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EXHIBIT 2.7A
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INTERACT SHARE PURCHASE AND SUBSCRIPTION AGREEMENT
AMONG
ASIA ONLINE-AUSTRALIA PTY LTD
(ACN 089 444 691)
AND
THE PARTIES LISTED IN EXHIBIT C HERETO
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DATED AS OF OCTOBER 1, 1999
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▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Solicitors
Level 26, AMP Centre ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 525 ▇▇▇▇▇▇▇ Street
SYDNEY NSW 2000 ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Tel: (▇▇) ▇▇▇▇-▇▇▇▇ Tel: (▇▇) ▇▇▇▇-▇▇▇▇
Fax: (▇▇) ▇▇▇▇-▇▇▇▇ Fax: (▇▇) ▇▇▇▇-▇▇▇▇
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TABLE OF CONTENTS
Clauses and Headings Page
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1. Agreement to Purchase and Subscribe for Shares....................1
1.1 Sale and Purchase of Shares from the Vendors and
Subscription of Shares...................................1
1.2 Price of Sale Shares and Subscription Shares.............1
1.3 Closing..................................................2
2. Representations and Warranties of the Vendors.....................5
2.1 Organisation; Good Standing and Qualification............5
2.2 Certificate of Incorporation and Constitution Records....5
2.3 Capitalisation...........................................6
2.4 No Conflict..............................................7
2.5 Proprietary Rights; Proprietary Information and
Inventions Agreement.....................................7
2.6 Actions Pending..........................................8
2.7 Offering Valid...........................................8
2.8 Financial Position.......................................8
2.9 Absence of Changes Since 30 June 1999...................11
2.10 Title to Assets.........................................13
2.11 Bank Accounts...........................................13
2.12 Receivables; Major Customers............................14
2.13 Equipment, Etc..........................................14
2.14 Real Property...........................................15
2.15 Proprietary Assets......................................15
2.16 Year 2000...............................................16
2.17 Contracts...............................................16
2.18 Liabilities; Major Suppliers............................18
2.19 Compliance with Legal Requirements......................19
2.20 Governmental Authorisations.............................20
2.21 Governmental Action.....................................21
2.22 Tax Matters.............................................21
2.23 Employee and Labor Matters..............................23
2.24 Benefit Plans...........................................25
2.25 Sale of Products; Performance of Services...............26
2.26 Insurance...............................................26
2.27 Related Party Transactions..............................28
2.28 Certain Payments, Etc...................................28
2.29 Proceedings.............................................29
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2.30 Brokers.................................................30
2.31 The Vendors.............................................30
2.32 Full Disclosure.........................................31
2.33 Insolvency Events.......................................32
2.34 Effect of Sale..........................................33
3. Representations and Warranties of Purchaser......................34
3.1 Acquisition of Shares...................................34
3.2 Authority; Binding Nature of Agreement..................34
4. Pre-Closing Covenants of the Vendors.............................34
4.1 Access and Investigation................................34
4.2 Operation of Business...................................35
4.3 Filings and Consents....................................37
4.4 Notification; Updates to Disclosure Schedule............37
4.5 Payment of Indebtedness by Related Parties..............38
4.6 No Negotiation..........................................38
4.7 Best Efforts............................................39
4.8 Confidentiality.........................................39
5. Conditions Precedent to Purchaser's Obligation to Close..........39
5.1 Satisfactory Completion of Pre-Acquisition Review.......39
5.2 Accuracy of Representations.............................40
5.3 Performance of Obligations..............................40
5.4 Consents................................................40
5.5 No Adverse Change.......................................40
5.6 Additional Documents....................................40
5.7 No Proceedings..........................................41
5.8 No Claim Regarding Stock Ownership or Sale Proceeds.....41
5.9 No Prohibition..........................................41
6. Conditions Precedent to the Vendors' and Company's Obligations to
Close............................................................41
6.1 Accuracy of Representations.............................42
6.2 Purchaser's Performance.................................42
6.3 No Injunction...........................................42
7. Termination......................................................42
7.1 Termination Events......................................42
7.2 Termination Procedures..................................43
7.3 Effect of Termination...................................43
7.4 Non-exclusivity of Termination Rights...................43
8. Indemnification, Etc.............................................44
8.1 Survival of Representation and Covenants................44
8.2 Indemnification by the Vendors..........................44
8.3 Right to Require Cure of Breach.........................45
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8.4 No Contribution.........................................45
8.5 Interest................................................46
8.6 Setoff..................................................46
8.7 Non-exclusivity of Indemnification Remedies.............46
8.8 Defence of Third Party Claims...........................46
8.9 Exercise of Remedies by Indemnitees other than
Purchaser...............................................47
9. Restriction of the Vendors.......................................47
9.1 General obligations.....................................47
9.2 Restraints fair and reasonable..........................48
9.3 Severability............................................49
9.4 Vendors to Procure......................................49
9.5 Exceptions..............................................49
10. Guarantees of Directors..........................................49
10.1 Best Endeavours.........................................49
10.2 Indemnity...............................................49
11. Miscellaneous Provisions.........................................49
11.1 Further Assurances......................................49
11.2 Fees, Expenses and Stamp Duty...........................50
11.3 Attorneys' Fees.........................................50
11.4 Notices.................................................50
11.5 Headings................................................51
11.6 Counterparts............................................51
11.7 Governing Law; Venue....................................51
11.8 Successors and Assigns..................................51
11.9 Remedies Cumulative; Specific Performance...............52
11.10 Waiver..................................................52
11.11 Amendments..............................................52
11.12 Severability............................................52
11.13 Parties in Interest.....................................53
11.14 Entire Agreement........................................53
11.15 Construction............................................53
Exhibits
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EXHIBIT A Certain Definitions......................................A-1
EXHIBIT B [Not Used]...............................................*
EXHIBIT C List of Shareholders.....................................C-1
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EXHIBIT D List of Consultants and Independent Contractors..........*
EXHIBIT E List of Governmental Licenses, Permits, Orders, Etc......*
EXHIBIT F Form of Employment Agreement.............................*
EXHIBIT G Designated Senior Officers and Employees.................*
EXHIBIT H Rental Agreements........................................*
EXHIBIT I Constitution.............................................*
EXHIBIT J Shareholders Deed........................................*
EXHIBIT K Guarantors and Guarantees................................*
EXHIBIT L Proprietary Information and Inventions Deed..............*
* Exhibit omitted -- will be provided supplementally to the Commission upon
request.
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SHARE PURCHASE AND SUBSCRIPTION AGREEMENT RELATING TO
INTERACT TECHNOLOGY GROUP PTY LTD
(ACN 077 153 792)
This Share Purchase and Subscription Agreement (the "Agreement") is entered into
as of 1st October, 1999, by and among the parties listed in Part I of Exhibit C
hereto (collectively referred to as the "Vendors") Asia Online-Australia Pty Ltd
(ACN 089 444 691) (the "Purchaser") and Interact Technology Group Pty Ltd (ACN
077 153 792) (the "Company").
RECITALS:
WHEREAS, the Vendors own the entire issued share capital of INTERACT TECHNOLOGY
GROUP PTY LTD ACN (077 153 792).
WHEREAS, the Vendors wish to sell and the Purchaser wishes to purchase 50% of
the issued shares in the capital of the Company (the "Sale Shares") and the
Purchaser wishes to subscribe for a further 10% of the shares in the capital of
the Company.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO PURCHASE AND SUBSCRIBE FOR SHARES
1.1 Sale and Purchase of Shares from the Vendors and Subscription
of Shares
At the Closing each of the Vendors shall sell, assign,
transfer and deliver to the Purchaser, and the Purchaser shall
purchase, the shares in the Company listed beside each
Vendor's name in Exhibit C, on the terms and subject to the
conditions set forth in this Agreement. At the Closing, the
Purchaser shall subscribe for the shares in the Company listed
in Part II of Exhibit C (the "Subscription Shares"), and the
Vendors shall cause the Company to allot and issue the
Subscription Shares, on the terms and subject to the
conditions set forth in this Agreement.
1.2 Price of Sale Shares and Subscription Shares
The purchase price for the Sale Shares and the Subscription
Shares shall be paid and satisfied at Closing as follows:
(a) in respect of the Sale Shares, TWO MILLION AND EIGHTY
THREE THOUSAND AND EIGHT AUSTRALIAN DOLLARS
(A$2,083,008) to be paid to the Vendors of the Sale
Shares at Closing in the proportions set out beside
their respective names in Exhibit C by bank cheque or
by telegraphic transfer to the bank accounts
nominated
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in writing by each of the Vendors to the Purchaser
not less than four business days prior to Closing;
and
(b) in respect of the Subscription Shares, by the
Purchaser undertaking the ongoing funding of the
Company as set out in clause 9 of the Shareholders
Deed.
1.3 Closing
(a) The closing of the sale of the Sale Shares to the
Purchaser and the issue of the Subscription Shares to
the Purchaser (the "Closing") shall take place at the
offices of the Purchaser's Australian counsel, ▇▇▇▇▇
& ▇▇▇▇▇▇▇▇, Level 26 A.M.P. Centre, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ at 10:00 a.m.
(Sydney Time) on the later of 22 September, 1999 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 Vendors shall:
(i) deliver to the Purchaser the certificates
representing the Sale Shares, duly executed
instruments of transfer to transfer title to
the Sale Shares to the Purchaser (or its
nominees) and certified copies of the
resolutions of the Boards of Directors of
those Vendors which are corporations
authorising the transfer of the Sale Shares
registered in their names and giving
authority to execute the relevant
instrument(s) of transfer on behalf of the
relevant Vendor to the party who executed
them;
(ii) duly executed powers of attorney (in deed
form) from each Vendor in favour of the
Purchaser (or its nominee(s)) generally in
respect of the Sale Shares sold by that
Vendor under this Agreement enabling the
Purchaser (or its nominee(s)) to attend and
vote at general meetings of the Company;
(iii) any waiver, consent or other document
necessary to give the Purchaser (or its
nominee(s)) full legal and beneficial
ownership of the Sale Shares;
(iv) deliver to the Purchaser a certified copy of
the written consent of the lessor of the
lease of Torrens Street, Braddon, Australian
Capital Territory confirming the Lessor's
approval of the assignment of the lease of
the premises arising out of the Purchaser's
acquisition of the Sale Shares;
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(v) deliver to the Purchaser fully executed
copies of the Rental Agreements annexed as
Exhibit H;
(vi) cause the Company to allot and issue 75 A
Class fully paid ordinary shares in the
Company to the Purchaser (or its
nominees(s)) (representing when aggregated
with the Sales Shares 60% of the total
number of shares in issue immediately
following such issue) and deliver to the
Purchaser (or its nominees(s)) a share
certificate in respect of those shares;
(vii) deliver to the Purchaser:
(A) employment contracts in the form of
the drafts annexed as Exhibit F,
entered into between the Company
and the senior officers and
employees designated in Exhibit G;
(B) copies of the Proprietary
Information and Inventions Deed
executed by each of ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇.
(viii) deliver to the Purchaser a document signed
by each Vendor confirming that at Closing
each Vendor has been repaid or has paid (or
has otherwise discharged in full) all loans
and other non-employee related indebtedness
owing by that Vendor to the Company or owed
by the Company to that Vendor;
(ix) execute and deliver to the Purchaser a
certificate (the "Closing Certificate")
setting forth the Vendors' representations
and warranties that (A) each of the
representations and warranties made by the
Vendors in this Agreement was accurate in
all respects as of the date of this
Agreement, (B) each of the representations
and warranties made by the Vendors in this
Agreement is accurate in all respects as of
the Closing Date as if made on the Closing
Date, (C) each of the covenants and
obligations that the Vendors is required to
have complied with or performed pursuant to
this Agreement at or prior to the Closing
has been duly complied with and performed in
all respects, and (D) each of the conditions
set forth in Sections 5.3, 5.4, 5.7 and 5.8
has been satisfied in all respects;
(x) if so requested by the Purchaser, ▇▇▇▇
▇▇▇▇▇▇ resigns from his position as a
director and officer of the Company and any
subsidiary, with effect from the end of the
meetings held pursuant to Section 1.4 and
acknowledging in a form reasonably
acceptable to the Purchaser that he has no
claim against the Company or any of its
subsidiaries for compensation for loss of
office or otherwise; and
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(xi) procure the revocation or amendment of the
bank signing mandates and authorities and
any power of attorney given by the Company
as the Purchaser notifies to the Vendors
shall be revoked.
(c) Subject to the Vendors duly complying with the
requirements of Section 1.3(b), at the Closing, the
Purchaser shall pay each Vendor the proportion
(expressed as a percentage) of the Purchase Price
specified beside their respective names in Exhibit C,
in each case by bank cheque or through telegraphic
transfer to the bank account nominated by each Vendor
in writing not less than four business days prior to
Closing and deliver the executed Promissory Note to
the Company.
(d) At the Closing, the parties shall execute and deliver
to each other counterpart copies of the Shareholders
Deed. The Vendors shall procure execution and
delivery of the Shareholders Deed by the Company.
1.4 Meetings
On or before Closing, the Vendors shall cause to be held a meeting of
the directors and/or shareholders of the Company at which the following
resolutions are passed:
(a) subject to payment of stamp duty (if any), the
approval of the registration of the transfers of the
Sale Shares;
(b) approve and authorise the allotment and issue of the
shares referred to in Section 1.3(b)(vi) in favour of
the Purchaser (or its nominees(s));
(c) appoint persons nominated by the Purchaser as
directors, secretary and auditor of the Company with
effect from the end of the meeting;
(d) the cancellation of the existing share certificates
for the Sales Shares;
(e) the issue of new certificates for the Sale Shares in
favour of the Purchaser (or its nominee(s));
(f) the issue of a certificate for the Subscription
Shares in favour of the Purchaser (or its
nominee(s));
(g) the approval and adoption of the Constitution as a
replacement to the existing constitution.
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2. REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The Vendors hereby jointly and severally represent and warrant (except
where this Section expressly provides for the representations and
warranties to be given severally, in which case they are given
severally), to and for the benefit of the Purchaser, as follows:
2.1 Organisation; Good Standing and Qualification
(a) The Company is a corporation duly organised, validly
existing and in good standing under the laws of the
Australian Capital Territory, Australia. 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) 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 name
"Interact Technology Group".
(c) Part 2.1 of the Disclosure Schedule accurately sets
forth (i) the names of the members of the Company's
board of directors, (ii) the names of the members of
each committee of the Company's board of directors,
and (iii) the names and titles of the Company's
officers.
(d) 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.
(e) 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.
2.2 Certificate of Incorporation and Constitution Records
(a) The Vendors have delivered to the Purchaser accurate
and complete copies of:
(i) the Company's certificate of incorporation
and constitution, including all amendments
thereto;
(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
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Company, the board of directors of the
Company and all committees of the board of
directors of the Company.
There have been no meetings or other proceedings of
the shareholders of the Company, the board of
directors of the Company or any committee of 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 of the
provisions of the Company's constitution or of any
resolution adopted by the Company's shareholders, the
Company's board of directors or any committee of 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 direct control of the Company. The
Company has in place an adequate and appropriate
system of internal controls.
2.3 Capitalisation
(a) The issued share capital of the Company, immediately
prior to the Closing, will consist of 300 shares
(divided into 150 A class shares and 150 B class
shares). All issued and outstanding shares of the
Company's issued capital (a) have been validly issued
to the persons listed in Part I of Exhibit C hereto,
(b) are fully paid and nonassessable, and (c) were
issued in compliance with all applicable Legal
Requirements concerning the issuance of securities.
The rights, preferences, privileges and restrictions
of the Shares are as stated in the Constitution.
(b) The Vendors severally warrant that they each have,
and the Purchaser will acquire at the Closing, good
and valid title to the Sale Shares listed beside the
name of each Vendor (representing not less than 50%
of the total outstanding voting equity of the Company
on a fully diluted basis immediately following such
acquisition) in Part I of Exhibit C free and clear of
any Encumbrances.
(c) The Vendors have each delivered to the Purchaser
accurate and complete copies of the certificates
evidencing their respective title to the Sale Shares.
(d) There is no:
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(i) outstanding subscription, option, call,
warrant or right (whether or not currently
exercisable) to acquire any shares or other
securities of the Company (except as
contemplated under this Agreement);
(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) Except as set out in Part 2.3 of the Disclosure
Schedule, the Company has never repurchased, redeemed
or otherwise reacquired any shares or other
securities.
2.4 No Conflict
Except as set out in Part 2.4 of the Disclosure Schedule,
neither the execution and delivery of this Agreement by the
Vendors or the Company nor the consummation by the Vendors or
the Company 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) 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) 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 are the Vendors aware
of any basis for the foregoing.
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(b) The Vendors do 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.
(c) To the best of the Vendors' Knowledge, the Company
owns, licences or has rights to all computer software
and (including the Beaver and Financial Management
Information System Software) data and documentation.
used in the Company's business. 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) mask works and
registrations and applications for registration
thereof; (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").
(d) 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 that would have a material adverse
effect on the business or assets of the Company. To
the Knowledge of the Vendors, 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
There is no action, suit or proceeding pending or, to the best
Knowledge of the Vendors, 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
None of the Vendors, nor any agent on their 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 Vendors to the Purchaser (or its
nominee(s)) within the registration provisions of the
Corporations Law of Australia.
2.8 Financial Position
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(a) Except as disclosed in Part 2.8 of the Disclosure
Schedule, the Vendors have delivered to the Purchaser
the following financial statements and notes
(collectively, the "the Company Financial
Statements"):
(i) for the Company in respect of the financial
year ended 30 June, 1998 (the "1998 Accounts
Date"), its unaudited profit and loss
statement for the financial year ending on
the 1998 Accounts Date and its unaudited
balance sheet as at the 1998 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 or balance sheet; and
(ii) for the Company in respect of the financial
year ended 30 June, 1999 (the "1999 Accounts
Date"), its unaudited profit and loss
statement for the financial year ending on
the 1999 Accounts Date and its unaudited
balance sheet (the "Unaudited Balance
Sheet") as at the 1999 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 or balance sheet.
(b) Except as disclosed in Part 2.8 of the Disclosure
Schedule, all of the Company Financial Statements are
true and fair and present fairly the financial
position of the Company in respect of the periods to
which they relate and the results of operations,
changes in shareholders' equity of the Company for
the relevant periods. Except as disclosed in Part 2.8
of the Disclosure Schedule, 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 of the Disclosure
Schedule, at the date of the Unaudited Balance Sheet,
(i) the Company had no Liabilities required by GAAP
to be provided for in the Unaudited Balance Sheet or
described in the notes thereto which were not
provided for in the Unaudited Balance Sheet or
described in the notes thereto and (ii) all reserves
established by the Company and set forth in the
Unaudited Balance Sheet were adequate for the
purposes for which they were established.
(d) Except as disclosed in Part 2.8(d) in the Disclosure
Schedule, since the date of the Unaudited Balance
Sheet:
(i) the Company has not entered into any
transaction which was not in the Ordinary
Course of its Business;
(ii) there has been no material adverse change in
the condition (financial or otherwise) of
the Company;
(iii) there has been no damage to, or destruction
or loss of, physical property (whether or
not covered by insurance) which may have
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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 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;
(vi) neither the number of subscribers for the
services offered by the Company nor the
revenues generated therefrom have decreased
since 31 July 1999;
(vii) there has been no resignation or termination
of employment of any officer or key employee
of the Company;
(viii) there has been no labour dispute or
industrial disruption involving the Company
or its employees and none is pending or, to
the best of the knowledge of any Vendor,
threatened;
(ix) 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;
(x) there have been no loans made by the Company
to its shareholders, employees, officers and
directors other than travel advances and
office advances made in the Ordinary Course
of Business;
(xi) 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;
(xii) there has been no sale, assignment or
transfer of any tangible asset of the
Company except in the Ordinary Course of
Business and no sale, assignment or transfer
of any patent, trademark, trade secret or
other intangible asset of the Company; and
(xiii) except in the Ordinary Course of Business,
the Company has not incurred any Liabilities
that (i) individually exceed A$50,000 or
(ii) in the aggregate exceed A$100,000.
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16
(e) Except as set out in Part 2.8 of the Disclosure
Schedule or otherwise noted in this Agreement, the
Company has good and marketable title to its
properties and assets. Such properties and assets are
not subject to Encumbrance 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. 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 Vendors'
knowledge, there exists no default thereunder or
occurrence or condition which could result in a
default thereunder or termination thereof. The
Company's buildings, equipment and other tangible
assets are in good operating condition and are
useable in the ordinary course of business, and the
Company owns, or has a valid leasehold interest in,
all assets necessary for the conduct of its business
as presently conducted.
2.9 Absence of Changes Since 30 June 1999
Except as set forth in Part 2.9 of the Disclosure Schedule,
since 30 June 1999:
(a) there has not been any adverse change in the
Company's business, condition, assets, liabilities,
operations, financial performance, net income or
prospects (or in any aspect or portion thereof), and
no event has occurred that might have an adverse
effect on the Company's business, condition, assets,
liabilities, operations, financial performance, net
income or prospects (or on any aspect or portion
thereof);
(b) there has not been any loss, damage or destruction
to, or any interruption in the use of, any of the
Company's assets (whether or not covered by
insurance);
(c) the Company has not (i) declared, accrued, set aside
or paid any dividend or made any other distribution
in respect of any shares or (ii) repurchased,
redeemed or otherwise reacquired any shares or other
securities;
(d) the Company has not sold or otherwise issued any
shares or any other securities;
(e) the Company has not amended its certificate of
incorporation or Constitution and has not effected or
been a party to any Acquisition Transaction,
recapitalisation, reclassification of shares, share
consolidation or division, capital reduction, share
buy back or similar transaction;
(f) the Company has not purchased or otherwise acquired
any asset from any other Person, except for supplies
acquired by the Company in the Ordinary Course of
Business;
-11-
17
(g) the Company has not leased or licensed any asset from
any other Person;
(h) the Company has not made any capital expenditure over
A$50,000;
(i) the Company has not sold or otherwise transferred,
and has not leased or licensed, any asset to any
other Person except for products sold by the Company
from its inventory in the Ordinary Course of
Business;
(j) the Company has not written off as uncollectable, or
established any extraordinary reserve with respect
to, any account receivable or other indebtedness;
(k) the Company has not pledged or hypothecated any of
its assets or otherwise permitted any of its assets
to become subject to any Encumbrance;
(l) the Company has not made any loan or advance to any
other Person;
(m) the Company has not (i) established or adopted any
Employee Benefit Plan, or (ii) 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;
(n) 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;
(o) 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
interest, has been amended or terminated;
(p) 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;
(q) the Company has not discharged any Encumbrance or
discharged or paid any indebtedness or other
Liability, except for accounts payable that (i) are
reflected as current liabilities in the "liabilities"
column of the Unaudited Balance Sheet or have been
incurred by the Company since 30 June, 1999 in the
Ordinary Course of Business, and (ii) have been
discharged or paid in the Ordinary Course of
Business;
(r) the Company has not forgiven any debt or otherwise
released or waived any right or claim;
-12-
18
(s) the Company has not changed any of its methods of
accounting or accounting practices in any respect;
(t) the Company has not entered into any transaction or
taken any other action outside the Ordinary Course of
Business; and
(u) 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 "(c)"
through "(t)" above.
2.10 Title to Assets
(a) The Company owns, and has good, valid and marketable
title to, all assets purported to be owned by it,
including:
(i) all assets reflected on the Unaudited
Balance Sheet (except for inventory sold by
the Company since 30 June, 1999 in the
Ordinary Course of Business);
(ii) all assets acquired by the Company since 30
June, 1999 (except for inventory sold by the
Company, since 30 June, 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 2.10 of the Disclosure
Schedule, all of said assets are owned by the Company
free and clear of any Encumbrances.
(b) Part 2.10 of the Disclosure Schedule identifies all
assets that are being leased or licensed to the
Company.
2.11 Bank Accounts
Part 2.11 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;
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19
(c) a description of such account and the purpose for
which such account is used;
(d) the current balance in such account;
(e) the rate of interest being earned on the funds in
such account; and
(f) the names of all individuals authorised 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.
2.12 Receivables; Major Customers
(a) Part 2.12 of the Disclosure Schedule provides an
accurate and complete breakdown and aging of all
accounts receivable, notes receivable and other
receivables of the Company as of 30 June 1999.
(b) Except as set forth in Part 2.12 of the Disclosure
Schedule, all existing accounts receivable of the
Company (including those accounts receivable
reflected on the Unaudited Balance Sheet that have
not yet been collected and those accounts receivable
that have arisen since incorporation and have not yet
been collected):
(i) represent valid obligations of customers of
the Company arising from bona fide
transactions entered into in the Ordinary
Course of Business; and
(ii) are current and will be collected in full
(without any counterclaim or set-off) on or
before 30 September 1999, and the Vendor has
no reason to believe that they will not be
collected in full.
(c) Part 2.12 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete
breakdown of the revenues received from the Company's
top ten customers, plus revenue from each such
customer for the financial year ending 30 June 1999.
The Company has not received any notice or other
communication (in writing or otherwise), and has not
received any other information, indicating that any
customer or other Person identified in Part 2.12 of
the Disclosure Schedule may cease dealing with the
Company or may otherwise reduce the volume of
business transacted by such Person with the Company
below historical levels.
2.13 Equipment, Etc.
(a) Part 2.13 of the Disclosure Schedule accurately
identifies each item of equipment, furniture,
fixtures, improvements and other tangible assets
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20
(other than inventory) owned by the Company having a
value in excess of $5,000. Part 2.13 also accurately
identifies each tangible asset leased to the Company
that has a value in excess of $5,000.
(b) Each asset identified or required to be identified in
Part 2.13 of the Disclosure Schedule:
(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 assets identified in Part 2.13 of the Disclosure
Schedule are adequate for the conduct of the
Company's business in the manner in which such
business is currently being conducted and in the
manner in which such business is proposed to be
conducted.
2.14 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 identified in Part 2.14 of the Disclosure
Schedule. Part 2.14 of the Disclosure Schedule provides an
accurate and complete description of the premises covered by
said leases and the facilities located on such premises. The
Company enjoys peaceful and undisturbed possession of such
premises.
2.15 Proprietary Assets
(a) Except as set forth in Part 2.15 of the Disclosure
Schedule, there is no Proprietary Asset that is owned
by or licensed to the Company or that is otherwise
used or useful in connection with the Company's
business. The Company has taken all measures and
precautions necessary to protect the confidentiality
and value of each Proprietary Asset identified or
required to be identified in Part 2.15 of the
Disclosure Schedule.
(b) 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 best of the Knowledge of each of the
Vendors, 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.
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21
(c) The Proprietary Assets identified in Part 2.15 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 and in the manner in which
its business is proposed to be conducted.
2.16 Year 2000
To the best of the Vendors' Knowledge, the Company's products
and services are "Year 2000 Compliant", meaning that (i) date
data from at least 1900 through 2001 will process without
error or interruption (other than an error or interruption not
expected to have a material adverse effect on the Company) in
any level of computer hardware, software or services the
Company provides, including but not limited to, microcode,
firmware, system or application programs, files, databases and
computer services, (ii) there will be no loss of functionality
of the Company's products and services (other than any loss
not expected to have a material adverse effect on the Company)
with respect to the introduction, processing or output of
records containing dates on or after 1 January, 2000 and
(iii) the Company's products and services will be
interoperable with other software/hardware which may deliver
records to, receive records from or interact with the
Company's products and services in the course of processing
data; provided, however, that the foregoing shall not apply to
any adverse effects caused by any products and services
(including any third party software or hardware) not developed
by the Company or by any modification to the Company's
products and services which are made by a party other than the
Company. Further, the Company has tested all of its products
and services and determined that they are Year 2000 Compliant.
To the Vendors' Knowledge, third party software used by the
Company in its products and services and the Company's
internal hardware and software is also Year 2000 Compliant.
2.17 Contracts
(a) Part 2.17 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, 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 $10,000 or which otherwise is material to the
business or prospects of the Company (collectively,
the "Material Contracts"), except for any Excluded
Contract. The Company has delivered to the Purchaser
accurate and complete copies of all the Company
Contracts identified in Part 2.17 of the Disclosure
Schedule, including all amendments, supplements,
modifications and waivers thereto.
(b) Each Company Contract is valid and in full force and
effect, and is enforceable by the Company in
accordance with its terms. No Company Contract
contains any term or provision that is extraordinary
-16-
22
or that is otherwise not customarily found in
Contracts entered into by Comparable Entities.
(c) Except as set forth in Part 2.17 of the Disclosure
Schedule:
(i) to the best of the Vendors' Knowledge, no
Person has materially violated or breached,
or declared or committed any default under,
any Company Contract;
(ii) to the best of the Vendors' Knowledge, no
material event has occurred, and no material
circumstance or material condition exists,
that might (with or without notice or lapse
of time) (A) result in a violation or breach
of any of the provisions of any Company
Contract, (B) give any Person the right to
declare a default or exercise any remedy
under any Company Contract, (C) give any
Person the right to accelerate the maturity
or performance of any Company Contract, or
(D) give any Person the right to cancel,
terminate or modify any Company 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 Company Contract;
and
(iv) the Company has not waived any of its rights
under any Company Contract.
(d) To the best of the Knowledge of the Vendors, each
Person against which the Company has or may acquire
any rights under any Company 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 2.17 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 any Person, or provides for the creation
or grant of, any stock appreciation right,
phantom stock right or similar right or
interest.
-17-
23
(f) The performance of the Company Contracts will not
result in any violation of or failure to comply with
any Legal Requirement.
(g) No Person is renegotiating, or has the right to
renegotiate, any amount paid or payable to the
Company under any Company Contract or any other term
or provision of any Company Contract.
(h) The Contracts identified in Part 2.17 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 and in the manner in which
its business is proposed to be conducted.
(i) Part 2.17 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.
2.18 Liabilities; Major Suppliers
(a) The Company has no Liabilities, except for:
(i) liabilities identified as such in the
"liabilities" column of the Unaudited
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
Contracts listed in Part 2.18 of the
Disclosure Schedule and under Excluded
Contracts, to the extent that the existence
of such obligations is ascertainable solely
by reference to such Contracts.
(b) Part 2.18 of the Disclosure Schedule:
(i) provides an 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.
(c) Part 2.18 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete
breakdown of the amounts paid to, each
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24
supplier or other Person that received (i) more than
A$15,000 from the Company in the 1999 financial year,
(ii) more than A$25,000 from the Company in the 1998
financial year, or (iii) more than A$10,000 from the
Company in the first quarter of the 2000 financial
year.
2.19 Compliance with Legal Requirements
(a) Except as set forth in Part 2.19 of the Disclosure
Schedule:
(i) the Company is in full compliance with each
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 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) 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 Legal Requirement.
(c) To the best of the Knowledge of the Vendors, no
Governmental Body has proposed or is considering any
Legal Requirement that, if adopted or otherwise put
into effect, (i) may have an adverse effect on the
Company's business, condition, assets, liabilities,
operations, financial performance, net income or
prospects or on the ability of the Vendors 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.
-19-
25
2.20 Governmental Authorisations
(a) Part 2.20 of the Disclosure Schedule identifies:
(i) each Governmental Authorisation that is
held by the Company; and
(ii) each other Governmental Authorisation that,
to the best of the Knowledge of the Vendors,
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
Authorisations identified in Part 2.20 of the
Disclosure Schedule, including all renewals thereof
and all amendments thereto. Each Governmental
Authorisation identified or required to be identified
in Part 2.20 of the Disclosure Schedule is valid and
in full force and effect.
(b) Except as set forth in Part 2.20 of the Disclosure
Schedule:
(i) the Company and its employees are, and have
at all times been, in full compliance with
all of the terms and requirements of each
Governmental Authorisation identified or
required to be identified in Part 2.20 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 term or requirement of any
Governmental Authorisation 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 Authorisation identified or
required to be identified in Part 2.20 of
the Disclosure Schedule;
(iii) the Company has never received, and, to the
best of the knowledge of the Vendors, 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 (A) any
actual, alleged, possible or potential
violation of or failure to comply with any
term or requirement of any Governmental
Authorisation, or (B) any actual, proposed,
possible or potential revocation,
withdrawal, suspension, cancellation,
termination or modification of any
Governmental Authorisation; and
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26
(iv) all applications required to have been filed
for the renewal of the Governmental
Authorisations required to be identified in
Part 2.20 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 Authorisations has been duly
given or made on a timely basis with the
appropriate Governmental Body.
(c) The Governmental Authorisations identified in Part
2.20 of the Disclosure Schedule constitute all of the
Governmental Authorisations necessary (i) to enable
the Company to conduct its business in the manner in
which its business is currently being conducted and
in the manner in which its business is proposed to be
conducted, and (ii) to permit the Company to own and
use its assets in the manner in which they are
currently owned and used and in the manner in which
they are proposed to be owned and used.
(d) Except as set forth in Part 2.20 of the Disclosure
Schedule, neither the Company nor the Vendors 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.
2.21 Governmental Action
No authorisation, consent or approval of, or filing with, any
court or any federal, state or local governmental authority or
agency is required in connection with the execution and
delivery of this Agreement and the issuance and sale of the
Sale Shares other than those that have been or will be made or
obtained prior to the Closing.
2.22 Tax Matters
(a) Each Tax required to have been paid, or claimed by
any Governmental Body to be due and 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.
(b) Part 2.22 of the Disclosure Schedule accurately
identifies 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"). All
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
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27
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 incorporation.
(c) The Company Financial Statements fully accrue all
actual and contingent liabilities for Taxes with
respect to all periods through the dates thereof in
accordance with Section 2.22. To the extent required
by any Legal Requirement, the Company will establish,
in the Ordinary Course of Business, reserves adequate
for the payment of all Taxes for the period from
incorporation through to 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) Except as specifically set out in Part 2.22 of the
Disclosure Schedule, each Company Return relating to
income Taxes that has been filed with respect to any
period since incorporation. Neither the Company nor
its advisers have received a Notice of Amendment to
the Company's income tax assessments by virtue of
section 170 of the Income Tax Assessment Act
("ITAA"), or any Notices issued by the Commissioner
under section 264 of the ITAA. Part 2.22 of the
Disclosure Schedule accurately identifies each
examination or audit of the Company Return that has
been conducted since incorporation. The Vendors have
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 2.22 of the
Disclosure Schedule, the Company has not engaged in
any fraudulent conduct or acts of evasion in relation
to Taxes and no allegation to that effect has been
made by any relevant taxing authority.
(e) Except as set forth in Part 2.22 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) 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 Australian tax legislation.
The Company is not, and has never been, a party to or
bound by any tax indemnity agreement, tax sharing
agreement, tax allocation agreement or similar
Contract.
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28
(g) 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 Vendors which
might give rise to any of the above.
(h) 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) Since the 1999 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) The Company has complied with the provisions of Part
IIIAA of the Income Tax Assessment Act, and has
maintained proper records of franking debits and
franking credits for the purposes of that Act.
(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 Australia.
(l) All documents to which the Company is a party or may
be interested in the enforcement of, and all
transfers of any issued shares (other than as
contemplated by this Agreement), have been properly
stamped under applicable stamp duty legislation.
2.23 Employee and Labor Matters
(a) Part 2.23 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) the aggregate dollar amount of the
compensation (including wages, salary,
commissions, director's fees, fringe
benefits, bonuses, allowances, share
options, profit-sharing payments and other
payments or benefits of any type) received
by such employee from the Company with
respect to services performed for the year
to 30 June 1999;
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29
(iv) such employee's annualized compensation as
of the date of this Agreement;
(v) particulars of accrued long service leave,
annual leave, sick leave and rostered days
off for each employee;
(vi) particulars of any redundancy or severance
pay owing as at the execution date of this
Agreement;
(vii) each Current Benefit Plan in which such
employee participates or is eligible to
participate; and
(viii) any Governmental Authorisation that is held
by such employee and that relates to or is
useful in connection with the Company's
business.
(b) Part 2.23 of the Disclosure Schedule accurately
identifies each former employee of the Company who is
receiving or is scheduled to receive (or whose spouse
or other dependent is receiving or is scheduled to
receive) any benefits (whether from the Company or
otherwise) relating to such former employee's
employment with the Company; and Part 2.23 of the
Disclosure Schedule accurately describes such
benefits.
(c) Exhibit D 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".
(d) Except as set forth in Part 2.23 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.
(e) The Vendors has delivered to the Purchaser accurate
and complete copies of all employee manuals and
handbooks, disclosure materials, policy statements
and other materials relating to the employment of the
current and former employees of the Company.
(f) To the best of the Knowledge of the Vendors:
(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
(iii) no employee of the Company is a party to or
is bound by any confidentiality agreement,
noncompetition agreement or other
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30
Contract (with any Person) that may have an
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.
(g) the Company is not engaged, and has never been
engaged, in any unfair labour practice of any nature.
There has never been any slowdown, work stoppage,
labour dispute or union organising 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, labour dispute or union
organising 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,
labour dispute or union organising activity or any
similar activity or dispute.
(h) Excluding the application of general law in any of
the following circumstances, the Company does not
have: any existing service or other agreements with
any officers, consultants or employees of the Company
which cannot be fairly terminated by three 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.
2.24 Benefit Plans
(a) Part 2.24 of the Disclosure Schedule sets out
complete and accurate material details of all
Relevant Schemes.
(b) The Company does not have any accrued liability,
unfunded or contingent obligations in relation to any
Relevant Scheme.
(c) The Company has made all occupational superannuation
contributions required under any award or prescribed
industrial agreement for its employees and has
satisfied all laws. There is no superannuation
guarantee charge or liability accrued or payable for
employees.
(d) Each Relevant Scheme has at all times been
administered under the relevant rules and/or trust
document and (in the case of superannuation schemes)
for the Relevant Scheme to qualify for the maximum
income Tax concessions available to superannuation
funds.
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31
2.25 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 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 design defects, construction
defects or other defects or deficiencies at
the time of sale.
All repair services and other services that have been
performed by the Company were performed properly and
in full conformity with the 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 2.25 of the Disclosure
Schedule, no customer or other Person has ever
asserted or threatened to assert any 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 best of the
Knowledge of the Vendors, 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.
(e) The Company has in place , and has at all times had
in place , an adequate and appropriate quality
control system.
2.26 Insurance
(a) Part 2.26 of the Disclosure Schedule accurately sets
forth, with respect to each insurance policy
maintained by or at the expense of, or for the direct
or indirect benefit of the Company:
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(i) the name of the insurance carrier that
issued such policy and the policy number of
such policy;
(ii) whether such policy is a "claims made" or an
"occurrences" policy;
(iii) a description of the coverage provided by
such policy and the material terms and
provisions of such policy (including all
applicable coverage limits, deductible
amounts and co-insurance arrangements and
any non-customary exclusions from coverage);
(iv) the annual premium payable with respect to
such policy, and the cash value (if any) of
such policy; and
(v) a description of any claims pending, and any
claims that have been asserted in the past,
with respect to such policy.
Part 2.26 of the Disclosure Schedule also identifies
(1) each pending application for insurance that has
been submitted by or on behalf of the Company, and
(2) each self-insurance or risk-sharing arrangement
affecting the Company or any of its assets. The
Company has delivered to the Purchaser accurate and
complete copies of all of the insurance policies
identified in Part 2.26 of the Disclosure Schedule
(including all renewals thereof and endorsements
thereto) and all of the pending applications
identified in Part 2.26 of the Disclosure Schedule.
(b) Each of the policies identified in Part 2.26 of the
Disclosure Schedule is valid, enforceable and in full
force and effect, and has been issued by an insurance
carrier that, to the best of the Knowledge of the
Vendors, is solvent, financially sound and reputable.
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. 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, key
employees, services and potential liabilities; and
said insurance coverage is at least as comprehensive
as the insurance coverage customarily maintained by
Comparable Entities.
(c) Except as set forth in Part 2.26 of the Disclosure
Schedule, there is no pending claim under or based
upon any of the policies identified in Part 2.26 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:
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33
(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 2.26
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 policies identified
in Part 2.26 of the Disclosure Schedule; or
(iii) any indication that the issuer of any of the
policies identified in Part 2.26 of the
Disclosure Schedule may be unwilling or
unable to perform any of its obligations
thereunder.
2.27 Related Party Transactions
Except as set forth in Part 2.27 of the Disclosure Schedule:
(a) no Related Party has, and no Related Party has at any
time since incorporation of the Company 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
incorporation of the Company been, indebted to the
Company;
(c) since incorporation of the Company, 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
incorporation of the Company 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
(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
favour of any Related Party against the Company.
2.28 Certain Payments, Etc.
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:
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34
(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 favour or given any gift which was not
deductible for federal income tax purposes;
(e) made any payment (whether or not lawful) to any
Person, or provided (whether lawfully or unlawfully)
any favour 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) favourable 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.
2.29 Proceedings
(a) Except as set forth in Part 2.29 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
(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 2.29 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 Vendors have delivered to the Purchaser accurate
and complete copies of all pleadings, correspondence
and other written materials to
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35
which the Company has access that relate to the
Proceedings identified in Part 2.29.
(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 an 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 any of the Selling Shareholders 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 best of the Knowledge of the Vendors, 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.
2.30 Brokers
Neither the Company nor any of the Vendors 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.
2.31 The Vendors
(a) In respect of each of the Vendors who are
incorporated, they severally warrant that they are a
corporation duly organised, validly existing and in
good standing under the laws of Queensland and have
all requisite corporate powers and authority to
execute and deliver this Agreement and to carry out
and perform their obligations under the Agreement and
the Certificate. Each of the Vendors severally
warrants that they have the capacity and financial
capability to comply with and perform all of their
covenants and obligations under each of the
Transactional Agreements to which they are or may
become a party.
(b) None of the Vendors:
(i) have at any time, (A) made a general
assignment for the benefit of creditors, (B)
filed, or had filed against it, any
bankruptcy petition or similar filing, (C)
suffered the attachment or other judicial
seizure of all or a substantial portion of
its assets, (D) admitted in writing its
inability to pay its debts as they become
due, (E) been convicted of, or pleaded
guilty to, any felony, or (F) taken or been
the subject of any action that may have an
adverse effect on such its ability to comply
with or perform any of its covenants or
obligations under any of the Transactional
Agreements; or
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36
(ii) is subject to any Order that may have an
adverse effect on its ability to comply with
or perform any of its covenants or
obligations under any of the Transactional
Agreements.
(c) There is no Proceeding pending, and no Person has
threatened to commence any Proceeding, that may have
an adverse effect on the ability of any of the
Vendors to comply with or perform any of its
covenants or obligations under any of the
Transactional Agreements. 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.
(d) Those of the Vendors that are corporations severally
warrant that all corporate action on the part of the
relevant Vendor, its officers, directors and
shareholders necessary for the authorisation of this
Agreement, the performance of all its obligations
hereunder at the Closing and the sale and delivery of
the Sale Shares it is selling has been taken or will
be taken prior to the Closing. Each Vendor severally
warrants that this Agreement constitutes the legal,
valid and binding obligation of each of the Vendors,
enforceable against each of the Vendors in accordance
with its terms except to the extent that enforcement
may be limited by bankruptcy, insolvency, moratorium
or similar laws affecting the rights of creditors
generally and except to the extent that enforcement
may be limited by the application of general
equitable principles.
2.32 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 2.32 of the Disclosure
Schedule, there is no fact within the Knowledge of
any of the Vendors (other than publicly known facts
relating exclusively to political or economic matters
of general applicability that will adversely affect
all Comparable Entities) that (i) may have an 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 any or all of the
Vendors 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,
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37
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 Vendors or any of the Vendors'
Representatives, is accurate and complete in all
respects.
(d) The Vendors 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.
2.33 Insolvency Events
(a) Liquidation/winding up/appointment of administrator
or receiver etc.
The Company has not had:
(i) a liquidator or provisional liquidator appointed;
(ii) a receiver, receiver and manager, trustee,
controller, official manager or similar officer
appointed;
(iii) an administrator appointed, whether under Part 5.3A
of the Corporations Law or otherwise; or
(iv) an application made for the appointment of an
administrator, liquidator or provisional liquidator;
over all or part of the business, Assets or revenues of the
Company and neither the Company nor its directors have passed
a resolution for any such appointment; or
(v) an application made for the winding up of the
Company.
(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.
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38
(d) Statutory demands
The Company has not received any demand under section 459E of
the Corporations Law, or been taken to have failed to comply
with a statutory demand as a result of the operation of
section 459F(1) of the Corporations Law.
(e) Solvency
The Company:
(i) is able to pay its debts as and when they fall due;
(ii) is not insolvent or presumed to be insolvent under
any law; and
(iii) is not insolvent under administration as defined in
section of the Corporations Law or has not taken any
action which could result in that event.
(f) Striking off
The Company:
(i) has not received a notice under sections 601AA or
601AB of the Corporations Law; and
(ii) has not been struck off the register of Companies or
dissolved and there is no action proposed by the
Australian Securities and Investments Commission to
do so.
2.34 Effect of Sale
(a) Except as disclosed in part 2.34 of the Disclosure
Schedule, neither the execution nor performance of
this Agreement or a document to be executed at or
before Closing will:
(i) result in the Company losing the benefit of
any Governmental Authorisation or an asset,
licence, grant, subsidy, right or privilege
which it enjoys at the date of this
Agreement in any jurisdiction; or
(ii) conflict with, or result in a breach of, or
give rise to an event of default under, or
require the consent of a person under, or
enable a person to terminate or relieve a
person from an obligation under, an
agreement, arrangement or obligation to
which the Company is a party or a legal or
administrative requirement in any
jurisdiction.
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39
(b) The Company is currently a party to agreements
entered into in the Ordinary Course of Business
for the provision of services to the Company by
both Optus Network Pty Limited and Telstra
Corporation Limited. These agreements have been
entered into for the benefit of the Company and
may be terminated on not less than 3 months'
notice to the other party without penalty or
compensation.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants, to and for the benefit of the
Vendors, as follows:
3.1 Acquisition of Shares
The Purchaser is not acquiring the Sale Shares or the
Subscription 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 authorised
by all necessary action on the part of the Purchaser
and its board of directors; and
(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 VENDORS
4.1 Access and Investigation
The Vendors shall jointly and severally, ensure that, at all
times during the Pre-Closing Period:
(a) the Company and its Representatives 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) the Company and its Representatives 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
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40
(c) the Company and its Representatives compile and
provide the Purchaser and its Representations 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 Vendors shall jointly and severally 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 and in the same
manner as such operations have been conducted prior
to the date of this Agreement;
(d) the Company preserves intact its current business
organisation, keeps available the services of its
current 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 2.26 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 and its officers use their Best Efforts
to cause the Company to operate profitably and to
maximize its net income;
(i) 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
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41
repurchase, redeem or otherwise reacquire any shares
or other securities;
(j) the Company does not sell or otherwise issue any
shares or any other securities;
(k) except as contemplated in this Agreement, the Company
does not amend its constitution, and does not effect
or become a party to any Acquisition Transaction,
recapitalisation, reclassification of shares, share
consolidation or division, capital reduction or share
buy back or similar transaction;
(l) the Company does not form any subsidiary or acquire
any equity interest or other interest in any other
Entity;
(m) 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
A$10,000 in the aggregate;
(n) 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;
(o) the Company does not incur, assume or otherwise
become subject to any Liability, except for current
liabilities (of the type required to be reflected in
the "liabilities" column of a balance sheet prepared
in accordance with GAAP) incurred in the Ordinary
Course of Business;
(p) the Company does not establish or adopt any Employee
Benefit Plan, and 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;
(q) the Company does not change any of its methods of
accounting or accounting practices in any respect;
(r) the Company does not make any Tax election;
(s) the Company does not commence any Proceeding;
(t) the Company does not enter into any transaction or
take any other action of the type referred to in
Section 2.9;
(u) the Company does not enter into any transaction or
take any other action outside the Ordinary Course of
Business;
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42
(v) the Company does not enter into any transaction or
take any other action that might cause or constitute
a Breach of any representation or warranty made by
the Vendors in this Agreement or in the Closing
Certificate; and
(w) 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
"(v)" of this Section 4.2.
4.3 Filings and Consents
The Vendors 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 Vendors 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 2.20 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 Vendors 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 2.20 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 Vendors 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 Vendors, 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.
4.4 Notification; Updates to Disclosure Schedule
(a) During the Pre-Closing Period, the Vendors 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
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43
and that caused or constitutes a Breach of
any representation or warranty made by the
Vendors 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 Vendors 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 Vendors; 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) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 4.4(a)
requires any change in the Disclosure Schedule, or if
any such event, condition, fact or circumstance would
require such a change assuming the Disclosure
Schedule were dated as of the date of the occurrence,
existence or discovery of such event, condition, fact
or circumstance, then the Vendors shall promptly
deliver to the Purchaser an update to the Disclosure
Schedule specifying such change. No 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 Vendors in this Agreement or in the
Closing Certificate, 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 Vendors 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 Vendors 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;
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(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, each of the Vendors and the
Company shall use its Best Efforts to cause the conditions set
forth in Sections 5 and 6.3 to be satisfied on a timely basis.
4.8 Confidentiality
The Vendors shall ensure that, during the Pre-Closing Period,
and, in so far as the obligations relate to the Vendors alone,
at all times after Closing:
(a) the Vendors, the Company and their Representatives
keep strictly confidential the existence and terms of
this Agreement;
(b) neither the Vendors, 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 Vendors are required by law to make
any such disclosure regarding the Transactions; and
(c) if the Company or the Vendors are required by law to
make any disclosure regarding the Transactions, the
Vendors advises the Purchaser, at least five business
days 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 subscribe
for the Subscription Shares (and in respect of the condition in Section
5.10, the Purchaser's acquisition of an interest in the Sale Shares or
the Subscription 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
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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 regulatory
matters and shall be satisfied with the results of that
investigation and review.
5.2 Accuracy of Representations
All of the representations and warranties made by the Vendors
in this Agreement (considered collectively), and each of said
representations and warranties (considered individually),
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, without giving effect to any update to
the Disclosure Schedule.
5.3 Performance of Obligations
(a) The Vendors shall have delivered to the Purchaser the
certificates representing all (and not less than all)
of the Sale Shares as required by Section 1.3(b)(i)
and the Vendors shall cause Company to deliver to the
Purchaser the certificates representing all (and not
less than all) of the Subscription Shares as required
by Section 1.3(b)(vi) and the Vendors shall have
executed and/or delivered each of the other documents
required to be executed and/or delivered by them
pursuant to Section 1.3(b) and (d) such that subject
only to payment of stamp duty and the registration of
the transfers of the Sale Shares by the Company, the
Purchaser shall upon Closing become the registered
holder of the entire issued share capital of the
Company.
(b) All of the other covenants and obligations that the
Vendors is required to comply with or to perform at
or prior to the Closing (considered collectively),
and each of said covenants and obligations
(considered individually), shall have been duly
complied with and performed in all material respects.
5.4 Consents
Each of the Consents identified in Part 2.20 of the Disclosure
Schedule shall have been obtained and shall be in full force
and effect.
5.5 No Adverse Change
There shall have been no 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 other materials or evidence
as the Purchaser, in good faith, may reasonably require for
the purpose of (i)
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evidencing the accuracy of any representation or warranty made
by the Vendors, (ii) evidencing the compliance by the Vendors
with, or the performance by the Vendors 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.
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 Board Approval
The board of directors (or any duly authorised committee
appointed by the board) of the Purchaser's ultimate parent
company, Asia Online, Ltd. has approved the terms of the
transactions contemplated or referred to in this Agreement and
the other Transactional Agreements.
6. CONDITIONS PRECEDENT TO THE VENDORS' AND COMPANY'S OBLIGATIONS TO
CLOSE
The Vendors' obligations to sell the Sale Shares and to take the other
actions required to be taken by each of them at the Closing and the
Company's obligation to allot and issue the Subscription Shares 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 Vendors, in
whole or in part, in accordance with Section 10.11):
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6.1 Accuracy of Representations
All of the representations and warranties made by the
Purchaser in this Agreement (considered collectively), and
each of said representations and warranties (considered
individually), 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
All of the other covenants and obligations that the Purchaser
is required to comply with or to perform pursuant to this
Agreement at or prior to the Closing (considered
collectively), and each of said covenants and obligations
(considered individually), shall have been complied with and
performed in all material respects.
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 Vendors to the Purchaser (or its nominee(s)) or
the issue of the Subscription Shares to the Purchaser (or its
nominee(s)).
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 any of the Vendors 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 comply with or perform its covenants and
obligations under this Agreement);
(b) by the Vendors if (i) there is a material Breach of
any covenant or obligation of the Purchaser, or (ii)
the Vendors reasonably determine 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 any of the
Vendors 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;
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48
(d) by the Vendors 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 6 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 Vendors if the Closing has not taken place on
or before 6 October, 1999 (other than as a result of
the failure on the part of the Vendors 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
Vendors.
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 any 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 Vendors wishes to
terminate this Agreement pursuant to Section 7.1(b), Section
7.1(d) or Section 7.1(f), the Vendors shall deliver to the
Purchaser a written notice stating that the Vendors are
terminating this Agreement and setting forth a brief
description of the basis on which the Vendors are 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;
(b) the Vendors 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).
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8. INDEMNIFICATION, ETC.
8.1 Survival of Representation and Covenants
(a) The representations, warranties, covenants and
obligations of each party shall survive (without
limitation):
(i) the Closing, the sale of the Sale Shares to
the Purchaser (or its nominee(s)) and the
issue of the Subscription Shares to the
Purchaser (or its nominee(s));
(ii) any sale or other disposition of any or all
of the Sale Shares or the Subscription
Shares by the Purchaser; and
(iii) any Acquisition Transaction effected by or
otherwise involving the Purchaser, the
Vendors or the Company.
All of said representations, warranties, covenants
and obligations shall remain in full force and effect
and shall survive for six years from the Closing
Date.
(b) The representations, warranties, covenants and
obligations of the Vendors, 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.
(c) For purposes of this Agreement, each statement or
other item of information set forth in the Disclosure
Schedule or in any update to the Disclosure Schedule
shall be deemed to be a representation and warranty
made by the Vendors in this Agreement.
8.2 Indemnification by the Vendors
(a) The Vendors shall hold harmless and indemnify each of
the Indemnitees from and against, and shall
compensate and reimburse each of the Indemnitees for,
any Damages which are directly or indirectly suffered
or incurred by any of the Indemnitees or to which any
of the Indemnitees may otherwise become subject at
any time (regardless of whether or not such Damages
relate to any third-party claim) and which arise
directly or indirectly from or as a direct or
indirect result of, or are directly or indirectly
connected with:
(i) any Breach of any representation or warranty
made by the Vendors in this Agreement
(without giving effect to any update to the
Disclosure Schedule) or in the Closing
Certificate;
(ii) any Breach of any representation, warranty,
statement, information or provision
contained in the Disclosure Schedule
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or in any other document delivered or
otherwise made available to the Purchaser or
any of its Representatives by or on behalf
of the Vendors or any of its
Representatives;
(iii) any Breach of any covenant or obligation of
the Vendors;
(iv) any Liability to which the Company or any of
the other Indemnitees may become subject and
that arises directly or indirectly from or
relates directly or indirectly to any
product manufactured or sold, or any service
performed, by or on behalf of the Company on
or at any time prior to the Closing Date;
(v) any matter identified or referred to in Part
2.21 or Part 2.29 of the Disclosure
Schedule; or
(vi) any Proceeding relating directly or
indirectly to any Breach, alleged Breach,
Liability or matter of the type referred to
in clause "(i)", "(ii)", "(iii)", "(iv)", or
"(v)" above (including any Proceeding
commenced by any Indemnitee for the purpose
of enforcing any of its rights under this
Section 8), providing the Proceeding is
successful.
(b) Each of the Vendors acknowledges and agrees that, if
there is any Breach of any representation, warranty
or other provision 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), or if
the Company becomes subject to any Liability of the
type referred to in clause "(iv)" of Section 8.2(a),
then the Purchaser itself shall be deemed, by virtue
of its ownership of common stock of the Company, to
have incurred Damages as a result of such Breach or
Liability.
8.3 Right to Require Cure of Breach
Without limiting the generality of anything contained in
Section 8.2, if there is any Breach of any representation or
warranty made by the Vendors, then the Vendors shall be
obligated to pay such amounts to the Company and take such
other actions as the Purchaser may in good faith request for
the purpose of causing such Breach to be corrected, cured and
eliminated in all respects (at no cost to the Company or the
Purchaser).
8.4 No Contribution
Each of the Vendors 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
any of the Vendors
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may become subject under any of the Transactional Agreements
or otherwise in connection with any of the Transactions.
8.5 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 the applicable rate of interest as applied by the Supreme
Court of New South Wales from time to time.
8.6 Setoff
In addition to any rights of setoff or other rights that the
Purchaser or any of the other Indemnitees may have at common
law or otherwise, the Purchaser shall have the right to set
off any amount that may be owed to any Indemnitee under this
Section 8 against any amount otherwise payable by any
Indemnitee to the Agent or any of the Selling Shareholders.
8.7 Non-exclusivity of Indemnification Remedies
The indemnification remedies and other remedies provided in
this Section 8 shall not be deemed to be exclusive.
Accordingly, the exercise by any Person of any of its rights
under this Section 8 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 Person 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).
8.8 Defence of Third Party Claims
In the event of the assertion or commencement by any Person of
any claim or Proceeding (whether against the Company, against
any other Indemnitee or against any other Person) with respect
to which the Vendors may become obligated to indemnify, hold
harmless, compensate or reimburse any Indemnitee pursuant to
this Section 8, the Purchaser may proceed with the defence of
such claim or Proceeding on its own, on the following basis:
(i) all expenses relating to the defence of such claim or
Proceeding (whether or not incurred by the Purchaser)
shall be borne and paid exclusively by the Vendors;
(ii) the Vendors shall make available to the Purchaser any
documents and materials in the possession or control
of any of the Vendors that may be necessary to the
defence of such claim or Proceeding;
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52
(iii) the Purchaser shall keep the Vendors informed of all
material developments and events relating to such
claim or Proceeding; and
(iv) the Purchaser shall have the right to settle, adjust
or compromise such claim or Proceeding with the
consent of the Vendors; provided, however, that the
Vendors shall not unreasonably withhold such consent.
8.9 Exercise of Remedies by Indemnitees other than Purchaser
No Indemnitee (other than the Purchaser or any successor
thereto or assign thereof) shall be permitted to assert any
indemnification claim or exercise any other remedy under this
Agreement unless the Purchaser (or any successor thereto or
assign thereof) shall have consented to the assertion of such
indemnification claim or the exercise of such other remedy.
9. RESTRICTION OF THE VENDORS
9.1 General obligations
Each of the Vendors, must not directly or indirectly, whether
solely or jointly with any other person:
(a) for a period of two years after the Closing Date or,
if applicable, two years after a Vendor ceases to be
employed or otherwise engaged by the Company, shall
not carry on or be engaged or involved in any trade,
business or undertaking which is in direct
competition with the Company either on its own
account or in conjunction with or on behalf of any
person, firm or company 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
carried on by the Company within such preceding year
other than:
(i) 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
(ii) where a Vendor is employed or otherwise
engaged in the provision of services to the
Government following cessation of employment
with the Company and the provision of those
services does not compete with the business
of the Company;
(b) use or disclose, or permit any other person to use or
disclose any Confidential Information (not being
information which is or becomes available to the
public other than by reason of a breach of this
clause);
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(c) for a period of two years after the Closing Date or,
if applicable, two years after a Vendor ceases to be
employed or otherwise engaged by the Company,
canvass, solicit, or entice away from the Company the
custom of any person, firm, company or organisation
who as at Completion was a client, customer,
identified prospective customer, representative or
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, firm, company or organisation
in a business area in which the Company competes;
(d) use or register a name or trade ▇▇▇▇, which includes
all or part of the name "INTERACT TECHNOLOGY GROUP",
or any confusingly similar word or words in such a
way as to be capable of or likely to be confused with
the above name, 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. For the avoidance of doubt, nothing in
this Section 9 shall prevent the Vendors using the
name "INTERACT INTERNET SERVICES PTY LTD" in so far
as it is only used in India;
(e) it will not at any time hereafter make use of or
disclose or divulge to any person (other than to
officers or employees of the Company whose province
it is to know the same) any information (other than
any information properly available to the public or
disclosed or divulged pursuant to an order of a court
of competent jurisdiction) relating to the Company,
the identity of its customers and suppliers, its
products, finance, contractual arrangements, business
or methods of business and shall use its best
endeavours to prevent the publication or disclosure
of any such information;
(f) 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;
9.2 Restraints fair and reasonable
The Vendors acknowledge that:
(a) the covenants given in Section 9.1 are material to the
Purchaser's decision to enter into this Agreement; and
(b) the restraints contained in Section 9.1 are:
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54
(i) fair and reasonable regarding the subject matter,
area and duration; and
(ii) reasonably required by the Purchaser to protect the
business, financial and proprietary interests of the
Company.
9.3 Severability
Each of the obligations set out in Section 9.1 is severable and
independent so that if Section 9.1 or any part or provision of it is
unenforceable then that Section or that part will be deemed eliminated
or modified to the minimum extent necessary to make this Agreement or
that clause or part enforceable.
9.4 Vendors to Procure
The Vendors shall procure that each of their subsidiaries, holding
companies and any other affiliated companies (and in the case of Cubic
Pty Ltd, it will procure that ▇▇▇▇ ▇▇▇▇▇▇) will observe the
restrictions contained in the foregoing provisions of this Section 9
and that their respective employees, officers and agents will observe
the restrictions contained in this Clause.
9.5 Exceptions
Nothing in this Section 9 will restrict, effect or prevent the Vendors
holding interests in Interact Internet Services Pty Limited provided
that it carries on business in India and not elsewhere or holding
interests in iSecure Pty Ltd provided it solely carries on the business
of providing security services and advice to technology users.
10. GUARANTEES OF DIRECTORS
10.1 Best Endeavours
The Company shall use its best endeavours to procure the
release, discharge or replacement of the persons listed in
Part I of Exhibit K from the guarantees and indemnities
described in Part II of Exhibit K (the "Guarantees").
10.2 Indemnity
Pending the release, discharge or replacement of the persons
listed in Part I of Exhibit K from the Guarantees, the Company
shall indemnify each person listed in Part I of Exhibit K
against all costs, claims and demands (collectively, "Losses")
suffered or incurred by each such person by reason of being a
guarantor under any Guarantee but excluding Losses suffered or
incurred in relation to acts or omissions occurring on or
before Closing.
11. MISCELLANEOUS PROVISIONS
11.1 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,
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at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
11.2 Fees, Expenses and Stamp Duty
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. All stamp duties assessed
or assessable on the transfer of the Sale Shares to the
Purchaser shall be borne by the Purchaser.
11.3 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 on a party/party basis (in addition to any other
relief to which the prevailing party may be entitled).
11.4 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 Vendors : Meyer Clapham
▇▇▇▇▇ ▇
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention : ▇▇▇▇ ▇▇▇▇▇
Facsimile : (▇▇▇) ▇▇▇▇ ▇▇▇▇
If to the Purchaser : Asia Online-Australia Pty Ltd
23rd Floor, Citicorp Centre
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇
Attention : MR. ED. ▇▇▇▇▇▇▇
Facsimile : (▇▇▇) ▇▇▇▇ ▇▇▇▇
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11.5 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.
11.6 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.
11.7 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 South Wales.
(b) Each party irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the courts of New
South Wales.
(c) The Vendors agree 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
Vendors 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 11.7(b) or 11.8(c) shall
be deemed to limit or otherwise affect the right of
any Indemnitee to commence any legal proceeding or
otherwise proceed against the Vendors in any other
forum or jurisdiction.
(e) Each of the Vendors 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.
11.8 Successors and Assigns
This Agreement shall be binding upon: the Vendors and the
Purchaser and their respective successors and assigns (if
any). This Agreement shall inure to the benefit of the
Purchaser; the other Indemnitees (subject to Section 8.9); and
the respective successors and assigns (if any) of the
foregoing. The Purchaser may freely assign any or all of its
rights under this Agreement (including its indemnification
rights under Section 8), 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.
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11.9 Remedies Cumulative: Specific Performance
The rights and remedies of the parties hereto shall be
cumulative (and not alternative). The Vendors agree that:
(a) in the event of any Breach or threatened Breach by
any one or more of the Vendors 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) neither the Purchaser nor any other Indemnitee shall
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.
11.10 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.
11.11 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
Vendors.
11.12 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
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unenforceable, shall not be impaired or otherwise affected and
shall continue to be valid and enforceable to the fullest
extent permitted by law.
11.13 Parties in Interest
Except for the provisions of Section 8 hereof, 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).
11.14 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.
11.15 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.
11.16 Trust Representations and Warranties
Cubic Pty Ltd represents and warrants to each other party
that:
(a) it is the only trustee of the Trust;
(b) it has the power under the Trust Deed to:
(i) execute and deliver this Agreement; and
(ii) perform its obligations under this
Agreement;
(c) all action required by the Trust Deed to authorise:
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(i) it's execution and delivery of this
Agreement to which it is a party; and
(ii) the performance of its obligations under
this Agreement,:
has been taken;
(d) the execution by it of this Agreement to which it is
a party and the performance by it of its obligations
or the exercise of its rights under this Agreement
does not contravene the Trust Deed;
(e) no action is currently taking place or pending to
remove it as trustee of the Trust or appoint a new or
additional trustee of the Trust;
(f) it has entered into this Agreement in its capacity as
trustee of the Trust and for the benefit of the
Beneficiary;
(g) it has a right to be fully indemnified out of the
Trust Fund in respect of the obligations incurred by
it under the Transactional Agreements and it has not
released, disposed of or restricted its equitable
lien over the Trust Fund which secures that
indemnity;
(h) it is not and has never been in breach of the Trust
Deed;
(i) it and its directors, officers, employees and agents
have complied with their obligations in connection
with the Trust;
(j) the Trust has not been terminated and no action is
pending to terminate the Trust;
(k) the Beneficiary is not presently entitled to any of
the assets of the Trust .
In this Section 11.16:
"BENEFICIARY" means any beneficiary or beneficiaries of
the Trust;
"TRUST" means the Hayden Family Trust as constituted
under the Trust Deed;
"TRUST DEED" means the trust deed dated 21 May 1986 between
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as settlor and ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇▇▇▇▇▇ as the initial trustee as subsequently amended by
deed dated 30 June 1986; and
"TRUST FUND" means the property which is at any time subject
to the Trust.
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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.
SIGNED for and on behalf of )
ASIA ONLINE-AUSTRALIA PTY LTD )
by its duly authorised representative )
in the presence of: )
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of authorised representative
▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------------------- ---------------------------------------------------
Name of witness (please print) Name of authorised representative
(please print)
SIGNED for and on behalf of )
CUBIC PTY LTD (IN ITS CAPACITY AS TRUSTEE OF THE )
HAYDEN FAMILY TRUST) )
)
by its duly authorised representative )
in the presence of: )
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of authorised representative
▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------- ---------------------------------------------------
Name of witness (please print) Name of authorised representative
(please print)
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
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SIGNED by )
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------------------
Name of witness (please print)
SIGNED by )
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ )
in the presence of: )
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇ /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇
---------------------------------------------------
Name of witness (please print)
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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 Purchase and
Subscription 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
South Wales.
CLOSING "Closing" shall have the meaning specified in Section
1.3(a) of the Agreement.
CLOSING CERTIFICATE "Closing Certificate" shall have the meaning
specified in Section 1.3(b)(iv) of the Agreement.
CLOSING DATE "Closing Date" shall have the meaning specified in
Section 1.3(a) of the Agreement.
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 2.22(b) of the Agreement.
COMPARABLE ENTITIES "Comparable Entities" shall mean Entities (other than
the Company) that are engaged in businesses similar
to the Company's business.
CONSENT "Consent" shall mean any approval, consent,
ratification, permission, waiver or authorisation
(including any Governmental Authorisation).
CONSTITUTION "Constitution" means the constitution in the form
attached as Exhibit I.
CONTRACT "Contract" shall mean any written, oral, implied or
other agreement, contract, understanding,
arrangement,
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instrument, note, guaranty, indemnity,
representation, warranty, deed, assignment, power of
attorney, certificate, purchase order, work order,
insurance policy, 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 and:
(a) that was established or adopted by the
Company or is maintained or sponsored by the
Company;
(b) in which the Company participates;
(c) with respect to which the Company is or may
be required or permitted to make any
contribution; or
(d) with respect to which the Company is or may
become subject to any Liability.
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 schedule (dated
as of the date of the Agreement) delivered to the
Purchaser on behalf of the Vendors, a copy of which
is attached to the Agreement and 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
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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 party, union, company (including
any limited liability company or joint stock
company), firm or other enterprise, association,
organisation 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) 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
(c) does not contemplate or involve the payment
of cash or other consideration in an amount
or having a value in excess of A$10,000.
GAAP "GAAP" shall mean the accounting standards applicable
for the purposes of the Corporations Law; the
requirements of the Corporations Law 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 Australia;
except those inconsistent with any of the foregoing.
GOVERNMENTAL AUTHORISATION "Governmental Authorisation" shall mean any:
(a) permit, license, certificate, franchise,
concession, approval, consent, ratification,
permission, clearance, confirmation,
endorsement, waiver, certification,
designation, rating, registration,
qualification or authorisation 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
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(b) right under any Contract with any
Governmental Body.
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, organisation, unit, body or
Entity and any court or other tribunal);
(d) multi-national organisation 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.
INDEMNITEES 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 Vendors shall be deemed to have "Knowledge" of a
particular fact or other matter if any officer,
employee or other Representative of the Vendors has
Knowledge of such fact or other matter.
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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 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 A$50,000 (or
equivalent in any other currency) individually or
when aggregated with other Purchaser Damages incurred
due to a breach of a representation or warranty by
the Vendors or if they 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.
ORDER "Order" shall mean any:
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(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;
(c) such action is not required to be authorised
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
authorisation of any nature; and
(d) such action is similar in nature and
magnitude to actions customarily taken,
without any separate or special
authorisation, in the ordinary course of the
normal day-to-day operations of other
Entities that are engaged in businesses
similar to the Company's business.
PAST BENEFIT PLAN "Past Benefit Plan" shall mean any employee benefit
plan (other than a Current Benefit Plan):
(a) which the Company has at any time
established, adopted, maintained or
sponsored;
(b) in which the Company has ever participated;
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(c) with respect to which the Company has ever
made, or has ever been required or permitted
to make, any contribution; or
(d) with respect to which the Company has ever
been subject to any Liability.
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, 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, maskwork,
maskwork 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.
PROPRIETARY INFORMATION
AND INVENTIONS DEED "Proprietary Information and Inventions Deed" shall
mean the proprietary information and inventions deed
in the form attached as Exhibit L;
PURCHASE PRICE "Purchase Price" shall have the meaning specified in
Section 1.2 of the Agreement.
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RELATED PARTY Each of the following shall be deemed to be a
"Related Party":
(a) the Vendors;
(b) each individual who is, or who has at any
time been, an officer of the Vendors;
(c) each member of the family of each of the
parties who are individuals referred to in
clauses "(a)" and "(b)" above; and
(d) any Entity in which any one of the parties
referred to in clauses "(a)", "(b)" and
"(c)" 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;
RENTAL AGREEMENTS "Rental Agreements" means the rental agreements in
the form attached as Exhibit H;
REPRESENTATIVES "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants, advisors
and representatives.
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.
SHAREHOLDERS DEED "Shareholders Deed" means the shareholder deed in the
form attached as Exhibit J.
"SUBSIDIARY" "subsidiary" has the meaning given to that term in
Division 6 of part 1.2 of the Corporations Law.
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TAX "Tax" shall mean any tax (including any income tax,
franchise tax, capital gains tax, estimated tax,
gross receipts 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 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, implementation or
enforcement of or compliance with any Legal
Requirement relating to any Tax.
TRANSACTIONAL AGREEMENTS "Transactional Agreements" shall mean:
(a) the Agreement;
(b) the Shareholders Deed;
(c) the Employment Agreements referred to in
Section 1.3(b)(vii) of the Agreement;
(d) the Rental Agreements;
(e) the Proprietary Information and Inventions
Deed;
(f) the Closing Certificate.
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:
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(i) the sale of the Sale Shares by the Vendors
to the Purchaser in accordance with the
Agreement and the subscription of the
Subscription Shares by the Purchaser (or its
nominee(s)) in accordance with the
Agreement; and
(ii) the performance by the Vendors, the Company
and the Purchaser of their respective
obligations under the Transactional
Agreements and the exercise by the Vendors,
the Company and the Purchaser of their
respective rights under the Transactional
Agreements.
UNAUDITED BALANCE SHEET "Unaudited Balance Sheet" shall have the meaning
specified in Section 2.8(a)(ii) of the Agreement.
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EXHIBIT C
LIST OF SHAREHOLDERS
PART I
-------------------------------- --------------------- -------------------------
SHAREHOLDER PROPORTION % SALE SHARES
-------------------------------- --------------------- -------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 33.33% 50 A Class Shares
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▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ 33.33% 50 A Class Shares
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Cubic Pty Ltd 33.34% 50 A Class Shares
(in its capacity as trustee of
the Hayden Family Trust)
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PART II: SUBSCRIPTION SHARES
75 A class shares in the capital of the Company representing, when aggregated
with the Sale Shares, 60% of the total outstanding voting equity of the Company
on a fully diluted basis immediately following the issue of such shares.
C-1