item exceeded
NZ$20,000 or in the aggregate exceeded
NZ$250,000;
(xxv) the Company has not changed any of its
methods of accounting or accounting
practices in any respect;
(xxvi) the Company has not agreed, committed or
offered (in writing or otherwise), and has
not attempted, to take any of the actions
referred to in clauses "(iv)" through
"(xxv)" above.
2.9 Title to Assets
(a) The Company owns, and has good, valid and marketable
title to, all assets purported to be owned by it,
including:
-12-
17
(i) all assets reflected on the Unaudited
Interim Balance Sheet (except for inventory
sold by the Company since June 30, 1999 in
the Ordinary Course of Business);
(ii) all assets acquired by the Company since
June 30, 1999 (except for inventory sold by
the Company, since June 30, 1999 in the
Ordinary Course of Business);
(iii) all assets referred to in Parts 2.11, 2.12,
2.13 and Part 2.15 of the Disclosure
Schedule and all of the Company's rights
under the Company Contracts; and
(iv) all other assets reflected in the Company's
books and records as being owned by the
Company.
Except as set forth in Part 2.9 of the Disclosure
Schedule, all of said assets are owned by the Company
free and clear of any Encumbrances except liens for
current Taxes and assessments not delinquent or those
which are not material in scope or amount and do not
materially interfere with the conduct of the
Company's business.
(b) Part 2.9 of the Disclosure Schedule identifies all
assets that are being leased or licensed to the
Company. All leases pursuant to which the Company
leases real or personal property are in good standing
and are valid and effective in accordance with their
respective terms and, to the Vendor's Knowledge,
there exists no default thereunder or occurrence or
condition which could result in a default thereunder
or termination thereof.
2.10 Bank Accounts
Part 2.10 of the Disclosure Schedule accurately sets forth,
with respect to each account maintained by or for the benefit
of the Company at any bank or other financial institution:
(a) the name and location of the institution at which
such account is maintained;
(b) the name in which such account is maintained and the
account number of such account; and
(c) the names of all individuals authorized to draw on or
make withdrawals from such account.
There are no safe deposit boxes or similar arrangements
maintained by or for the benefit of the Company.
-13-
18
2.11 Receivables
(a) Part 2.11 of the Disclosure Schedule provides a
materially accurate and complete breakdown of all
accounts receivable, notes receivable and other
receivables of the Company that are not fully
provided for in the Unaudited Interim Balance Sheet.
(b) Except as set forth in Part 2.11 of the Disclosure
Schedule, all existing accounts receivable of the
Company (including those accounts receivable
reflected in the Unaudited Interim Balance Sheet that
have not yet been collected and those accounts
receivable that have arisen since the Inception and
have not yet been collected) will be collected in
full (without any counterclaim or setoff) on or
before December 31, 1999.
2.12 Equipment, Etc.
(a) Part 2.12 of the Disclosure Schedule contains a copy
of the fixed asset register of the Company which is
accurate and complete.
(b) Each asset identified in the fixed asset register of
the Company as owned by the Company and with a net
book value as at 30 June, 1999 of NZ$5,000 or more:
(i) is structurally sound, free of defects and
deficiencies and in good condition and
repair (ordinary wear and tear excepted);
(ii) complies in all respects with, and is being
operated and otherwise used in full
compliance with, all applicable Legal
Requirements; and
(iii) is adequate for the uses to which it is
being put.
The Company owns or leases all assets required for
the conduct of the Company's business in the manner
in which such business is currently being conducted.
(c) Melco Limited currently makes available for the use
of the Company three motor vehicles and will, for the
period of 6 months following Closing, continue (at
the election of the Company) to make the vehicles
available to the Company on the same terms.
-14-
19
2.13 Real Property
The Company does not own any real property or any interest in
real property, except for the leaseholds created under the
real property leases, accurate and complete copies of which
are contained in Part 2.13 of the Disclosure Schedule. The
Company enjoys quiet possession of the premises covered by the
said leases.
2.14 Proprietary Assets
(a) Part 2.14 of the Disclosure Schedule contains an
accurate and complete list of all Proprietary Assets
that are owed by or licensed to the Company. The
Company has taken all measures and precautions
necessary to protect the confidentiality and value of
each Proprietary Asset so listed.
(b) Except as set forth in Part 2.14 of the Disclosure
Schedule, to the Vendor's Knowledge, the Company is
not infringing, and has not at any time infringed or
received any notice or other communication (in
writing or otherwise) of any actual, alleged,
possible or potential infringement of, any
Proprietary Asset owned or used by any other Person.
To the Vendor's Knowledge, no other Person is
infringing, and no Proprietary Asset owned or used by
any other Person infringes or conflicts with, any
Proprietary Asset owned or used by the Company.
(c) The Proprietary Assets identified in Part 2.14 of the
Disclosure Schedule constitute all of the Proprietary
Assets necessary to enable the Company to conduct its
business in the manner in which its business is
currently being conducted.
2.15 Year 2000
Part 2.15 of the Disclosure Schedule contains an accurate and
complete copy of the report entitled the "Year 2000
Compliance Project Report" prepared by the Company. The
Company has taken all of the steps referred to in the Year
2000 Compliance Project Report to ascertain whether the
Company's products and services are "Year 2000 compliant".
2.16 Contracts
(a) Part 2.16 of the Disclosure Schedule identifies and
provides an accurate and complete description of all
contracts, agreements, commitments and undertakings
of any nature, written or oral, of the Company
(including all amendments, supplements, modifications
and waivers thereto), each of which involves future
payments, performance of services or delivery of
goods or materials to or by the Company of an
aggregate amount or value in excess of NZ$50,000 or
which otherwise is material to the business or
prospects of the Company
-15-
20
(collectively, the "Material Contracts"), except for
any Excluded Contract.
(b) Each Material Contract is valid and in full force and
effect, and is enforceable by the Company in
accordance with its terms.
(c) Except as set forth in Part 2.16 of the Disclosure
Schedule:
(i) no Person has violated or breached, or
declared or committed any default of any
material provision of any Material Contract;
(ii) no event has occurred, and no circumstance
or condition exists, that might (with or
without notice or lapse of time) (A) result
in a material violation or breach of any of
the provisions of any Material Contract, (B)
give any Person the right to declare a
default or exercise any remedy under any
Material Contract, (C) give any Person the
right to accelerate the maturity or
performance of any Material Contract, or (D)
give any Person the right to cancel,
terminate or modify any Material Contract;
(iii) the Company has not received any notice or
other communication (in writing or
otherwise) regarding any actual, alleged,
possible or potential violation or breach
of, or default under, any Material Contract;
and
(iv) the Company has not waived any of its rights
under any Material Contract.
For the purposes of this paragraph (c) only, the term
"Material Contract" shall be deemed to include the
guarantees referred to in Section 10.17
("Guarantee").
(d) To the Vendor's Knowledge, each Person against which
the Company has or may acquire any rights under any
Material Contract is solvent and is able to satisfy
all of such Person's current and future monetary
obligations and other obligations and Liabilities to
the Company.
(e) Except as set forth in Part 2.16 of the Disclosure
Schedule:
(i) the Company has never guaranteed or
otherwise agreed to cause, insure or become
liable for, and has never pledged any of its
assets to secure, the performance or payment
of any obligation or other Liability of any
other Person; and
(ii) the Company has never been a party to or
bound by (A) any joint venture agreement,
partnership agreement, profit-sharing
agreement, cost-sharing agreement,
loss-sharing agreement or similar Contract,
or (B) any Contract that creates or grants
to
-16-
21
any Person, or provides for the creation or
grant of, any stock appreciation right,
phantom stock right or similar right or
interest.
(f) The performance of the Material Contracts will not
result in any violation of or failure to comply with
any Legal Requirement.
(g) Except as disclosed in Part 2.16 of the Disclosure
Schedule, no Person is renegotiating, or has the
right to renegotiate, any amount paid or payable to
the Company under any Material Contract or any other
term or provision of any Material Contract.
(h) The Contracts identified in Part 2.16 of the
Disclosure Schedule and the Excluded Contracts
collectively constitute all of the Contracts
necessary to enable the Company to conduct its
business in the manner in which its business is
currently being conducted.
(i) Part 2.16 of the Disclosure Schedule identifies and
provides an accurate and complete description of each
proposed Contract as to which any bid, offer, written
proposal, term sheet or similar document has been
submitted or received by the Company.
(j) No notice or demand has been received by the Vendor
or the Company in relation to any Guarantee requiring
payment thereunder and no event has occurred, and no
circumstance or condition exists, that might (with or
without notice or lapse of time) result in a demand
being made or notice being served for payment under
any Guarantee.
2.17 Liabilities
(a) Except as disclosed in Part 2.17 of the Disclosure
Schedule, the Company has no Liabilities, except for:
(i) Liabilities identified as such in the
"Liabilities" column of the Unaudited
Interim Balance Sheet;
(ii) accounts payable (of the type required to be
reflected as current Liabilities in the
"Liabilities" column of a balance sheet
prepared in accordance with GAAP) incurred
by the Company in the Ordinary Course of
Business since 30 June 1999; and
(iii) the Company's obligations under the Material
Contracts and under Excluded Contracts, to
the extent that the existence of such
obligations is ascertainable solely by
reference to such Contracts.
(b) Part 2.17 of the Disclosure Schedule:
-17-
22
(i) provides materially accurate and complete
breakdown and aging of the Company's
accounts payable as of 30 June, 1999;
(ii) provides an accurate and complete breakdown
of all customer deposits and other deposits
held by the Company as of the date of this
Agreement; and
(iii) provides an accurate and complete breakdown
of the Company's long-term debt as of the
date of this Agreement.
2.18 Compliance with Legal Requirements
(a) Except as set forth in Part 2.18 of the Disclosure
Schedule:
(i) the Company is in full compliance with each
material Legal Requirement that is
applicable to it or to the conduct of its
business or the ownership or use of any of
its assets;
(ii) the Company has at all times been in full
compliance with each material Legal
Requirement that is or was applicable to it
or to the conduct of its business or the
ownership or use of any of its assets;
(iii) to the Vendor's Knowledge no event has
occurred, and no condition or circumstance
exists, that might (with or without notice
or lapse of time) constitute or result
directly or indirectly in a violation by the
Company of, or a failure on the part of the
Company to comply with, any Legal
Requirement; and
(iv) the Company has not received, at any time,
any notice or other communication (in
writing or otherwise) from any Governmental
Body or any other Person regarding (i) any
actual, alleged, possible or potential
violation of, or failure to comply with, any
Legal Requirement, or (ii) any actual,
alleged, possible or potential obligation on
the part of the Company to undertake, or to
bear all or any portion of the cost of, any
cleanup or any remedial, corrective or
response action of any nature.
(b) The Company has delivered to the Purchaser an
accurate and complete copy of each report, study,
survey or other document to which the Company has
access that addresses or otherwise relates to the
compliance of the Company with, or the applicability
to the Company of, any material Legal Requirement.
(c) To the Vendor's Knowledge, no Governmental Body has
proposed or is considering any Legal Requirement
that, if adopted or otherwise put into effect, (i)
may have a Material Adverse Effect on the Company's
-18-
23
business, condition, assets, Liabilities, operations,
financial performance, net income or prospects or on
the ability of the Vendor to comply with or perform
any covenant or obligation under this Agreement, or
(ii) may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of
the Transactions.
2.19 Governmental Authorizations
(a) Part 2.19 of the Disclosure Schedule identifies:
(i) each Governmental Authorization that is held
by the Company; and
(ii) each other Governmental Authorization that,
to the Vendor's Knowledge, is held by any of
the Company's employees and relates to or is
useful in connection with the Company's
business.
The Vendors have delivered to the Purchaser accurate
and complete copies of all of the Governmental
Authorizations identified in Part 2.19 of the
Disclosure Schedule, including all renewals thereof
and all amendments thereto. Each Governmental
Authorization identified or required to be identified
in Part 2.19 of the Disclosure Schedule is valid and
in full force and effect.
(b) Except as set forth in Part 2.19 of the Disclosure
Schedule:
(i) the Company and its employees are, and have
at all times been, in full compliance with
all of the material terms and requirements
of each Governmental Authorization
identified or required to be identified in
Part 2.19 of the Disclosure Schedule;
(ii) no event has occurred, and no condition or
circumstance exists, that might (with or
without notice or lapse of time) (A)
constitute or result directly or indirectly
in a violation of or a failure to comply
with any material term or requirement of any
Governmental Authorization identified or
required to be identified in Part 2.20 of
the Disclosure Schedule, or (B) result
directly or indirectly in the revocation,
withdrawal, suspension, cancellation,
termination or modification of any
Governmental Authorization identified or
required to be identified in Part 2.19 of
the Disclosure Schedule;
(iii) the Company has never received, and, to the
Vendor's Knowledge, no employee of the
Company has ever received, any notice or
other communication (in writing or
otherwise) from any Governmental Body or any
other Person regarding
-19-
24
(A) any actual, alleged, possible or
potential violation of or failure to comply
with any material term or requirement of any
Governmental Authorization, or (B) any
actual, proposed, possible or potential
revocation, withdrawal, suspension,
cancellation, termination or modification of
any Governmental Authorization; and
(iv) all applications required to have been filed
for the renewal of the Governmental
Authorizations required to be identified in
Part 2.19 of the Disclosure Schedule have
been duly filed on a timely basis with the
appropriate Governmental Bodies, and each
other notice or filing required to have been
given or made with respect to such
Governmental Authorizations has been duly
given or made on a timely basis with the
appropriate Governmental Body.
(c) The Governmental Authorizations identified in Part
2.19 of the Disclosure Schedule constitute all of the
Governmental Authorizations necessary (i) to enable
the Company to conduct its business in the manner in
which its business is currently being conducted, and
(ii) to permit the Company to own and use its assets
in the manner in which they are currently owned and
used.
(d) Except as set forth in Part 2.19 of the Disclosure
Schedule, neither the Company nor the Vendor was, is
or will be required to make any filing with or give
any notice to, or to obtain any Consent from, any
Person in connection with the execution and delivery
of any of the Transactional Agreements or the
consummation or performance of any of the
Transactions.
2.20 Governmental Action
No authorization, consent or approval of, or filing with, any
court or any federal, state or local governmental authority or
agency is required to be obtained by the Vendor in connection
with the execution and delivery of this Agreement and the sale
of the Sale Shares other than those that have been or will be
made or obtained prior to the Closing.
2.21 Tax Matters
(a) Except as set out in Part 2.21 of the Disclosure
Statement, each Tax required to have been paid, or
claimed by any Governmental Body to be payable, by
the Company (whether pursuant to any Tax Return or
otherwise) has been duly paid in full or on a timely
basis. Any Tax required to have been withheld or
collected by the Company has been duly withheld and
collected; and (to the extent required) each such Tax
has been paid to the appropriate Governmental Body.
-20-
25
(b) Except as set out in Part 2.21 of the Disclosure
Schedule all Tax Returns required to be filed by or
on behalf of the Company with any Governmental Body
with respect to any taxable period ending on or
before the Closing Date ("the Company Returns") (i)
have been or will be filed when due, and (ii) have
been, or will be when filed, accurately and
completely prepared in full compliance with all
applicable Legal Requirements. All amounts shown on
the Company Returns to be due on or before the
Closing Date, and all amounts otherwise payable in
connection with the Company Returns on or before the
Closing Date, have been or will be paid on or before
the Closing Date. The Company has delivered to the
Purchaser accurate and complete copies of all the
Company Returns filed since the Inception.
(c) Except as set out in Part 2.21 of the Disclosure
Schedule, the Company Financial Statements fully
accrue all material actual and contingent Liabilities
for Taxes with respect to all periods through the
dates thereof in accordance with Section 2.22. The
Company will establish, in the Ordinary Course of
Business, reserves adequate for the payment of all
Taxes for the period from the Inception through the
Closing Date, and the Company will disclose the
dollar amount of such reserves to the Purchaser on or
prior to the Closing Date.
(d) Part 2.21 of the Disclosure Schedule accurately
identifies each examination or audit of any Company
Return that has been conducted since Inception. The
Vendor has delivered to the Purchaser accurate and
complete copies of all audit reports and similar
documents (to which the Company has access) relating
to the Company Returns. Except as set forth in Part
2.21 of the Disclosure Schedule, no extension or
waiver of the limitation period applicable to any of
the Company Returns has been granted (by the Company
or any other Person), and no such extension or waiver
has been requested from the Company.
(e) Except as set forth in Part 2.21 of the Disclosure
Schedule, no claim or other Proceeding is pending or
has been threatened against or with respect to the
Company in respect of any Tax. There are no
unsatisfied Liabilities for Taxes (including
Liabilities for interest, additions to Tax and
penalties thereon and related expenses) with respect
to any notice of deficiency or similar document
received by the Company.
(f) Except as set out in Part 2.21 of the Disclosure
Schedule, there is no agreement, plan, arrangement or
other Contract covering any employee or independent
contractor or former employee or independent
contractor of the Company that, individually or
collectively, could give rise directly or indirectly
to the payment of any amount that would not be
deductible pursuant to New Zealand Tax legislation.
The Company is not, and has never been, a party to or
bound by any Tax indemnity
-21-
26
agreement, Tax sharing agreement, Tax allocation
agreement or similar Contract.
(g) Except as set out in Part 2.21 of the Disclosure
Schedule, the Company: has not lodged a private
ruling request; is not and has not been the subject
of any Tax audit; is not a party to any action or
Proceeding for the assessment or collection of Tax;
does not have any dispute or disagreement with any
Governmental Body for Tax; and has not made any
agreement with or undertaking to any Governmental
Body for Tax and there is no fact or matter known to
the Vendor which might give rise to any of the above.
(h) Except as set out in Part 2.21 of the Disclosure
Schedule, the Company has not entered into any
agreement which now or in the future may extend the
period of assessment or collection of any Tax.
(i) Except as set out in Part 2.21 of the Disclosure
Schedule, since the Unaudited Accounts Date no
additional liability for Tax has accrued to the
Company other than as a result of trading activities
in the Ordinary Course of Business and no payment or
expenditure has been made or incurred or committed
which will not be wholly deductible in computing the
Company's Taxable income.
(j) Except as set out in Part 2.21 of the Disclosure
Schedule, the Company has complied with the
provisions of the Income Tax ▇▇▇ ▇▇▇▇, the Tax
Administration ▇▇▇ ▇▇▇▇ and the Goods and Services
Tax ▇▇▇ ▇▇▇▇ and has properly maintained an
imputation credit account for the purposes of that
Act which on Closing shall not have a debit balance.
(k) The Company does not have any permanent establishment
(as that expression is defined in any relevant Double
Taxation Agreement current at the date of this
Agreement) outside New Zealand.
(l) The Company, its directors and its shareholders have
made all elections and done all things necessary to
ensure the initial and continuing eligibility of the
Company under the qualifying company and loss
attributing qualifying company regimes.
(m) No taxation liabilities will arise directly as a
consequence of the deemed revocation of qualifying
company and loss attributing qualifying company
status from the first day of the income year in which
the Transactions occur (ie 1 April 1999). Without
limiting the generality of the foregoing, the
transaction contemplated by Section 10A.1 will not
result in any taxation liabilities which are not
subject to the indemnity given in Section 10A.2.
-22-
27
2.22 Employee and Labor Matters
(a) Part 2.22 of the Disclosure Schedule accurately sets
forth, with respect to each employee of the Company
(including any employee of the Company who is on a
leave of absence or on layoff status):
(i) the name of such employee and the date as of
which such employee was originally hired by
the Company;
(ii) such employee's title, and a description of
such employee's duties and responsibilities;
(iii) such employee's annualized compensation as
of the date of this Agreement;
(iv) particulars of accrued long service leave,
annual leave, sick leave and rostered days
off for each employee;
(v) particulars of any redundancy or severance
pay owing as at the date of this Agreement;
and
(vi) any Governmental Authorization that is held
by such employee and that relates to or is
useful in connection with the Company's
business.
(b) Exhibit E contains a list of individuals who are
currently performing services for the Company related
to its business and are classified as "consultants"
or "independent contractors".
(c) Except as set forth in Part 2.22 of the Disclosure
Schedule, the Company is not a party to or bound by,
and has never been a party to or bound by, any
employment agreement or any union contract,
industrial award or determination collective
bargaining agreement or similar Contract.
(d) The Company has not created and does not use any
employee manuals or handbooks, disclosure materials,
policy statements or other materials relating to the
employment of the current or former employees of the
Company.
(e) Except as set forth in Part 2.22 of the Disclosure
Schedule, to the Vendor's Knowledge:
(i) no employee of the Company intends to
terminate his employment with the Company;
(ii) no employee of the Company has received an
offer to join a business that may be
competitive with the Company's business; and
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28
(iii) no employee of the Company is a party to or
is bound by any confidentiality agreement,
non-competition agreement or other Contract
(with any Person) that may have a Material
Adverse Effect on (A) the performance by
such employee of any of his duties or
responsibilities as an employee of the
Company, or (B) the Company's business or
operations.
(f) The Company is not engaged, and has never been
engaged, in any unfair labor practice of any nature.
There has never been any slowdown, work stoppage,
labor dispute or union organizing activity, or any
similar activity or dispute, affecting the Company or
any of its employees. There is not now pending, and
no Person has threatened to commence, any such
slowdown, work stoppage, labor dispute or union
organizing activity or any similar activity or
dispute. No event has occurred, and no condition or
circumstance exists, that might directly or
indirectly give rise to or provide a basis for the
commencement of any such slowdown, work stoppage,
labor dispute or union organizing activity or any
similar activity or dispute.
(g) Except as disclosed in Part 2.22 of the Disclosure
Schedule, the Company does not have: any existing
service or other agreements with any officers,
consultants or employees of the Company the terms of
which do not provide for termination by one months'
notice or less without giving rise to a claim for
damages or compensation; liability for compensation
to ex-employees or ex-consultants; obligation to
re-instate or re-employ any ex-officer, ex-consultant
or ex-employee of the Company; policy, practice or
obligation regarding redundancy payments to employees
which is more generous than the applicable award(s)
or legislation; or any industrial agreement or
enterprise agreement (whether registered or not) or
plans to introduce any such agreement, that applies
to any employee or officer of the Company.
(h) The Company has never established or adopted or been
a party to an Employee Benefit Plan or a Relevant
Scheme.
2.23 Sale of Products; Performance of Services
(a) Each product or service that has been sold or
performed by the Company to or for any Person:
(i) conformed and complied in all material
respects with the terms and requirements of
any applicable warranty or other Contract
and with all applicable Legal Requirements;
and
(ii) was free of any material design defects,
construction defects or other defects or
deficiencies at the time of sale.
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All repair services and other services that have been
performed by the Company were performed properly and
in full conformity with the material terms and
requirements of all applicable warranties and other
Contracts and with all applicable Legal Requirements.
(b) The Company will not incur or otherwise become
subject to any Liability arising directly or
indirectly from any product sold, or any services
performed by, the Company on or at any time prior to
the Closing Date.
(c) No product developed or sold by the Company has been
the subject of any recall or other similar action;
and no event has occurred, and no condition or
circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for any such recall or
other similar action relating to any such product.
(d) Except as set forth in Part 2.23 of the Disclosure
Schedule, no customer or other Person has ever
asserted or threatened to assert any material claim
against the Company (i) under or based upon any
warranty provided by or on behalf of the Company, or
(ii) under or based upon any other warranty relating
to any product sold by the Company or any services
performed by the Company. To the Vendor's Knowledge,
no event has occurred, and no condition or
circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for the assertion of any
such claim.
2.24 Insurance
(a) Part 2.24 of the Disclosure Schedule contains an
accurate and complete copy of each insurance policy
maintained by or at the expense of, or for the direct
or indirect benefit of the Company (including all
renewals thereof and endorsements thereto) and each
pending application for insurance that has been
submitted by or on behalf of the Company.
(b) Each of the policies identified in Part 2.24 of the
Disclosure Schedule is valid, enforceable and in full
force and effect. All of the information contained in
the applications submitted in connection with said
policies was (at the times said applications were
submitted) accurate and complete, and all premiums
and other amounts owing with respect to said policies
have been paid in full on a timely basis. Except as
set forth in Part 2.24 of the Disclosure Schedule,
the nature, scope and dollar amounts of the insurance
coverage provided by said policies are sufficient to
adequately insure the Company's business, assets,
operations and potential Liabilities.
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(c) Except as set forth in Part 2.24 of the Disclosure
Schedule, there is no pending claim under or based
upon any of the policies identified in Part 2.24 of
the Disclosure Schedule; and no event has occurred,
and no condition or circumstance exists, that might
(with or without notice or lapse of time) directly or
indirectly give rise to or serve as a basis for any
such claim.
(d) The Company has not received:
(i) any notice or other communication (in
writing or otherwise) regarding the actual
or possible cancellation or invalidation of
any of the policies identified in Part 2.24
of the Disclosure Schedule or regarding any
actual or possible adjustment in the amount
of the premiums payable with respect to any
of said policies;
(ii) any notice or other communication (in
writing or otherwise) regarding any actual
or possible refusal of coverage under, or
any actual or possible rejection of any
claim under, any of the said policies
identified in Part 2.24 of the Disclosure
Schedule; or
(iii) any indication that the issuer of any of the
policies identified in Part 2.24 of the
Disclosure Schedule may be unwilling or
unable to perform any of its obligations
thereunder.
2.25 Related Party Transactions
Except as set forth in Part 2.25 of the Disclosure Schedule:
(a) no Related Party has, and no Related Party has at any
time since the Inception had, any direct or indirect
interest of any nature in any asset used in or
otherwise relating to the business of the Company;
(b) no Related Party is, or has at any time since the
Inception been, indebted to the Company;
(c) since the Inception, no Related Party has entered
into, or has had any direct or indirect financial
interest in, any Contract, transaction or business
dealing of any nature involving the Company;
(d) no Related Party is competing, or has at any time the
Inception competed, directly or indirectly, with the
Company in any market served by the Company;
(e) no Related Party has any claim or right against the
Company; and
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(f) no event has occurred, and no condition or
circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for any claim or right in
favor of any Related Party against the Company.
2.26 Certain Payments, Etc.
To the Vendor's Knowledge, neither the Company, nor any
officer, employee, agent or other Person associated with or
acting for or on behalf of the Company, has at any time,
directly or indirectly:
(a) used any corporate funds (i) to make any unlawful
political contribution or gift or for any other
unlawful purpose relating to any political activity,
(ii) to make any unlawful payment to any governmental
official or employee, or (iii) to establish or
maintain any unlawful or unrecorded fund or account
of any nature;
(b) made any false or fictitious entry, or failed to make
any entry that should have been made, in any of the
books of account or other records of the Company;
(c) made any payoff, influence payment, bribe, rebate,
kickback or unlawful payment to any Person;
(d) performed any favor or given any gift which was not
deductible for income tax purposes;
(e) made any payment (whether or not lawful) to any
Person, or provided (whether lawfully or unlawfully)
any favor or anything of value (whether in the form
of property or services, or in any other form) to any
Person, for the purpose of obtaining or paying for
(i) favorable treatment in securing business, or (ii)
any other special concession; or
(f) agreed, committed, offered or attempted to take any
of the actions described in clauses "(a)" through
"(e)" above.
2.27 Proceedings
(a) Except as set forth in Part 2.27 of the Disclosure
Schedule, there is no pending Proceeding or
investigation, and no Person has threatened to
commence any Proceeding:
(i) that involves the Company or that otherwise
relates to or might affect the Company's
business or any of the assets owned or used
by the Company (whether or not the Company
is named as a party thereto); or
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(ii) that challenges, or that may have the effect
of preventing, delaying, making illegal or
otherwise interfering with, any of the
Transactions.
Except as set forth in Part 2.27 of the Disclosure
Schedule, no event has occurred, and no claim,
dispute or other condition or circumstance exists,
that might directly or indirectly give rise to or
serve as a basis for the commencement of any such
Proceeding.
(b) The Vendor has delivered to the Purchaser accurate
and complete copies of all pleadings, correspondence
and other written materials to which the Company has
access that relate to the Proceedings identified in
Part 2.27.
(c) There is no Order to which the Company, or any of the
assets owned or used by the Company, is subject that
(i) may have a Material Adverse Effect on the
Company's business, condition, assets, Liabilities,
operations, financial performance, net income or
prospects (or on any aspect or portion thereof) or on
the ability of the Company or the Vendor to comply
with or perform any covenant or obligation under any
of the Transactional Agreements, or (ii) may have the
effect of preventing, delaying, making illegal or
otherwise interfering with any of the Transactions.
(d) To the Vendor's Knowledge, no officer or employee of
the Company is subject to any Order that prohibits
such officer or employee from engaging in or
continuing any conduct, activity or practice relating
to the Company's business.
2.28 Brokers
Neither the Company nor the Vendor have agreed or become
obligated to pay, or has taken any action that might result in
any Person claiming to be entitled to receive, any brokerage
commission, finder's fee or similar commission or fee in
connection with any of the Transactions.
2.29 The Vendor
(a) The Vendor has the absolute and unrestricted right,
power and authority to enter into and perform its
obligations under the Transactional Agreements.
(b) This Agreement constitutes the legal, valid and
binding obligation of the Vendor enforceable against
the Vendor in accordance with its terms.
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2.30 Full Disclosure
(a) None of the Transactional Agreements contains or will
contain any untrue statement of fact; and none of the
Transactional Agreements omits or will omit to state
any fact necessary to make any of the
representations, warranties or other statements or
information contained therein not misleading.
(b) Except as set forth in Part 2.30 of the Disclosure
Schedule, there is no fact within the Vendor's
Knowledge (other than publicly known facts relating
exclusively to political or economic matters of
general applicability) that (i) may have a Material
Adverse Effect on the Company's business, condition,
assets, Liabilities, operations, financial
performance, net income or prospects (or on any
aspect or portion thereof) or on the ability of the
Vendor to comply with or perform any covenant or
obligation under any of the Transactional Agreements,
or (ii) may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of
the Transactions.
(c) All of the information set forth in the Disclosure
Schedule, and all other information regarding the
Company and its business, condition, assets,
Liabilities, operations, financial performance, net
income and prospects that has been furnished to the
Purchaser or any of its Representatives by or on
behalf of the Vendor or any of the Vendor's
Representatives, is accurate and complete in all
respects.
(d) The Vendor provided the Purchaser and the Purchaser's
Representatives with full and complete access to all
of the Company's records and other documents and
data.
2.31 Insolvency Events
(a) Liquidation/winding up/appointment of administrator
or receiver etc.
There has not been:
(i) an application or order made, or resolution
passed or proposed for the liquidation of
the Company or its removal from the
register;
(ii) a receiver, manager, statutory manager,
trustee, administrator, inspector, or
similar official appointed in respect of the
Company or any of its assets whether by a
Court, by the Company, by its creditors or
otherwise nor has the Company declared to be
at risk in accordance with section 30 of the
Corporations (Investigation and Management)
▇▇▇ ▇▇▇▇;
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(iii) an assignment, arrangement or composition
for the benefit of or with creditors
proposed or made or a moratorium or
administration proposed, ordered or
arranged;
(iv) a statutory demand (as defined in Section
289 of the Companies Act 1993) served on the
Company; or
(v) any action taken by any holder of a secured
interest in any asset of the Company to
enter into or take possession of such asset
or take any other step to realise or enforce
such secured interest.
(b) Execution
No execution, distress or similar process has been
levied upon or against all or any part of the
business, Assets or revenues of the Company.
(c) Schemes of arrangement
The Company has not:
(i) entered into or resolved to enter into any scheme of
arrangement, composition, assignment for the benefit
of, or other arrangement with its creditors or any
class of creditors; or
(ii) proposed or had proposed on its behalf a
reorganisation, moratorium, deed of company
arrangement or other administration involving one or
more of its creditors, or its winding up or
dissolution.
(d) Solvency
The Company:
(i) is able to pay its debts as they become due
in the normal course of business and the
value of the Company's assets is greater
than the value of its Liabilities including
contingent Liabilities;
(ii) is not insolvent or presumed to be insolvent
under any law; and
(iii) is not insolvent under administration as
defined in the ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ or has not taken any action which could
result in that event.
(e) Striking off
(i) The Company has not received notice from its
shareholders nor from any other person of
any application to the New Zealand
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Companies Office for the removal of the
Company from the New Zealand Register of
Companies.
(ii) The Company has not received any notice from
the New Zealand Companies Office of any
removal procedures initiated or to be
initiated against the Company nor has the
Company taken any action which could result
in the Company being removed from the New
Zealand Register of Companies.
2.32 US Securities Laws Representations and Undertakings
(a) The Asia Online stock to be acquired under this
Agreement by the Vendor will be acquired for
investment for the Vendor's own account, not as a
nominee or agent, and not with a view to the resale
or distribution of any part thereof in the United
States or to a United States resident (except in
compliance with United States securities laws), and
that the Vendor has no present intention of selling,
granting any participation in, or otherwise
distributing the same (except in compliance with
United States securities laws). By executing this
Agreement, the Vendor further represents, warrants
and undertakes that the Vendor does not have any
contract, undertaking, agreement or arrangement with
any person to sell, transfer or grant participations
to such person or to any third person in the United
States or to a United States resident, or any hedging
transaction with any third person in the United
States or to a United States resident, with respect
to any of the Regulation S Securities.
(b) The Vendor understands and acknowledges that the Asia
Online Stock is not registered under the Securities
Act on the ground that the sale provided for in this
Agreement and the issuance of Asia Online stock
hereunder is exempt from registration under the
Securities Act pursuant to thereof, and that Asia
Online's reliance on such exemption is predicated on
the Vendors' representations set forth in this
Agreement.
(c) The Vendor has received all the information the
Vendor considers necessary or appropriate for
deciding whether to purchase the Asia Online stock.
(d) The Vendor has had an opportunity to ask questions
and receive answers from Asia Online regarding the
terms and conditions of the offering of the Asia
Online stock and the business, properties, prospects,
and financial condition of Asia Online and to obtain
such additional information (to the extent Asia
Online possessed such information or could acquire it
without unreasonable effort or expense) necessary to
verify the accuracy of any information furnished to
the Vendor or to which the Vendor had access.
(e) The Vendor is either experienced in evaluating and
investing in securities of companies in the early
stages of product production or has access to
appropriate advisers or representation that can
assist in
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evaluating companies in the early stages of product
production and acknowledges that the Vendor is able
to fend for himself, can bear the economic risk of
the Vendor's investment, and has such knowledge and
experience in financial and business matters that the
Vendor is capable of evaluating the merits and risks
of the investment in the Asia Online stock. If other
than an individual, the Vendor also represents,
warrants and undertakes that the Vendor has not been
organized for the purpose of acquiring the Asia
Online stock.
(f) The Vendor is a Qualified Regulation S Vendor. The
term "Qualified Regulation S Vendor" in this
Agreement means a person or entity who is not a U.S.
person, as such term is defined in Rule 902
promulgated under the Securities Act.
2.33 Restricted Securities
The Vendor understands that the Asia Online stock may not be
sold, transferred, or otherwise disposed of without
registration under the Securities Act or an exemption
therefrom, and that in the absence of an effective
registration statement covering the Asia Online stock or an
available exemption from registration under the Securities
Act, the Asia Online stock must be held indefinitely. In
particular, the Vendor is aware that the Asia Online stock may
not be sold pursuant to Rule 144 promulgated under the
Securities Act unless all of the conditions of that Rule are
met. Among the conditions for use of Rule 144 may be the
availability of current information to the public about Asia
Online. Such information is not now available and Asia Online
has no current plans to make such information available.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants, to and for the benefit of the
Vendor, as follows:
3.1 Acquisition of Shares
The Purchaser is not acquiring the Sale Shares with the
current intention of making a public distribution thereof.
3.2 Authority; Binding Nature of Agreement
(a) The Purchaser has the absolute and unrestricted
right, power and authority to enter into and perform
its obligations under this Agreement;
(b) The execution, delivery and performance of this
Agreement by the Purchaser has been duly authorized
by all necessary action on the part of the Purchaser
and its board of directors; and
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37
(c) This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
4. PRE-CLOSING COVENANTS OF THE VENDOR
4.1 Access and Investigation
The Vendor shall ensure that, at all times during the
Pre-Closing Period, the Company and its Representatives:
(a) provide the Purchaser and its Representatives with
free and complete access to the Company's
Representatives, personnel and assets and to all
existing books, records, Tax Returns, work papers and
other documents and information relating to the
Company to enable the Purchaser to conduct its due
diligence enquiries;
(b) provide the Purchaser and its Representatives with
such copies of existing books, records, Tax Returns,
work papers and other documents and information
relating to the Company as the Purchaser may request
in good faith to enable the Purchaser to conduct its
due diligence enquiries; and
(c) compile and provide the Purchaser and its
Representatives with such additional financial,
operating and other data and information regarding
the Company as the Purchaser may request in good
faith to enable the Purchaser to conduct its due
diligence enquiries.
4.2 Operation of Business
The Vendor shall ensure that, during the Pre-Closing Period:
(a) none of the Sale Shares are sold or otherwise
transferred, or offered for sale, and thus no
agreement or commitment is entered into (in writing
or otherwise) to sell or otherwise transfer, any of
the Sale Shares or any interest in or right relating
thereto;
(b) it does not permit offer, agree or commit (in writing
or otherwise) to permit, any of the Sale Shares to
become subject, directly or indirectly, to any
Encumbrance;
(c) the Company conducts its operations exclusively in
the Ordinary Course of Business, except that the
Company may settle up the indebtedness between it and
the Vendor's Related Parties [(as appears in Part
2.25 of the Disclosure Schedule)] on or prior to
Closing;
(d) the Company uses its Best Efforts to preserve intact
its current business and uses its Best Efforts to
keep available the services of its current
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38
officers and employees and maintains its relations
and good will with all suppliers, customers,
landlords, creditors, licensors, licensees, employees
and other Persons having business relationships with
the Company;
(e) the Company keeps in full force all insurance
policies identified in Part 2.24 of the Disclosure
Schedule;
(f) the Company's officers confer regularly with the
Purchaser concerning operational matters and
otherwise report regularly to the Purchaser
concerning the status of the Company's business,
condition, assets, Liabilities, operations, financial
performance and prospects;
(g) the Company immediately notifies the Purchaser of any
inquiry, proposal or offer from any Person relating
to any Acquisition Transaction;
(h) the Company does not declare, accrue, set aside or
pay any dividend or make any other distribution in
respect of any shares, and does not repurchase,
redeem or otherwise reacquire any shares or other
securities;
(i) the Company does not sell or otherwise issue any
shares or any other securities;
(j) the Company does not effect or become a party to any
Acquisition Transaction, recapitalization,
reclassification of shares, share consolidation or
division, capital reduction or share buy back or
similar transaction;
(k) the Company does not form any subsidiary or acquire
any equity interest or other interest in any other
Entity;
(l) the Company does not make any capital expenditure,
except for capital expenditures that are made in the
Ordinary Course of Business and that, when added to
all other capital expenditures made on behalf of the
Company during the Pre-Closing Period, do not exceed
NZ$100,000 in the aggregate;
(m) the Company does not enter into or permit any of the
assets owned or used by the Company to become bound
by any Contract, except for any Excluded Contract;
(n) the Company does not pay any bonus or make any
profit-sharing or similar payment to, or increase the
amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration
payable to, any of its directors, officers, or
employees except in the Ordinary Course of Business;
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39
(o) the Company does not change any of its methods of
accounting or accounting practices in any respect;
(p) the Company does not make any Tax election;
(q) the Company does not commence any Proceeding; and
(r) the Company does not agree, commit or offer (in
writing or otherwise), and does not attempt, to take
any of the actions described in clauses "(a)" through
"(q)" of this Section 4.2.
4.3 Filings and Consents
The Vendor shall ensure that:
(a) each filing or notice required to be made or given
(pursuant to any applicable Legal Requirement,
Government Authorisation, Order or Contract, or
otherwise) by the Company or the Vendor in connection
with the execution and delivery of any of the
Transactional Agreements or in connection with the
consummation or performance of any of the
Transactions (including each of the filings and
notices identified in Part 2.19 of the Disclosure
Schedule) is made or given as soon as possible after
the date of this Agreement;
(b) each Consent required to be obtained (pursuant to any
applicable Legal Requirement, Order or Contract, or
otherwise) by the Company or the Vendor in connection
with the execution and delivery of any of the
Transactional Agreements or in connection with the
consummation or performance of any of the
Transactions (including each of the Consents
identified in Part 2.19 of the Disclosure Schedule)
is obtained as soon as possible after the date of
this Agreement and remains in full force and effect
through the Closing Date;
(c) the Company and the Vendor promptly delivers to the
Purchaser a copy of each filing made, each notice
given and each Consent obtained by them during the
Pre-Closing Period; and
(d) during the Pre-Closing Period, the Vendor, the
Company and their Representatives cooperate with the
Purchaser and with the Purchaser's Representatives,
and prepare and make available such documents and
take such other actions as the Purchaser may request
in good faith, in connection with any filing, notice
or Consent that the Purchaser is required or elects
to make, give or obtain.
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40
4.4 Notification
(a) During the Pre-Closing Period, the Vendor shall
promptly notify the Purchaser in writing of:
(i) the discovery of any event, condition, fact
or circumstance that occurred or existed on
or prior to the date of this Agreement and
that caused or constitutes a Breach of any
representation or warranty made by the
Vendor in this Agreement;
(ii) any event, condition, fact or circumstance
that occurs, arises or exists after the date
of this Agreement and that would cause or
constitute a Breach of any representation or
warranty made by the Vendor in this
Agreement if (A) such representation or
warranty had been made as of the time of the
occurrence, existence or discovery of such
event, condition, fact or circumstance, or
(B) such event, condition, fact or
circumstance had occurred, arisen or existed
on or prior to the date of this Agreement;
(iii) any Breach of any covenant or obligation of
the Vendor; and
(iv) any event, condition, fact or circumstance
that may make the timely satisfaction of any
of the conditions set forth in Section 5 or
Section 6 impossible or unlikely.
(b) No notification pursuant to Section 4.4(a) such
update shall be deemed to supplement or amend the
Disclosure Schedule for the purpose of (i)
determining the accuracy of any of the
representations and warranties made by the Vendor in
this Agreement, or (ii) determining whether any of
the conditions set forth in Section 5 has been
satisfied.
4.5 Payment of Indebtedness by Related Parties
The Vendor shall cause all indebtedness and other Liabilities
of each Related Party to the Company (including any such
indebtedness or other Liability identified in Part 2.27 of the
Disclosure Schedule) to be discharged and paid in full prior
to the Closing.
4.6 No Negotiation
The Vendor shall ensure that, during the Pre-Closing Period,
neither the Company nor any of the Company's Representatives
directly or indirectly:
(a) solicits or encourages the initiation of any inquiry,
proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction;
-36-
41
(b) participates in any discussions or negotiations with,
or provides any non-public information to, any Person
(other than the Purchaser) relating to any
Acquisition Proposal; or
(c) considers the merits of any unsolicited inquiry,
proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction.
4.7 Best Efforts
During the Pre-Closing Period, the Vendor shall use its Best
Efforts (where satisfaction of a condition is within the
Vendor's control) to cause the conditions set forth in
Sections 5 and 6.3 to be satisfied on a timely basis.
4.8 Confidentiality
The Vendor shall ensure that, during the Pre-Closing Period,
and, in so far as the obligations relate to the Vendor alone,
at all times after Closing:
(a) the Vendor, the Company and their Representatives
keep strictly confidential the existence and terms of
this Agreement;
(b) neither the Vendor, the Company nor any of their
Representatives issues or disseminates any press
release or other publicity or otherwise makes any
disclosure of any nature (to any of the Company's
suppliers, customers, landlords, creditors or
employees or to any other Person) regarding any of
the Transactions, except to the extent that the
Company or the Vendor is required by law to make any
such disclosure regarding the Transactions; and
(c) if the Company or the Vendor is required by law to
make any disclosure regarding the Transactions, the
Vendor advises the Purchaser, at the earliest
possible opportunity, and if possible before making
such disclosure, of the nature and content of the
intended disclosure and take into account the
Purchaser's reasonable requirements relating to the
preservation of confidentiality.
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
The Purchaser's obligation to purchase the Sale Shares and to take the
other actions required to be taken by the Purchaser at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by the Purchaser, in
whole or in part, in accordance with Section 10.11):
5.1 Satisfactory Completion of Pre-Acquisition Review
The Purchaser shall have satisfactorily completed its
pre-acquisition investigation and review of the Company's
business, condition, assets, Liabilities, operations,
financial performance, net income, prospects and
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42
regulatory matters and shall be satisfied with the results of
that investigation and review.
5.2 Accuracy of Representations
Each of the representations and warranties made by the Vendor
in this Agreement shall have been accurate in all material
respects as of the date of this Agreement, and shall be
accurate in all material respects as of the Scheduled Closing
Time as if made at the Scheduled Closing Time.
5.3 Performance of Obligations
(a) The Vendor shall have delivered to the Purchaser the
certificates (if any) representing all (and not less
than all) of the Sale Shares as required by Section
1.3(b)(i), and shall have executed and/or delivered
each of the other documents required to be executed
and/or delivered by it pursuant to Section 1.3(b)
such that the Purchaser shall upon Closing become the
registered holder of the entire issued share capital
of the Company.
(b) Each other covenant and obligation that the Vendor is
required to comply with or to perform at or prior to
the Closing shall have been duly complied with and
performed in all material respects.
5.4 Consents
Each of the Consents identified in Part 2.4 of the Disclosure
Schedule shall have been obtained and shall be in full force
and effect. [Includes BCL, Lessors, Aim Quest and National
Bank of New Zealand Limited].
5.5 No Adverse Change
There shall have been no material adverse change in the
Company's business, condition, assets, Liabilities,
operations, financial performance, net income or prospects (or
in any aspect or portion thereof) since the date of this
Agreement.
5.6 Additional Documents
Purchaser shall have received such materials or evidence as
the Purchaser acting in good faith may reasonably require for
the purpose of (i) evidencing the accuracy of any
representation or warranty made by the Vendor, (ii) evidencing
the Vendor's compliance with, or performance of, any covenant
or obligation set forth in this Agreement, (iii) evidencing
the satisfaction of any condition set forth in this Section 5,
or (iv) otherwise facilitating the consummation or performance
of any of the Transactions.
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43
5.7 No Proceedings
Since the date of this Agreement, there shall not have been
commenced or threatened against the Purchaser, or against any
Person affiliated with the Purchaser, any Proceeding (a)
involving any challenge to, or seeking damages or other relief
in connection with, any of the Transactions, or (b) that may
have the effect of preventing, delaying, making illegal or
otherwise interfering with any of the Transactions.
5.8 No Claim Regarding Stock Ownership or Sale Proceeds
No Person shall have made or threatened any claim asserting
that such Person (a) may be the holder or the beneficial owner
of, or may have the right to acquire or to obtain beneficial
ownership of, any capital stock or other securities of the
Company, or (b) may be entitled to all or any portion of the
Purchase Price.
5.9 No Prohibition
Neither the consummation nor the performance of any of the
Transactions will, directly or indirectly (with or without
notice or lapse of time), contravene or conflict with or
result in a violation of, or cause the Purchaser or any Person
affiliated with the Purchaser to suffer any adverse
consequence under, (a) any applicable Legal Requirement or
Order, or (b) any Legal Requirement or Order that has been
proposed by or before any Governmental Body.
5.10 OIC Consent
The Purchaser shall have obtained the approval of the Overseas
Investment Commission to the Transaction on terms and
conditions satisfactory in all respects to the Purchaser.
6. CONDITIONS PRECEDENT TO THE VENDOR'S OBLIGATIONS TO CLOSE
The Vendor's obligation to sell the Sale Shares and to take the other
actions required to be taken by it at the Closing is subject to the
satisfaction, at or prior to the Closing, of each of the following
conditions (any of which may be waived by the Vendor, in whole or in
part, in accordance with Section 10.11):
6.1 Accuracy of Representations
Each representation and warranty made by the Purchaser in this
Agreement shall have been accurate in all material respects as
of the date of this Agreement and shall be accurate in all
material respects as of the Scheduled Closing Time as if made
at the Scheduled Closing Time.
6.2 Purchaser's Performance
Each other covenant and obligation that the Purchaser is
required to comply with or to perform pursuant to this
Agreement at or prior to the Closing shall have been complied
with and performed in all material respects.
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6.3 No Injunction
There shall not be in effect any injunction that shall have
been entered by a court of competent jurisdiction since the
date of this Agreement and that prohibits the sale of the Sale
Shares by the Vendor to the Purchaser.
7. TERMINATION
7.1 Termination Events
This Agreement may be terminated prior to the Closing:
(a) by the Purchaser if (i) there is a material Breach of
any covenant or obligation of the Vendor or (ii) the
Purchaser reasonably determines that the timely
satisfaction of any condition set forth in Section 5
has become impossible or impractical (other than as a
result of any failure on the part of the Purchaser to
comply with or perform its covenants and obligations
under this Agreement);
(b) by the Vendor if (i) there is a material Breach of
any covenant or obligation of the Purchaser, or (ii)
the Vendor reasonably determines that the timely
satisfaction of any condition set forth in Section 6
has become impossible or impractical (other than as a
result of any failure on the part of the Vendor to
comply with or perform any covenant or obligation set
forth in this Agreement);
(c) by the Purchaser at or after the Scheduled Closing
Time if any condition set forth in Section 5 has not
been satisfied by the Scheduled Closing Time;
(d) by the Vendor at or after the Scheduled Closing Time
if any condition set forth in Section 6 has not been
satisfied by the Scheduled Closing Time;
(e) by the Purchaser if the Closing has not taken place
on or before 30 October, 1999 (other than as a result
of any failure on the part of the Purchaser to comply
with or perform its covenants and obligations under
this Agreement);
(f) by the Vendor if the Closing has not taken place on
or before 30 October, 1999 (other than as a result of
the failure on the part of the Vendor to comply with
or perform any covenant or obligation set forth in
this Agreement); or
(g) by the mutual consent of the Purchaser and the
Vendor.
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7.2 Termination Procedures
If the Purchaser wishes to terminate this Agreement pursuant
to Section 7.1(a), Section 7.1(c) or Section 7.1(e), the
Purchaser shall deliver to the Vendor a written notice stating
that the Purchaser is terminating this Agreement and setting
forth a brief description of the basis on which the Purchaser
is terminating this Agreement. If the Vendor wishes to
terminate this Agreement pursuant to Section 7.1(b), Section
7.1(d) or Section 7.1(f), the Vendor shall deliver to the
Purchaser a written notice stating that the Vendor is
terminating this Agreement and setting forth a brief
description of the basis on which the Vendor is terminating
this Agreement.
7.3 Effect of Termination
If this Agreement is terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement shall
terminate; provided, however, that:
(a) no party shall be relieved of any obligation or other
Liability arising from any Breach by such party of
any provision of this Agreement; and
(b) the Vendor shall, in all events, remain bound by and
continue to be subject to Section 4.8.
7.4 Non-exclusivity of Termination Rights
The termination rights provided in Section 7.1 shall not be
deemed to be exclusive. Accordingly, the exercise by any party
of its right to terminate this Agreement pursuant to Section
7.1 shall not be deemed to be an election of remedies and
shall not be deemed to prejudice, or to constitute or operate
as a waiver of, any other right or remedy that such party may
be entitled to exercise (whether under this Agreement, under
any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
8. FURTHER PROVISIONS REGARDING WARRANTIES
8.1 Survival of Representation and Covenants
(a) The representations and warranties given by each
party under the Transactional Agreements
("Warranties") and the covenants and obligations
given by each party under the Transactional
Agreements shall survive (without limitation):
(i) the Closing and the sale of the Shares to
the Purchaser;
(ii) any sale or other disposition of any or all
of the Shares by the Purchaser; and
(iii) any Acquisition Transaction effected by or
otherwise involving the Purchaser, the
Vendor or the Company.
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All of the Warranties shall remain in full force and
effect and shall survive for an unlimited period of
time.
(b) Subject to clause 8.2, the Warranties and obligations
of the Vendor, and the rights and remedies that may
be exercised by the Indemnitees, shall not be limited
or otherwise affected by or as a result of any
information furnished to, or any investigation made
by or Knowledge of, any of the Indemnitees or any of
their Representatives.
8.2 Application of Vendor's Warranties
(a) Each of the Warranties of the Vendor is given subject
to, and is qualified by matters fairly disclosed, in
the Disclosure Schedule.
(b) For purposes of this Agreement, each statement or
other item of information set forth in the Disclosure
Schedule or in any notification pursuant to Section
4.4(a) shall be deemed to be a Warranty made by the
Vendor under this Agreement.
8.3 Right of termination
If before Closing:
(a) the Purchaser identifies a breach of or an inaccuracy
in any of the Warranties given by the Vendor; or
(b) the Vendor discloses to the Purchaser in writing a
breach of, or an inaccuracy in, any of the Warranties
of the Vendor,
the Purchaser may immediately terminate this Agreement by
giving written notice to the Vendor but shall have no other
right or remedy available to it.
8.4 Indemnity
(a) The Vendor indemnifies the Indemnitees from and
against, and shall compensate and reimburse the
Indemnitees for, all Damages which are directly or
indirectly suffered or incurred by the Indemnitees
and which arise directly or indirectly by reason of
any of the Warranties in this Agreement being untrue,
inaccurate or misleading in any respect or by reason
of any other breach by the Vendor of the
Transactional Agreements.
(b) The Vendor acknowledges and agrees that, if there is
any Breach of any Warranty relating to the Company or
the Company's business, condition, assets,
Liabilities, operations, financial performance, net
income or prospects (or any aspect or portion
thereof), then the
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Purchaser itself shall be deemed, by virtue of its
ownership of shares of the Company, to have incurred
Damages as a result of such Breach. Nothing contained
in this Section 8.4(b) shall have the effect of (i)
limiting the circumstances under which the Purchaser
may otherwise be deemed to have incurred Damages for
purposes of this Agreement, or (ii) limiting the
other types of Damages that the Purchaser may be
deemed to have incurred (whether in connection with
any such Breach or otherwise).
8.5 Notice of potential claim
As soon as reasonably possible after the Purchaser first has
all material particulars of any act, matter or thing which is
reasonably likely to give rise to a claim against the Vendor
under this Section 8:
(a) it must notify the Vendor of that fact, together with
all available details; and
(b) it must, as and when requested by the Vendor, provide
to the Vendor any further information and details
which the Vendor reasonably requests.
8.6 Notice of claim
Any claim made by the Purchaser against the Vendor under this
Section 8 must be by notice in writing to the Vendor setting
out the facts and circumstances relied upon as giving rise to
the claim, the Warranty or other provision the subject of the
claim and all relevant available details of the claim.
8.7 Purchaser's Acknowledgments
The Purchaser acknowledges and agrees that:
(a) the Warranties given by the Vendor are the only
representations, warranties or other assurances of
any kind given by or on behalf of the Vendor and on
which the Purchaser may rely in entering into this
Agreement;
(b) no other statement, promise or forecast made by or on
behalf of the Vendor may form the basis of, or be
pleaded in connection with, any claim by the
Purchaser under or in connection with this Agreement;
(c) any claim by the Purchaser in connection with the
Warranties (`Warranty Claim') is subject to the
provisions of this Section 8 and Section 9; and
(d) other than as fairly disclosed in the Disclosure
Schedule in accordance
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with Section 8.2(a), at the time of entering into
this Agreement the Purchaser is not aware of any
breach of any Warranty given by the Vendor save for:
(i) information received from the Vendor's
solicitors (but subsequently withdrawn) that
▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ and certain other
employees have an interest in certain Sale
Shares to be sold by Vendor to the Purchaser
under this Agreement;
(ii) the Company may be liable for interest and
penalties in respect of goods and services
tax which was not paid when due in the period
prior to Closing and which was not provided
for in the Company Financial Statements;
(iii) information received from the Vendor's
solicitors that a former customer, ▇▇ ▇▇▇▇
Till, has filed a counterclaim in the New
Zealand District Court against the Company,
in the amount of $90,000, claiming loss of
profit and punitive damages for breach of
contract;
(iv) the Company may be liable for resident
withholding tax and/or interest and penalties
in respect of resident withholding tax not
deducted and paid when due in the period
prior to Closing and which was not provided
for in the Company's Financial Statements;
(v) the Company may be liable for income tax
and/or interest and/or penalties in respect
of tax on income for the 1999 and/or 2000
income years which has not been paid in the
period prior to Closing and which was not
provided for in the Company's Financial
Statements; and
(vi) the Purchaser has been informed by
PricewaterhouseCoopers that, in its view, the
provision for doubtful debts in the Company's
Financial Statements is inadequate,
and in respect of each of which the Purchaser shall
be entitled to the rights under this Agreement which
it otherwise would have been entitled to but for such
awareness.
8.8 Vendor's Liability
(a) The liability of the Vendor under or in respect of
the Warranties is limited as follows:
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(i) the Vendor is not liable in respect of any
breach of the Warranties under this Section
8 if and to the extent that the matter
giving rise to the breach is the subject of
a Tax Claim;
(ii) except for a Tax Claim, there must be
disregarded for all purposes any breach of
Warranty in respect of which the amount of
the Damages to which the Purchaser would
otherwise be entitled is less than
NZ$10,000;
(iii) except for a Tax Claim, the Purchaser is not
entitled to recover any damages in respect
of any breach or breaches of the Warranties
unless the amount of damages in respect of
such breach or breaches exceeds in aggregate
the sum of NZ$100,000; and
(iv) the maximum aggregate liability of the
Vendor in respect of all and any Warranty
Claims must not exceed NZ$10,000,000.
(b) The Purchaser is not entitled to make any Warranty
Claim (other than a Tax Claim to which the provisions
of Section 9A shall apply):
(i) to the extent that provision or allowance
for that matter or liability which would
otherwise give rise to the Warranty Claim in
question has been made in the Company
Financial Statements or it is otherwise
taken account of, or reflected in, the
Company Financial Statements;
(ii) if the Warranty Claim would not have arisen
but for a change in legislation made after
the date of this Agreement; or
(iii) to the extent that the Warranty Claim arises
as a result only of any change after Closing
in the accounting bases on which the Company
or any subsidiaries values its assets.
(c) There shall be deducted from the amount of Damages
payable in respect of any Warranty Claim or any claim
under the indemnity in Section 10.20 ("Indemnity
Claim") the following amounts:
(i) where an asset is recorded in the Unaudited
Interim Balance Sheet and is realised after
Closing for an amount greater than that at
which it was recorded, the amount of the
difference between its book and realised
value;
(ii) the value of any asset of the Company which
relates to the period prior to the Unaudited
Interim Accounts Date, is realised after
Closing and is not recorded in the Unaudited
Interim Balance Sheet; and
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(iii) to the extent not included in paragraph
(ii), any amounts recovered from Telecom New
Zealand Limited after Closing, being a
refund of charges or fees either paid by the
Company prior to Closing or payment for
which provision has been made in the
Unaudited Interim Balance Sheet,
provided that an amount falling within paragraph (i),
(ii) or (iii):
(iv) having been fully deducted once from an
amount of Damages must be ignored for the
purposes of all future Damages payable in
respect of a Warranty Claim or Indemnity
Claim; and
(v) shall be reduced by any costs, expenses and
Taxes incurred or suffered in connection
with its recovery or receipt.
8.9 Time limitations on Warranty Claims
(a) The Vendor will cease to have any liability under or
in respect of the Warranties:
(i) in the case of a Tax Claim, on the seventh
anniversary of the Closing Date; and
(ii) in the case of all other Warranty Claims, on
the second anniversary of the Closing Date,
except in respect of a Warranty Claim of which the
Purchaser gives notice to the Vendor before the
relevant date, in which event the liability of the
Vendor in respect of any such Warranty Claim will
absolutely terminate if proceedings in respect of it
have not been commenced within six months of that
date.
8.10 Specific mitigation obligations
(a) Without prejudice to the Purchaser's obligation at
law to mitigate loss, the Purchaser shall consult
with the Vendor in respect of any action which may or
may not be taken by the Purchaser or the Company in
respect of any matter in respect of which the Vendor
may be liable under the Warranties, for the purpose
of determining in good faith any such action and
shall keep the Vendor regularly informed as to
material developments in respect to the progress of
any such action.
(b) If the Vendor makes any payment in respect of a
Warranty Claim to the Purchaser (`Damages Payment')
and within 12 months of the making of the relevant
payment the Company or the Purchaser receives any
benefit referable to the circumstance giving rise to
the Warranty Claim in respect of which the Damages
Payment was made (including insurance moneys), the
Purchaser must, once it or the Company has received
such benefit, immediately repay to the Vendor an
amount
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equal to the lesser of the amount of such benefit and
the Damages Payment.
(c) The Purchaser must refrain from doing, and shall
procure that the Company and any subsidiary refrains
from doing, any act or thing (other than in the
Ordinary Course of Business of the Company) which, to
the Purchaser's Knowledge or the Company's Knowledge
(acquired after Closing) will give rise to a Warranty
Claim which would not otherwise arise.
8.11 No Contribution
The Vendor waives, and acknowledges and agrees that it shall
not have and shall not exercise or assert or attempt to
exercise or assert, any right of contribution or right of
indemnity or any other right or remedy against the Company or
any of its employees, officers or agents in connection with
any indemnification obligation or any other Liability to which
the Vendor may become subject under any of the Transactional
Agreements or otherwise in connection with any of the
Transactions.
8.12 Interest
Any party that is required to indemnify any other Person
pursuant to this Section 8 with respect to any Damages shall
also be required to pay such other Person interest on the
amount of such Damages (for the period commencing as of the
date on which such other Person first incurred or otherwise
became subject to such Damages and ending on the date on which
the applicable indemnification payment is made by such party)
at a floating rate three percentage points above the rate of
interest publicly announced by Bank of America, N.T. & S.A.
from time to time as its prime, base or reference rate.
9A. TAXATION
9A.1 Subject to Section 9A.2, the Vendor indemnifies the
Indemnitees against and shall reimburse the Indemnities for
all Damages which are directly or indirectly suffered or
incurred by the Indemnities and which arise directly or
indirectly by reason of any of the Warranties in Section 2.21
of this Agreement being untrue, inaccurate or misleading in
any respect.
9A.2 Section 9A.1 does not apply to a Tax Claim:
(a) to the extent that the Tax Claim is offset by a Tax
benefit not included in the Company Financial
Statements and referable to the period up to Closing
and available at no cost to the Purchaser as a Tax
benefit asset;
(b) which relates to Tax for which provision was made in
the Company Financial Statements;
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(c) which would not have arisen but for a voluntary act
or omission of the Purchaser, the Company or any
subsidiary after Closing and which the Purchaser, the
Company or the subsidiary was, or should reasonably
have been, aware would give rise to such liability,
other than the disclosure to the Taxation authorities
of a matter or thing which occurred before Closing;
(d) to the extent that it arises or is increased as a
result of a retrospective change in the law of
Taxation announced after the date of this Agreement;
(e) to the extent that the liability would not have
arisen or would have been reduced or eliminated but
for a failure or omission on the part of the Company
after Closing to make any claim surrender or
disclaimer or to give any notice or consent;
(f) to the extent that the Purchaser has made recovery in
respect of the liability under any other provisions
of this Agreement; or
(g) to the extent that the liability arises from any
change in accounting or Tax policy or practice
adopted by the Company on or after Closing, other
than any such change required to ensure compliance by
the Company with GAAP or any Tax legislation.
9A.3 If for any reason an amount received by the Purchaser under
clause 9A.1 is or will be treated as assessable income of the
Purchaser under any law relating to Tax, the Vendor must pay
to the Purchaser an additional amount so that, after allowing
for all Tax paid or payable in respect of the initial receipt
and the additional amount, the balance remaining is equal to
the Tax Claim.
9. RESTRICTION OF THE VENDOR
9.1 The Vendor undertakes with the Purchaser (for itself and as
trustee for the Company) that, except with the prior consent
in writing of the Purchaser:
(a) for the period of two years after Closing it will not
within any country or place in which the Company has
carried on a Core Business during the year preceding
the date of this Agreement (including for this
purpose New Zealand and Australia) either on its own
account or in conjunction with or on behalf of any
Person carry on or be engaged, concerned or
interested, directly or indirectly, whether as
shareholder, director, employee, partner, agent or
otherwise in carrying on any business substantially
the same as the Core Business (other than as a holder
of not more than 5 per cent (5%) of the issued shares
or debentures of any company listed on a recognised
stock exchange or as expressly excluded under Section
9.4);
(b) for the period of two years after Completion it will
not either on its
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own account or in conjunction with or on behalf of
any other Person, solicit or entice away or attempt
to solicit or entice away from the Company the custom
of any Person who shall at any time within the year
preceding the date hereof have been a customer,
identified prospective customer, representative,
agent, or correspondent of the Company or in the
habit of dealing with the Company or enter into any
contract for sale and purchase or accept business
from any such Person in a business area in which the
Company competes;
(c) for the period of two years after Completion it will
not either on its own account or in conjunction with
or on behalf of any other Person employ, solicit,
entice away or attempt to employ, solicit or entice
away from the Company any Person who at the date
hereof is or at the date of or within the year
preceding such employment, solicitation, enticement
or attempt shall have been an officer, manager,
consultant or employee of the Company whether or not
such Person would commit a breach of contract by
reason of leaving such employment;
(d) if, in connection with the business or affairs the
Company, it shall have obtained trade secrets or
other confidential information belonging to any third
party under an agreement purporting to bind the
Company which contained restrictions on disclosure it
will not without the previous written consent of the
board of directors of the Purchaser at any time
infringe or take any action which would or might
result in an infringement of such restrictions;
(e) it will not at any time hereafter in relation to any
trade, business or company use a name or trade ▇▇▇▇
including the word "ICONZ" or "Internet Company of
New Zealand" or any word or symbol confusingly
similar thereto in such a way as to be capable of or
likely to be confused with the name or any trade ▇▇▇▇
the Company and shall use its best endeavours to
procure that no such name or trade ▇▇▇▇ shall be used
by any person, firm or company with which he is
connected.
9.2 (a) The Vendor shall for the period of twelve months
after Closing exercise his Best Efforts to procure
that each of his Related Parties and the companies
referred to in Section 9.4 will observe the
restrictions contained in the foregoing provisions of
this Section and that their respective employees,
officers or agents will observe the restrictions
contained in this Section.
(b) If notwithstanding the exercise of his Best Efforts
the Vendor is unable to procure the observance by any
of the parties referred to in Section 9(a) of the
restriction contained in this Section, the Vendor
shall use his Best Efforts to procure that such
parties avoid competition with the Core Business by
encouraging them to enter into mutually beneficial
commercial relationships or partnerships with the
Company.
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9.3 While the restrictions contained in this Section are
considered by the parties to be reasonable in all the
circumstances, it is recognised that restrictions of the
nature in question may fail for technical reasons and
accordingly it is hereby agreed and declared that if any of
such restrictions shall be adjudged to be void as going beyond
what is reasonable in all the circumstances for the protection
of the interests of the Purchaser but would be valid if part
of the wording thereof were deleted or the periods thereof
reduced or the range of activities or area dealt with thereby
reduced in scope the said restriction shall apply with such
modifications as may be necessary to make it valid and
effective.
9.4 Nothing in this Section 9 (but subject to Section 9.2) shall
restrict, affect or limit the holding, whether directly or
indirectly, by:
(a) the Vendor or any Related Party of the Vendor of an
interest in NZCity Limited (trading as NZCity and/or
Web Ads);
(b) the Vendor of an interest in Capital Networks
(Holdings) Limited or any successor company of that
company;
(c) the Vendor of an interest in Melco NZ Limited,
nor shall anything in this Section 9 restrict the Vendor or
any Related Party of the Vendor from carrying on the business
of, or being engaged in providing services, to any of those
companies.
9.5 The Vendor agrees in relation to himself and shall exercise
his Best Efforts to procure that in relation to any Related
Party that if within one year after Closing the Vendor or any
Related Party proposes to sell to a third party, or proposes
to accept an offer from a third party to acquire, the shares
held directly or indirectly by it in:
(a) NZCity Limited; or
(b) Capital Networks (Holdings) Limited or any successor
company of that company
("Third Party Offer"), then (subject to first complying with
any pre-emptive rights provisions in relation to those
companies) the Vendor or the Related Party (as the case may
be) will first give notice to the Purchaser offering those
shares for sale to the Purchaser on the same terms and
conditions (including as to price) as the Third Party Offer
("Notice"). The Purchaser shall have 10 Business Days from the
date of the Notice to accept the offer contained in the
Notice. If the Purchaser declines to accept the offer, the
Vendor or the Related Party (as the case may be) may sell the
shares the subject of the offer to any other party on the
terms and conditions of the Third Party Offer. If the
Purchaser does not accept the offer within the stated period,
it shall be deemed to have declined to accept the offer. If
the Purchaser accepts the offer, then completion of the sale
and purchase of the relevant shares shall take place on
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the day which is 30 Business Days from the date of acceptance
if consent of the New Zealand Overseas Investment Commission
is required for the transaction and otherwise 10 Business Days
from such date, or such earlier date as the parties agree
("End Date"). If the Purchaser, through no fault of the Vendor
or the Related Party (as the case may be), is unable to
complete the sale and purchase of the relevant shares on the
End Date, then the Vendor's obligations to the Purchaser in
respect of those shares are at an end and the Vendor or the
Related Party (as the case may be) may sell those shares to
any other party on the terms and conditions of the Third Party
Offer. The Vendor further agrees that if a Related Party of
the Vendor proposes to exercise its pre-emptive rights to
acquire the Vendor's shares in NZCity Limited, the Vendor will
procure the agreement of that Related Party to be bound by the
provisions of this Clause 9.5 in relation to those shares as
if the Related Party were the Vendor.
10A. PROVISIONS RELATING TO CAPITAL NETWORKS (HOLDINGS) LIMITED ("CNHL")
10A.1 Prior to Closing the Vendor will cause the Company to transfer
its shares in CNHL to the Vendor or its nominee in
consideration of the payment of a price equal to the value at
which those shares are recorded in the Company Financial
Statements.
10A.2 The Vendor will indemnify the Purchaser for any Tax arising
from the transfer, referred to in Section 10A.1, either
directly or indirectly, including income tax or withholding
tax arising through the transaction as giving rise to a Tax
liability.
10A.3 The Vendor shall indemnify each of the Purchaser and the
Company from and against, and shall compensate and reimburse
the Purchaser and the Company for, all Damages which are
directly or indirectly suffered or incurred by the Purchaser
or the Company in respect of any transfer of CNHL shares as
provided for in Section 10A.1.
10. MISCELLANEOUS PROVISIONS
10.1 Further Assurances
Each party hereto shall execute and/or cause to be delivered
to each other party hereto such instruments and other
documents, and shall take such other lawful actions within its
power, as such other party may reasonably request (prior to,
at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
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10.2 Fees and Expenses
Each party shall bear its own expenses of and incidental to
the negotiation leading to the entering into of this Agreement
all the Transaction Agreement, and the preparation, execution
and performance of such agreement.
10.3 Attorneys' Fees
If any legal action or other legal proceeding relating to any
of the Transactional Agreements or the enforcement of any
provision of any of the Transactional Agreements is brought
against any party hereto, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the
prevailing party may be entitled).
10.4 Notices
Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and
received when delivered (by hand, by registered mail, by
courier or express delivery service or by facsimile) to the
address or facsimile number set forth beneath the name of such
party below (or to such other address or facsimile number as
such party shall have specified in a written notice given to
the other parties hereto):
If to the Vendor : ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇
Attention : ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Facsimile : (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to : ▇▇ ▇▇▇ ▇▇-▇▇▇
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Equinox House
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▇▇▇ ▇▇▇▇▇▇▇
Attention : ▇▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇
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Facsimile : (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Purchaser: Asia Online - New Zealand Limited
23rd Floor, Citicorp Centre
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇
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Attention : Mr. Ed. ▇▇▇▇▇▇▇
Facsimile : (▇▇▇) ▇▇▇▇ ▇▇▇▇
with a copy to : ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention : ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile : (▇▇▇) ▇▇▇▇ ▇▇▇▇
10.5 Time of the Essence
Time is of the essence of this Agreement.
10.6 Headings
The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this
Agreement.
10.7 Counterparts
This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
10.8 Governing Law; Venue
(a) This Agreement and all definitive Agreements
contained herein shall be construed in accordance
with, and governed in all respects by, the laws of
New York, USA, and shall be based on U.S. style
transaction documents unless otherwise dictated by
local procedural laws (without giving effect to
principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating
to this Agreement or the enforcement of any provision
of this Agreement may be brought or otherwise
commenced in any state or federal court located in
the County of New York, New York, USA. Each party to
this Agreement:
(i) expressly and irrevocably consents and
submits to the jurisdiction of each state
and federal court located in the County of
New York, New York, USA (and each appellate
court
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located in the State of New York, USA) in
connection with any such legal proceeding;
(ii) agrees that each state and federal court
located in the County of New York, New York,
USA shall be deemed to be a convenient
forum; and
(iii) agrees not to assert (by way of motion, as a
defense or otherwise), in any such legal
proceeding commenced in any state or federal
court located in the County of New York, New
York, USA, any claim that such party is not
subject personally to the jurisdiction of
such court, that such legal proceeding has
been brought in an inconvenient forum, that
the venue of such proceeding is improper or
that this Agreement or the subject matter of
this Agreement may not be enforced in or by
such court.
(c) The Vendor agrees that, if any Proceeding is
commenced against any Indemnitee by any Person in or
before any court or other tribunal anywhere in the
world, then such Indemnitee may proceed against the
Vendor in such court or other tribunal with respect
to any indemnification claim or other claim arising
directly or indirectly from or relating directly or
indirectly to such Proceeding or any of the matters
alleged therein or any of the circumstances giving
rise thereto.
(d) Nothing contained in Section 10.8(b) or 10.8 (c)
shall be deemed to limit or otherwise affect the
right of any Indemnitee to commence any legal
proceeding or otherwise proceed against the Vendor in
any other forum or jurisdiction.
(e) The Vendor irrevocably waives the right to a jury
trial in connection with any legal proceeding
relating to this Agreement or the enforcement of any
provision of this Agreement.
10.9 Successors and Assigns
This Agreement shall be binding upon: the Vendor and the
Purchaser and their respective successors and assigns (if
any). This Agreement shall inure to the benefit of the
Purchaser and its successors and assigns (if any). The
Purchaser may freely assign any or all of its rights under
this Agreement (including its indemnification rights under
Sections 8 and 9), in whole or in part, to any other Person
without obtaining the consent or approval of any other party
hereto or of any other Person.
10.10 Remedies Cumulative; Specific Performance
The rights and remedies of the parties hereto shall be
cumulative (and not alternative). The Vendor agrees that:
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(a) in the event of any Breach or threatened Breach by
the Vendor of any covenant, obligation or other
provision set forth in this Agreement, the Purchaser
shall be entitled (in addition to any other remedy
that may be available to it) to (i) a decree or order
of specific performance or mandamus to enforce the
observance and performance of such covenant,
obligation or other provision, and (ii) an injunction
restraining such Breach or threatened Breach; and
(b) the Purchaser shall not be required to provide any
bond or other security in connection with any such
decree, order or injunction or in connection with any
related action or Proceeding.
10.11 Waiver
(a) No failure on the part of any Person to exercise any
power, right, privilege or remedy under this
Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy
under this Agreement, shall operate as a waiver of
such power, right, privilege or remedy; and no single
or partial exercise of any such power, right,
privilege or remedy shall preclude any other or
further exercise thereof or of any other power,
right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim
arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the
waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such Person;
and any such waiver shall not be applicable or have
any effect except in the specific instance in which
it is given.
10.12 Amendments
This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly
executed and delivered on behalf of the Purchaser and the
Vendor.
10.13 Severability
In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful,
void or unenforceable to any extent, the remainder of this
Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to
be invalid, unlawful, void or unenforceable, shall not be
impaired or otherwise affected and shall continue to be valid
and enforceable to the fullest extent permitted by law.
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10.14 Parties in Interest
None of the provisions of this Agreement is intended to
provide any rights or remedies to any Person other than the
parties hereto and their respective successors and assigns (if
any).
10.15 Entire Agreement
The Transactional Agreements set forth the entire
understanding of the parties relating to the subject matter
thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject
matter thereof.
10.16 Construction
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the
plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter
genders; and the neuter gender shall include the
masculine and feminine genders.
(b) The parties hereto agree that any rule of
construction to the effect that ambiguities are to be
resolved against the drafting party shall not be
applied in the construction or interpretation of this
Agreement.
(c) As used in this Agreement, the words "include" and
"including", and variations thereof, shall not be
deemed to be terms of limitation, but rather shall be
deemed to be followed by the words "without
limitation".
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended
to refer to Sections of this Agreement and Exhibits
to this Agreement.
10.17 Guarantee
The Purchaser shall immediately following Closing use its Best
Efforts and procure the Company to use its Best Efforts to
procure the release of the guarantees given by the Vendor:
(a) to SunRentals, a division of Sun Microsystems (NZ)
Limited; and
(b) to The National Bank of New Zealand Limited in
relation to the Company's banking facilities,
and until such release is obtained the Purchaser shall
indemnify the Vendor from and against, and shall compensate
and reimburse the Vendor for, all Damages which are directly
or indirectly suffered or incurred by the Vendor in respect of
such guarantees.
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10.18 Legends
To the extent applicable, each certificate or other document
evidencing any of the Asia Online stock shall be endorsed with
the legends set forth below:
(a) The following legend under the Securities Act:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, AND MAY NOT BE SOLD,
TRANSFERRED, ASSIGNED, PLEDGED, OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED
UNDER SUCH ACT, OR UNLESS THE COMPANY HAS
RECEIVED AN OPINION OF COUNSEL OR OTHER
EVIDENCE SATISFACTORY TO THE COMPANY AND ITS
COUNSEL, THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) As to Regulation S Securities, the following legend
under the Securities Act:
"THE SECURITIES REPRESENTED HEREBY HAVE BEEN
ACQUIRED PURSUANT TO REGULATION S OF THE
SECURITIES ACT OF 1933, AS AMENDED (THE
`ACT'), AND MAY NOT BE SOLD, MORTGAGED,
PLEDGED, HYPOTHECATED OR OTHERWISE
TRANSFERRED EXCEPT IN ACCORDANCE THEREWITH.
IN ADDITION, NO HEDGING TRANSACTION MAY BE
CONDUCTED WITH RESPECT TO THESE SECURITIES
UNLESS SUCH TRANSACTIONS ARE IN COMPLIANCE
WITH THE ACT."
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10.19 Lock Up
The Vendor hereby undertakes that the Vendor shall not sell,
transfer, make any short sale of, grant any option for the
purchase of, or enter into any hedging or similar transaction
with the same economic effect as a sale, or otherwise reduce
its risk of ownership or investment in, any common stock (or
other securities) of Asia Online held by the Vendor (other
than those included in the registration) for a period (if any)
specified by the representative of the underwriters of common
stock (or other securities) of Asia Online with respect to
each such transaction not to exceed one hundred eighty (180)
days following the effective date of a registration statement
of Asia Online filed under the Securities Act. Asia Online may
impose stop-transfer instructions with respect to the shares
of common stock (or other securities) subject to the foregoing
restriction until the end of said one hundred eighty (180) day
period. The Vendor agrees to execute and deliver such other
agreements as may be reasonably requested by Asia Online or
the underwriter which are consistent with the foregoing or
which are necessary to give further effect thereto. In
addition, if requested by Asia Online or the representative of
the underwriters of common stock (or other securities) of Asia
Online, the Vendor shall provide, within ten (10) days of such
request, such information as may be required by Asia Online or
such representative in connection with the completion of any
public offering of Asia Online's securities pursuant to a
registration statement filed under the Securities Act.
10.20 Indemnity
The Company has entered into an agreement (the "Dissolution
Agreement") with Akiko International Limited providing for the
dissolution of the partnership known as "WebNZ". The Vendor
shall indemnify each of the Purchaser and the Company from and
against, and shall compensate and reimburse the Company for
all Damages which are directly or indirectly suffered or
incurred by the Purchaser or the Company as a result of the
Liabilities assumed, suffered or incurred by the Company under
the Dissolution Agreement exceeding NZ$300,000.
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The parties hereto have caused this Agreement to be executed and delivered as of
the date stated at the commencement hereof.
PURCHASER : ASIA ONLINE - NEW ZEALAND LIMITED
By : /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------
Name
President and CEO
---------------------
Title
VENDOR
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION TRANSACTION "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale or other disposition of
all or any portion of the Company's
business or assets (other than in
the Ordinary Course of Business);
(b) the issuance, sale or other
disposition of (i) any capital
stock of the Company, (ii) any
option, call, warrant or right
(whether or not immediately
exercisable) to acquire any capital
stock of the Company, or (iii) any
security, instrument or obligation
that is or may become convertible
into or exchangeable for any
capital stock of the Company; or
(c) any merger, consolidation, business
combination, share exchange,
reorganization or similar
transaction involving the Company.
AGREEMENT "Agreement" shall mean the Share Sale and
Purchase Agreement to which this Exhibit A
is attached (including the Disclosure
Schedule), as it may be amended from time to
time.
BEST EFFORTS "Best Efforts" shall mean the efforts that a
prudent Person desiring to achieve a
particular result would use in order to
ensure that such result is achieved as
expeditiously as possible.
BREACH There shall be deemed to be a "Breach" of a
representation, warranty, covenant,
obligation or other provision if there is or
has been (a) any inaccuracy in or breach of,
or any failure to comply with or perform,
such representation, warranty, covenant,
obligation or other provision, or (b) any
claim (by any Person) or other circumstance
that is inconsistent with such
representation, warranty, covenant,
obligation or other provision; and the term
"Breach" shall be deemed to refer to any
such inaccuracy, breach, failure, claim or
circumstance.
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BUSINESS DAY "Business day" means a day (excluding
Saturday) when banks are open for business
in both Hong Kong and New Zealand.
CLAIM AMOUNT "Claim Amount" means the amount the Company
or any subsidiary is or may be required to
pay in Tax as a result of a Tax Claim.
CLOSING "Closing" shall have the meaning specified
in Section 1.3(a) of the Agreement.
CLOSING DATE "Closing Date" shall have the meaning
specified in Section 1.3(a) of the
Agreement.
COMPANY "Company" shall mean the Internet Company of
New Zealand Limited
COMPANY CONTRACT "Company Contract" shall mean any Contract:
(a) to which the Company is a party;
(b) by which the Company or any of its
assets is or may become bound or
under which the Company has, or may
become subject to, any obligation;
or
(c) under which the Company has or may
acquire any right or interest.
COMPANY FINANCIAL STATEMENTS "Company Financial Statements" shall have
the meaning specified in Section 2.8(a) of
the Agreement.
COMPANY PLAN "Company Plan" shall mean any Current
Benefit Plan or Past Benefit Plan.
COMPANY RETURNS "Company Returns" shall have the meaning
specified in Section 2.21(b) of the
Agreement.
CONSENT "Consent" shall mean any approval, consent,
ratification, permission, waiver or
authorization (including any Governmental
Authorization).
CONTRACT "Contract" shall mean any written, oral,
implied or other agreement, contract,
understanding, arrangement, instrument,
note, guaranty, indemnity, representation,
warranty, deed, assignment, power of
attorney, certificate, purchase order, work
order, insurance policy,
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benefit plan, commitment, covenant,
assurance or undertaking of any nature.
CURRENT BENEFIT PLAN "Current Benefit Plan" shall mean any
employee benefit plan that is currently in
effect.
CORE BUSINESS "Core Business" means the services performed
by the Company that (a) facilitate internet
access provision by means of dedicated or
dial-up telecommunications lines; (b)
provide facilities to host internet sites on
dedicated hardware operated by the Company;
or (c) provide such internet services as
electronic mail management and news group
services.
DAMAGES "Damages" shall include any loss, damage,
injury, decline in value, lost opportunity,
Liability, claim, demand, settlement,
judgment, award, fine, penalty, Tax, fee
(including any legal fee, expert fee,
accounting fee or advisory fee), charge,
cost (including any cost of investigation)
or expense of any nature.
DISCLOSURE SCHEDULE "Disclosure Schedule" shall mean the
Disclosure Schedule and attached documents
delivered to the Purchaser on behalf of the
Vendor, which are attached to the Agreement
in Exhibit I and which are incorporated in
the Agreement by reference.
ENCUMBRANCE "Encumbrance" shall mean any lien, pledge,
hypothecation, charge, mortgage, security
interest, encumbrance, equity, trust,
equitable interest, claim, preference, right
of possession, lease, tenancy, license,
encroachment, covenant, infringement,
interference, Order, proxy, option, right of
first refusal, pre-emptive right, community
property interest, legend, defect,
impediment, exception, reservation,
limitation, impairment, imperfection or
retention of title, condition or restriction
of any nature (including any restriction on
the voting of any security, any restriction
on the transfer of any security or other
asset, any restriction on the receipt of any
income derived from any asset, any
restriction on the use of any asset and any
restriction on the possession, exercise or
transfer of any other attribute of ownership
of any asset).
ENTITY "Entity" shall mean any corporation
(including any non-profit corporation),
general partnership, limited partnership,
limited liability partnership, joint
venture, estate, trust, cooperative,
foundation, society, political
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party, union, company (including any limited
liability company or joint stock company),
firm or other enterprise, association,
organization or entity.
EXCLUDED CONTRACT "Excluded Contract" shall mean any Company
Contract that:
(a) the Company has entered into in the
Ordinary Course of Business;
(b) is identical in all material
respects to one of the Standard
Form Agreements;
(c) has a term of less than 90 days or
may be terminated by the Company
(without penalty) within 90 days
after the delivery of a termination
notice by the Company; and
(d) does not contemplate or involve the
payment of cash or other
consideration in an amount or
having a value in excess of
NZ$10,000.
GAAP "GAAP" shall mean the accounting standards
applicable as required by the Financial
Reporting ▇▇▇ ▇▇▇▇ and the Financial
Reporting Standards of the Institute of
Chartered Accountants in New Zealand for the
preparation and content of financial
statements, directors' reports and auditor's
reports; and generally accepted and
consistently applied accounting principles
and practices in New Zealand (except those
inconsistent with any of the foregoing);
GOVERNMENTAL AUTHORIZATION "Governmental Authorization" shall mean any:
(a) permit, license, certificate,
franchise, concession, approval,
consent, ratification, permission,
clearance, confirmation,
endorsement, waiver, certification,
designation, rating, registration,
qualification or authorization that
is, has been or may in the future
be issued, granted, given or
otherwise made available by or
under the authority of any
Governmental Body or pursuant to
any Legal Requirement; or
(b) right under any Contract with any
Governmental Body.
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GOVERNMENTAL BODY "Governmental Body" shall mean any:
(a) commonwealth, state, province,
nation, principality, territory,
county, municipality, district or
other jurisdiction of any nature;
(b) federal, state, local, municipal,
foreign or other government;
(c) governmental or quasi-governmental
authority of any nature (including
any governmental division,
subdivision, department, agency,
bureau, branch, office, commission,
council, board, instrumentality,
officer, official, representative,
organization, unit, body or Entity
and any court or other tribunal);
(d) multi-national organization or
body; or
(e) individual, Entity or body
exercising, or entitled to
exercise, any executive,
legislative, judicial,
administrative, regulatory, police,
military or taxing authority or
power of any nature.
INCEPTION "Inception" has the meaning set out in
Section 2.8(b).
INTELLECTUAL PROPERTY "Intellectual Property" has the meaning set
out in Section 2.5(d).
INDEMNITEES "Indemnitees" means the Purchaser, its
shareholders and subsidiaries and after
Closing, the Company, and their respective
directors, officers and agents.
KNOWLEDGE An individual shall be deemed to have
"Knowledge" of a particular fact or other
matter if:
(a) such individual is actually aware
of such fact or other matter; or
(b) a prudent individual could be
expected to discover or otherwise
become aware of such fact or other
matter in the course of conducting
a diligent and comprehensive
investigation concerning the truth
or existence of such fact or other
matter.
The Vendor, Purchaser or the Company shall
be deemed to have "Knowledge" of a
particular fact or other matter if any
officer, employee or other Representative of
that
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Person has knowledge of such fact or other
matter after making due and careful enquiry.
LEGAL REQUIREMENT "Legal Requirement" shall mean any federal,
state, local, municipal, foreign or other
law, statute, legislation, constitution,
principle of common law, resolution,
ordinance, code, edict, decree,
proclamation, treaty, convention, rule,
regulation, ruling, directive,
pronouncement, requirement, specification,
determination, decision, opinion or
interpretation that is, has been or may in
the future be issued, enacted, adopted,
passed, approved, promulgated, made,
implemented or otherwise put into effect by
or under the authority of any Governmental
Body.
LIABILITY "Liability" shall mean any debt, obligation,
duty or liability of any nature (including
any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent, indirect,
conditional, implied, vicarious, derivative,
joint, several or secondary liability),
regardless of whether such debt, obligation,
duty or liability would be required to be
disclosed on a balance sheet prepared in
accordance with generally accepted
accounting principles and regardless of
whether such debt, obligation, duty or
liability is immediately due and payable.
MATERIAL ADVERSE EFFECT For the purposes of the Agreement, "Material
Adverse Effect" as it applies to the Company
or Purchaser means an adverse effect on the
business, operations, condition (financial
or otherwise), assets or prospects of the
Company or Purchaser, taken as a whole,
which is material. For the purposes of this
Agreement, documents, objects, effects,
conditions, events or occurrences shall be
deemed "material" if they involve amounts,
or result in Purchaser Damages (as
hereinafter defined), in excess of NZ$10,000
(or equivalent in any other currency)
individually or NZ$100,000 when aggregated
with other Purchaser Damages incurred due to
a breach of a representation or warranty by
the Vendor or if it in any way materially
and adversely affect the value of, or the
Company's rights, title or interest in, any
of its assets. For purposes of this
Agreement, "Purchaser Damages" means any
material loss, expense, liability, or other
damages, including the reasonable costs of
investigation, interest, penalties and
attorney's and accountant's fees.
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ORDER "Order" shall mean any:
(a) order, judgment, injunction, edict,
decree, ruling, pronouncement,
determination, decision, opinion,
verdict, sentence, subpoena, writ
or award that is, has been or may
in the future be issued, made,
entered, rendered or otherwise put
into effect by or under the
authority of any court,
administrative agency or other
Governmental Body or any arbitrator
or arbitration panel; or
(b) Contract with any Governmental Body
that is, has been or may in the
future be entered into in
connection with any Proceeding.
ORDINARY COURSE OF BUSINESS An action taken by or on behalf of the
Company shall not be deemed to have been
taken in the "Ordinary Course of Business"
unless:
(a) such action is recurring in nature,
is consistent with the Company's
past practices and is taken in the
ordinary course of the Company's
normal day-to-day operations;
(b) such action is taken in accordance
with sound and prudent business
practices; and
(c) such action is not required to be
authorized by the Company's
shareholders, the Company's board
of directors or any committee of
the Company's board of directors
and does not require any other
separate or special authorization
of any nature.
PERSON "Person" shall mean any individual, Entity
or Governmental Body.
PRE-CLOSING PERIOD "Pre-Closing Period" shall mean the period
commencing as of the date of the Agreement
and ending on the Closing Date.
PROCEEDING "Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding
(including any civil, criminal,
administrative, investigative or appellate
proceeding and any informal proceeding),
prosecution, contest, hearing, inquiry,
inquest, audit, examination or investigation
that is, has been or may in the future be
commenced, brought, conducted or heard by or
before,
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or that otherwise has involved or may
involve, any Governmental Body or any
arbitrator or arbitration panel.
PROPRIETARY ASSET "Proprietary Asset" shall mean any patent,
patent application, trademark (whether
registered or unregistered and whether or
not relating to a published work), trademark
application, trade name, fictitious business
name, service ▇▇▇▇ (whether registered or
unregistered), service ▇▇▇▇ application,
copyright (whether registered or
unregistered), copyright application, trade
secret, know-how, franchise, system, domain
name or internet address, computer software,
invention, design, blueprint, proprietary
product, technology, proprietary right or
other intellectual property right or
intangible asset.
PURCHASE PRICE "Purchase Price" shall have the meaning
specified in Section 1.2 of the Agreement.
REGULATION S "Regulation S" means Regulation S
promulgated by the SEC under the Securities
Act;
RELATED PARTY Each of the following shall be deemed to be
a "Related Party":
(a) the Vendor;
(b) each member of the family of the
Vendor; and
(c) any Entity in which any one of the
parties referred to in clauses
"(a)" and "(b)" above holds (or in
which more than one of such parties
collectively hold), beneficially or
otherwise, a material voting,
proprietary or equity interest.
RELEVANT SCHEME "Relevant Scheme" shall mean: all
superannuation schemes, retirement benefit
schemes or other pension schemes or
arrangements; and all employment benefit
plans, programs or arrangements including
medical, dental or life insurance to which
the Company or any of its subsidiaries is a
party or which the Company or any of its
subsidiaries makes available or obtains for
its officers or employees or former officers
or employees;
REPRESENTATIVES "Representatives" shall mean officers,
directors, employees, agents, attorneys,
accountants, advisors and representatives.
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SALE SHARES "Sale Shares" shall have the meaning as
specified in the Recitals to the Agreement.
SCHEDULED CLOSING TIME "Scheduled Closing Time" shall have the
meaning specified in Section 1.3(a) of the
Agreement.
SEC "SEC" means the United States Securities and
Exchange Commission;
SECURITIES ACT "Securities Act" means the United States
Securities Act of 1933, as amended, and the
rules and regulations promulgated
thereunder;
"SUBSIDIARY" "Subsidiary" has the meaning given to that
term in the Companies ▇▇▇ ▇▇▇▇ (New
Zealand).
TAX "Tax" shall mean any tax (including any
income tax, franchise tax, capital gains
tax, fringe benefit tax, estimated tax,
gross receipts tax, accident compensation
levies, gift duty, resident withholding tax,
non-resident withholding tax, non-resident
contractors withholding tax, value-added or
goods and services tax, surtax, excise tax,
ad valorem tax, transfer tax, stamp tax,
sales tax, use tax, land or property tax,
business tax, occupation tax, inventory tax,
occupancy tax, withholding tax or payroll
tax), levy, assessment, tariff, impost,
imposition, toll, duty (including any
customs duty), deficiency or fee, and any
related charge or amount (including any
fine, penalty or interest), that is, has
been or may in the future be (a) imposed,
assessed or collected by or under the
authority of any Governmental Body, or (b)
payable pursuant to any tax-sharing
agreement or similar Contract.
TAX CLAIM "Tax Claim" means a Warranty Claim made
under Section 9A.1.
TAX RETURN "Tax Return" shall mean any return
(including any information return), report,
statement, declaration, estimate, schedule,
notice, notification, form, election,
certificate or other document or information
that is, has been or may in the future be
filed with or submitted to, or required to
be filed with or submitted to, any
Governmental Body in connection with the
determination, assessment, collection or
payment of any Tax or in connection with the
administration,
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73
implementation or enforcement of or
compliance with any Legal Requirement
relating to any Tax.
TRANSACTIONAL AGREEMENTS "Transactional Agreements" shall mean:
(a) the Agreement; and
(b) the Employment Agreements referred
to in Section 1.3(b)(v) of the
Agreement.
TRANSACTIONS "Transactions" shall mean (a) the execution
and delivery of the respective Transactional
Agreements, and (b) all of the transactions
contemplated by the respective Transactional
Agreements, including:
(i) the sale of the Sale Shares by the
Vendor to the Purchaser in
accordance with the Agreement; and
(ii) the performance by the Vendor and
the Purchaser of their respective
obligations under the Transactional
Agreements and the exercise by the
Vendor and the Purchaser of their
respective rights under the
Transactional Agreements.
UNAUDITED ACCOUNTS DATE "Unaudited Accounts Date" has the meaning
set out in Section 2.8(a)(i).
UNAUDITED INTERIM ACCOUNTS DATE "Unaudited Interim Accounts Date" has the
meaning set out in Section 2.8(a)(ii).
UNITED STATES "United States" means the United States of
America, its territories and possessions,
any state of the United States and the
District of Columbia; and
US PERSON "US Person" has the meaning given to that
expression in Rule 902 of Regulation S.
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EXHIBIT C
LIST OF SHAREHOLDERS
SHAREHOLDER PROPORTIONS (%) SHARES CLASS
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 100% 1,000,000 Ordinary Shares
C-1