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EXHIBIT 10.10
SHARE SALE AGREEMENT
relating to shares in HJF Acquisition Corporation
The ▇.▇. ▇▇▇▇▇▇▇ Company (VENDOR)
SPC Ardmona Limited (PURCHASER)
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SHARE SALE AGREEMENT
DETAILS 6
AGREED TERMS 6
1. DEFINED TERMS & INTERPRETATION 6
1.1 Defined terms 6
1.2 Interpretation 14
1.3 Headings 15
2. CONDITIONS 15
2.1 Conditions 15
2.2 Waiver of Conditions 16
2.3 Conduct of the parties 16
2.4 Failure of Condition 16
2.5 Action on termination 16
3. SALE AND PURCHASE 16
3.1 Agreement to sell and purchase 16
3.2 Waiver of pre-emptive rights 16
4. PURCHASE PRICE AND OTHER PAYMENTS 16
4.1 Amount 16
4.2 Payment of the Purchase Price 17
4.3 Method of payment 17
4.4 Interest on overdue payments 17
4.5 Allowance for remediation of Effluent Ponds 17
5. PRE-COMPLETION AND OTHER MATTERS 17
5.1 Payment of Dividend and Vendor Distribution 17
5.2 Pre-Completion notices 18
5.3 Continuity of Business 18
5.4 Access to Business 19
5.5 Assistance in relation to change of control 19
5.6 Terminate discussions 20
5.7 Transfer of registration of Company 20
6. COMPLETION 21
6.1 Time and place 21
6.2 Obligations of the Vendor 21
6.3 Obligations of the Purchaser 22
6.4 Simultaneous actions at Completion 23
6.5 Default in Completion 23
6.6 Books and Records 24
7. COMPLETION ACCOUNTS 24
7.1 Stocktake 24
7.2 Completion Accounts 24
7.3 Basis of preparation 24
7.4 Instructions to Auditors 24
7.5 Access to information 24
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7.6 Review of Completion Accounts 25
7.7 Dispute Resolution Procedure 25
7.8 Costs 26
8. TAX MATTERS 26
8.1 Section 338(h)(10) Election 26
8.2 Pre-Completion Tax returns 26
8.3 Post-Completion Tax returns 27
8.4 Straddle Period calculations 27
9. PURCHASER'S UNDERTAKINGS REGARDING GROUP EMPLOYEES 27
10. SUPERANNUATION 28
10.1 Cessation of participation in the funds 28
10.2 Transitional Superannuation Arrangements - employer contributions 28
10.3 Transitional Superannuation Arrangements - employee contributions 28
10.4 Superannuation Arrangements after the Withdrawal Date 28
10.5 Employee consent 29
10.6 Transfer of benefits from a Fund to the Purchaser's Fund 29
10.7 Unfunded liability of HJF Fund 30
10.8 Maintenance of earnings base 30
10.9 Reasonable endeavours 31
10.10 Records 31
11. WARRANTIES 31
11.1 Warranties by Vendor 31
11.2 Warranties by Purchaser 31
11.3 Gross Up 32
11.4 Time limits and other requirements for Warranty Claims 32
11.5 Small Warranty Claims 33
11.6 Maximum amount the Purchaser may recover 34
11.7 Purchaser acknowledgments 34
11.8 Limits on types of Warranty Claims 34
11.9 Contingent Warranty Claims 35
11.10 Purchaser's obligations for Warranty Claims relating to third parties 36
11.11 Purchaser must pursue third parties 36
11.12 Benefits received 36
12. VENDOR'S INDEMNITIES 37
12.1 General indemnity 37
12.2 Redundancy indemnity 37
12.3 Indemnity for customer Claims 38
12.4 Superannuation indemnity 38
12.5 Indemnity for US Taxes 39
12.6 Indemnity for Management Incentive Program Payments 39
12.7 Capacity 40
12.8 Continuing security 40
12.9 Obligations and rights not affected by certain matters 40
12.10 Principles for recovery under the indemnities 40
13. PURCHASER'S INDEMNITY 41
13.1 Indemnity for breach of positive obligations 41
13.2 Continuing security 41
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13.3 Obligations and rights not affected by certain matters 41
13.4 Principles for recovery under the indemnity 41
14. RESTRAINT OF VENDOR 42
14.1 Definitions 42
14.2 Prohibited activities 42
14.3 Restraint Period 42
14.4 ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
14.5 Interpretation 43
14.6 Exceptions 43
14.7 Acknowledgments 43
15. CONFIDENTIALITY AND PUBLICITY 43
15.1 Confidentiality 43
15.2 Confidential Information - until Completion or termination 44
15.3 Confidential Information - after Completion 44
15.4 Announcements 44
16. TRANSITION PRODUCTS 44
17. LICENSED PRODUCTS 45
18. GST 46
18.1 Interpretation 46
18.2 GST gross up 46
18.3 Reimbursements 46
18.4 Tax invoice 46
18.5 Variation 46
18.6 Recovery of GST 46
19. NOTICES AND OTHER COMMUNICATIONS 46
19.1 Service of notices 46
19.2 Effective on receipt 47
20. MISCELLANEOUS 47
20.1 Alterations 47
20.2 Approvals and consents 47
20.3 Assignment 47
20.4 Costs 47
20.5 Stamp duty 47
20.6 Survival 47
20.7 Counterparts 47
20.8 No merger 48
20.9 Entire agreement 48
20.10 Further action 48
20.11 Severability 48
20.12 Waiver 48
20.13 Relationship 48
20.14 Governing law and jurisdiction 48
20.15 Time is of the essence 49
SCHEDULE 1 - DETAILS OF THE COMPANY AND SUBSIDIARIES 50
SCHEDULE 2 - FORM OF MERGER AGREEMENT 51
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SCHEDULE 3 - MATERIAL CONTRACTS 52
SCHEDULE 4 - CALCULATION OF ADJUSTMENT AMOUNT 53
SCHEDULE 5 - WARRANTIES 56
SCHEDULE 6 - INTELLECTUAL PROPERTY RIGHTS 85
SCHEDULE 7 - PROPERTIES 86
SCHEDULE 8 - EQUIPMENT LEASES 87
SCHEDULE 9 - EMPLOYEE DETAILS 88
SCHEDULE 10 - DISCLOSED DOCUMENTS INDEX 89
SCHEDULE 11 - FIXED ASSET REGISTER 90
SCHEDULE 12 - AUDITED ACCOUNTS 91
SCHEDULE 13 - MANAGEMENT ACCOUNTS 92
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DETAILS
DATE
PARTIES
Name The ▇.▇. ▇▇▇▇▇▇▇ Company (a corporation incorporated in
the State of Ohio, United States of America)
Short form name VENDOR
Notice details ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ of
America
Facsimile: + 1 330 684 3026
Attention: General Counsel
Name SPC Ardmona Limited
ABN 68 059 317 618
Short form name PURCHASER
Notice details ▇▇-▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇
Facsimile: + 61 03 5822 2121
Attention: Managing Director and Company Secretary
BACKGROUND
A The Shares are legally and beneficially owned by the Vendor as set out in
Schedule 1.
B The Vendor has agreed to sell and the Purchaser has agreed to purchase the
Shares on the terms and conditions set out in this agreement.
AGREED TERMS
1. DEFINED TERMS & INTERPRETATION
1.1 DEFINED TERMS
In this agreement:
ACCC means the Australian Competition and Consumer Commission.
ASIC means the Australian Securities and Investments Commission.
ASX means Australian Stock Exchange Limited.
ACCOUNTING STANDARDS means:
(a) accounting standards approved under the Corporations Act and its
requirements about the preparation and contents of accounts; and
(b) generally accepted accounting principles, policies, practices and
procedures in Australia.
ACCOUNTS DATE means 30 April 2003, being the date in respect of which the
Audited Accounts have been prepared.
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ACTUARY means the actuary of the Vendor's Fund as at the Completion Date.
ACTUARY'S LETTER means the letter to be provided by the actuary of the HJF
Fund to the Purchaser which sets out each Group Company's contribution
rates to the HJF Fund and the frequency at which those contributions are
to be made, during the period between the Completion Date and the
Withdrawal Date.
AFFILIATED GROUP means any affiliated group within the meaning of Code
Section 1504(a) or any similar group defined under a similar provision of
state, local or foreign law.
ADJUSTMENT AMOUNT means the Preliminary Amount as adjusted in accordance
with clause 7.3(b).
ASSETS means the assets owned or used by the Group Companies in conducting
the Business as at the date of this agreement, particulars of which are
set out in Schedule 11 in respect of fixed Assets.
ASSOCIATE means, in relation to a person:
(a) an associate of the person under sections 10 to 17 of the
Corporations Act as if section 12(1) of that Act included a
reference to this agreement;
(b) a company or trust of which the person has Control;
(c) the spouse or child over the age of 18 of the person; or
(d) a Related Body Corporate of that person.
AUDITED ACCOUNTS means:
(a) the audited consolidated balance sheet of the Australian
Subsidiaries as at the Accounts Date; and
(b) the audited consolidated profit and loss statement and statement of
cash flows of the Australian Subsidiaries for the financial year
ended on the Accounts Date,
together with the notes to, and the reports of the directors in respect
of, those accounts. A copy of the Audited Accounts is reproduced in
Schedule 12.
AUDITORS means the auditors of the Group Companies.
AUSTRALIAN MIGRATION has the meaning given to that term in clause 5.7(a).
AUSTRALIAN SUBSIDIARIES means ▇▇▇▇▇ ▇▇▇▇▇ Foods and Hallco.
BOOKS AND RECORDS means all original and copy records, documents, books,
files, reports, accounts, plans, correspondence, letters and papers of
every description and other material regardless of their form or medium
and whether coming into existence before, on or after the date of this
agreement, belonging or relating to or used by any Group Company including
certificates of registration, minute books, statutory books and registers,
books of account, Tax returns, title deeds and other documents of title,
customer lists, price lists, computer programs and software, and trading
and financial records.
BUSINESS means the business carried on by the Group as at the date of this
agreement, including the business of the manufacture and sale of
conserves, jams, fruit pulps, marinades and sauces, toppings, fruit bars
and related food products.
BUSINESS DAY means:
(a) for receiving a Notice under clause 19, a day that is not a
Saturday, Sunday, public holiday or bank holiday in the place where
the Notice is received; and
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(b) for all other purposes, a day that is not a Saturday, Sunday, public
holiday or bank holiday in Victoria, Australia.
BUSINESS HOURS means from 9.00am to 5.00pm on a Business Day.
CATEGORY A MEMBER means a member of Category A of the HJF Fund, pursuant
to the trust deed of the HJF Fund as amended from time to time.
CATEGORY B MEMBER means a member of Category B of the HJF Fund, pursuant
to the trust deed of the HJF Fund as amended from time to time.
CATEGORY C MEMBER means a member of Category C of the HJF Fund, pursuant
to the trust deed of the HJF Fund as amended from time to time.
CATEGORY D MEMBER means a member of Category D of the HJF Fund, pursuant
to the trust deed of the HJF Fund as amended from time to time.
CLAIM includes a claim, notice, demand, action, proceeding, litigation,
investigation, judgment, damage, loss, cost, expense or liability however
arising, whether present, unascertained, immediate, future or contingent,
whether based in contract, tort or statute and whether involving a third
party or a party to this agreement.
CODE means the United States Internal Revenue Code of 1986. All section
references to the Code or Treasury Regulations include all similar
provisions under the applicable state, local or foreign tax law.
COMPANY means HJF Acquisition Corporation (a corporation incorporated in
the State of Delaware, United States of America), further details of which
are set out in Schedule 1.
COMPLETION means completion of the sale and purchase of the Shares
contemplated by this agreement.
COMPLETION ACCOUNTS means the audited consolidated balance sheet of the
Company and the Subsidiaries as at midnight on 30 April 2004, to be
prepared in accordance with clause 7.
COMPLETION DATE means the date on which Completion occurs, being:
(a) the Business Day which is at least 2 Business Days after the date on
which each of Conditions 1 and 2 in clause 2.1 are satisfied in
accordance with clause 2;
(b) if clause 7.7 applies, the date determined by clause 7.7(h); or
(c) such later date as the parties agree in writing.
COMPLETION EMPLOYEE means all employees of the Group Companies as at the
Completion Date, including any Management Employee.
CONDITIONS means the conditions set out in clause 2.1.
CONFIDENTIAL INFORMATION means:
(a) all information of or used by any Group Company relating to their
transactions, operations and affairs;
(b) all other information treated by any Group Company as confidential;
(c) all notes, data, reports and other records (whether or not in
tangible form) based on, incorporating or derived from information
referred to in paragraphs (a) or (b); and
(d) all copies (whether or not in tangible form) of the information,
notes, reports and records referred to in paragraphs (a), (b) or
(c),
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that is not public knowledge (otherwise than as a result of a breach of a
confidentiality obligation of a party).
CONTROL means:
(a) of a company by a person:
(i) the person determines the composition of the board of
directors of the company;
(ii) the board of directors of the company is accustomed to act in
accordance with the instructions, directions or wishes of the
person; or
(iii) the person holds or owns (alone or with its Associates or
Related Bodies Corporate):
(A) the majority of the issued shares of the company;
(B) the majority of the issued shares of the ultimate
holding company of the company; or
(C) the majority of any securities or other rights granted
by the company entitling holders to distributions based
on the profits, earnings or net liquidation proceeds of
the company; and
(b) of a trust by a person:
(i) the person is the sole trustee of the trust;
(ii) the composition of the board of directors of any trustee
company of the trust is determined by the person;
(iii) the board of directors of any trustee company of the trust is
accustomed to act in accordance with the instructions,
directions or wishes of the person; or
(iv) the person holds or owns (alone or with its Associates or
Related Bodies Corporate):
(A) the majority of the issued shares of any trustee company
of the trust;
(B) the majority of the issued shares of the ultimate
holding company of any trustee company of the trust; or
(C) the majority of the units, securities or other rights
granted by the trust which entitling holders to
distributions from the trust.
CORPORATIONS ACT means the Corporations ▇▇▇ ▇▇▇▇ (Cth).
DELAWARE NEWCO 2 means Ardmona Acquisition Corporation, a corporation
incorporated in the State of Delaware, United States of America, further
particulars of which are set out in Schedule 1.
DISCLOSED DOCUMENTS INDEX means the index of disclosed documents agreed by
the Vendor and the Purchaser in relation to the Group and the Business, an
initialled copy of which is reproduced in Schedule 10.
DIVIDEND means the unfranked dividend of $12,500,000 declared and paid by
▇▇▇▇▇ ▇▇▇▇▇ Foods to ▇▇▇▇▇▇▇ Australia on 29 April 2004.
DISCLOSURE LETTER means the letter dated on or about the date of this
agreement from the Vendor to the Purchaser entitled 'Disclosure Letter',
making disclosures against the Warranties.
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DISCLOSURE MATERIAL means the written information made available to the
Purchaser and its advisers during the course of its investigations in
respect of the Business and the Group comprising:
(a) the material listed in the Disclosed Documents Index; and
(b) the Disclosure Letter.
EFFLUENT PONDS means the effluent ponds located adjacent to the freehold
property referred to in Schedule 7 and used by ▇▇▇▇▇ ▇▇▇▇▇ Foods for trade
waste and waste water disposal under the Kyabram Town Council Agreement.
EMPLOYEES means all employees of the Group Companies as at Completion,
including the Management Employees, particulars of whom are provided in
Schedule 9.
ENCUMBRANCE includes mortgage, charge, lien, restriction against transfer,
encumbrance and other third party interest.
ENVIRONMENTAL WARRANTIES means the representations and warranties set out
in paragraph 16 of Schedule 5.
EQUIPMENT LEASES means the leases held by the Group Companies in respect
of plant, equipment and motor vehicles, the particulars of which are set
out in Schedule 8.
FREEHOLD PROPERTIES means those Properties listed in Part 1 of Schedule 7
which are real property owned by a Group Company.
FUND means the HJF Fund and the Participating Funds.
GOVERNMENT AUTHORITY means:
(a) a government, whether foreign, federal, state, territorial or local;
(b) a department, office or minister of a government acting in that
capacity; or
(c) a commission, delegate, instrumentality, agency, board or other
governmental, semi-governmental, judicial, administrative, monetary
or fiscal authority, whether statutory or not.
GROUP means the Company and the Subsidiaries, particulars of which are set
out in Schedule 1.
GROUP COMPANY means any one of the Company and the Subsidiaries and GROUP
COMPANIES means all of them.
GST has the meaning given to that term in the A New Tax System (Goods and
Services Tax) ▇▇▇ ▇▇▇▇ (Cth).
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇. ▇▇ Pty Ltd ACN 089 247 094 (being one of the
Subsidiaries).
▇▇▇▇▇ ▇▇▇▇▇ FOODS means ▇▇▇▇▇ ▇▇▇▇▇ Foods Pty Ltd ACN 007 179 857 (being
one of the Subsidiaries).
HJF SUPERANNUATION NOMINEES means ▇▇▇▇▇ ▇▇▇▇▇ Foods Kyabram Superannuation
Nominees Pty Ltd ACN ▇▇▇ ▇▇▇ ▇▇▇, being the trustee of the HJF Fund.
HJF FUND means the ▇▇▇▇▇ ▇▇▇▇▇ Foods Kyabram Superannuation Fund.
INDEPENDENT ACCOUNTANT means a chartered accountant or firm of chartered
accountants appointed under clause 7.7(d).
KYABRAM TOWN COUNCIL AGREEMENT means the agreement between ▇▇▇▇▇ ▇▇▇▇▇
Foods and The Mayor Councillors and Burgesses of the Town of Kyabram dated
26 June 1989, as varied in
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accordance with a supplemental agreement between ▇▇▇▇▇ ▇▇▇▇▇ Foods and The
Kyabram Town Council dated 9 November 1994.
LAW includes any statute, legislation, law, regulation, by-law, scheme,
determination, ordinance, rule or other statutory provision (whether
Commonwealth, State or municipal).
LEASES means the leases held by ▇▇▇▇▇ ▇▇▇▇▇ Foods in respect of plant,
equipment and motor vehicles, the particulars of which are set out in
Schedule 7.
LIABILITIES includes all liabilities (whether actual, contingent or
prospective), losses, damages, costs and expenses of whatever description.
LICENSED PRODUCTS means:
(a) the product described as '1508033 A10 x 3 Chocolate Fudge';
(b) the product described as '1508031 A10 x 3 Caramel Fudge'; and
(c) the product described as '1508002 A10 x 3 Strawberry Topping'.
MANAGEMENT ACCOUNTS means:
(a) the unaudited consolidated balance sheet of the Australian
Subsidiaries (other than Delaware Newco 2) as at 28 February 2004;
and
(b) the unaudited consolidated profit and loss statement and statement
of cash flows of the Australian Subsidiaries (other than Delaware
Newco 2) for the 10 months ended 28 February 2004,
as prepared by the management of the Group, together with the notes to,
and the reports of the directors in respect of, those accounts. A copy of
the Management Accounts is reproduced in Schedule 12.
MANAGEMENT EMPLOYEE means any of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ or ▇▇▇▇▇ ▇▇▇▇▇▇▇.
MATERIAL ADVERSE CHANGE means:
(a) the destruction of or damage rendering unusable or irreparable any
of the fixed Assets that are material to the operation of the
Business; or
(b) the occurrence of a change, event or circumstance in relation to the
Business or a Group Company which has resulted in or is reasonably
likely to result in either:
(i) a reduction of $250,000 or more in the consolidated earnings
before interest, tax, depreciation and amortisation of the
Group for the financial year ended 30 April 2004; or
(ii) a reduction of $2,500,000 or more in the consolidated net
assets of the Group as at the date of the Management Accounts.
MATERIAL CONTRACTS means all material contracts or agreements to which a
Group Company is a party or by which a Group Company may be bound as at
the date of this agreement, particulars of which are provided in Schedule
3.
MERGER AGREEMENT means an agreement entitled 'AGREEMENT AND PLAN OF
MERGER' in substantially the form set out in Schedule 2 to be entered into
prior to Completion between ▇▇▇▇▇▇▇ Australia and Delaware Newco 2, in
respect of the Merger Transaction.
MERGER TRANSACTION means the merger of ▇▇▇▇▇▇▇ Australia with and into
Delaware Newco 2 under the Merger Agreement and otherwise in accordance
with the laws of the States of Ohio and Delaware, United States of
America, such that ▇▇▇▇▇▇▇ Australia ceases to exist as a separate
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legal entity and all of its assets and liabilities become assets and
liabilities of Delaware Newco 2, with Delaware Newco 2 being:
(a) the successor at law of ▇▇▇▇▇▇▇ Australia; and
(b) the holder and beneficial owner of all of the shares in ▇▇▇▇▇ ▇▇▇▇▇
Foods.
MIDNIGHT in relation to a day is the first midnight to occur after the
commencement of that day.
OHIO FRANCHISE TAX means that Tax imposed on all corporations, business
trusts and certain limited liability companies by Chapter 5733 of the Ohio
Revised Code.
OHIO REVISED CODE means the body of all statutes of a permanent and
general nature of the State of Ohio, which statutes:
(a) have been passed by the legislature of the State of Ohio;
(b) have been approved by the Ohio State governor; and
(c) are revised and consolidated into general provisions, titles,
chapters and sections.
1936 TAX ACT means the Income Tax Assessment ▇▇▇ ▇▇▇▇ (Cth).
1997 TAX ACT means the Income Tax Assessment ▇▇▇ ▇▇▇▇ (Cth) and includes,
where appropriate, the Income Tax (Transitional Provisions) ▇▇▇ ▇▇▇▇
(Cth).
NET ASSETS AMOUNT means the amount of the net assets of the relevant Group
Companies as at midnight on 30 April 2004 as set out in the Completion
Accounts, agreed by the parties or determined by the Independent
Accountant under clause 7.7, as the case may be.
PARTICIPATING FUNDS mean each of the superannuation funds known as the
Superannuation Trust of Australia and the Food Industry Superannuation
Trust of Australia.
PRE-COMPLETION PARTIAL TAX PERIOD means the portion of any Straddle Period
up to and including the Completion Date.
PRELIMINARY AMOUNT has the meaning given in Part A of Schedule 4.
PROPERTIES means the real property (whether leasehold or freehold) owned
or occupied by any of the Group Companies, particulars of which are
provided in Schedule 7.
PURCHASE PRICE means the amount calculated as provided in clause 4 and
Schedule 4.
PURCHASER'S ENVIRONMENTAL REPORT means the report prepared by GHD Pty Ltd
on behalf of the Purchaser in respect of the environmental condition of
the Properties and dated April 2004.
PURCHASER'S FUND has the meaning given to it in clause 10.4.
RELATED BODY CORPORATE has the meaning given to that term in the
Corporations Act.
SECTION 338(h)(10) ELECTION means an election under section 338(h)(10) of
the Code and any corresponding election under state, local and foreign tax
law with respect to the purchase and sale of the Shares and with respect
to Delaware Newco 2.
SHARES means all of the issued shares in the capital of the Company.
▇▇▇▇▇▇▇ AUSTRALIA means ▇▇▇▇▇▇▇ Australia Inc., a corporation incorporated
in the State of Ohio, further particulars of which are set out in Schedule
1, and on or after the completion of the Merger Transaction, its successor
corporation.
SGA ACT means the Superannuation Guarantee (Administration) ▇▇▇ ▇▇▇▇.
SGC ACT means the Superannuation Guarantee Charge ▇▇▇ ▇▇▇▇.
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SIS ACT means the Superannuation Industry (Supervision) ▇▇▇ ▇▇▇▇ (Cth) and
Superannuation Industry (Supervision) Regulations 1994.
STOCK means all raw materials, supplies, packaging and containers,
work-in-progress, finished products, parts and components and other
inventory of the Group Companies, including items of stock in transit or
on consignment to customers.
STRADDLE PERIOD means any taxable period beginning before the Completion
Date and ending after the Completion Date.
STRAWBERRY CONCENTRATE means the product described as '3300201 Strawberry
Conc 4 x W/Seed (JMS Code: 70/475 # Strawberry Concentrate Item 1682)'.
STRAWBERRY ESTER means the product described as '3500212 Strawberry Ester
(JMS Code: Oz Straw Ess Item 91682)'.
SUBSIDIARIES means the corporations listed in Schedule 1 as subsidiaries
of the Company and includes Delaware Newco 2 and ▇▇▇▇▇▇▇ Australia.
SUPERANNUATION ARRANGEMENT means any fund, plan, scheme, agreement or
arrangement under which superannuation benefits, retirement benefits, life
assurance benefits, death or disability benefits, pensions or annuities
are or may be provided to or in respect of any present or former Employees
of the Group Companies or their respective dependants.
TAX includes income tax, capital gains tax, franchise tax, franking
deficit tax, franking additional tax, over-franking tax, withholding tax,
fringe benefits tax, pay-as-you-earn tax, pay-as-you-go tax, sales tax,
customs duty, payroll tax, land tax, stamp duty, financial institutions
duty, debits tax, water and municipal rates, gift tax, estate tax,
superannuation contributions and charges, social security and national
insurance contributions, purchase, goods and services tax, value added
tax, prescribed payments and all other taxes, charges, assessments,
contributions, withholdings, remittences, imposts, duties, excises, rates
and levies in any part of the world and any penalties, interest, fines or
other costs in relation to any Tax.
TAXATION WARRANTIES means each of the representations and warranties set
out in paragraph 10 of Schedule 5.
TRANSFER AMOUNT means the amount to be transferred under clause 10.7.
TRANSITION PRODUCTS means Strawberry Concentrate and Strawberry Ester.
VENDOR'S BUSINESS means the business carried on by the Vendor as at the
date of this agreement of the manufacture and sale of jams, jellies,
preserves, conserves, marmalades, butters, fruit spreads and related food
products.
VENDOR DISTRIBUTION means the distribution by ▇▇▇▇▇▇▇ Australia to the
Vendor of cash on or about the time of payment of the Dividend.
VENDOR'S INTELLECTUAL PROPERTY means all Intellectual Property Rights (as
that term is defined in Schedule 5) of the Vendor used in respect of the
Licensed Products, as specified in Part 2 of Schedule 6.
WARRANTIES means each of the representations and warranties given by the
Vendor under clause 11 and set out in Schedule 5, including the
Environmental Warranties, the Taxation Warranties, the Vendor's
acknowledgments and confirmations in clause 5.1(a).
WARRANTY CLAIM means any Claim by the Purchaser (or any person making a
Claim through or on behalf of the Purchaser) against the Vendor for breach
of any of the Warranties.
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WITHDRAWAL DATE means the date which is 3 months after the Completion
Date, or any earlier date:
(a) in respect of a Participating Fund, specified by the Purchaser; and
(b) in respect of the HJF Fund, agreed between the parties,
as the date on which each Group Company will cease to be a participating
employer in, and as the case may be, the principal participating employer
of, the relevant Fund.
1.2 INTERPRETATION
In this agreement, except where the context otherwise requires:
(a) the singular includes the plural and vice versa, and a gender
includes other genders;
(b) another grammatical form of a defined word or expression has a
corresponding meaning;
(c) a reference to a clause, paragraph, schedule or annexure is to a
clause or paragraph of, or schedule or annexure to, this agreement,
and a reference to this agreement includes any schedule or annexure;
(d) a reference to a document or instrument includes the document or
instrument as novated, altered, supplemented or replaced from time
to time;
(e) a reference to A$, $A, DOLLAR or $ is to Australian currency;
(f) a reference to $US or US$ is to United States currency.
(g) a reference to time is to Victoria, Australia time;
(h) a reference to a party is to a party to this agreement, and a
reference to a party to a document includes the party's executors,
administrators, successors and permitted assigns and substitutes;
(i) a reference to a person includes a natural person, partnership, body
corporate, association, governmental or local authority or agency or
other entity;
(j) a reference to a statute, ordinance, code or other law means a
statute, ordinance, code or other law of any jurisdiction and
includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of
them;
(k) a word or expression defined in the Corporations Act has the meaning
given to it in the Corporations Act;
(l) the meaning of general words is not limited by specific examples
introduced by INCLUDING, FOR EXAMPLE or similar expressions;
(m) any agreement, representation, warranty or indemnity by two or more
parties (including where two or more persons are included in the
same defined term) binds them jointly and severally;
(n) any agreement, representation, warranty or indemnity in favour of
two or more parties (including where two or more persons are
included in the same defined term) is for the benefit of them
jointly and severally;
(o) a rule of construction does not apply to the disadvantage of a party
because the party was responsible for the preparation of this
agreement or any part of it; and
(p) if a day on or by which an obligation must be performed or an event
must occur is not a Business Day, the obligation must be performed
or the event must occur on or by the next Business Day.
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1.3 HEADINGS
Headings are for ease of reference only and do not affect interpretation.
2. Conditions
2.1 CONDITIONS
Completion of the sale and purchase of the Shares under this agreement is
subject to the following conditions precedent being satisfied before 30
June 2004 or such other date as the parties agree.
PARTY ENTITLED
CONDITION TO BENEFIT
1. ▇▇▇▇▇▇▇ Australia and Delaware Newco 2 entering into the Merger Agreement Vendor and Purchaser
and the Merger Transaction being completed according to the terms of the
Merger Agreement and otherwise being effective under and in compliance
with the laws of the States of Ohio and Delaware, United States of
America.
2. The Treasurer of the Commonwealth of Australia consenting under the Vendor and Purchaser
Foreign Acquisition and Takeovers ▇▇▇ ▇▇▇▇ (Cth) (FATA) to the acquisition
of all of the issued shares in ▇▇▇▇▇ ▇▇▇▇▇ Foods by Delaware Newco 2 under
the Merger Transaction. If that consent is given subject to conditions or
requirements, this condition is not fulfilled unless those conditions or
requirements are reasonably acceptable to the Purchaser and the Vendor.
For the purpose of this condition, the Treasurer is taken to have
consented to the acquisition of all of the issued shares in ▇▇▇▇▇ ▇▇▇▇▇
Foods by Delaware Newco 2 under the Merger Transaction if:
(a) the Treasurer issues a notice under FATA stating that the
Commonwealth Government does not object to the acquisition of all of
the issued shares in ▇▇▇▇▇ ▇▇▇▇▇ Foods by Delaware Newco 2 under the
Merger Transaction; or
(b) the Treasurer is, by reason of lapse of time, not empowered to make
an order under FATA in relation to the acquisition of all of the
issued shares in ▇▇▇▇▇ ▇▇▇▇▇ Foods by Delaware Newco 2 under the
Merger Transaction.
3. There being no Material Adverse Change or if such a change occurs before Purchaser
Completion, its effect is made good or remedied to the reasonable
satisfaction of the Purchaser by Completion.
4. There being no material breach or any facts or circumstances that may Purchaser
reasonably be expected to lead to a material breach of any of the Warranties
before Completion.
5. The Vendor complying with its obligations under clause 5.7(b) with respect Purchaser
to the Australian Migration.
6. The Vendor doing all things required of it under clause 8.1(b) to enable the Purchaser
Company and, if required, any Group Company to make the Section 338(h)(10)
Election.
7. The delivery of the Actuary's Letter referred to in clause 10.2. Purchaser
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2.2 WAIVER OF CONDITIONS
A Condition may only be waived in writing by each party entitled to the
benefit of that Condition (as specified in relation to each Condition in
the second column of the table in clause 2.1) and will be effective only
to the extent specifically set out in that waiver.
2.3 CONDUCT OF THE PARTIES
Each party must use all reasonable efforts within its own capacity to
ensure that each Condition is fulfilled by midnight on the day before the
Completion Date.
2.4 FAILURE OF CONDITION
If a party has complied with its obligations under clause 2.3, it may
terminate this agreement by giving notice in writing to the other parties
if one or more Conditions are not fulfilled by midnight on the day before
the Completion Date or another date agreed by the parties in writing.
2.5 ACTION ON TERMINATION
(a) On termination of this agreement under clause 2.4, or for any other
reason, each party must stop, and must cause its permitted
disclosees to stop, using confidential information of another party
and, at the other party's option:
(i) return to the other party;
(ii) destroy and certify in writing to the other party the
destruction of; or
(iii) destroy and permit a representative of the other party to
witness the destruction of,
all confidential information in its possession or control.
(b) Termination of this agreement does not affect any accrued rights or
remedies of a party.
3. SALE AND PURCHASE
3.1 AGREEMENT TO SELL AND PURCHASE
The Vendor as beneficial owner agrees to sell to the Purchaser, and the
Purchaser agrees to buy from the Vendor, the Shares:
(a) for the Purchase Price;
(b) free from Encumbrances;
(c) with all rights, including dividend and voting rights, attached or
accrued to them on or after the date of this agreement; and
(d) subject to this agreement.
3.2 WAIVER OF PRE-EMPTIVE RIGHTS
The Vendor waives in favour of the Purchaser any rights of pre-emption
which the Vendor or a Related Body Corporate of it has or may have in
respect of any of the Shares.
4. PURCHASE PRICE AND OTHER PAYMENTS
4.1 AMOUNT
The Purchase Price for the Shares is $51,000,000 plus or minus (as the
case may be) the Adjustment Amount as provided in Part C of Schedule 4 and
disregarding the fact that the Adjustment Amount may be a negative amount.
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4.2 PAYMENT OF THE PURCHASE PRICE
The Purchaser must pay the Purchase Price on the Completion Date.
4.3 METHOD OF PAYMENT
Unless the context otherwise requires, where an amount is required to be
paid to a party (RECEIVING PARTY) by another party (PAYING PARTY) under
this agreement, that amount must be paid by the electronic transfer of
funds to the Receiving Party, or otherwise as set out in the written
direction of the Receiving Party if that written direction is received by
the Paying Party more than 2 Business Days before the date upon which
payment of the amount is due.
4.4 INTEREST ON OVERDUE PAYMENTS
(a) Without prejudice to any other rights or remedies of the Vendor, if
the Purchaser fails to make any payment required under this
agreement by the due date for payment, then the Purchaser must pay
to the Vendor interest on the unpaid amount at the Bank of Melbourne
Business Overdraft Rate (as varied from time to time) plus 2%. Such
interest will accrue from the date payment was due to the date
payment is made, will be calculated daily and capitalised monthly,
and must be paid by the Purchaser upon demand by the Vendor.
(b) Without prejudice to any other rights or remedies of the Purchaser,
if the Vendor fails to make any payment required under this
agreement by the due date for payment, then the Vendor must pay to
the Purchaser interest on the unpaid amount at the Bank of Melbourne
Business Overdraft Rate (as varied from time to time) plus 2%. Such
interest will accrue from the date payment was due to the date
payment is made, will be calculated daily and capitalised monthly,
and must be paid by the Vendor upon demand by the Purchaser.
4.5 ALLOWANCE FOR REMEDIATION OF EFFLUENT PONDS
The parties acknowledge and agree that:
(a) the Purchase Price specified in clause 4.1 includes an allowance in
the amount of $250,000 in favour of the Purchaser for the estimated
costs of remediation of the Effluent Ponds under the Kyabram Town
Council Agreement;
(b) if the costs of remediating the Effluent Ponds under the Kyabram
Town Council Agreement are less than $250,000, the Vendor is not
entitled to make a Claim on the Purchaser in respect of the
difference;
(c) if the costs of remediating the Effluent Ponds under the Kyabram
Town Council Agreement are greater than $250,000, the Purchaser is
not entitled to make a Claim on the Vendor in respect of the
difference; and
(d) despite any other provision of this agreement, on and from
Completion, the Vendor will have no Liability in respect of the
Effluent Ponds, whether pursuant to the Kyabram Town Council
Agreement or otherwise.
5. PRE-COMPLETION AND OTHER MATTERS
5.1 PAYMENT OF DIVIDEND AND VENDOR DISTRIBUTION
(a) The Vendor warrants to the Purchaser that:
(i) prior to the date of this agreement, the directors of ▇▇▇▇▇
▇▇▇▇▇ Foods have declared and fully paid the Dividend to
▇▇▇▇▇▇▇ Australia;
(ii) the Dividend was paid from the cash reserves of ▇▇▇▇▇ ▇▇▇▇▇
Foods;
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(iii) prior to the date of this agreement, ▇▇▇▇▇▇▇ Australia has
paid the Vendor Distribution to the Vendor;
(iv) the Vendor Distribution was fully paid from the proceeds of
the Dividend received by ▇▇▇▇▇▇▇ Australia; and
(v) each Group Company has discharged all Liabilities in relation
to the Dividend and the Vendor Distribution and the Vendor has
no Claim against ▇▇▇▇▇▇▇ Australia or any other Group Company
with respect to the Dividend or the Vendor Distribution or
both.
(b) The Purchaser disclaims any involvement in the declaration,
authorisation, issuance and payment of the Dividend and the Vendor
Distribution.
5.2 PRE-COMPLETION NOTICES
(a) At least 2 Business Days before the Completion Date, the Vendor must
give the Purchaser full and accurate written details of:
(i) each bank or other financial institution with which the Group
Companies have an account, safety deposit box or deposit; and
(ii) the names of all persons authorised to draw on or have access
to them.
(b) At least 2 Business Days before the Completion Date, the Purchaser
must notify the Vendor in writing of the authorities to operate bank
accounts that are to be revoked and the names of the new signatories
to those accounts.
5.3 CONTINUITY OF BUSINESS
Until Completion, the Vendor must ensure that the Group Companies (and
each of them):
(a) conduct the Business in the usual and ordinary course, on arm's
length commercial terms and substantially in the same manner as the
Business was conducted prior to the date of this agreement; and
(b) do not, without the prior consent of the Purchaser (with such
consent not to be unreasonably withheld):
(i) destroy any Books and Records;
(ii) take any step to wind up any Group Company;
(iii) take any action to effect a reorganisation, reclassification,
reconstruction, consolidation or sub-division of the capital
of any Group Company or any buy-back, redemption, reduction or
cancellation of shares or share capital of any Group Company
other than to implement the Merger Transaction;
(iv) enter into any individual commitment for capital expenditure
which is for more than $50,000 (inclusive of GST) or any
series of commitments for more than $200,000 (inclusive of
GST) in aggregate;
(v) enter into, vary or terminate any contract which is for more
than $50,000 (inclusive of GST), other than a contract for the
supply of advertising and/or media services to a Group Company
by a third party, or for a term of longer than one year;
(vi) acquire, dispose of, or create an Encumbrance over, any of the
Assets other than an acquisition or disposal in the usual and
ordinary course of the Business and for less than $20,000
(inclusive of GST);
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(vii) distribute or return any capital or pay any dividend to their
members;
(viii) borrow money, draw on any credit lines or provide any
guarantee or other security to any third party;
(ix) issue any shares, options or securities which are convertible
into shares in any of the Group Companies;
(x) alter the constitution, articles of incorporation or other
constituent documents of any of the Group Companies other than
pursuant to the Merger Transaction;
(xi) alter any accounting policy or practice of the Group
Companies, except as required by any change to the Accounting
Standards;
(xii) employ any new employee with an annual remuneration package of
more than $60,000;
(xiii) except in the usual and ordinary course of the Business or as
required by any applicable law or industrial award, terminate,
change the terms of employment, or pay or provide any bonus,
to any employee; or
(xiv) except as otherwise provided in this agreement, materially
vary or terminate any of the Material Contracts.
5.4 ACCESS TO BUSINESS
Until Completion the Vendor must:
(a) ensure that ▇▇▇▇▇ ▇▇▇▇▇ Foods permits the Purchaser or its
authorised representatives to have reasonable access during normal
business hours to the Properties and the Assets, including the Books
and Records;
(b) answer any reasonable written enquiries or requisitions issued by
the Purchaser; and
(c) provide all information, assistance and facilities that the
Purchaser reasonably requires.
Any request by the Purchaser and its representatives under this clause 5.4
must not be made or pursued in such manner as to interfere unreasonably
with the conduct of the Business or the business of the Vendor.
5.5 ASSISTANCE IN RELATION TO CHANGE OF CONTROL
If a Lease or any Material Contract requires the consent of the relevant
landlord or counterparty as a consequence of the proposed sale of the
Shares to the Purchaser, then:
(a) the parties must cooperate and use all reasonable endeavours to
obtain that consent before Completion;
(b) the Purchaser must, and must cause the relevant Group Company to,
accept any terms imposed by the landlord or counterparty (as the
case may be) that are reasonably required (including the provision
of a guarantee from a Related Body Corporate of the Purchaser) or
are not more onerous for the Purchaser or the relevant Group
Company, or less favourable to the Purchaser or the relevant Group
Company, than those which apply immediately before Completion;
(c) the Purchaser must pay the costs of any third party (other than a
Related Body Corporate of the Vendor) incurred in providing the
required consent; and
(d) the Purchaser must not delay or fail to complete the purchase of the
Shares if that consent has not been obtained on or before
Completion.
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5.6 TERMINATE DISCUSSIONS
Until Completion, the Vendor must not solicit or respond to any enquiries
or proposals by any person, other than the Purchaser, concerning an
acquisition of the Shares or the assets of the Company or the Group.
5.7 TRANSFER OF REGISTRATION OF COMPANY
(a) The Vendor acknowledges that, if this agreement is Completed
according to its terms, the Purchaser intends, immediately following
Completion, to take the steps necessary under law of the State of
Delaware, United States of America (DELAWARE LAW), and Part 5B.1 of
the Corporations Act to transfer the incorporation of the Company
and Delaware Newco 2 so that:
(i) the Company and Delaware Newco 2 will each cease to be
registered as a corporation incorporated in the State of
Delaware, United States of America; and
(ii) the Company and Delaware Newco 2 are each registered in
Victoria, Australia as a proprietary company limited by shares
under Part 5B.1 of the Corporations Act,
(together, the AUSTRALIAN MIGRATION).
(b) Prior to Completion, the Vendor undertakes to do in a timely manner:
(i) all things required of it under Delaware law, the law of the
State of Ohio, the law of any other State of the United States
of America and Part 5B.1 the Corporations Act;
(ii) all things within its control; and
(iii) all things reasonably requested by the Purchaser,
in relation to the Merger Transaction and the Australian Migration,
including executing and delivering documents, causing documents to
be executed and delivered, certifying documents, causing documents
to be certified, obtaining director and shareholder consents and
anything related or incidental thereto, to place the Purchaser in
the position that, immediately following Completion, the Purchaser
will be able to lodge with ASIC a complying application under Part
5B.1 of the Corporations Act for each of the Company and Delaware
Newco 2 to effect the Australian Migration, first in relation to
Delaware Newco 2 and secondly in relation to the Company.
(c) Following Completion, the Vendor undertakes to do in a timely
manner:
(i) any further things required of it under Delaware law, the law
of the State of Ohio, the law of any other State of the United
States of America and the Corporations Act;
(ii) any further things within its control; and
(iii) any further things reasonably requested by the Purchaser,
in relation to the Merger Transaction and the Australian Migration,
including executing and delivering documents, causing documents to
be executed and delivered, certifying documents, causing documents
to be certified, obtaining director and shareholder consents, and
anything related or incidental thereto, to enable the Purchaser to
complete or otherwise perfect the Australian Migration, first in
relation to Delaware Newco 2 and secondly in relation to the
Company.
(d) The Vendor acknowledges and agrees that time is of the essence in
relation to its obligations under this clause 5.7.
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(e) The Vendor must bear its own costs incurred in complying with its
obligations under this clause 5.7.
(f) The Purchaser must bear its own costs incurred in effecting the
Australian Migration. For the avoidance of doubt, nothing in this
clause 5.7(f) restricts or limits the Purchaser's indemnity under
clause 12.1 in respect of any breach by the Vendor of its
obligations under this clause 5.7.
6. COMPLETION
6.1 TIME AND PLACE
If all of the Conditions have been fulfilled or waived under clause 2.1,
Completion will take place at 2.00 p.m. on the Completion Date at the
offices of ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, or
another time and place agreed by the parties.
6.2 OBLIGATIONS OF THE VENDOR
At or before Completion, the Vendor must:
(a) deliver to the Purchaser evidence satisfactory to the Purchaser that
Conditions 1, 2 and 7 in clause 2.1 have been satisfied;
(b) deliver to the Purchaser duly executed and completed transfers of
the Shares in favour of the Purchaser in registrable form together
with the relevant share certificates;
(c) deliver to the Purchaser duly executed and completed transfers in
favour of the Purchaser of any shares in the Subsidiaries which are
not registered in the name of the Company or another Subsidiary in
registrable form together with the relevant share certificates;
(d) deliver all documents and otherwise do (and cause to be done) the
acts, matters and things that clause 5.7(b) provides for the Vendor
to do (and to cause to be done) at or before Completion in respect
of the Australian Migration, including delivering counterparts of
the Merger Agreement duly executed by ▇▇▇▇▇▇▇ Australia and Delaware
Newco 2;
(e) deliver to the Purchaser evidence satisfactory to the Purchaser
that:
(i) the Merger Transaction has been completed in compliance with
and is effective under the laws of the States of Ohio and
Delaware, United States of America;
(ii) Delaware Newco 2 is the successor at law of ▇▇▇▇▇▇▇ Australia;
and
(iii) Delaware Newco 2 is the legal and beneficial owner of all of
the issued share capital in ▇▇▇▇▇ ▇▇▇▇▇ Foods;
(f) deliver all documents and otherwise do (and cause to be done) the
acts, matters and things that clause 8.1(b) provides for the Vendor
to do (and cause to be done) at or before Completion in respect of
the Section 338(h)(10) Election;
(g) produce to the Purchaser any power of attorney or other authority
under which this agreement, the transfers of the Shares and any
shares referred to in clause 6.2(c) are executed;
(h) deliver to the Purchaser copies of any consents and waivers required
under clause 3.2;
(i) cause to be held a meeting of the directors of the Company and to
obtain at that meeting, subject to the payment of stamp duty (if
any):
(i) the approval of the registration of the transfer of the Shares
in favour of the Purchaser;
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(ii) the cancellation of the existing share certificates for the
Shares; and
(iii) the issue of a new certificate for the Shares in favour of the
Purchaser,
or cause a circular resolution of the directors of the Company to be
passed resolving to do the matters referred to in sub-paragraphs
(i), (ii) and (iii) above;
(j) cause to be held meetings of the directors of each Group Company
(including the Company) accepting the resignations of all of the
existing directors and other officeholders or cause a circular
resolution of the directors of each Group Company to be passed
resolving to accept those resignations, but in either case with all
resignations being subject to and taking effect from Completion;
(k) deliver to the Purchaser a letter (in the form approved by the
Purchaser) from each resigning officer of a Group Company
acknowledging that he or she has no Claim against any Group Company
for breach of contract, loss of office, redundancy, compensation,
payment or repayment of loans or otherwise, except for payments
properly payable as an employee for accrued salary, holiday pay and
long service leave up to the Completion Date;
(l) if required by the Purchaser, cause the revocation, with effect from
Completion, of all authorities relating to bank accounts of each
Group Company;
(m) deliver to the Purchaser all Books and Records complete and up to
date (other than those which the Vendor is entitled to retain under
clause 6.6), or otherwise place the Purchaser in control of the
Books and Records by leaving them at the Properties;
(n) deliver to the Purchaser, by leaving at the Properties, all of the
following for the Group Companies which are in the possession of the
Vendor:
(i) copies of the constitution or other constituent documents;
(ii) the common seal and duplicate seals;
(iii) the Books and Records;
(iv) the certificates of incorporation;
(v) share certificates representing all of the issued share
capital of the Company;
(vi) certificates of registration of all business names used in the
Business;
(vii) certificates of title for any relevant Assets;
(viii) executed and stamped originals of all leases of the
Properties, the Material Contracts and any other contracts;
(ix) certificates of registration and other documents of title for
in respect of intellectual property rights; and
(x) all other Assets; and
(o) do all other things necessary or desirable to transfer the Shares,
to complete any other transaction contemplated by this agreement and
to place the Purchaser in effective control of the Group and the
Business.
6.3 OBLIGATIONS OF THE PURCHASER
The Purchaser must:
(a) at Completion, pay the amount under clause 4.1; and
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(b) at or before Completion, deliver to the Vendor a copy of any power
of attorney or other authority under which this agreement has been
executed by the Purchaser (for example, a copy of the Purchaser's
authorising board resolution).
6.4 SIMULTANEOUS ACTIONS AT COMPLETION
In respect of Completion:
(a) the obligations of the parties under this agreement are
interdependent;
(b) all actions required to be performed will be taken to have occurred
simultaneously on the Completion Date; and
(c) the Purchaser need not complete the purchase of any Shares unless
the purchase of all the Shares is completed simultaneously.
6.5 DEFAULT IN COMPLETION
If, without the written agreement of the Vendor and the Purchaser,
Completion does not take place on the Completion Date due to the Vendor or
the Purchaser (DEFAULTING PARTY) not complying with clause 6.2 or 6.3
(respectively), the following provisions will apply.
(a) That of the Vendor or the Purchaser which is not the Defaulting
Party (NON-DEFAULTING PARTY) may give the Defaulting Party a notice
(COMPLETION NOTICE) requiring the Defaulting Party to comply with
clause 6.2 or 6.3 (as the case may be) within 3 Business Days after
the date the notice is given.
(b) A Completion Notice will be effective only if the Non-Defaulting
Party, at the time the notice is given, is in all respects ready,
able and willing to proceed to effect Completion in accordance with
the Completion Notice (and the Non-Defaulting Party states in the
Completion Notice that it is so ready, willing and able) or is not
so ready, able and willing to effect Completion only by reason of
the default or omission of the Defaulting Party.
(c) The Defaulting Party must comply with all of its obligations under
clause 6.2 or 6.3 (as the case may be) within 3 Business Days after
the date the Completion Notice is validly given.
(d) If the Defaulting Party is the Purchaser and the Purchaser does not
comply with its obligations referred to in clause 6.5(c), the Vendor
may, without prejudice to any of its other rights or remedies
available under this agreement or at law:
(i) ▇▇▇ the Purchaser for specific performance; or
(ii) terminate this agreement and ▇▇▇ the Purchaser for damages, it
being acknowledged and agreed that the entry by the Vendor
into an unconditional contract for the resale of all or some
of the Shares by the Vendor within 60 days after the
Completion Date will take effect as a termination of this
agreement by the Vendor, if this agreement has not previously
been terminated, and the resale will be deemed to have
occurred after termination.
(e) If the Defaulting Party is the Vendor and the Vendor does not comply
with its obligations referred to in clause 6.5(c), the Purchaser
may, without prejudice to any of its other rights or remedies
available under this agreement or at law:
(i) ▇▇▇ the Vendor for specific performance; or
(ii) terminate this agreement and ▇▇▇ the Vendor for damages.
(f) If this agreement is terminated under this clause 6, this clause 6
and clause 15 continue to apply.
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6.6 BOOKS AND RECORDS
The Vendor may retain after Completion copies of any Books and Records
necessary for it to comply with any applicable law (including Tax law) and
to prepare Tax or other returns required of them by law.
7. COMPLETION ACCOUNTS
7.1 STOCKTAKE
At the close of business on the fourth last Business Day prior to the
Completion Date, the Vendor must commence a physical stocktake of all of
the Stock. The Vendor and the Purchaser must use their respective
reasonable endeavours to complete the Stocktake within 5 Business Days
after the Completion Date.
7.2 COMPLETION ACCOUNTS
The Vendor must as soon as practicable, and in any event no later than 5
Business Days before the Completion Date, procure the Group to prepare and
give the Purchaser, Vendor and Auditors a balance sheet of the Australian
Subsidiaries as at midnight on 30 April 2004.
7.3 BASIS OF PREPARATION
(a) The Completion Accounts must be prepared in accordance with the
Accounting Standards and on a basis consistent with:
(i) the basis on which the Audited Accounts were prepared; and
(ii) the basis on which the Management Accounts were prepared,
and the Preliminary Amount must be calculated as provided in Part A
of Schedule 4.
(b) The Preliminary Amount must then be adjusted in accordance with the
adjustment principles set out in Parts B and C of Schedule 4.
7.4 INSTRUCTIONS TO AUDITORS
As soon as practicable after the Completion Accounts are prepared, but in
any event no later than 5 Business days after the date specified in clause
7.2, the Vendor and the Purchaser must jointly instruct the Auditors to:
(a) audit the Completion Accounts in accordance with the principles set
out in clause 7.3(a) and calculate the Adjustment Amount in
accordance with clause 7.3(b);
(b) complete the audit and calculate the Adjustment Amount as soon as
practicable, but in any event no later than 10 Business Days after
the date the Completion Accounts are received from the Vendor and
the Purchaser; and
(c) give the Vendor and the Purchaser a written opinion on the
Completion Accounts, the Adjustment Amount and, if requested by
either the Vendor or the Purchaser, an opportunity to review the
working papers of the Auditors used by them in preparing their
writing opinion.
7.5 ACCESS TO INFORMATION
The Vendor must ensure that all information and assistance reasonably
requested by the Purchaser, or the Auditors, or both of them, is given to
them to prepare and audit the Completion Accounts and calculate the
Adjustment Amount, and must permit representatives of the Purchaser and
the Auditors to have reasonable access to, and take extracts from or make
copies of the Books
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and Records to respectively review and audit the Completion Accounts and
calculate the Adjustment Amount.
7.6 REVIEW OF COMPLETION ACCOUNTS
If neither the Purchaser nor the Vendor dispute the Completion Accounts or
the Adjustment Amount within 7 Business Days after the date on which they
are given a copy of the written report of the audit and calculation under
clause 7.4 (FINAL OBJECTION DATE) the Completion Accounts and the
Adjustment Amount will be taken to be the final Completion Accounts and
the Adjustment Amount will be final and binding on the parties. If either
the Purchaser or the Vendor disputes the Completion Accounts or the
Adjustment Amount before the Final Objection Date, the dispute will be
determined in accordance with clause 7.7.
7.7 DISPUTE RESOLUTION PROCEDURE
(a) If either the Purchaser or the Vendors disputes the Completion
Accounts or the Adjustment Amount (DISPUTING PARTY), the Disputing
Party must give the other party a notice (DISPUTE NOTICE) before the
Final Objection Date setting out:
(i) reasonable details of each matter in dispute; and
(ii) the reasons why each matter is disputed.
(b) Within 10 Business Days of the Disputing Party giving the other
Party a Dispute Notice, the other party must give the Disputing
Party a response in writing on the disputed matters (RESPONSE).
(c) If the Vendor and the Purchaser have not resolved the dispute within
10 Business Days of the other party giving the Response to the
Disputing Party, the dispute must promptly be submitted for
determination to the Independent Accountant to determine the matter
or matters in dispute.
(d) The Independent Accountant must be agreed by the Vendor and the
Purchaser. If the Vendors and the Purchaser cannot agree within 5
Business days of the other party giving the Response to the
Disputing Party, then the Independent Accountant will be nominated,
at the request of either the Vendor or the Purchaser, by the
President of the Institute of Chartered Accountants (Victorian
Branch).
(e) The disputed matters must be referred to the Independent Accountant
by written submission which must include the Completion Accounts,
the calculation of the Adjustment Amount, the Dispute Notice, the
Response and an extract of the relevant provisions of this
agreement. The Independent Accountant must also be instructed to
finish its determination no later than 20 Business Days after its
appointment (or another period agreed by the parties).
(f) The parties must promptly supply the Independent Accountant with any
information, assistance and cooperation requested in writing by the
Independent Accountant in connection with its determination. All
correspondence between the Independent Accountant and a party must
be copied to the other parties.
(g) The Independent Accountant must act as an expert and not as an
arbitrator and its written determination will be final and binding
on the parties in the absence of manifest error and the Completion
Accounts or the Adjustment Amount (as applicable) will be deemed to
be amended accordingly and will be taken to comprise the final
Completion Accounts or the final Adjustment Amount (as applicable).
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(h) The Completion Date will be deferred until the first Business Day
after the day in which the dispute is resolved by the parties or
determined by the Independent Expert as provided in this clause 7.7.
7.8 COSTS
The costs of the:
(a) Auditors in preparing the Completion Accounts and calculating the
Adjustment Amount; and
(b) the Independent Accountant (if instructed),
will be borne as to one-half by the Vendor and as to one-half by the
Purchaser.
8. TAX MATTERS
8.1 SECTION 338(h)(10) ELECTION
(a) The Vendor agrees to join with the Purchaser in making the Section
338(h)(10) Election. The Purchaser shall be responsible for, and
control, the preparation and filing of the Section 338(h)(10)
Election. The Vendor and the Purchaser shall bear their own costs in
relation to the making of the Section 338(h)(10) Election.
(b) The Vendor must execute and deliver to the Purchaser at or before
Completion such returns, documents, statements, and other forms as
the Purchaser reasonably requests or that are required to be
submitted to any federal, state, county or other local Taxing
authority (whether in the United States or elsewhere) in connection
with the Section 338(h)(10) Election, including, two completed
counterparts of US IRS Form 8023 (together with any schedules or
attachments thereto) signed by a duly authorised officer.
(c) The Vendor authorises the Purchaser to file the completed election
forms with the appropriate federal, state and local Taxing
authorities (whether in the United States or elsewhere).
(d) The Purchaser, the Company, Delaware Newco 2 and the Vendor must
file all Tax returns (including amended returns and claims for
refund) and information reports in a manner consistent with the
Section 338(h)(10) Election.
(e) The Vendor shall be solely responsible for, and shall pay, any
federal, state, local or foreign Tax (and shall indemnify the
Purchaser and the Company from and against any Tax liability or
other adverse consequence arising out of any failure to pay such
Tax) arising as a result of the Section 338(h)(10) Election,
including, without limitation, any Tax imposed on the Company or any
of the Subsidiaries by any state, local or foreign jurisdiction.
8.2 PRE-COMPLETION TAX RETURNS
(a) The Vendor shall prepare and file in a timely manner all
consolidated, combined or unitary Tax returns for the Vendor's
Affiliated Group for all periods ending on or prior to the
Completion Date (including, with respect to the Company, a short
taxable year ending on the Completion Date) and shall include the
income of the Company, ▇▇▇▇▇▇▇ Australia and Delaware Newco 2 in
such returns and pay any Taxes attributable to such income.
(b) All Tax returns contemplated by clause 8.2(a) shall be prepared and
filed in a manner consistent with prior practice, except as required
by a change in applicable law. For all taxable periods ending on or
before the Completion Date, the Vendor shall cause the Company and
the Subsidiaries to file separate Tax returns in all jurisdictions
requiring
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separate reporting from the Vendor including the final Ohio Franchise Tax
return for ▇▇▇▇▇▇▇ Australia, and the Vendor shall pay all Taxes shown on
such returns.
(c) The Vendor agrees to provide the following documents to the
Purchaser:
(i) a copy for the Purchaser's review of portions of Tax returns
relating to the Company and the Subsidiaries, at least 15
Business Days prior to the filing of such returns; and
(ii) proof of filing and evidence of Tax payments, if any.
(d) The Company, the Subsidiaries and the Purchaser shall consult and
cooperate with the Vendor as to any elections to be made on returns
of the Company and the Subsidiaries for periods ending on or before
the Completion Date.
8.3 POST-COMPLETION TAX RETURNS
(a) The Purchaser shall prepare and file in a timely manner all Tax
returns with respect to the Company and the Subsidiaries, other than
the Tax returns referred to in clause 8.2, that are required to be
filed after the Completion Date, and shall duly and timely pay all
Taxes shown on such returns.
(b) The Purchaser shall make such tax returns for a Straddle Period
available for the Vendor's review and approval, which approval must
not be unreasonably withheld or delayed, no later than 20 Business
Days prior to the due date for filing such Tax returns.
(c) Within 10 days prior to the due date for the filing of such Straddle
Period Tax return, whether or not the Vendor agrees with the
contents of such return, the Vendor shall pay the Company or the
Purchaser an amount equal to the amount of Taxes shown as due on
such return allocable to the Vendor under clauses 8.1 and 8.4, less
any estimated Taxes paid for such Taxes prior to the Completion
Date.
8.4 STRADDLE PERIOD CALCULATIONS
(a) In the case of any Straddle Period, the amount of any Taxes based on
or measured by income or receipts of the Company and the
Subsidiaries for the Pre-Completion Partial Tax Period shall be
determined based on an interim closing of the books as of the close
of business on the Completion Date.
(b) The amount of other Taxes of the Company and the Subsidiaries for
the Pre-Completion Partial Tax Period shall be deemed to be the
amount of such Tax for the entire taxable period multiplied by a
fraction:
(i) the numerator of which is the number of days in the taxable
period ending on the Completion Date; and
(ii) the denominator of which is the number of days in such
Straddle Period.
9. PURCHASER'S UNDERTAKINGS REGARDING GROUP EMPLOYEES
The Purchaser acknowledges and agrees as follows.
(a) Following the signing of this agreement, the Purchaser will
regularly communicate with the Employees of the Group Companies to
advise them of the Purchaser's intentions concerning their
continuing employment after Completion.
(b) In addition to any redundancy payments to which Employees other than
Management Employees may be entitled, the Purchaser will offer
formal outplacement services to any
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employees (other than Management Employees) who are made redundant
by the Purchaser after Completion.
10. SUPERANNUATION
10.1 CESSATION OF PARTICIPATION IN THE FUNDS
The Vendor and the Purchaser must do all that is reasonably necessary to
ensure that each Group Company is able to irrevocably cease to be a
participating employer in and, as the case may be, the principal
participating employer of, the Funds as at the Withdrawal Date.
10.2 TRANSITIONAL SUPERANNUATION ARRANGEMENTS - EMPLOYER CONTRIBUTIONS
(a) From the Completion Date to the Withdrawal Date, where a Completion
Employee is:
(i) a Category A Member, the Purchaser shall ensure that the Group
Company which is the employer of that Completion Employee
makes employer superannuation contributions to the HJF Fund in
respect of that Completion Employee's service for that period
at the rate and frequency specified in the Actuary's Letter;
(ii) a Category B Member, the Purchaser shall ensure that the Group
Company which is the employer of that Completion Employee
makes employer superannuation contributions to the HJF Fund in
respect of that Completion Employee's service for that period
at the rate and frequency specified in the Actuary's Letter;
(iii) a Category C Member, the Purchaser shall ensure that the Group
Company which is the employer of that Completion Employee
makes employer superannuation contributions to the HJF Fund in
respect of that Completion Employee's service for that period,
which are the minimum level required to avoid the imposition
of the Superannuation Guarantee Charge under the SGA Act and
the SGC Act; or
(iv) a member of a Participating Fund, the Purchaser shall ensure
that the Group Company which is the employer of that
Completion Employee makes employer superannuation
contributions to the Participating Fund in respect of that
Completion Employee's service for that period which are the
minimum level required to avoid the imposition of the
Superannuation Guarantee Charge under the SGA Act and the SGC
Act.
(b) For the avoidance of doubt, references in this clause 10.2 to
employer superannuation contributions are references to
contributions which a Group Company makes in respect of a Completion
Employee, but do not include contributions which arise from employee
salary sacrifice arrangements.
10.3 TRANSITIONAL SUPERANNUATION ARRANGEMENTS - EMPLOYEE CONTRIBUTIONS
From the Completion Date to the Withdrawal Date, employee superannuation
contributions (being those which arise from employee salary sacrifice
arrangements and including those made for the benefit of the employee's
spouse) shall continue to be made on the same basis and to the same
superannuation fund as they were made immediately prior to the Completion
Date, unless otherwise agreed between the relevant Completion Employee and
the Group Company employing that person.
10.4 SUPERANNUATION ARRANGEMENTS AFTER THE WITHDRAWAL DATE
The Purchaser agrees to make available a complying superannuation fund (as
defined under the SIS Act) (PURCHASER'S FUND) to which each Group Company
will make superannuation contributions in respect of its Completion
Employees on and from the Withdrawal Date, which will provide accumulation
benefits in respect of those employees.
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10.5 EMPLOYEE CONSENT
(a) Prior to the Withdrawal Date:
(i) both the Vendor and Purchaser must use their respective best
endeavours to procure that each Completion Employee consents
to a variation to his or her contract of employment; and
(ii) if any certified agreement (including the ▇▇▇▇▇ ▇▇▇▇▇ Foods
(Enterprise Bargaining) Agreement 2003) or any other
industrial instrument (including any award) requires that
superannuation contributions be made to any of the Funds, both
the Vendor and the Purchaser must use their respective best
endeavours to procure that that industrial agreement be varied
by order of the Australian Industrial Relations Commission,
such that employer and/or employee superannuation contributions
after the Withdrawal Date will only be made to the Purchaser's Fund,
being an accumulation fund. The consent must be informed consent,
obtained in writing and in compliance with law.
(b) The variation to a contract of employment of any Completion Employee
and, as applicable any certified agreement or other industrial
instrument which is applicable to a Completion Employee, must not
cause any overall increase in the superannuation obligations of the
Purchaser or any Group Company, in respect of that Completion
Employee unless otherwise agreed between the Vendor and the
Purchaser.
(c) In the event that, in respect of a Completion Employee who is a
Category A or a Category B Member:
(i) the consent to a variation of his or her contract of
employment under clause 10.5(a); and
(ii) the variation to the certified agreement or other industrial
instrument under clause 10.5(b) which is applicable to that
Completion Employee (if any),
cannot be procured, the parties will agree upon appropriate
alternative arrangements to those set out in this clause 10, in
relation to the Superannuation Arrangements of that Completion
Employee from the Withdrawal Date.
10.6 TRANSFER OF BENEFITS FROM A FUND TO THE PURCHASER'S FUND
(a) The Purchaser and the Vendor must use their respective best
endeavours to ensure that the trustees of the Fund and the
Purchaser's Fund provide the Completion Employees and Category D
Members with the option of transferring their respective benefit
entitlements or interests in the Fund to the Purchaser's Fund as at
or as soon as practicable after the Withdrawal Date.
(b) If a Completion Employee or Category D Member does not wish to
transfer his or her benefit entitlement or interest in a Fund to the
Purchaser's Fund in accordance with clause 10.6(a), that person's
benefit will be dealt with in accordance with the governing rules of
the Fund to which that benefit relates and applicable superannuation
law.
(c) If a Completion Employee or Category D Member requests the transfer
of his or her benefit entitlement or interest in a Fund in
accordance with clause 10.6(a) and after the return of the relevant
forms of election completed by that Completion Employee or Category
D Member (or without the return of the forms if the transfer would
otherwise be permitted by Australian superannuation law), then:
(i) as soon as practicable after the request is notified to the
trustee of the Fund, the Vendor must use its best endeavours
to:
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(A) cause the Actuary to make a calculation of the benefit
entitlement or interest of that:
(I) Completion Employee, where he or she is a member
of the HJF Fund; or
(II) Category D Member;
as at the Withdrawal Date; or
(B) where a Completion Employee is not a member of the HJF
Fund, determine the benefit entitlement or interest of
that Completion Employee, where he or she is a member of
a Participating Fund as at the Withdrawal Date; and
(ii) the Vendor and the Purchaser shall, after determination of
that benefit entitlement or interest, use their respective
best endeavours to facilitate the transfer of such entitlement
or interest to the Purchaser's Fund together with interest
(accruing daily) on that amount from the Withdrawal Date until
the date of payment as determined by the trustee of the Fund
in accordance with the Fund's governing rules from time to
time and applicable superannuation law.
(d) The parties acknowledge and agree that the benefit entitlement or
interest of a Completion Employee or Category D Member transferred
under this clause 10.6 shall be transferred on such conditions and
be vested in the Purchaser's Fund on behalf of that Completion
Employee or Category D Member on such terms as are agreed between
the trustee of the Fund and the trustee of Purchaser's Fund, as
permitted by those Funds' respective governing rules and applicable
superannuation law.
10.7 UNFUNDED LIABILITY OF HJF FUND
If the HJF Fund has an unfunded liability, arising because there are
insufficient assets available to support any part of the amount to be
transferred under clause 10.6(c) (TRANSFER AMOUNT) or the benefit
entitlement or interest of any member or beneficiary of the HJF Fund, at:
(a) the date of transfer described at clause 10.6(c); or
(b) the time the benefit entitlement or interest of any member or
beneficiary of the HJF Fund is payable or transferable under the
governing rules of the HJF Fund,
then the Vendor must promptly make such contributions to the HJF Fund, or
by some other arrangement, to completely reduce that unfunded liability to
enable the HJF Fund trustee to permit:
(c) in the circumstances described at clause 10.7(a) above, the Transfer
Amount to be transferred to the Purchaser's Fund; or
(d) in the circumstances described at clause 10.7(b) above, that benefit
entitlement or interest to be payable or transferable.
10.8 MAINTENANCE OF EARNINGS BASE
The Vendor must do all that is reasonably necessary to assist the
Purchaser to maintain the earnings base applicable to a Completion
Employee in use prior to the Completion Date, to enable the Purchaser or
any Group Company, in accordance with applicable superannuation law, to
continue to utilise that earnings base as the basis on which its
superannuation obligations are calculated after the Completion Date.
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10.9 REASONABLE ENDEAVOURS
The Purchaser and the Vendor agree to use their respective reasonable
endeavours to give effect to this clause 10 and the transactions
contemplated by it, and where third party approval is required, this
includes using reasonable endeavours to procure that third parties do
likewise.
10.10 RECORDS
No later than 5 Business Days after a written request from the Purchaser,
the Vendor must give the Purchaser written notice disclosing details of:
(a) any Group Company's Superannuation Arrangements as at a date
immediately prior to the Completion Date; and
(b) for each Completion Employee and Category D Member, the name of each
superannuation fund to which the Group Company contributes for each
such person and the contact details of the trustee of such fund.
11. WARRANTIES
11.1 WARRANTIES BY VENDOR
(a) The Vendor warrants and represents to the Purchaser, as an
inducement to the Purchaser to enter into this agreement that,
subject to the limitations in this clause 11 and except as expressly
stated, each of the Warranties is true and accurate as at the date
of this agreement and will be so at Completion.
(b) The Vendor acknowledges and agrees that:
(i) each of the Warranties is to be treated as a separate warranty
and the interpretation of any statement made is not restricted
by reference to or inference from any other statement;
(ii) with the exception of the Disclosure Material, no other
document or communication qualifies any of the Warranties;
(iii) the Warranties are not extinguished or affected by any
investigation made by or on behalf of the Purchaser into the
Group Companies and the Business before the date of this
agreement, unless the Warranty Claim relates to a matter which
is specifically and accurately disclosed in the Disclosure
Material; and
(iv) the Purchaser is relying on the Purchaser's Environmental
Report and on the Environmental Warranties, provided that,
subject to clause 11.8(i), the Purchaser's Environmental
Report in no way limits, detracts or otherwise diminishes the
scope or operation of the Environmental Warranties or the
Purchaser's reliance on those warranties.
11.2 WARRANTIES BY PURCHASER
The Purchaser warrants and represents to the Vendor, as an inducement to
the Vendor entering into this Agreement, that each of the following
warranties is true and accurate as at the date of this agreement and will
be so at Completion:
(a) it is validly existing under the laws of its place of registration
or incorporation;
(b) it has the power to enter into and perform its obligations under
this agreement and to carry out the transactions contemplated by
this agreement;
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(c) it has taken all necessary action to authorise its entry into and
performance of this agreement and to carry out the transactions
contemplated by this agreement, including obtaining all regulatory,
shareholder and third party approvals;
(d) it has undertaken its own investigations into the state of the
Properties and the compliance of the Business with Environmental
Laws (as defined in paragraph 1 of Schedule 5), including by virtue
of the commissioning of the Purchaser's Environmental Report; and
(e) its obligations under this agreement are valid and binding and
enforceable against it in accordance with their terms.
11.3 GROSS UP
(a) Subject to clause 11.3(b) if:
(i) the Vendor is required by law to make any deduction or
withholding from any sum paid to the Purchaser by the Vendor
in relation to a Warranty Claim; or
(ii) the Purchaser is required by law to make any payment on
account of Tax or any other matter on or in relation to any
amount received or receivable by it in relation to a payment
by the Vendor in respect of payment for a Warranty Claim,
then the sum so payable by the Vendor will be increased to the
extent necessary to ensure that after the making of such deduction,
withholding or payment, the Purchaser receives and retains (free of
any liability in respect of such deduction, withholding or payment)
a net sum equal to the sum that the Purchaser would have received
and so retained had no such deduction, withholding or payment been
required.
(b) In determining the existence and amount of an obligation to make any
deduction, withholding or payment referred to in clause 11.3(a)
(OBLIGATION) the following procedures will be adopted:
(i) the Purchaser must deduct from any Obligation the amount of
any Tax benefit derived by it as a result of the occurrence
giving rise to the Warranty Claim;
(ii) the Purchaser will notify the Vendor of the existence and
amount of an Obligation and provide the Vendor with access to
such of the Records as the Vendor may reasonably request to
make an informed assessment of the existence and/or amount of
the Obligation;
(iii) the Vendor may obtain written advice from its accountants or
lawyers as to the existence and amount of the Obligation; and
(iv) the Purchaser will provide all reasonably necessary assistance
to the Vendor and its accountants or lawyers in preparing such
advice.
11.4 TIME LIMITS AND OTHER REQUIREMENTS FOR WARRANTY CLAIMS
(a) Despite any other provision of this agreement and to the fullest
extent permitted by law, the Purchaser must not make a Warranty
Claim unless it notifies the Vendor of the Warranty Claim:
(i) in the case of a Tax Warranty Claim, before the expiration of
6 years after the Completion Date;
(ii) in the case of an Environmental Warranty Claim, before the
expiration of 4 years after the Completion Date; or
(iii) in the case of any other Warranty Claim, before the expiration
of 2 years after the Completion Date,
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except to the extent that:
(iv) the Warranty Claim relates to a matter involving an act of
fraud, dishonesty or wilful misconduct on the part of the
Vendor, in which case no time limit applies; or:
(v) the Warranty Claim is not a Tax Warranty Claim and relates to
a matter involving:
(A) the Shares, in so far as the Warranty Claim is in
respect of a breach of Warranty 3 or Warranty 4 in
Schedule 5;
(B) the Dividend;
(C) the Vendor Distribution;
(D) the formation of the Company or Delaware Newco 2;
(E) the Merger Transaction; or
(F) the Australian Migration,
in each of which cases no time limit applies.
(b) If the Purchaser gives the Vendor notice of a Warranty Claim, the
notice to the Vendor must give full details of the nature of the
Warranty Claim (together with copies of all relevant Records) and an
estimate of the amount claimed and details of how it has been
calculated, to the extent that those details are available to the
Purchaser.
11.5 SMALL WARRANTY CLAIMS
(a) The Vendor is not liable to make any payment in respect of a
Warranty Claim (whether by way of damages or otherwise) unless:
(i) if that Warranty Claim relates to a Tax Warranty or an
Environmental Warranty, the amount adjudicated against the
Vendor or agreed by the Vendor in respect of that Warranty
Claim (or a series of Tax or Environmental Warranty Claims) is
more than $350,000; and
(ii) if that Warranty Claim does not relate to a Tax Warranty or an
Environmental Warranty, the amount adjudicated against the
Vendor or agreed by the Vendor in respect of that Warranty
Claim (or a series of non-Tax or non-Environmental Warranty
Claims) is more than $250,000.
(b) The parties acknowledge and agree that, subject to the time
limitations and other restrictions in this clause 11:
(i) the Purchaser is entitled to aggregate individual Warranty
Claims of $20,000 or more but less than the monetary
thresholds referred to in clause 11.5(a);
(ii) the Purchaser is not entitled to make a Warranty Claim unless
and until a Warranty Claim exceeds, or the total of all
individual Warranty Claims that are aggregated under clause
11.5(b)(i) exceed, the monetary thresholds referred to in
clause 11.5(a); and
(iii) if the Purchaser makes a Warranty Claim which exceeds, or
Warranty Claims the aggregate amount of which exceed, the
monetary thresholds referred to in clause 11.5(a), the
Purchaser is entitled to recover 100% of the amount of the
Warranty Claim or aggregate Warranty Claims, as the case may
be, not merely the amount in excess of the monetary thresholds
referred to in clause 11.5(a).
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11.6 MAXIMUM AMOUNT THE PURCHASER MAY RECOVER
The total Liability of the Vendor under this clause 11 will not exceed
$10,000,000.
11.7 PURCHASER ACKNOWLEDGMENTS
(a) The Purchaser acknowledges and agrees that the only representations
and warranties on which the Purchaser has relied in entering into
this agreement are:
(i) the representations and warranties set out in Schedule 5;
(ii) the matters described in the Disclosure Materials; and
(iii) the representations made in the management presentations given
to the Purchaser on 16 January 2004 by the senior managers of
▇▇▇▇▇ ▇▇▇▇▇ Foods and in the written information distributed
at those presentations, excluding any representations in those
materials of a prospective nature, such as forecasts,
projections or estimates.
(b) The Purchaser acknowledges and agrees that, to the extent permitted
by law, all other warranties, representations and undertakings
(whether express or implied and whether oral or in writing) made or
given by the Vendor, the Company or their respective directors,
employees, agents, advisers or representatives are expressly
excluded.
(c) The Purchaser acknowledges and agrees that where a Warranty is
qualified by reference to the knowledge or awareness of the Vendor,
the Vendor's knowledge or awareness is limited to matters within the
knowledge or awareness, after making all reasonable and proper
inquiries, of ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇ in relation to the subject matter of the Warranty.
(d) The Purchaser acknowledges and agrees that any monetary compensation
received by the Purchaser as a result of a breach of a Vendor's
Warranty is deemed to be in reduction and partial refund of the
Purchase Price.
(e) The Purchaser acknowledges and agrees that if the sale and purchase
of the Shares is completed in accordance with the terms of this
agreement, the Purchaser will acquire control of the freehold
Property subject to:
(i) the easements and covenants noted on the title for the
Freehold Properties;
(ii) all easements or rights vested in any Government Authority as
disclosed in the Disclosure Material or publicly available
databases maintained under the Environment Protection ▇▇▇ ▇▇▇▇
(Vic) or by the Victorian Land Titles Office; and
(iii) all town planning or other restrictions on the use and
development of the Freehold Properties.
11.8 LIMITS ON TYPES OF WARRANTY CLAIMS
The Purchaser must not make a Warranty Claim to the extent that:
(a) the matter, information or circumstance giving rise to, or the
subject of, the Warranty Claim is expressly disclosed in this
agreement or in writing to the Purchaser on or before 6.00 p.m. on 8
May 2004 by way of the Disclosure Material other than by way of the
Disclosure Letter;
(b) the matter, information or circumstance giving rise to, or the
subject of, the Warranty Claim is expressly and accurately disclosed
in the Disclosure Letter;
(c) at the date of this agreement, the matter, information or
circumstance is disclosed in publicly available databases maintained
by:
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(i) IP Australia;
(ii) the ASIC;
(iii) the ACCC;
(iv) registers (including the Priority Sites Register) maintained
under the Environment Protection Act 1970 (Vic);
(v) the National Native Title Tribunal;
(vi) the Federal Court of Australia;
(vii) the High Court of Australia;
(viii) the Supreme Court of Victoria and all State and Territory
equivalents; or
(ix) the Victorian Land Titles Office;
(d) a specific provision, reserve or accrual has been made in the
Completion Accounts in respect of the matter, information or
circumstance giving rise to, or the subject of, the Warranty Claim
and that provision, reserve or accrual has a proper and reasonable
basis and is of an amount that appropriately quantifies the relevant
liability;
(e) the Warranty Claim results from, or the amount of the Warranty Claim
is increased because of, an increase in a rate of Tax, or the
enactment or amendment of any legislation, on or after the date of
this agreement (other than an increase in a rate of Tax, or the
enactment or amendment of any legislation, that existed as at the
date of this agreement);
(f) the Warranty Claim is directly caused by a thing the Purchaser or
any Group Company does or does not do on or after Completion;
(g) the Warranty Claim is directly caused by a thing the Vendor does or
does not do:
(i) at the Purchaser's express request;
(ii) with the Purchaser's express consent; or
(iii) as required by this agreement,
disregarding for this purpose any matter relating to the
incorporation of the Company, the incorporation of Delaware Newco 2,
the entry into the Merger Agreement, the Merger Transaction or the
Australian Migration,
(h) the Purchaser or the relevant Group Company is fully compensated for
the Claim or Liability giving rise to, or the subject of, the
Warranty Claim, whether by the Vendor, through insurance or
otherwise, subject to such compensation covering the reasonable
costs incurred in connection with pursuing the Claim or defending or
otherwise dealing with the Liability (including reasonable legal
costs on a full indemnity basis); or
(i) the Warranty Claim is in respect of a matter or circumstance of
which the Purchaser or any of its directors, officers, employees or
advisers who were directly involved in advising the Purchaser on the
transactions the subject of this agreement is actually aware.
11.9 CONTINGENT WARRANTY CLAIMS
As soon as practicable after the Purchaser becomes aware of a contingent
Liability that the Purchaser reasonably considers may give rise to a
Warranty Claim, the Purchaser must notify the Vendor giving reasonable
details of:
(a) the nature of the contingent Liability (together with copies of all
relevant Books and Records) to the extent that those details are
available to the Purchaser; and
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(b) an estimate of the amount that may be claimed if the Liability
becomes actual.
11.10 PURCHASER'S OBLIGATIONS FOR WARRANTY CLAIMS RELATING TO THIRD PARTIES
If after Completion, the Purchaser becomes aware of a matter that may give
rise to a Warranty Claim in connection with a Warranty as a result of a
Claim made or threatened by another person (THIRD PARTY) against the
Purchaser or a Group Company (THIRD PARTY CLAIM), then:
(a) the Purchaser must as soon as reasonably practicable notify the
Vendor of all reasonable and relevant details available to the
Purchaser, including the identity of the Third Party and the nature
and amount of the Third Party Claim;
(b) the Purchaser must not (and must ensure that a Group Company does
not) admit anything or agree to anything with the Third Party in
connection with the Third Party Claim, without the Vendor's prior
consent, not to be unreasonably withheld or delayed, other than as
reasonably required to avoid judgment against the Purchaser or a
Group Company;
(c) the Purchaser must permit the Vendor, through its authorised
representatives, to have, at the Vendor's risk, access to the Books
and Records and employees of the relevant Group Company (during
normal business hours and with reasonable notice), to enable the
Vendor to deal with the Third Party Claim and the Vendor will
reimburse the Purchaser for its reasonable costs in providing the
Vendor with such access;
(d) the Purchaser must, at the Vendor's discretion (by notice to the
Purchaser):
(i) enable the Vendor to defend or otherwise deal with the Third
Party Claim in the Purchaser's name (or the name of the
relevant Group Company) as against the Third Party, with the
Purchaser being required at the Vendor's risk and cost to
ensure the Vendor is provided with reasonable assistance and
cooperation; and
(ii) do any thing or not do any thing, in each case as the Vendor
reasonably requests, to defend or otherwise deal with the
Third Party Claim as against the Third Party and keep the
Vendor informed about the Purchaser's actions or proposed
actions in connection with the Third Party Claim;
(e) the Vendor must indemnify the Purchaser for the reasonable costs
(including reasonable legal costs on a full indemnity basis)
incurred by the Purchaser in complying with clause 11.10(d); and
(f) the Vendor will only be liable to the Purchaser for any Warranty
Claim arising from a Third Party Claim to the extent that the
Purchaser complies with its obligations under this clause 11.10 in
all material respects.
11.11 PURCHASER MUST PURSUE THIRD PARTIES
Subject to clause 11.10, if the Purchaser or any Group Company recovers an
amount under this clause 11 in connection with a matter and the Purchaser
or a Group Company subsequently becomes entitled to claim an amount from a
third party in connection with that matter, the Purchaser must, or must
ensure that the relevant Group Company, promptly enforces its Claim
against the third party.
11.12 BENEFITS RECEIVED
(a) The Purchaser must promptly reimburse the Vendor if:
(i) the Purchaser recovers an amount from the Vendor under this
clause 11; and
(ii) the Purchaser or a Group Company then receives an amount from
a third party and this amount would have reduced the amount
recovered by the Purchaser if it had been received before the
recovery.
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(b) The amount the Purchaser must reimburse to the Vendor is equal to
the amount the Purchaser or Group Company (as the case may be)
receives from the third party (less any costs reasonably incurred,
including reasonable legal costs on a full indemnity basis) in
recovering the amount from the Vendor and the third party).
12. VENDOR'S INDEMNITIES
12.1 GENERAL INDEMNITY
(a) Without limiting any other provision of this clause 12 and as a
separate and independent principal obligation, the Vendor
indemnifies and holds harmless the Purchaser and each Group Company
from any and all Claims or Liabilities which the Purchaser or any
Group Company suffers or incurs by reason of :
(i) any of the Warranties being untrue, inaccurate or breached in
any respect; or
(ii) the failure by the Vendor to perform any covenants, agreement,
obligation or undertaking imposed on the Vendor under this
agreement.
(b) For the avoidance of doubt, the Purchaser acknowledges and agrees
that the indemnity in clause 12.1(a)(i) is subject to and
conditional on each of the limitations and exclusions on the
Warranties contained in clause 11.
12.2 REDUNDANCY INDEMNITY
(a) As a separate and independent principal obligation, the Vendor
indemnifies and hold harmless the Purchaser and each Group Company
against:
(i) any Redundancy Benefits which any Group Company provides to
any Management Employee; and
(ii) all costs reasonably incurred by any Group Company (including
reasonable legal costs on a full indemnity basis) in dealing
with any Claim made by a Management Employee against that
Group Company for any Redundancy Benefits,
but only if the Management Employee's employment with a Group
Company is terminated for reasons of redundancy within three months
of Completion.
(b) In this clause 12.2, REDUNDANCY BENEFIT means any benefit a
Management Employee is eligible to receive, and actually receives,
from a Group Company on or as a consequence of the cessation of the
Management Employee's employment with the Group Company for:
(i) redundancy or severance pay;
(ii) pay in lieu of notice;
(iii) financial services; and
(iv) outplacement services,
but not for pay in lieu of accrued and untaken annual leave and long
service leave.
(c) In this clause 12.2, a Management Employee will be considered
redundant:
(i) if his or her position is made redundant by the Purchaser or
any Group Company; or
(ii) if:
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(A) he or she is required by the Purchaser or any Group
Company to perform duties which are other than, or not
substantially the same or similar to, the duties which
are performed by the Management Employee at the date of
this agreement, regardless of the Management Employee's
title, status or remuneration; and
(B) he or she resigns.
12.3 INDEMNITY FOR CUSTOMER CLAIMS
As a separate and independent principal obligation, the Vendor indemnifies
and holds harmless the Purchaser and each Group Company against any Claim
that is made for reimbursement, set-off, deduction, rebates or otherwise
by a customer in respect of sales of products to that customer before the
Completion Date (CUSTOMER CLAIM), subject to:
(a) each individual Customer Claim being for an amount of at least
$25,000;
(b) the Customer Claim being made against the Purchaser or any Group
Company within 9 months after the Completion Date;
(c) a provision, reserve or accrual of a comparable amount not being
made in the Completion Accounts in respect of the matter,
information or circumstance giving rise to or the subject of the
Customer Claim; and
(d) the Customer Claim being substantiated to the reasonable
satisfaction of the Vendor as being a Customer Claim that arises
directly or indirectly from:
(i) sales of products to that customer prior to the Completion
Date; or
(ii) an arrangement made between the customer and an authorised
representative of a Group Company prior to the Completion
Date.
12.4 SUPERANNUATION INDEMNITY
As a separate and independent principal obligation, the Vendor indemnifies
and holds harmless the Purchaser and each Group Company against:
(a) any Claim, Liability or any other obligation whatsoever in relation
to the defined benefits provided in respect of Category A and
Category B Members of the HJF Fund, including any obligation to make
contributions to the HJF Fund in respect of any unfunded liability
arising because there are insufficient assets to support:
(i) the Transfer Amount, benefit entitlement or interest in the
HJF Fund attributable to a Category A Member or a Category B
Member; or
(ii) the benefit entitlement or interest in the HJF Fund of any
other member or beneficiary of the HJF Fund, which Claim,
Liability or any other obligation arises because there are
insufficient assets to support the Transfer Amount, benefit
entitlement or interest in the HJF Fund attributable to a
Category A Member or a Category B Member,
but excluding the obligations specified in clause 10.2 or clause
10.3; and
(b) any Claim by or Liability to:
(i) any employee of a Group Company or to anybody acting on behalf
of such an employee (including a trade union) and whether or
not the relevant employee is employed by a Group Company at
the time the Claim or Liability arises;
(ii) any other member of beneficiary of the HJF Fund,
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against the Purchaser or any Related Body Corporate of the
Purchaser:
(iii) with respect to that person's benefit entitlement or interest
as a Category A Member or Category B Member of the HJF Fund;
(iv) due to a failure to obtain the consent of an employee who is a
Category A Member or Category B Member or a failure under
clause 10.5(c) to procure the variation of a certified
agreement or other industrial instrument; or
(v) arising out of or in relation to:
(A) any consent of an employee who is a Category A Member or
Category B Member; or
(B) any order varying a certified agreement or other
industrial instrument applicable to a Category A Member
or Category B Member,
under clause 10.5, not being valid for any reason.
12.5 INDEMNITY FOR US TAXES
(a) In this clause 12.5, US TAXES means any Taxes under any law of the
United States of America or under any law of any State, Territory or
possession of the United States of America.
(b) As a separate and independent principal obligation, the Vendor
indemnifies and holds harmless the Company, the Subsidiaries and the
Purchaser from and against any Claim or Liability attributable to
all US Taxes (or the non-payment thereof) for which the Company, any
of its Subsidiaries or the Purchaser may be liable, with respect to
all taxable periods ending on or before the Completion Date and any
Pre-Completion Partial Tax Period, including for:
(i) all US Taxes arising as a result of the Section 338(h)(10)
Election;
(ii) all US Taxes arising as a result of the Merger Transaction;
(iii) all US Taxes arising as a result of the Australian Migration;
(iv) all US Taxes of any member of an affiliated, consolidated,
combined or unitary group of which the Company or any of the
Subsidiaries (or any predecessor of any of the foregoing) is
or was a member on or prior to the Completion Date, including
pursuant to United States Treasury Regulations Section
1.1502-6 or any analogous or similar state, local or foreign
law or regulation; and
(v) all US Taxes of any person (other than the Company and the
Subsidiaries) imposed on the Company or any of its
Subsidiaries as a transferee or successor, by contract or
pursuant to any law, rule, or regulation, which US Taxes
related to an event or transaction occurring before
Completion.
(c) The total Liability of the Vendor under this clause 12.5 will not
exceed $10,000,000. The parties acknowledge and agree that the
$10,000,000 maximum Liability of the Vendor provided for in this
clause 12.5 is separate and distinct from the $10,000,000 maximum
Liability of the Vendor provided for in clause 11.6.
12.6 INDEMNITY FOR MANAGEMENT INCENTIVE PROGRAM PAYMENTS
As a separate and independent principal obligation, the Vendor indemnifies
and holds harmless the Company, the Subsidiaries and the Purchaser from
and against:
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(a) any Claim or Liability attributable to a Management Incentive
Program Payment not having been taken fully into account in
determining the Adjustment Amount; or
(b) any Claim by or Liability of the Company, the Subsidiaries or the
Purchaser arising as a result of any one of them directly paying to
any employee entitled thereto a Management Incentive Program Payment
for the financial year ended 30 April 2004,
but in any such case only the amount by which the Claim or Liability
exceeds the payment so taken into account or otherwise adjusted in
accordance with Schedule 4.
In this clause 12.6, MANAGEMENT INCENTIVE PROGRAM PAYMENT means any
payment due to any employee having a management function within the
Business in accordance with the policy in place prior to the date of this
agreement and any associated 'on-costs' (for example workers' compensation
payments and premiums and payroll tax).
12.7 CAPACITY
For the purposes of this clause 12, the Purchaser contracts on its own
behalf and also as trustee for each Group Company and, accordingly, may
take action in that capacity to recover on behalf of each Group Company.
12.8 CONTINUING SECURITY
The indemnities given under this clause 12 are continuing obligations
which:
(a) continue after Completion and after the parties' other obligations
under this agreement terminate, subject only to the time limits in
clause 11.4 in respect of the indemnity under clause 12.1; and
(b) are not discharged by any one payment.
12.9 OBLIGATIONS AND RIGHTS NOT AFFECTED BY CERTAIN MATTERS
The Vendor's obligations and the Purchaser's rights under the indemnities
given in this clause 12 are not affected by anything which might otherwise
affect them at law, including:
(a) any concession (such as extra time) being given to any person,
including the Vendor;
(b) the Purchaser's failure or delay in taking action or asserting a
right, or any other act, omission or mistake by the Purchaser;
(c) the assignment or novation of a right or obligation of the
Purchaser;
(d) this agreement being varied; or
(e) an obligation or Liability of a person other than the Vendor being
invalid or unenforceable.
12.10 PRINCIPLES FOR RECOVERY UNDER THE INDEMNITIES
(a) If the Vendor is required to make a payment to the Purchaser under
any of the indemnities in this clause 12, the Purchaser will make
available to the Vendor all information reasonably required by the
Vendor to assess and verify that payment.
(b) Before or until all money due and payable to the Purchaser by the
Vendor in connection with this agreement is paid, the Vendor must
not seek to reduce its Liability under the indemnities in this
clause 12 through set-off or counterclaim, without the consent of
the Purchaser.
(c) The Vendor must pay or reimburse the Purchaser on demand for the
Purchaser's reasonable costs (including reasonable legal costs on a
full indemnity basis) in connection with enforcing any of the
indemnities in this clause 12.
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(d) Any sum payable by the Vendor to the Purchaser or a Group Company
under any of the indemnities in this clause 12, must be paid free
and clear of any deduction or withholding whatsoever.
(e) If any deduction or withholding is required by law to be made from
any payment by the Vendor under an indemnity in this clause 12 or if
the Purchaser is subject to Tax in respect of any such payment, the
Vendor must increase the amount of the payment by such additional
amount as is necessary to ensure that the net amount received and
retained by the Purchaser after taking account of all deductions or
withholdings or Tax is equal to the amount which it would have
received and retained had the payment in question not been subject
to any deductions or withholdings or Tax.
13. PURCHASER'S INDEMNITY
13.1 INDEMNITY FOR BREACH OF POSITIVE OBLIGATIONS
As a separate and independent principal obligation, the Purchaser
indemnifies and holds harmless the Vendor from any and all Claims or
Liabilities which the Vendor suffers or incurs by reason of the failure by
the Purchaser to perform any covenant, agreement, obligation or
undertaking imposed on the Purchaser under this agreement, including under
clause 8.1.
13.2 CONTINUING SECURITY
The indemnity given under this clause 13 is a continuing obligation which:
(a) continues after Completion and after the parties' other obligations
under this agreement terminate; and
(b) is not discharged by any one payment.
13.3 OBLIGATIONS AND RIGHTS NOT AFFECTED BY CERTAIN MATTERS
The Purchaser's obligations and the Vendor's rights under the indemnity
given in this clause 13 are not affected by anything which might otherwise
affect them at law, including:
(a) any concession (such as extra time) being given to any person,
including the Purchaser;
(b) the Vendor's failure or delay in taking action or asserting a right,
or any other act, omission or mistake by the Vendor;
(c) the assignment or novation of a right or obligation of the Vendor;
(d) this agreement being varied; or
(e) an obligation or Liability of a person other than the Purchaser
being invalid or unenforceable.
13.4 PRINCIPLES FOR RECOVERY UNDER THE INDEMNITY
(a) If the Purchaser is required to make a payment to the Vendor under
the indemnity in this clause 13, the Vendor will make available to
the Purchaser all information reasonably required by the Purchaser
to assess and verify that payment.
(b) Before or until all money due and payable to the Vendor by the
Purchaser in connection with this agreement is paid, the Purchaser
must not seek to reduce its Liability under the indemnity in this
clause 13 through set-off or counterclaim, without the consent of
the Vendor.
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(c) The Purchaser must pay or reimburse the Vendor on demand for the
Vendor's reasonable costs (including reasonable legal costs on a
full indemnity basis) in connection with enforcing the indemnity in
this clause 13.
(d) Any sum payable by the Purchaser to the Vendor under the indemnity
in this clause 13, must be paid free and clear of any deduction or
withholding whatsoever.
(e) If any deduction or withholding is required by law to be made from
any payment by the Purchaser under the indemnity in this clause 13
or if the Vendor is subject to Tax in respect of any such payment,
the Purchaser must increase the amount of the payment by such
additional amount as is necessary to ensure that the net amount
received and retained by the Vendor after taking account of all
deductions or withholdings or Tax is equal to the amount which it
would have received and retained had the payment in question not
been subject to any deductions or withholdings or Tax.
14. RESTRAINT OF VENDOR
14.1 DEFINITIONS
In this clause 14:
ENGAGE IN means to carry on, participate in, provide finance or services,
or otherwise be directly or indirectly involved as a shareholder,
unitholder, director, consultant, adviser, contractor, principal, agent,
manager, employee, beneficiary, partner, associate, trustee or financier.
PROHIBITED PERSONS means the Vendor and each of its Associates.
14.2 PROHIBITED ACTIVITIES
The Vendor (in consideration for the Purchaser entering into this
agreement) undertakes to the Purchaser that the Prohibited Persons will
not:
(a) during the period specified in clause 14.3 (RESTRAINT PERIOD) and in
the area specified in clause 14.4 (RESTRAINT AREA) engage in a
business or an activity that is:
(i) the same or similar to the Business or any material part of
the Business; and
(ii) in competition with the Business or any material part of the
Business;
(b) during the Restraint Period, solicit, canvass, approach or accept an
approach from a person who was at any time during the 12 months
ending on the Completion Date a customer or prospective customer of
the Group with a view to obtaining their custom in a business that
is the same or similar to the Business and is in competition with
the Business;
(c) during the Restraint Period, interfere with the relationship between
the Group and its customers, employees, contractors or suppliers;
(d) during a period of 12 months from the Completion Date, induce or
help to induce an employee or a contractor of the Group to leave
their employment or engagement.
14.3 RESTRAINT PERIOD
The Restraint Period is each of the following periods separately:
(a) 5 years from the Completion Date;
(b) 4 years from the Completion Date
(c) 3 years from the Completion Date;
(d) 2 years from the Completion Date; and
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(e) 12 months from the Completion Date.
14.4 RESTRAINT AREA
The Restraint Area is each of the following areas:
(a) Australia and New Zealand;
(b) Australia; and
(c) the States of Victoria and New South Wales.
14.5 INTERPRETATION
Clauses 14.2, 14.3 and 14.4 have effect together as if they consisted of
separate provisions, each being severable from the other. Each separate
provision results from combining each undertaking in clause 14.2, with
each period in clause 14.3, and combining each of those combinations with
each area in clause 14.4. If any of those separate provisions is invalid
or unenforceable for any reason, the invalidity or unenforceability does
not affect the validity or enforceability of any of the other separate
provisions or other combinations of the separate provisions of clauses
14.2, 14.3 and 14.4.
14.6 EXCEPTIONS
This clause 14 not restrict a Prohibited Person from:
(a) performing any employment agreement with the Group;
(b) holding 5% or less of the shares of a listed company; or
(c) recruiting a person through a recruitment agency (except if the
agency targets employees of the Group) or in a response to a
newspaper, web page or other public employment advertisement.
14.7 ACKNOWLEDGMENTS
The Vendor acknowledges that:
(a) all the prohibitions and restrictions in this clause 14 are
reasonable in the circumstances and necessary to protect the
goodwill of the Business;
(b) damages are not an adequate remedy if a Prohibited Person breaches
this clause 14; and
(c) the Purchaser may apply for injunctive relief if:
(i) a Prohibited Person breaches or threatens to breach this
clause 14; or
(ii) it believes a Prohibited Person is likely to breach this
clause 14.
15. CONFIDENTIALITY AND PUBLICITY
15.1 CONFIDENTIALITY
A party (RECIPIENT):
(a) must keep confidential any confidential information of another party
(DISCLOSING PARTY) disclosed to the Recipient by the Disclosing
Party, or of which the Recipient becomes aware, at any time up to
Completion, except information which is public knowledge otherwise
than as a result of a breach of confidentiality by the Recipient or
any of its permitted disclosees; and
(b) may disclose any confidential information in respect of which the
Recipient has an obligation of confidentiality under clause 15.1(a)
only:
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(i) to those of the Recipient's officers or employees or
financial, legal or other advisers who:
(A) have a need to know for the purposes of this agreement
or the transactions contemplated by it; and
(B) undertake to the Recipient (and, where required by the
Disclosing Party, to the Disclosing Party also) a
corresponding obligation of confidentiality to that
undertaken by the Recipient under this clause 15.1; or
(ii) if required to do so by law or the Listing Rules of ASX.
15.2 CONFIDENTIAL INFORMATION - UNTIL COMPLETION OR TERMINATION
A reference in clauses 15.1(a) and 15.1(b) to CONFIDENTIAL INFORMATION
includes, as regards the Purchaser, Confidential Information and the
Purchaser must comply with those provisions with respect to Confidential
Information until the first to occur of:
(a) Completion; or
(b) a period of 6 months after termination of this agreement.
15.3 CONFIDENTIAL INFORMATION - AFTER COMPLETION
The Vendor must not, and must ensure that any Related Body Corporate of it
and its officers and employees must not, after Completion without the
prior written consent of the Purchaser, use or disclose any Confidential
Information unless required to do so by law or the Listing Rules of ASX.
15.4 ANNOUNCEMENTS
A party must not make or authorise a press release or public announcement
relating to the negotiations of the parties or the subject matter or
provisions of this agreement unless:
(a) it is required to be made by law or the Listing Rules of ASX and
before it is made that party has:
(i) notified the Purchaser and the Vendor; and
(ii) given the Purchaser and the Vendor a reasonable opportunity to
comment on the contents of, and the requirement for it; or
(b) it has the prior written approval of the Purchaser and the Vendor.
16. TRANSITION PRODUCTS
(a) From Completion until the date that is 24 months after the
Completion Date, the Purchaser will have the right, exercisable in
its absolute discretion from time to time, to purchase any of the
Transition Products from the Vendor at:
(i) at the fixed price of $US3.41 per kilogram; and
(ii) on terms requiring:
(A) the Purchaser to place an order in writing with the
Vendor setting out the type and quantity of Transition
Products ordered;
(B) the Vendor to provide the Purchaser with a ▇▇▇▇ of
lading in respect of orders received and processed by
the Vendor; and
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(C) the Purchaser to pay for the Transition Products in full
within 60 days of the date endorsed on the ▇▇▇▇ of
lading provided by the Vendor under clause 16(a)(ii)(B).
(b) If the Purchaser exercises its right under this clause 16, the
Vendor must supply the Transition Products in accordance with this
clause 16.
17. LICENSED PRODUCTS
(a) Subject to this clause 17, the Vendor grants to the Purchaser and
▇▇▇▇▇ ▇▇▇▇▇ Foods an exclusive, non-transferable and royalty free
licence to use the Vendor's Intellectual Property for the sole
purpose of the sale in Australia of Licensed Products using ▇▇▇▇▇
▇▇▇▇▇ Foods' existing stock of labels and other packaging for a
period of 9 months after the Completion Date (LICENCE PERIOD).
(b) The Purchaser and the Group Companies must:
(i) use the Vendor's Intellectual Property only as permitted by
this clause 17, and not for any other purpose;
(ii) not modify the Vendor's Intellectual Property in any way;
(iii) not use the Vendor's Intellectual Property in any manner that
is likely to deceive or cause confusion or jeopardise the
distinctiveness of the Vendor's Intellectual Property;
(iv) not use or authorise the use of, or make or authorise any
application to register, any trade ▇▇▇▇ or other intellectual
property that is substantially identical with, or deceptively
similar to, the Vendor's Intellectual Property; and
(v) not hold itself out as an agent of, or connected in any other
way with, the Vendor, other than as the exclusive Australian
licensee of the Vendor's Intellectual Property under the terms
of this clause 17.
(c) Immediately on the expiry of the Licence Period:
(i) the rights of the Purchaser and any Group Company to use the
Vendor's Intellectual Property will cease; and
(ii) if requested by Vendor, the Purchaser must provide written
assurances to the reasonable satisfaction of the Vendor that
the Purchaser has complied with its obligations under this
clause 17.
(d) Despite this clause 17, all right, title and interest in the
Vendor's Intellectual Property remains with the Vendor. Nothing in
this clause 17 operates to transfer to the Purchaser or to the Group
Companies any proprietary rights or interest in the Vendor's
Intellectual Property, or to permit the Purchaser or the Group
Companies to use any other intellectual property of the Vendor.
(e) The Vendor acknowledges and agrees that nothing in this clause 17
precludes the Purchaser, after the Licence Period ends, from
producing the Licensed Products in the same manner as they are
produced during the Licence Period, provided only that any Licensed
Products produced after the Licensed Period are branded, marketed,
packaged and sold without infringing the Vendor's Intellectual
Property.
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18. GST
18.1 INTERPRETATION
In this clause 18, a word or expression defined in the A New Tax System
(Goods and Services Tax) ▇▇▇ ▇▇▇▇ (Cth), other than the word
'consideration', has the meaning given to it in that Act.
18.2 GST GROSS UP
If a party makes a supply under or in connection with this agreement in
respect of which GST is payable, the consideration for the supply but for
the application of this clause 18.2 (GST EXCLUSIVE CONSIDERATION) is
increased by an amount equal to the GST exclusive consideration multiplied
by the rate of GST prevailing at the time the supply is made.
18.3 REIMBURSEMENTS
If a party must reimburse or indemnify another party for a loss, cost or
expense, the amount to be reimbursed or indemnified is first reduced by
any input tax credit the other party is entitled to or would be entitled
to if it were registered for GST for the loss, cost or expense, and then
increased in accordance with clause 18.2.
18.4 TAX INVOICE
A party need not make a payment of the additional amount required under
clause 18.2 on account of GST for a taxable supply made under or in
connection with this agreement until it receives a tax invoice for the
supply to which the payment relates.
18.5 VARIATION
If the GST payable in relation to a taxable supply made by a party under
or in connection with this agreement varies from the additional amount
paid by the recipient under clause 18.2 such that:
(a) further GST is payable in relation to the supply; or
(b) a refund or credit of GST is received in relation to the supply,
then the supplier will issue an adjustment note and will be entitled to
receive an amount equal to the further GST from, or provide a
corresponding refund to, the recipient. Any payment, credit or refund
under this clause is deemed to be a payment, credit or refund of the
additional amount payable under clause 18.2.
18.6 RECOVERY OF GST
If an amount is paid by a party to the agreement as an additional amount
under clause 18.2 and the amount of GST is not payable or the amount of
GST is less than the additional amount paid, the payer shall be entitled
to recover the amount paid from the supplier by serving notice on the
supplier.
19. NOTICES AND OTHER COMMUNICATIONS
19.1 SERVICE OF NOTICES
A notice, demand, consent, approval or communication under this agreement
(NOTICE) must be:
(a) in writing, in English and signed by a person duly authorised by the
sender; and
(b) hand delivered or sent by prepaid post or facsimile to the
recipient's address for Notices specified in the Details, as varied
by any Notice given by the recipient to the sender.
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19.2 EFFECTIVE ON RECEIPT
A Notice given in accordance with clause 19.1 takes effect when taken to
be received (or at a later time specified in it), and is taken to be
received:
(a) if hand delivered, on delivery;
(b) if sent by prepaid post, two Business Days after the date of posting
(or seven Business Days after the date of posting if posted to or
from a place outside Australia);
(c) if sent by facsimile, when the sender's facsimile system generates a
message confirming successful transmission of the entire Notice
unless, within eight Business Hours after the transmission, the
recipient informs the sender that it has not received the entire
Notice,
but if the delivery, receipt or transmission is not on a Business Day or
is after 5.00pm on a Business Day, the Notice is taken to be received at
9.00am on the next Business Day.
20. MISCELLANEOUS
20.1 ALTERATIONS
This agreement may be altered only in writing signed by each party.
20.2 APPROVALS AND CONSENTS
Except where this agreement expressly states otherwise, a party may, in
its discretion, give conditionally or unconditionally or withhold any
approval or consent under this agreement.
20.3 ASSIGNMENT
A party may only assign this agreement or a right under this agreement
with the prior written consent of each other party.
20.4 COSTS
(a) Subject to clause 20.4(b), each party must pay its own costs of
negotiating, preparing and executing this agreement.
(b) The Vendor must pay, or reimburse the Purchaser for 50% of the
professional fees and expenses of the Purchaser's US attorneys,
▇▇▇▇▇▇ & Dodge of Boston, Massachusetts, United States of America
promptly after receipt by the Vendor from the Purchaser of a copy of
all relevant invoices, up to a maximum of US$75,000. For the
avoidance of doubt, clause 18 applies to this clause.
20.5 STAMP DUTY
Any stamp duty, duties or other taxes of a similar nature (including
fines, penalties and interest) in connection with this agreement or any
transaction contemplated by this agreement, must be paid by the Purchaser.
20.6 SURVIVAL
Any indemnity or any obligation of confidence under this agreement is
independent and survives termination of this agreement. Any other term by
its nature intended to survive termination of this agreement survives
termination of this agreement.
20.7 COUNTERPARTS
(a) This agreement may be executed in counterparts. Each counterpart is
an original but the counterparts together are one and the same
agreement.
(b) This agreement is binding on the parties on exchange of duly
executed counterparts.
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(c) The parties agree that a copy of an original executed counterpart
sent by facsimile machine instead of the original is sufficient
evidence of the execution of the original and may be produced in
evidence for all purposes in place of the original.
20.8 NO MERGER
The rights and obligations of the parties under this agreement do not
merge on completion of any transaction contemplated by this agreement.
20.9 ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the parties in
connection with its subject matter and supersedes all previous agreements
or understandings between the parties in connection with its subject
matter.
20.10 FURTHER ACTION
Each party must do, at its own expense, everything reasonably necessary
(including executing documents) to give full effect to this agreement and
any transactions contemplated by it.
20.11 SEVERABILITY
A term or part of a term of this agreement that is illegal or
unenforceable may be severed from this agreement and the remaining terms
or parts of the term of this agreement continue in force.
20.12 WAIVER
A party does not waive a right, power or remedy if it fails to exercise or
delays in exercising the right, power or remedy. A single or partial
exercise of a right, power or remedy does not prevent another or further
exercise of that or another right, power or remedy. A waiver of a right,
power or remedy must be in writing and signed by the party giving the
waiver.
20.13 RELATIONSHIP
Except where this agreement expressly states otherwise, it does not create
a relationship of employment, trust, agency or partnership between the
parties.
20.14 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the law of Victoria, Australia and
each party irrevocably and unconditionally submits to the exclusive
jurisdiction of the courts of Victoria, Australia.
(b) Any action, suit or other legal proceeding commenced by a party to
this agreement relating to or arising out of this agreement or the
transactions contemplated by it must be commenced only in a court of
Victoria, Australia.
(c) Each party hereby consents to service of process, and to be sued, in
such courts and to the personal jurisdiction and venue of such
courts and all courts to which an appeal may be taken from such
courts. Each party expressly waives any and all objections it may
have as to jurisdiction or venue of any such court.
(d) The Vendor appoints ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, Solicitors of ▇▇▇▇▇ ▇▇, ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ as the Vendor's agent to
accept on its behalf service of initiating process in any
proceedings relating to or arising out of this agreement or any of
the transactions contemplated by it, including the Merger
Transaction or the Australian Migration (PROCESS AGENT).
(e) The Vendor may from time to time appoint a replacement of the
Process Agent or any replacement Process Agent by giving written
notice to the Purchaser and a copy of the written consent of the
replacement Process Agent to their appointment.
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20.15 TIME IS OF THE ESSENCE
Time is of the essence of this agreement.
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SCHEDULE 1 - DETAILS OF THE COMPANY AND SUBSIDIARIES
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SCHEDULE 2 - FORM OF MERGER AGREEMENT
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SCHEDULE 3 - MATERIAL CONTRACTS
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SCHEDULE 4 - CALCULATION OF ADJUSTMENT AMOUNT
PART A: CALCULATION OF ADJUSTMENT AMOUNT
The Adjustment Amount will be an amount (including any negative amount)
calculated by the following formula:
PA = NCA - NMA,
where:
PA means the Preliminary Amount;
NCA means the Net Assets Amount; and
NMA means the amount of the net assets (excluding cash) of the relevant Group
Companies as set out in the Management Accounts,
and then applying to the Preliminary Amount the adjustment principles set out in
Parts B and C of this Schedule 4.
PART B: ADJUSTMENT PRINCIPLES
The Preliminary Amount (item 'A' of the proforma adjustment statement set out in
Part C of this Schedule 4) will be adjusted by:
1. adding an amount equal to the aggregate of all charges for amortisation
and depreciation of fixed and intangible assets of the Group Companies
from the date of the Management Accounts to 30 April 2004 (item 'B' of the
pro forma adjustment statement set out in Part C of this Schedule 4);
2. deducting an amount equal to the aggregate of all Redundancy Benefits paid
to Management Employees prior to Completion (item 'D' of the pro forma
adjustment statement set out in Part C of this Schedule 4);
3. deducting an amount equal to an appropriate provision for the costs
incurred or accrued, but not paid, by the Vendor or any Group Company in
relation to any transaction provided for or contemplated by this
agreement, including professional advisers' fees and charges (item 'E' of
the pro forma adjustment statement set out in Part C of this Schedule 4);
4. deducting an amount equal to the aggregate of all bonuses paid or payable
to any employees or ex-employees of any Group Company in connection with
the completion of the sale and purchase of the Shares or the consummation
of any transactions contemplated by this agreement and any associated 'on
costs' (for example, workers' compensation payments and premiums and
payroll tax) (item 'F' of the pro forma adjustment statement set out in
Part C of this Schedule 4);
5. deducting an amount equal to any MIP (Management Incentive Program)
bonuses paid or payable to any employees or ex-employees of any Group
Company in respect of the year ended 30 April 2004 and any associated 'on
costs' (for example, workers' compensation payments and
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premiums and payroll tax) (item 'G' of the pro forma adjustment statement
set out in Part C of this Schedule 4); and
6. to the extent that, as at 30 April 2004, ▇▇▇▇▇ ▇▇▇▇▇ Foods had on hand in
excess of 9 months' stock of pre-labelled Licensed Products, or any
combination of labelled Licensed Products and labels and/or other
packaging equivalent to 9 months of projected sales (EXCESS PRODUCT), and
such Excess Product is not otherwise provided for in the Completion
Accounts, deducting an amount equal to the cost to ▇▇▇▇▇ ▇▇▇▇▇ Foods of
such Excess Product (item 'H' of the pro forma adjustment statement set
out in Part C of this Schedule 4).
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PART C: PRO FORMA ADJUSTMENT STATEMENT
Completion Accounts $
Preliminary Amount A.[ ]
Adjustments
Depreciation and amortisation of fixed and intangible assets B.[ ]
Total upward adjustment C.[ ]
Pre-Completion Redundancy Benefits of Management Employees D.[ ]
Transaction costs E.[ ]
Employee completion bonuses F.[ ]
MIP Bonuses G.[ ]
Excess Product H.[ ]
Total downward adjustments I.[ ]
Adjustment Amount = A + C - I
If the Adjustment Amount is a negative amount it will be subtracted from the
$51,000,000 referred to in clause 4.1.
If the Adjustment Amount is a positive amount it will be added to the
$51,000,000 referred to in clause 4.1.
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SCHEDULE 5 - WARRANTIES
1. DEFINED TERMS
In these Warranties:
ASSET REGISTER means the register of fixed assets of the Group Companies
that are owned, leased or otherwise used in the operation of the Business
as at the date of this agreement, as set out in Schedule 11.
AUTHORISATIONS means any licence, permission or authority lawfully issued
by or on behalf of a Government Authority, including without limitation
development approvals.
CEREBOS TRADE ▇▇▇▇ DEED means the deed entered into between Cerebos
(Australia) Limited and the Company and dated 4 September 2002.
CONFIDENTIAL INFORMATION means:
(a) all information of or used by any Group Company relating to the
Business, including information and know-how in relation to
formulae, recipes and manufacturing processes;
(b) all other information of or used by any Group Company and which is
treated by any Group Company as confidential;
(c) all notes, data, reports and other records (whether or not in
tangible form) based on, incorporating or derived from information
referred to in paragraphs (a) or (b); and
(d) all copies (whether or not in tangible form) of the information,
notes, reports and records referred to in paragraphs (a), (b) or
(c),
that is not public knowledge (otherwise than as a result of a breach of a
confidentiality obligation of a party).
CONTAMINANT means any solid, liquid or gaseous substance, odour, heat,
sound, vibration or radiation which is or may be:
(a) noxious or poisonous or offensive to the senses of human beings;
(b) harmful or potentially harmful to the health, welfare, safety or
property of human beings;
(c) poisonous, harmful, or potentially harmful to animals or plants; or
(d) detrimental to any beneficial use made of the Environment.
CONTRACT means any contract entered into by any of the Group Companies.
DELAWARE CODE means the body of all statutes of a permanent and general
nature of the State of Delaware, which statutes:
(a) have been passed by the legislature of the State of Delaware;
(b) have been approved by the Delaware State governor; and
(c) are revised and consolidated into general provisions, titles,
chapters and sections.
ENVIRONMENT means the physical factors of the surroundings of human and
non-human life forms, including the land, waters, soils, plants, habitats,
atmosphere, climate, sounds, odours, tastes, biodiversity and the social
and aesthetic value of landscapes.
ENVIRONMENTAL AUTHORISATION means any authorisation, approval, permit,
licence, authority, consent or registration required by or issued pursuant
to any Environmental Law.
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ENVIRONMENTAL LAW means a law (including without limitation any
determination or requirement of any Government Authority) relating to the
Environment, including without limitation in relation to land use,
planning, pollution of air or water, soil or ground water contamination,
chemicals, waste, dangerous goods or to any other aspect of protection of
the Environment or person or property.
FRANKING ACCOUNT BALANCE DATE means 30 April 2003.
GOULBURN VALLEY WATER means the Goulburn Valley Region Water Authority
(ABN 84 578 076 056) of ▇▇▇-▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇.
INTELLECTUAL PROPERTY LICENCES means the licences granted to the Group
Companies, as listed in Part 1 of Schedule 6.
INTELLECTUAL PROPERTY RIGHTS means all intellectual property rights and
proprietary rights (whether registered or unregistered), including:
(a) trade marks or service marks;
(b) copyright, patents, patent applications, drawings, discoveries,
inventions, improvements, trade secrets, technical data, formulae
and recipes, computer programs, databases, know-how, logos, designs,
design rights and similar industrial or intellectual property
rights;
(c) any right to have information (including Confidential Information)
kept confidential;
(d) business names; and
(e) internet domain names.
MORAL RIGHTS means each right defined as a moral right in Part IX of the
Copyright ▇▇▇ ▇▇▇▇ (Cth).
OWNED INTELLECTUAL PROPERTY RIGHTS means all Intellectual Property Rights
owned by the Group Companies, including those listed in Schedule 6 but
excluding the Intellectual Property Licences.
PERSONAL INFORMATION means PERSONAL INFORMATION (as defined in the Privacy
▇▇▇ ▇▇▇▇ (Cth)) held by the Company.
PRIVACY LAW means:
(a) the Privacy ▇▇▇ ▇▇▇▇ (Cth); and
(b) the National Privacy Principles contained in the Privacy ▇▇▇ ▇▇▇▇
(Cth) or an approved privacy code (as defined in the Privacy ▇▇▇
▇▇▇▇ (Cth)) that applies to the Company.
UNITED STATES CODE means the consolidation and codification by subject
matter of the general and permanent laws of the United States of America,
which federal laws have been passed by Congress and approved by the
President.
2. VENDOR
2.1 The Vendor:
(a) is a corporation duly organised, validly existing and in good
standing under the laws of its jurisdiction of incorporation; and
(b) has full authority and all necessary consents to enter into and
perform this agreement.
2.2 This agreement and all the transactions contemplated by this agreement
will, when executed by the Vendor, constitute binding obligations of the
Vendor in accordance with their respective terms.
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2.3 The execution, delivery and performance by the Vendor of this agreement
and the transactions contemplated by it will not:
(a) result in a breach of any provision of the constitution or other
organisational documents of the Vendor;
(b) result in a breach of, or constitute a default under, any instrument
or agreement to which the Vendor is a party or by which the Vendor
is bound and which is material in the context of the transactions
contemplated by this agreement;
(c) result in a breach of any order, judgment or decree of any court or
Government Authority to which the Vendor is a party or by which the
Vendor is bound and which is material in the context of the
transactions contemplated by this agreement; or
(d) result in the imposition or creation of any Encumbrance on or with
respect to the Shares or the assets of the Group Companies.
2.4 No:
(a) meeting has been convened, resolution proposed, application made,
petition presented or order made for the winding up of the Vendor;
(b) receiver, receiver and manager, provisional liquidator, liquidator
or other officer of the Court has been appointed in relation to all
or any material asset of the Vendor; or
(c) mortgagee or chargee has taken, attempted or indicated an intention
to exercise its rights under any security of which the Vendor is the
mortgagor or chargor.
2.5 The Vendor:
(a) is not insolvent within the meaning of Ohio Revised Code "
1701.01(H) or ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code " 101(32);
(b) has not stopped paying its debts as and when they fall due; or
(c) is not subject to any dissolution proceeding under Ohio Revised Code
" 1701.86(D), an insolvency proceeding under Ohio Revised Code
Chapter 2735, or a bankruptcy proceeding under Title 11 of the
United States Code.
3. THE GROUP COMPANIES
3.1 Each of the Group Companies:
(a) is a body corporate duly incorporated, validly existing and in good
standing under the laws of the place of its incorporation;
(b) is accurately described in Schedule 1 in respect of the matters
described therein;
(c) has full corporate power to own its properties, assets and
businesses and to carry on the businesses it conducts;
(d) is duly registered and authorised to do business in every
jurisdiction which, by the nature of its business and assets, makes
registration or authorisation necessary; and
(e) is not in default under or in violation of any provision of its
constituent or other organisational documents.
3.2 No:
(a) meeting has been convened, resolution proposed, application made,
petition presented or order made for the winding up of any of the
Group Companies;
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(b) receiver, receiver and manager, provisional liquidator, liquidator
or other officer of the Court has been appointed in relation to all
or any material asset of any of the Group Companies; or
(c) mortgagee or chargee has taken, attempted or indicated an intention
to exercise its rights under any security of which any of the Group
Companies is the mortgagor or chargor.
3.3 Except for the Subsidiaries, the Company:
(a) has no subsidiaries within the meaning of the Corporations Act, the
Delaware Code or the United States Code; and
(b) has no interest in the share capital of any company.
3.4 The Subsidiaries are not the holders or beneficial owners of any shares or
other capital in any body corporate (whether incorporated or not).
3.5 No Group Company:
(a) acts or carries on business in partnership with any other person;
(b) is a member of any corporate or unincorporated body, undertaking or
association (other than a trade association);
(c) holds nor is liable on any share or security (other than a share of
security in a trade association); or
(d) is the manager trustee or representative of any trust or scheme
involving prescribed interests or managed investment (within the
meaning of the Corporations Act).
3.6 The Company:
(a) is not insolvent within the meaning of the general laws of the ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code [ ] [ ] 101(32);
(b) has not stopped paying its debts as and when they fall due; and
(c) is not subject to a dissolution proceeding under [ ] [ ] 8 Delaware
Code Subchapter X, an insolvency proceeding under 8 Delaware Code
Subchapter XL, or a bankruptcy proceeding under Title 11 of the
United States Code.
3.7 ▇▇▇▇▇▇▇ Australia:
(a) is not insolvent within the meaning of Ohio Revised Code [ ] [ ]
1701.01(H) or 11 United States Code [ ] [ ] 101(32);
(b) has not stopped paying its debts as and when they fall due; and
(c) is not subject to a dissolution proceeding under Ohio Revised Code
[ ] [ ] 1701.86(D), an insolvency proceeding under Ohio Revised Code
Chapter 2735, or a bankruptcy proceeding under Title 11 of the
United States Code.
3.8 Delaware Newco 2:
(a) is not insolvent within the meaning of the general laws of the ▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code [ ] [ ] 101(32);
(b) has not stopped paying its debts as and when they fall due; and
(c) is not subject to a dissolution proceeding under [ ] [ ] 8 Delaware
Code Subchapter X, an insolvency proceeding under 8 Delaware Code
Subchapter XL, or a bankruptcy proceeding under Title 11 of the
United States Code.
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3.9 Each Group Company that is incorporated in Australia:
(a) is not insolvent within the meaning of section 95A of the
Corporations Act;
(b) has not stopped paying its debts as and when they fall due; or
(c) is not subject to voluntary administration under Part 5.3A of the
Corporations Act.
3.10 Each of the Group Companies does not trade under a name other than its
corporate name (excluding trademarks or business names registered in a
name other than its corporate name).
3.11 Since its incorporation, the Company has not held any assets, had any
Liabilities, carried on any business or trading activity in any
jurisdiction or derived any income or incurred any expenses from such
activity. The Company's sole function is to hold the shares in Delaware
Newco 2.
3.12 Since its incorporation, Delaware Newco 2 has not held any assets, had any
Liabilities, carried on any business or trading activity in any
jurisdiction or derived any income or incurred any expenses from such
activity. Delaware Newco 2's sole function is to enter into the Merger
Agreement and to complete the Merger Transaction according to its terms
and otherwise in compliance with the laws of the States of Ohio and
Delaware, United States of America.
3.13 Since its incorporation, ▇▇▇▇▇▇▇ Australia has not carried on any business
or trading activity in any jurisdiction or derived any income or incurred
any expenses from such activity. ▇▇▇▇▇▇▇ Australia's sole function is to
hold shares directly in ▇▇▇▇▇ ▇▇▇▇▇ Foods. Since its incorporation,
▇▇▇▇▇▇▇ Australia's only asset has been its shareholding in ▇▇▇▇▇ ▇▇▇▇▇
Foods. Since, its incorporation and prior to the date of this agreement,
▇▇▇▇▇▇▇ Australia's only Liabilities have ever been inter-group
indebtedness owed to the Vendor. All such indebtedness has been
extinguished as at the date of this agreement, with the effect that
▇▇▇▇▇▇▇ Australia has no Liabilities as at the date of this agreement.
3.14 Since its incorporation, Hallco has not carried on any business or trading
activity in any jurisdiction or derived any income or incurred any
expenses from such activity. Hallco's sole function is to hold
Intellectual Property Rights. Since its incorporation, Hallco's only asset
has been and continues to be Intellectual Property Rights. Hallco has no
Liabilities and has never had any Liabilities since its incorporation.
3.15 HJF Superannuation Nominees' sole function is to act as the trustee of the
HJF Fund. Since its incorporation, HJF Superannuation Nominees has not
carried on any business or trading activity in any jurisdiction or derived
any income or incurred any expenses from such activity, other than in its
capacity as the trustee of the HJF Fund.
3.16 The execution, delivery and performance of this agreement and the
transactions contemplated by it will not:
(a) result in a breach of any provision of the constitution or
organisational documents of any of the Group Companies;
(b) to the Vendor's knowledge, result in a breach of, or constitute a
default under, any instrument or agreement to which any Group
Company is a party or by which any Group Company is bound and which
is material in the context of the transactions contemplated by this
agreement;
(c) result in a breach of any order, judgment or decree of any court or
Government Authority to which any Group Company is a party or by
which any Group Company is bound and which is material in the
context of the transactions contemplated by this agreement; or
(d) result in the imposition or creation of any Encumbrances on or with
respect to the Shares or the assets of any Group Company.
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4. SHARE CAPITAL
4.1 The shares issued in each of the Group Companies are as specified in
Schedule 1 and:
(a) comprise all of the issued and outstanding shares in the capital of
each respective Group Company;
(b) are fully paid; and
(c) were validly issued in compliance with the constituent documents of
each Group Company and:
(i) in the case of any Group Company incorporated in Australia, in
compliance with the securities laws of Australia; and
(ii) in the case of any Group Company incorporated in the United
States of America, in compliance with the securities laws of
the relevant State of that Group Company's incorporation.
4.2 The Vendor is the sole legal and beneficial owner and has complete and
unrestricted power and right to sell, assign and transfer the Shares to
the Purchaser.
4.3 In respect of the one ordinary share in the capital of ▇▇▇▇▇ ▇▇▇▇▇ Foods
that is legally held by ▇▇▇▇ ▇▇▇▇▇▇▇, the Vendor is entitled to transfer,
and will procure the transfer of, the legal ownership of that share to
Delaware Newco No 2 free from Encumbrance on and with effect from
Completion.
4.4 In respect of each of the Group Companies:
(a) there are no securities convertible into shares in the capital of
any of those Group Companies;
(b) there are no options or other entitlements:
(i) over the shares in the capital of any Group Company; or
(ii) to have shares in any Group Company issued; and
(c) there are no restrictions on the transfer of any shares in any Group
Company.
4.5 There is no Encumbrance over or affecting any of the Shares or any of the
shares in the Subsidiaries.
4.6 On Completion, the Purchaser will acquire the full beneficial ownership of
all of the Shares, free of any Encumbrance and have a right to be
registered as legal owner of those Shares.
4.7 Other than:
(a) in respect of the one ordinary share in the capital of ▇▇▇▇▇ ▇▇▇▇▇
Foods that is legally held by ▇▇▇▇ ▇▇▇▇▇▇▇; and
(b) the 2 'B' class shares held by ▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇▇
respectively in HJF Superannuation Nominees,
▇▇▇▇▇▇▇ Australia is the beneficial owner of all the issued shares in each
Subsidiary free from any Encumbrance.
5. THE AUDITED ACCOUNTS AND THE MANAGEMENT ACCOUNTS
5.1 The Audited Accounts and the Management Accounts:
(a) give a true and fair view of:
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(i) the assets, liabilities, financial position and state of
affairs of the Group as at the Accounts Date (in the case of
the Audited Accounts) and as at 28 February 2004 (in the case
of the Management Accounts); and
(ii) the financial performance of the Group for the year ended on
the Accounts Date (in the case of the Audited Accounts) and as
at 28 February 2004 (in the case of the Management Accounts);
(b) were prepared in accordance with:
(i) the Accounting Standards, the Corporations Act and all other
applicable laws; and
(ii) the same accounting policies as were applied in the
corresponding accounts for the previous 5 years;
(c) contain proper and adequate provision for or fully disclose all
liabilities, whether actual, contingent or otherwise, of the Group
as at the Accounts Date (in the case of the Audited Accounts) and as
at 28 February 2004 (in the case of the Management Accounts); and
(d) fully disclose any abnormal, extraordinary or exceptional items if
they are affected by any such items.
3.2 Since the Accounts Date:
(a) there has been no material adverse change in the assets,
liabilities, turnover, earnings, financial condition, trading
position, affairs or prospects of any Group Company;
(b) other than the Dividend and the Vendor Distribution, no dividend or
distribution of capital or income has been declared, made, paid or
determined to be payable in respect of any share capital of a Group
Company whether of cash, specific assets or otherwise;
(c) the Group has carried on the Business in the ordinary and usual
course and has not entered into any contracts or arrangements other
than in the ordinary and usual course of carrying on the Business;
(d) no Group Company has incurred or undertaken any actual or contingent
liabilities or obligations, including Tax, except in the ordinary
and usual course of business;
(e) no Group Company has acquired or disposed of or dealt with any
assets, nor has it entered into any agreement or option to acquire
or dispose of any assets, other than in the ordinary and usual
course of business or for full market value;
(f) except in the ordinary and usual course of business, no Group
Company has borrowed money;
(g) except by operation of law or in the ordinary and usual course of
business, no Group Company has granted any Encumbrance over any of
its inventory or assets;
(h) no Group Company has paid or agreed to pay any retiring allowance,
superannuation or benefit to any of its officers or employees other
than as required by law or in accordance with a superannuation or
retirement scheme in force at the Accounts Date or any other
arrangement giving rise to such requirement;
(i) no Group Company has entered into or altered any contract of service
with any officers, employees or agents, or increased or agreed to
increase the rate of remuneration or compensation payable to any of
its officers, employees or agents, other than pursuant to salary
reviews that have been undertaken on a commercial basis and in the
ordinary and usual course of business;
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(j) the rights attaching to any shares in a Group Company, have not
altered and no alteration has been made to the capital structure of
a Group Company;
(k) no Group Company has implemented any new accounting or valuation
method for its business, assets, property or rights;
(l) no loans have been made nor bonuses paid by a Group Company to
employees, nor have any advances or loan money been accepted from
any employees, other than in accordance with the Company's
remuneration procedures that have been adopted and applied on a
commercial basis and in the ordinary and usual course of business;
and
(m) no resolutions have been passed by the members or directors of a
Group Company except in the ordinary and usual course of business of
that Group Company and those necessary to give effect to this
agreement and, where applicable, the Merger Transaction.
5.3 No Group Company has provided any letter of comfort or made any
representation or given any undertaking to any person in respect of the
obligations or solvency of any other person or in support of or as an
inducement to or otherwise in connection with the provision of financial
accommodation, whether or not considered by the Group Company to be
legally binding
5.4 No Group Company has entered into any contract under which it receives, or
is entitled to receive, financial accommodation from any person, including
any other Group Company. Without limiting the foregoing, as between the
Subsidiaries and the Vendor, there is no indebtedness, other than accounts
payable arising from inter-Group supply arrangements that have been
entered into in the usual and ordinary course of the Business.
5.5 Except for operating leases, the Group Companies do not have nor are they
engaged in financing of a type which is not required to be shown or
reflected in the Audited Accounts and the Management Accounts.
5.6 No Group Company is a party to any foreign currency transaction, other
than in respect of raw material purchases made in the ordinary and usual
course of the Business.
5.7 No Group Company has any obligation to provide money, indemnify or
otherwise be responsible to another person for obligations (whether they
relate to financial accommodation or otherwise) of any other Group
Company, the Vendor or any of its Associates.
6. BOOKS AND RECORDS
6.1 The Books and Records are in the possession of the Group Companies.
6.2 To the best of the Vendor's knowledge, the Books and Records:
(a) have been fully, properly and accurately kept and completed;
(b) do not contain material inaccuracies or discrepancies of any kind;
and
(c) as far as necessary, have been prepared in accordance with the
requirements of the Corporations Act and the Accounting Standards.
7. CONTRACTS AND COMMITMENTS
7.1 No Group Company is a party to any Contract under which it is or
will be bound to share profits or pay any royalties, other than the
Intellectual Property Licences.
7.2 No Contract:
(a) is outside the ordinary and proper course of the Business; or
(b) is not on arm's length terms
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7.3 As at the date of this agreement, there are no contracts other than the
Material Contracts listed in Schedule 3 that are material to the operation
of the Business as it is conducted by the Group Companies as at the date
of this agreement. To the Vendor's knowledge, there are no issues in
relation to any of the Material Contracts that are material to the
operation of the Business and have not been disclosed by the Vendor to the
Purchaser prior to the date of this agreement. For the purpose of this
Warranty 7.3, an issue in relation to a Material Contract is material to
the operation of the Business if that issue has resulted in or is
reasonably likely to result in either:
(a) a reduction of $250,000 or more in the consolidated earnings before
interest, tax, depreciation and amortisation of the Group; or
(b) a reduction of $2,500,000 or more in the consolidated net assets of
the Group as at the date of the Management Accounts.
7.4 No party is entitled under any Material Contract because of any change in
the legal or beneficial ownership of the Shares or any of them, or the
compliance with this agreement:
(a) to terminate any Material Contract;
(b) to make any Claim against the Purchaser or any Group Company; or
(c) to require the adoption of terms less favourable to any of the Group
Companies.
7.5 To the Vendor's knowledge, no party to any Material Contract is:
(a) in default; or
(b) but for the requirements of notice or lapse of time or both, would
be in default; and
(c) the default could be reasonably expected to have a material adverse
effect on the Business.
7.6 As far as the Vendor is aware, no action has been taken, or threat made,
to terminate or amend any Material Contract where such action or threat is
reasonably likely to have a material adverse effect on the Business.
7.7 To the Vendor's knowledge, during the 12 months prior to the date of this
agreement, no party to a Material Contract:
(a) stopped or indicated an intention to stop trading with or supplying
the Group Company;
(b) reduced or indicated an intention to reduce substantially its
trading with or supply arrangements with the Group Company; or
(c) changed or indicated an intention to change substantially the terms
on which it is prepared to trade with or supply the Group Company
other than normal price and quota changes.
7.8 Neither the Vendor nor any Group Company has entered into a binding
contract with, or given a binding offer to or arrived at any other binding
arrangement or understanding with, Goulburn Valley Water in respect of or
relating to matters in connection with the Effluent Ponds.
8. SUPERANNUATION
8.1 The Group Companies incorporated in Australia contribute to the Funds and
those Group Companies do not have any other obligation, liability or duty
to make any payments in respect of any other Superannuation Arrangements.
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8.2 Each Group Company has complied with all of its superannuation
obligations, duties and liabilities in respect of its employees under all
applicable laws, awards, employment agreements and the governing rules of
each Fund.
8.3 The Vendor has made available to the Purchaser complete and correct copies
of all documents, to the Vendor's knowledge, comprising:
(a) the governing rules of the HJF Fund, including all explanatory
booklets, announcements and notices regarding the benefit
entitlements of the employees of the Group Companies in the HJF
Fund; and
(b) the most recent annual reports and actuarial reports of the HJF Fund
(where applicable), including reports as to contribution rates of
the HJF Fund.
8.4 To the Vendor's knowledge, each Fund is a 'complying superannuation fund'
within the meaning of the SIS Act, and the Funds have not received any
"section 63" notices or non-compliance notices under the SIS Act.
8.5 The Group Companies contribute to each Fund in accordance with current
actuarial requirements. The HJF Fund is fully funded. To the Vendor's
knowledge, the assets of the HJF Fund are sufficient, having regard to
appropriate actuarial evaluation methods and assumptions, to meet all
potential claims which are governed by the HJF Fund's governing rules, in
connection with all members of the HJF Fund, including (but not limited
to) claims for benefits by the employees of the Group Companies and their
beneficiaries of the HJF Fund.
8.6 To the Vendor's knowledge, neither a Group Company nor the trustee of the
HJF Fund has received notice of any material complaints, actions, claims
or suits in connection with the HJF Fund.
8.7 Full and proper Books and Records for the HJF Fund have been kept, are
up-to-date, and present a true and fair view of the financial position of
the HJF Fund.
8.8 Except where it would be in the ordinary course of the Business, or as
otherwise specifically provided for in this agreement or in connection
with a transaction required by clause 10 of this agreement, neither the
actions of a Group Company or the Vendor prior to the Completion Date nor
the sale of Shares contemplated by this agreement will cause:
(a) a variation in the Superannuation Arrangements of the Group
Companies or their employees; or
(b) an increase in the obligations of the Purchaser or any Group Company
to make superannuation contributions, or an increase in benefits
payable from a Fund in respect of the employees of any Group Company
under any applicable law, award, industrial agreement, employment
agreement or the governing rules of a Fund.
8.9 The governing rules of the HJF Fund have not been amended since the date
of the last amendment dated 26 November 2002, provided to the Purchaser.
8.10 Prior to and as at the Completion Date, no superannuation contributions
were or are required to be made by any Group Company in respect of any
contractors in accordance with the SGA Act or the SGC Act.
8.11 The Group Companies have no superannuation guarantee charge liabilities in
respect of their employees under the SGA Act or SGC Act.
8.12 All superannuation related contributions, expenses or other payments,
including the minimum employer superannuation guarantee contributions
required to be paid in respect of the employees
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of the Group Companies to avoid the imposition of the Superannuation
Guarantee Charge under the SGA Act and the SGC Act, up to and including
the Completion Date have been:
(a) paid; or
(b) accrued or provided for in the Audited Accounts (including any
penalties or interest in respect thereof);
as at Completion.
9. EMPLOYEES
9.1 Schedule 9 sets out a complete and accurate summary of the following
particulars in relation to each employee of any of the Group Companies as
at the date of this agreement:
(a) name;
(b) classification/job title and job description;
(c) date of commencement of employment;
(d) salary/wages;
(e) other forms of remuneration (including, without limitation,
allowances and provision of a motor vehicle);
(f) provision for accrued and untaken annual leave;
(g) provision for accrued and untaken sick leave; and
(h) provision for accrued and untaken, and unaccrued, long service
leave.
9.2 No employees of any of the Group Companies are eligible to receive any
benefits from their employment other than those set out in Schedule 9.
9.3 All of the employees of any of the Group Companies who are classified as
'casual' employees are not engaged on either a full-time or part-time
basis.
9.4 With the exception of the Management Employees who have agreements with
the Vendor for the payment of bonuses if this agreement is Completed
according to its terms, the Group Companies have not made any contract,
arrangement, understanding or representation (whether written or oral)
under which one or more employees, contractors or agents will or may be
entitled to any benefit (monetary or otherwise) if ownership (direct or
indirect) of the Group Companies changes, as will occur on the sale of the
Shares.
9.5 No notice has been received by the Group Companies of a potential Claim,
by or on behalf of any past or present employee or contractor against the
Group Companies.
9.6 There are no Claims made by an employee of any of the Group Companies for
workers' compensation which are outstanding and, to the Vendor's
knowledge, no event has arisen which may reasonably be expected to give
rise to a claim for workers' compensation by any employee of any of the
Group Companies.
9.7 To the Vendor's knowledge, the Group Companies have materially complied
with all obligations arising under law, equity, statute (including
occupational health and safety, annual leave, long service leave, equal
opportunity, anti-discrimination, Tax, superannuation, workers
compensation and industrial laws), award, enterprise agreement or other
instrument made or approved under any law with respect to its past and
present employees and contractors. Without limiting the generality of the
foregoing, no director or employee of any Group Company has been
terminated in circumstances which may reasonably be expected to give rise
to a Claim against any of the
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Group Companies in relation to loss of office or termination of employment
(including, without limitation, redundancy).
9.8 The Group Companies (or any of them) are not involved in any industrial or
trade dispute or any dispute or negotiation regarding a Claim of material
importance with any organisation or body of employees.
9.9 No amount due to or in respect of any director, employee, consultant or
former director, former employee or former consultant of any of the Group
Companies is in arrears and unpaid, other than amounts that are in arrears
and unpaid in the usual and ordinary course of the Business and in
accordance with a Group Company's remuneration procedures.
9.10 The Group Companies (or any of them) have no outstanding undischarged
liability to pay to any Government Authority any contribution, Taxes or
other impost arising in connection with the employment or engagement of
personnel by any of the Group Companies.
9.11 To the Vendor's knowledge, the Group Companies (or any of them) have not
breached any legislation or authorisation relating to the health or safety
of their employees. As at the date of this agreement there are no
outstanding notifications in relation to such breaches.
9.12 Subject to Warranty 9.13 and any statutory or award entitlements:
(a) no officer or employee of any of the Group Companies is entitled to
any more than 30 days' notice of termination (or payment in lieu
thereof) ; and
(b) no officer or employee is entitled to compensation for termination
after proper notice (or payment in lieu thereof) other than a
redundancy or severance payment in the usual and ordinary course of
the Business (other than in the case of unfair dismissal).
9.13 Except for notice of termination (or pay in lieu), the only redundancy
benefits employees of the Group Companies who are retrenched are eligible
to receive are as follows:
(a) employees who are covered by the ▇▇▇▇▇ ▇▇▇▇▇ Foods (Enterprise
Bargaining) Agreement 2003 - the redundancy benefits under that
agreement;
(b) the Management Employees - the redundancy benefits specified in the
severance and termination agreements between the Vendor and each
Management Employees, drafts of which form part of the Disclosure
Materials. The draft agreements referred to in this Warranty will,
when executed by ▇▇▇▇▇ ▇▇▇▇▇ Foods and each Management Employee, be
substantially similar in all respects to the draft agreements that
form part of the Disclosure Materials; and
(c) all employees other than those described in (a) and (b) - in
accordance with all applicable laws, policies and procedures in
place from time to time as applied on a case by case basis after
obtaining legal advice where appropriate.
9.14 All of the persons who are engaged to work by a Group Company and who are
classified as 'contractors' or 'consultants' are not 'employees' at common
law.
10. TAX
In Warranties 10.1 to 10.23 inclusive, AUSTRALIAN TAX means any Tax under
any law of the Commonwealth of Australia or any law of a State or
Territory of Australia.
10.1 AUDITED ACCOUNTS
The Audited Accounts contain provisions for all Australian Taxes for or in
respect of any of the Australian Subsidiaries for all periods up to the
Accounts Date. No additional or other Taxes are or will be payable
(whether on, before or after Completion) by any of the Australian
Subsidiaries in respect of the period up to the Accounts Date.
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10.2 TAX SINCE THE ACCOUNTS DATE
Since the Accounts Date, no additional liability for Australian Tax has
accrued to any of the Australian Subsidiaries otherwise than as a result
of trading activities in the usual and ordinary course of the Business.
Each of the Australian Subsidiaries has accrued for all Australian Taxes
for which it is liable or will become liable in respect of the period from
the Accounts Date up to and including the Completion Date.
10.3 DEDUCTIONS
The Australian Subsidiaries have complied with all of their material
obligations under any statutory provisions requiring the deduction or
withholding of Australian Tax from amounts paid by them and have properly
accounted for any Australian Tax so deducted or withheld to any Australian
Taxation authority (other than amounts which have not yet become due to be
paid) in accordance with relevant law.
10.4 PAYMENT OF TAX
(a) All Australian Tax payable with respect to any period or part of a
period ending on or prior to Completion by any Australian
Subsidiary, including Australian Tax payable in respect of:
(i) any agreement or transaction (other than as contemplated by
this agreement) occurring prior to Completion; or
(ii) all or part of any financial year of the relevant company
occurring before Completion; or
(iii) any income, gains, profits or receipts (of a revenue or
capital nature), accrued, earned, received or derived, or
deemed by any Australian Tax law to be accrued, earned,
received or derived, prior to Completion,
has been duly paid or is adequately provided for in the Audited
Accounts on the basis of the usual accounting practice of the
Australian Subsidiaries.
(b) The Australian Subsidiaries have not entered into any agreement or
arrangement which extends the period for assessment or payment of
any Australian Tax.
10.5 APPLICATIONS
No application to any Government Authority for any ruling, consent or
clearance on behalf of the Australian Subsidiaries has been made in
respect of Australian Tax.
10.6 NO DISALLOWANCE
Nothing has occurred in respect of the Australian Subsidiaries which will
cause the disallowance for Australian income tax purposes of either the
carry forward of losses as at the Accounts Date or the deduction of losses
incurred since the Accounts Date other than as a result of the transfer of
Shares in accordance with this agreement.
10.7 NO ADDITIONAL TAXES
Since the Accounts Date, the Australian Subsidiaries (or any of them) have
not become liable to pay any additional Australian Taxes, interest,
penalty, charge, fee or other like amount imposed or made on or in respect
of the failure to file a return in respect of or to pay any Australian
Taxes.
10.8 INVESTIGATIONS
(a) All necessary information, notices, computations and returns:
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(i) have been properly and duly submitted by each of the
Australian Subsidiaries to each relevant Government Authority
in respect of Australian Taxes for or in respect of each of
the Australian Subsidiaries for all periods up to the date of
this agreement; and
(ii) will continue to be submitted in respect of periods after the
date of this agreement until the Completion Date in respect of
those later periods.
(b) There is no unresolved dispute with any Government Authority in
respect of Australian Tax. Neither the Australian Commissioner of
Taxation nor any other fiscal authority is at present conducting any
investigation into all or any part of the business or affairs of any
of the Australian Subsidiaries. The Vendor is not aware of any
reason why any such investigation may be initiated.
10.9 RECORDS OF ASSETS
(a) The Australian Subsidiaries, the Vendor or Related Bodies Corporate
of the Vendor have maintained and have retained for the period
required by law an asset register containing:
(i) sufficient Australian Tax depreciation schedules and
sufficient Australian Tax building allowance schedules of its
assets listed in the asset register;
(ii) accurate records of cost bases of its assets listed in the
asset register for Australian Tax purposes; and
(iii) accurate records required to substantiate or permit the
calculation of any taxation liability which may arise to the
Australian Subsidiaries.
10.10 CAPITAL GAINS TAX
The capital gains tax status of the assets of the Australian Subsidiaries
is accurately recorded in the depreciation register for Taxation purposes.
In particular, the estimated cost base and acquisition date of the assets
has been properly calculated in accordance with the Australian Tax law.
10.11 DIVIDENDS
(a) Since the last Franking Account Balance Date:
(i) no dividend has been paid by any Australian Subsidiary:
(A) in respect of which the required franking amount (as
provided for in section 160AQE of the 1936 Tax Act) has
exceeded the franked amount (as defined in section
160APA of the 1936 Tax Act) of the dividend; or
(B) which has been franked with franking credits or
exempting credits (whichever is applicable) in excess of
the required franking amount,
which would result in the Australian Subsidiary being liable
to pay franking deficit Australian Tax or additional
Australian Tax under the 1936 Tax Act, and
(C) in respect of which the required franking amount (as
provided for in section 160AQE of the 1936 Tax Act) was
less than the franked amount (as defined in section
160APA of the 1936 Tax Act) of the dividend; or
(D) (which has been franked with franking credits or
exempting credits (whichever is applicable) in excess of
the required franking amount; and
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(ii) no dividend has been paid by any Australian Subsidiary in
respect of which that company has or will have a liability to
over-franking tax or franking deficit tax pursuant to section
203-50 or section 205-45 respectively of the 1997 Tax Act that
has not been or will not be paid in full prior to Completion.
(b) No Australian Subsidiary has paid or will as at Completion have paid
or provided any amount, other than a duly declared dividend which
would or may be deemed to be a dividend under the 1936 Tax Act or
the 1997 Tax Act.
(c) No asset revaluation dividend (as defined in section 46E(1) of the
1936 Tax Act) has at any time been paid or as at Completion will
have been paid to any Australian Subsidiary.
(d) No dividend has been paid by any Australian Subsidiary to the
Company or to any other Subsidiary which has resulted in an
Australian withholding tax obligation that has not been paid by the
Company, any Australian Subsidiary or the Vendor.
10.12 GST
(a) To the Vendor's knowledge, no Australian Subsidiary is a party to
any material contract, agreement, arrangement or understanding
entered into on or after 1 July 2000 in respect of which it is or
will become liable to pay GST without factoring such GST into the
consideration or being entitled to increase the consideration
payable under the contract, agreement, arrangement or understanding
or otherwise seek reimbursement so that the Australian Subsidiary
retains the amount it would have retained but for the imposition of
GST.
(b) Each Australian Subsidiary:
(i) is registered for GST under the GST law;
(ii) has complied in all respects with the GST law; and
(iii) is not in default of any obligation to make any payment or
return (including without limitation any Business Activity
Statement) or notification under the GST law.
10.13 No Australian Subsidiary has engaged in any avoidance scheme for the
purposes of section 165-5 of the A New Tax System (Goods and Services Tax)
▇▇▇ ▇▇▇▇ (Cth).
10.14 Except in relation to the transaction contemplated by this agreement, no
Australian Subsidiary has been notified that it is subject to any current
investigation, enquiry or review of its prices by the ACCC.
10.15 To the Vendor's knowledge, no Australian Subsidiary has received any
complaints of non-compliance in relation to its obligations under Part VB
of the Trade Practices ▇▇▇ ▇▇▇▇ (Cth).
10.16 ▇▇▇▇▇ ▇▇▇▇▇ Foods has established internal procedures and systems
necessary to ensure that its billing, accounts receivable and general
ledger functions accurately capture and account for GST in all material
respects.
Unless otherwise defined in this agreement, words or expressions used in
Warranties 10.12 to 10.16 have the same meaning as defined in the A New
Tax System (Goods and Services Tax) ▇▇▇ ▇▇▇▇ (Cth).
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10.17 PAYG
(a) The Australian Subsidiaries have made all payments due under the
PAYG system as and when due.
(b) Any obligations on any Australian Subsidiary under any Australian
Tax law to withhold amounts at source, including, but not limited
to, any Australian withholding Tax, PAYG Tax obligations in respect
of periods to 30 June 2000, prescribed payments system obligations
in respect of periods to 30 June 2000, royalties and any PAYG
withholding pursuant to Part 2-5 of Schedule 1 of the Taxation
Administration Act 1953 in respect of periods from 1 July 2000, have
been complied with.
10.18 ASSESSABLE INCOME, ALLOWABLE DEDUCTIONS AND OTHER MATTERS
Since the Accounts Date, no event has taken place, including the Merger
Transaction that has resulted in an Australian Subsidiary either:
(a) deriving additional assessable income or incurring reduced allowable
deductions under the 1997 Tax Act or the 1936 Tax Act which are not
provided for or otherwise reflected in the Completion Accounts; or
(b) breaching the same business test in Division 165 of the 1997 Tax Act
or Section 80E of the 1936 Act.
10.19 STAMP DUTY
(a) All stamp duty and other similar Australian Tax payable in respect
of every Material Contract or transaction to which any of the
Australian Subsidiaries is or has been a party, or by which any of
the Australian Subsidiaries derive, has derived or will derive a
substantial benefit, have been duly paid.
(b) No Material Contract is unstamped or insufficiently stamped.
10.20 COMPANY RETURNS
(a) All returns and notices required by law for Australian Taxes and
lodged by the Australian Subsidiaries, were:
(i) properly and correctly compiled; and
(ii) not misleading.
(b) To the Vendor's knowledge, the Australian Subsidiaries have complied
with the 1936 Tax Act and the 1997 Tax Act.
10.21 MISCELLANEOUS
(a) The Australian Subsidiaries:
(i) have not entered into or been a party to any transaction which
contravenes the anti-avoidance provisions of any applicable
Australian Tax law including the 1936 Tax Act and the 1997 Tax
Act; and
(ii) have not made any Australian income Tax private binding ruling
requests, objections or amended assessments with respect to
its lodged Australian income Tax returns.
(b) Since the Accounts Date, the Australian Subsidiaries have not done
or omitted to do anything which might incur an Australian Tax
liability except in the usual and ordinary course of the Business.
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(c) In respect of the returns lodged pursuant to the 1936 Tax Act and
the 1997 Tax Act, the Australian Tax deduction or loss otherwise
claimed by the Australian Subsidiaries in respect of the
consideration given by the Australian Subsidiaries for services or
trading stock or other property has not been deemed and is not
likely to be deemed to be reduced or disallowed in whole or in part
by sections ▇▇▇, ▇▇▇, ▇▇(▇), ▇▇, ▇▇▇▇, ▇▇▇▇, 82KL or 177F or any
other provision of the 1936 Tax Act, or any corresponding provisions
of the 1997 Tax Act (including sections 70-20, 40-190, 40-300, or
26-35).
(d) No future income tax benefits are treated as assets in the Audited
Accounts other than benefits resulting from timing differences.
(e) No Australian Subsidiary has engaged in any transaction that has
triggered Division 245 of Schedule 2C to the 1936 Tax Act.
(f) Without limit to the generality of the other Warranties, the Vendor
represents and warrants that, as at Completion:
(i) no Australian Tax is or will be payable by any Australian
Subsidiary by reason of the application of section 160ZZOA,
subdivision 126-B or subdivision 104-J of the 1997 Tax Act in
relation to any agreement or transaction occurring prior to
Completion;
(ii) no Australian Tax is or will be payable by any Australian
Subsidiary by reason of the application of section 160 ZZOA,
subdivision 126-B or subdivision 104-J of the 1997 Tax Act in
relation to entry into or Completion of this agreement;
(iii) no Australian Tax is or will be payable by any Australian
Subsidiary by reason of the application of Part IVA of the
1936 Tax Act to any transaction entered into prior to
Completion or in relation to entry into or Completion of this
agreement; and
(iv) no Australian Tax (excluding franking deficits Tax for which a
credit is obtained) is or will be payable by any Australian
Subsidiary in relation to any dividends paid by an Australian
Subsidiary on or prior to Completion, including the Dividend.
10.22 TAXATION AMOUNT
(a) Each of the relevant Australian Subsidiaries have complied with all
required Australian Tax obligations in relation to its employees.
(b) Each of the relevant Australian Subsidiaries have remitted to the
relevant complying superannuation fund (within the meaning of the
Superannuation Guarantee (Administration) Act 1992) all amounts
required by that Act by the relevant due dates immediately prior to
the Completion Date.
(c) Each of the Australian Subsidiaries have remitted to the relevant
state authority all amounts required by the applicable legislation
in relation to workers compensation.
(d) Each of the Australian Subsidiaries have remitted to the Australian
Commissioner of Taxation all fringe benefits tax required by the
Fringe Benefits Tax Assessment ▇▇▇ ▇▇▇▇.
(e) Each of the Australian Subsidiaries have remitted to the relevant
State Taxation Office all payroll tax required by the applicable
State pay-roll tax legislation.
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10.23 AUSTRALIAN INCOME TAX CONSOLIDATION
With respect to the Australian Subsidiaries:
(a) no election has been made or communicated to the Australian Taxation
Office (ATO) to consolidate any consolidatable group or potential
'Multipal Entry Consolidated' group; and
(b) no choices or elections have been made by any Australian Subsidiary
under Part 3-90 of the 1997 Tax Act.
Terms or expressions used in this Warranty 10.23 that correspond to terms
or expressions used in Part 3-90 of the 1997 Tax Act have the same meaning
in this Warranty as they have for the purposes of Part 3-90.
10.24 US TAX WARRANTIES
(a) The Company, Delaware Newco 2 and ▇▇▇▇▇▇▇ Australia (or any of them)
have not been a member of an Affiliated Group filing a consolidated
United States federal income tax return, other than a group the
common parent of which is the Vendor.
(b) The Vendor has filed a consolidated United States federal income Tax
return for ▇▇▇▇▇▇▇ Australia for the taxable year immediately
preceding the current taxable year and is eligible to make the Code
Section 338(h)(10) Election.
(c) Neither the Company nor the Subsidiaries have any liability for the
US Taxes of any person other than the Company and the Subsidiaries:
(i) under United States Treasury Regulations Section 1.1502-6 (or
any similar provision of state, local or foreign law);
(ii) as a transferee or successor;
(iii) by contract; or
(iv) otherwise.
(d) Each Affiliated Group of which ▇▇▇▇▇▇▇ Australia is or has been a
member has filed all US Tax returns that it was required to file for
each taxable period during which ▇▇▇▇▇▇▇ Australia was a member of
the group. All such US Tax returns were correct and complete in all
respects. All US Taxes owed by any Affiliated Group for each taxable
period during which ▇▇▇▇▇▇▇ Australia was a member of the group have
been paid. There are no deficiencies for US Taxes of any Affiliated
Group for any taxable period during which ▇▇▇▇▇▇▇ Australia was a
member of the group claimed, proposed or assessed by any Government
Authority that have not yet been fully and finally resolved.
(e) There are no pending investigations or, to the Vendor's knowledge,
threatened investigations, Claims or disputes concerning any US Tax
liability of any Affiliated Group for any taxable period during
which ▇▇▇▇▇▇▇ Australia was a member.
(f) No Affiliated Group has waived any statute of limitations in respect
of any US Taxes or agreed to any extension of time with respect to a
US Tax assessment or deficiency for any taxable period during which
▇▇▇▇▇▇▇ Australia was a member of the group.
(g) There are no liens for US Taxes (other than US Taxes not yet due and
payable) on any of the assets of ▇▇▇▇▇▇▇ Australia.
(h) ▇▇▇▇▇▇▇ Australia has not agreed and is not required to make any
adjustment pursuant to Section 481(a) of the Code by reason of a
change in accounting method. ▇▇▇▇▇▇▇ Australia has no knowledge that
the Internal Revenue Service has proposed any such adjustment or
change in accounting method.
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(i) Neither ▇▇▇▇▇▇▇ Australia nor any of its affiliates or predecessors
by merger or consolidation has within the past three years been a
party to a transaction intended to qualify under Section 355 of the
Code or under so much of Section 356 of the Code as relates to
Section 355 of the Code.
(j) There are no tax-sharing agreements or similar agreements with
respect to or involving any Group Company.
(k) No Group Company has ever made an election to change its
classification for United States federal income tax purposes or had
such an election made on its behalf.
(l) None of the Group Companies own any property located in the United
States of America or are or have been engaged in activities in the
United States of America that amount to a permanent establishment
within the meaning of the tax treaty between the United States if
America and Australia.
For the purpose of this Warranty 10.24, US TAXES has the same meaning as
in clause 12.5 of this agreement.
11. LITIGATION
11.1 None of the Group Companies is engaged in any prosecution, litigation or
arbitration proceedings (PROCEEDINGS).
11.2 To the Vendor's knowledge, the Group's dispute with National Foods
relating to the supply of aseptic fruit containing contaminated guar gum
has been settled on terms that do not give rise to:
(a) any further Liability or Claim against any Group Company;
(b) any materially adverse consequences for the Group's profitability
and trading position for the financial year ending 30 April 2004 and
the financial year commencing 1 May 2004; or
(c) any materially adverse consequences for the Group's on-going
relationship with National Foods.
11.3 There are no Proceedings pending involving any of the Group Companies.
11.4 To the Vendor's knowledge, there are no disputes which may or might give
rise to any Proceedings involving any of the Group Companies.
11.5 To the Vendor's knowledge, there are no Proceedings threatened in respect
of which written or verbal communication has been given or received by any
of the Group Companies.
11.6 Subject only to the subsequent events referred to in Warranty 11.2, all
information provided to the Purchaser in the Disclosure Material regarding
any investigation, prosecution, litigation or arbitration proceeding
represents a fair statement of the status of such investigation,
prosecution, litigation or arbitration proceedings.
11.7 There are no unsatisfied judgements, awards, claims or demands against any
of the Group Companies.
12. PRIVACY
12.1 To the Vendor's knowledge, the Group Companies have complied with Privacy
Law in relation to Personal Information.
12.2 No notice has been received that any person has claimed, or to the
Vendor's knowledge, threatened to claim, any compensation from any of the
Group Companies for a breach or alleged breach of Privacy Law.
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12.3 No notice has been received by any of the Group Companies from a competent
authority alleging a breach of Privacy Law.
13. INTELLECTUAL PROPERTY
13.1 Part 1 of Schedule 6 contains a complete and accurate list of all Owned
Intellectual Property Rights.
13.2 The Group Companies either own or hold valid licences for all Intellectual
Property Rights used in the Business, as conducted by the Group
immediately prior to Completion. Without limiting the foregoing, the Group
Companies either own all Intellectual Property Rights in or hold valid
licences to use and exploit all recipes and methods of manufacture for
products supplied by the Business.
13.3 The Group Companies are the legal and beneficial owners of the Owned
Intellectual Property Rights, which are owned free from Encumbrance other
than to the extent that they are Encumbered pursuant to the Cerebos Trade
▇▇▇▇ Deed. The Vendor is the legal and beneficial owner of the Vendor
Intellectual Property Rights, free from Encumbrance.
13.4 The Group Companies have not dealt with or granted to any person any
rights in respect of the Owned Intellectual Property Rights by way of
licence or in any other way, other than the Intellectual Property Rights
the subject of the Cerebos Trade ▇▇▇▇ Deed.
13.5 To the knowledge of the Vendor, the Group Companies have not infringed the
Intellectual Property Rights of any other person and no person has
infringed or is presently infringing the Owned Intellectual Property
Rights.
13.6 Other than in respect of the Intellectual Property Licences, there are no
royalties, licence fees or other similar fees payable by any Group Company
in connection with the use of any Intellectual Property Rights.
13.7 Each of the Intellectual Property Licences is valid, binding and
enforceable by and against the relevant Group Companies. The Group
Companies and, to the Vendor's knowledge, each licensor have complied at
all times with the terms, conditions and other provisions of each licence
and no circumstances exist which might cause any of them to be terminated.
13.8 Each of the trade marks, patents and designs (if any) used in the Business
are the subject of a valid registration or a pending application for
registration, owned by the Group Companies, in each jurisdiction where
they are used in the Business.
13.9 No Group Company uses or requires in the Business any Intellectual
Property Rights other than the Owned Intellectual Property Rights and the
Intellectual Property Licences. To the Vendor's knowledge, there is no
reason why, immediately after Completion, the Group Companies could not
continue to exploit the Owned Intellectual Property Rights for the
remainder of their term.
13.10 To the Vendor's knowledge, no notice has been received of any challenge to
the validity, enforceability, patentability or registrability of the Owned
Intellectual Property Rights or the Vendor Intellectual Property.
13.11 The Group Companies may do, or omit to do, any act in relation to any
copyright works owned by or used by the Group Companies, without
infringing the Moral Rights of the authors of those works or films.
13.12 To the Vendor's knowledge, the Confidential Information has not been
disclosed to any person other than to employees of the Group Companies
whose duties require them to have access to the Confidential Information.
13.13 The Vendor is entitled to grant the Purchaser and the Group Companies an
exclusive licence to use the Vendor Intellectual Property for the sole
purpose of the sale in Australia of the Licensed
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Products using ▇▇▇▇▇ ▇▇▇▇▇ Foods' existing stock of labels and other
packaging as at the Completion Date. To the Vendor's knowledge, the use by
the Purchaser and the Group Companies of the Vendor Intellectual Property
for that purpose will not infringe any third party's Intellectual Property
Rights.
14. INSURANCE
14.1 Each insurance policy held by or on behalf of the Group Companies is
currently in full force and effect and all applicable premiums are either
accrued or paid in respect of the period up to Completion.
14.2 There are no Claims in excess of $10,000 by the Group Companies or any
person claiming on their behalf under any insurance policy presently held
by the Group Companies or held by them within 5 years prior to the
Completion Date that are outstanding or for which an indemnity is not
available from an insurer.
14.3 The Group Companies have effected all insurances required by law to be
effected by them for the conduct of the Business in the usual and ordinary
course.
14.4 To the Vendor's knowledge, nothing has been done or omitted to be done by
the Group Companies which would make any insurance contract void or
voidable or which would permit an insurer to cancel the insurance contract
or refuse or reduce a claim, or alter any of the other provisions of the
insurance contract.
14.5 To the Vendor's knowledge, the Group Companies have not done or omitted to
do anything which might result in an increase in the premium payable under
any contract of insurance.
14.6 Under the insurance policies in which the Group Companies have an
interest:
(a) all of the property and assets of the Group Companies of an
insurable nature are insured in amounts representing their full
replacement or reinstatement value against fire and other risks
normally insured against; and
(b) the Group Companies are adequately insured for such amounts as would
be maintained in accordance with prudent business practice in
respect of all risks, whether in relation to damage to property,
personal injury, public liability, product liability, workers'
compensation, business interruption insurance or otherwise.
14.7 The Group Companies have not been notified by any insurer that any of them
are required or that it is advisable for any of them to carry out any
maintenance, repairs or other works in relation to any of its assets or
properties used in connection with the Business.
14.8 There is no unresolved Claim nor, to the Vendor's knowledge, any
circumstance giving rise to a Claim under any insurance policy of the
Group Companies.
15. PROPERTIES
GENERAL
15.1 The particulars of the Properties set out in Schedule 7 are true and
correct in all material respects.
15.2 Details of all material documentation pursuant to which the Properties are
owned, used or occupied by the Group Companies have been provided to the
Purchaser.
15.3 The Properties are the only land and buildings owned, used or occupied by
the Group Companies in connection with the Business.
15.4 The Group Companies hold all easements, rights, interest and privileges
that are necessary for the conduct of the Business at the Properties, as
conducted by the Group Companies as at the date of this Agreement.
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15.5 The Group Companies have exclusive occupation and right of quiet enjoyment
of each of the Properties and none of the Properties is subject to any
sub-lease, tenancy or right of occupation by any person other than a Group
Company.
15.6 No notices have been received by the Vendor or any Group Company and, to
the Vendor's knowledge, there is no order, declaration, report,
recommendation or approved proposal of a Government Authority which would
materially affect the use of any of the Freehold Properties.
15.7 Each of the Freehold Properties is not:
(a) subject to any restrictive covenant or exception or reservation
which adversely affects its value or use (including without
derogation, its use for the purposes of carrying on the Business);
or
(b) affected by any proposals for compulsory acquisition or road
widening.
15.8 No Group Company has assigned its interest in any leasehold premises.
15.9 There are no:
(a) improvements constructed on the Freehold Properties which encroach
on land abutting the Freehold Properties;
(b) structures owned by a third party which encroach on the Freehold
Properties;
(c) disputes, claims or actions relating to any of the Freehold
Properties or their use including, but not limited to, disputes with
any adjoining or neighbouring owner with respect to boundary walls
or fences or with respect to any easement, right or means of access
to the Freehold Properties;
(d) buildings or other erections or chattels, fixtures or fittings
forming part of any improvement on the Freehold Properties that any
person is entitled to remove;
(e) Encumbrances (other than any lien arising by operation of law or in
the usual and ordinary course of the Business) affecting any of the
Freehold Properties; or
(f) improvements erected on the Freehold Properties that encroach onto,
over or under any easements located on the Freehold Properties.
15.10 The principal means of access to the Properties is over roads which have
been taken over by the local or other highway authority and no means of
access to the Properties is shared with another party, other than with
Kyabram Cold Storage Pty Ltd.
15.11 No building or structure on the Freehold Properties:
(a) is affected by structural damage or electrical defects or by timber
infestation or disease; or
(b) contains any asbestos which may require removal or repair; or
(c) is, to the Vendor's knowledge, infested by any vermin, insect or
animal life.
15.12 All utilities and services needed for the proper operation of the Business
on the Properties:
(a) are connected to the Properties;
(b) are separately metered on the Properties;
(c) have had the supply and connection arrangements approved by the
supplying authority; and
(d) to the knowledge of the Vendor, comply with applicable laws.
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15.13 The Vendor is not aware of any limitations, restrictions, deficiencies,
failings or defects concerning the services or utilities being provided
for the operation of the Business at the Properties (including
air-conditioning) which could lead to material expenditure or occupational
health and safety concerns.
15.14 All premiums payable by the Vendor or a Group Company in respect of
insurance policies with respect to the Properties which have become due
have been duly paid.
15.15 To the Vendor's knowledge, the Group Companies have complied in all
material respects with essential services regulations under the Victorian
Building Regulations 1994 and with the Building (Legionella) Act 2000 with
respect to cooling towers in relation to the Freehold Properties.
15.16 To the Vendor's knowledge:
(a) there are no subsisting material breaches of any building laws with
respect to improvements erected on the Freehold Properties;
(b) occupancy permits and certificates of final inspection have been
issued by the relevant authorities with respect to improvements
erected on the Freehold Properties;
(c) there are no subsisting material breaches of any planning laws in
relation to the Freehold Properties or the Business being conducted
on the Freehold Properties.
FREEHOLD PROPERTY
15.17 In relation to those Freehold Properties:
(a) the relevant Group Company is the registered holder and beneficial
owner of the Freehold Property free from Encumbrance, other than:
(i) easements and covenants noted on the title for the Freehold
Property;
(ii) easements or rights vested in any Government Authority as
disclosed in the Disclosure Material or publicly available
databases maintained under the Environment Protection ▇▇▇ ▇▇▇▇
(Vic) or by the Victorian Land Titles Office; and
(iii) town planning or other restrictions on the use and development
of the Freehold Property.
(b) all rates, Taxes and levies (including land tax) applicable to the
Freehold Property have been paid; and
(c) that Group Company has not sold, agreed to sell, granted any option
to sell, lease or sublease or agreed to lease or sublease any of the
Freehold Property.
15.18 No Group Company is a party to any outstanding agreement to acquire or
dispose of land or premises (including the Properties) or any interest in
land or premises.
THE EQUIPMENT LEASES
15.19 The Equipment Leases:
(a) material particulars of which are set out in Schedule 8, are
complete recordings of their terms and there are no other
agreements, documents or understandings in relation to the Equipment
Leases; and
(b) are current and enforceable.
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15.20 No Group Company that is a lessee under an Equipment Lease has defaulted
in the payment of rent, other moneys or other material obligations under
such leases. To the Vendor's knowledge, no lessor under an Equipment Lease
is in breach of any material obligation under such leases.
15.21 No lessor under an Equipment Lease has served any notice to terminate the
lease.
15.22 No Group Company nor the Vendor:
(a) has agreed to any assignment, subletting, parting with possession or
surrender of an Equipment Lease or any part of the equipment leased;
or
(b) has given any materially false or misleading information to an
authority having jurisdiction over property the subject of an
Equipment Lease.
15.23 There are no arrears of rent under an Equipment Lease:
16. ENVIRONMENT
(a) To the Vendor's knowledge, the Business is presently carried on in
material compliance with all applicable Environmental Laws and, to
the Vendor's knowledge, the Business has been carried on in material
compliance with such laws for the 5 years prior to the Completion
Date.
(b) There are no on-going or pending Claims by any regulatory
authorities or third parties involving the Group Companies
concerning any breach or alleged breach of Environmental Law or of
any Environmental Authorisation arising from the operations of the
Business. Without limiting the foregoing, there are no unresolved or
pending complaints or notifications received by the Vendor or Group
Company from any neighbouring companies or private persons relating
to noise, smell, dust, vibration or traffic emanating from the
Freehold Properties,
(c) To the Vendor's knowledge, all Environmental Authorisations
necessary to operate the Business in the manner conducted by the
Group Companies immediately prior to Completion:
(i) have been obtained;
(ii) are in full force and effect; and
(iii) have been complied with in all material respects for the 5
years prior to the Completion Date.
(d) To the Vendor's knowledge, no material event has occurred which
would cause any of the Group Companies to be in material breach of
any:
(i) Environmental Authorisation; or
(ii) Environmental Law.
(e) Other than in respect of the Effluent Ponds, to the Vendor's
knowledge, there is nothing at, in, on, under or emanating from the
Freehold Properties (including but not limited to underground
storage tanks and associated piping) which requires notification to
any Government Authority or which could entitle any Government
Authority to require monitoring, closure, clean up or remediation
under any Environmental Law.
(f) Other than in respect of the Effluent Ponds, there is no hazardous,
toxic or poisonous material or any other material that is harmful to
the Environment, including asbestos, present on or at the Freehold
Properties except in such quantities and stored or maintained in
such a manner as is allowed by an Environmental Law or Environmental
Authorisation.
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(g) To the Vendor's knowledge, no event has occurred nor does any fact
or circumstance exist which:
(i) could lead to any material Environmental Authorisation
necessary to operate the Business being modified, suspended,
revoked or not renewed; or
(ii) may require the Purchaser or any Group Company to carry out
any major work or expend a material amount of money in
relation to the Freehold Properties in order for the Business
or the Freehold Properties to comply with any Environmental
Law or any notice or requirement issued pursuant to any
Environmental Law, other than any obligations existing under
any contract, including the Kyabram Town Council Agreement.
(h) To the Vendor's knowledge, the Group Companies have complied with
all requirements of any Environmental Authorisation with respect to
the proper handling, storage or transportation of waste, other than
in respect of the use of the Effluent Ponds.
(i) To the Vendor's knowledge, and other than in respect of the Effluent
Ponds, the location, use, manufacture, storage, handling, supply,
acquisition or disposal of any chemicals or products on or from the
Freehold Properties or in connection with the conduct of the
Business has been carried out in accordance with procedures designed
to ensure that there has been no material:
(A) injury suffered by any person; and
(B) contamination of any land or the Environment in the previous
two years beyond the limits allowed by Environmental Law and
the Environmental Authorisations.
(j) The results of groundwater monitoring in the area of the Effluent
Ponds have not revealed the need for any groundwater remediation to
be carried out.
(k) The Freehold Properties are not the subject of any charge in favour
of any Government Authority as security for the cleaning up of the
Freehold Properties.
(l) All asbestos containing materials at the Freehold Properties have
been documented in asbestos registers in accordance with
Environmental Law and there are no outstanding or pending Claims or
Liabilities in relation to requirements for the removal of or
exposure to asbestos.
17. OWNERSHIP OF ASSETS
17.1 The fixed assets listed in the Asset Register are a complete list of all
of the fixed assets that are material to the operation of the Business.
17.2 Except for:
(a) current assets sold or realised in the usual and ordinary course of
the Business;
(b) assets the subject of equipment leases; and
(c) any Properties that are listed in the Asset Register,
the Group Companies legally and beneficially own, free from Encumbrances,
all of the property and assets included in the Audited Accounts and
disclosed in the Asset Register.
17.3 The Group Companies own or have valid and subsisting leases to use all
plant and equipment used by the Group Companies, or which the Group
Companies require, to conduct the Business.
17.4 The assets used by the Group Companies in the Business:
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(a) are all located on the Properties;
(b) are in the physical possession or control of the Company which owns
or leases them assets; and
(c) are the only assets necessary for the conduct and operation of the
Business as it is currently carried on.
17.5 No plant, machinery, furniture, fixtures, fittings, furnishings of any of
the Group Companies are owned or used by the Vendor.
17.6 All fixed assets and plant and equipment whether owned or used by the
Group Companies in the Business are in working order (consistent with
their respective ages), and have been regularly and properly maintained in
accordance with good practice and:
(a) are fit for the purpose for which they are intended to be used; and
(b) conform with the descriptions in the Asset Register, and
(c) there are no such assets in need of repair, other than in the usual
and ordinary course of operations.
18. TRADE PRACTICES
To the Vendor's knowledge, the Group Companies nor any of their officers
or employees have not committed or omitted to do any act or thing the
commission or omission of which is a contravention of the Trade Practices
▇▇▇ ▇▇▇▇ (Cth), the Fair Trading Act 1989 (Qld), any equivalent
legislation in any other state or territories of Australia, or any
equivalent foreign enactment.
19. INFORMATION
19.1 To the Vendor's knowledge, none of the information (including financial
information other than forecasts, estimates and projections) disclosed to
or for the benefit of the Purchaser or its advisers by the Vendor or any
of its agents or Associates in respect of the Group Companies (such
information being exhaustively set out in the Disclosure Materials) is
untrue, incorrect or incomplete. The Vendor has disclosed to the Purchaser
all information of which the Vendor is aware that would reasonably be
regarded as material to an intending purchaser of the Business, where the
intending purchaser is a party having experience in the industry in which
the Business is operated.
19.2 All copies of documents provided by the Vendor or on its behalf to the
Purchaser or its agents are true copies, subject to any deletions or
blacked out passages that are apparent from the face of the copies.
19.3 Each of the statements and all information set out in the schedules to
this agreement is true, complete and accurate.
19.4 The Vendor has not purposely or knowingly withheld any information which
might reasonably be supposed to materially affect the value of the
Business, from the perspective of an intending purchaser who has
experience in the industry in which the Business is operated. For the
purpose of this Warranty, a material effect on the value of the Business
is one that has resulted in or is reasonably likely to result in either:
(a) a reduction of $250,000 or more in the consolidated earnings before
interest, tax, depreciation and amortisation of the Group; or
(b) a reduction of $2,500,000 or more in the consolidated net assets of
the Group as at the date of the Management Accounts.
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20. COMPLIANCE WITH APPLICABLE LAWS
20.1 To the Vendor's knowledge, the Group Companies and all of their officers,
agents and employees have materially complied with all laws applicable to
the operation of the Business. No contravention or allegation of any
contravention of any applicable law (excluding Environmental Laws
applicable in respect of the Freehold Properties) by the Group Companies
is known to the Vendor.
20.2 There is no outstanding correspondence concerning any of the Group
Companies initiated by the ASIC or (except as otherwise disclosed to the
Purchaser or in connection with the transaction contemplated by this
agreement), the ACCC.
20.3 To the knowledge of the Vendor, the Group Companies are not the subject of
any outstanding order, waiver, declaration, exemption or notice granted or
issued by a United States Government Authority or an Australian Government
Authority relevant to the operation of the Business, excluding any orders,
waivers, declarations or exemptions that relate to minor or technical
relief from compliance with a United States or Australian statute.
20.4 Each of the Group Companies holds all necessary Authorisations for the
conduct of the Business. In respect of each Authorisation:
(a) all fees due have been paid;
(b) all terms, conditions and other provisions have been duly complied
with by the Group Companies in all material respects;
(c) neither the Vendor nor any of the Group Companies has received any
notice or knows of any factor that might prejudice its continuance
or renewal in such a way as would disrupt the Business.
20.5 The Dividend and the Vendor Distribution are duly authorised and have been
declared and paid in compliance with all applicable laws in Australia and
the United States of America. The Purchaser will not be liable to the
Vendor, any Group Company or any third party in any way with respect to
the Dividend or the Vendor Distribution or both.
21. DEFECTIVE PRODUCTS
To the Vendor's knowledge during the two year period preceding the
Completion Date, the Group Companies have not manufactured, sold or
supplied any products which were at the time of manufacture, sale or
supply, in any material respect faulty or defective or which did not, in
any material respect, comply with any warranties or representations
expressly or impliedly made or given by them.
22. STOCK
22.1 Other than slow moving or obsolete stock, the Group Companies' stock of
finished goods, including packaging, is of good and merchantable quality,
and is adequate in relation to the current trading requirements of its
Business.
22.2 The Group Companies' unfinished goods and packaging materials are in good
condition and capable of being used to produce the Company's current
products.
22.3 The packaging and labels of each Group Company's finished goods are
neither false, misleading or deceptive nor in any other way contrary to
law.
22.4 Other than slow moving or obsolete stock, the Stock in trade of each Group
Company is in good condition and is capable of being sold by the relevant
Group Company in the ordinary and usual course of business in accordance
with its current price lists, without rebate or allowances to a purchaser.
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22.5 Each Company's level of Stock is sufficient to meet the requirements of
its Business at the Completion Date and is not materially surplus to the
requirements of the Group.
23. COMPUTER SYSTEMS AND SOFTWARE
23.1 All the computers and computer systems owned, leased or used by the Group
Companies (or any of them):
(a) are in operating order and are fulfilling the purposes for which
they were acquired or established without material downtime or
errors;
(b) have adequate capacity for the Group Companies' present needs;
(c) have adequate security, back-ups, hardware and software support and
maintenance and trained personnel to ensure so far as is reasonable:
(i) that breaches of security, errors and breakdowns are kept to a
minimum; and
(ii) that no material disruption will be caused to the business of
the Group Companies or any material part of the Business in
the event of a breach of security, error or breakdown;
(d) are properly documented so as to enable them to be used and operated
by any reasonably qualified personnel; and
(e) are owned and under the sole control of the Group Companies, are
located in premises occupied by the Group Companies and are not
shared with or used by or on behalf of or accessible by any other
person.
23.2 To the Vendor's knowledge, all Books and Records stored by electronic
means are capable of ready access through the present computer systems of
the Group Companies.
23.3 No person, other than employees or agents of the Group Companies, is in a
position, by virtue of his or her rights in, knowledge of or access to any
of the computer systems used by the Group Companies or any part of them
(including software) to demand any payment in excess of any current
licence fee or in excess of reasonable remuneration for services rendered.
23.4 To the Vendor's knowledge, the appropriate employees of the Group
Companies are adequately trained to enable them to use and operate the
computer systems owned or used by the Group Companies.
23.5 To the Vendor's knowledge, all of the computers and computer systems
owned, leased or used by the Group Companies have been maintained or
serviced only in accordance with the proper maintenance or service
contract in respect of the relevant computer and computer systems.
23.6 To the Vendor's knowledge, no software owned by or licensed to the Group
Companies:
(a) is used by any other person; or
(b) has been licensed or sub-licensed to any other person.
23.7 All software used on the computers used by the Group Companies, to the
Vendor's knowledge, is lawfully held and used and does not infringe the
intellectual property rights of any person and all copies held have been
lawfully made.
23.8 The copyright in the software or source code:
(a) in the case of standard packaged software purchased outright, is
licensed to the Group Companies on an express or implied licence
which does not require the Group Companies to make any further
payments, is not terminable without the consent of the Group
Companies and imposes no material restrictions on the use or
transfer of the software; and
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(b) is licensed to the Group Companies on the terms of a valid written
licence which requires payment by the Group Companies of a fixed
annual licence fee at a rate not exceeding that paid in the
financial year ended on the Accounts Date, and (except for
reasonable fees for software support) requires the Group Companies
to make no further or other payment, is not terminable (except for
failure to pay the licence fee) without the consent of the Group
Companies and imposes no material restrictions on the use or
transfer of the software.
24. DELEGATIONS, OFFERS, FINDER'S FEES
24.1 No power of attorney given by a Group Company will be in force after
Completion.
24.2 Any offer, tender or quotation made or given by a Group Company which is
outstanding and capable of acceptance by a third party, has been made or
given in the usual and ordinary course of the Business.
24.3 None of the Vendor, the Group Companies or any of their respective
Associates has taken any action under which any person is or may be
entitled to a finder's fee, brokerage or commission in connection with the
acquisition of any shares under this agreement.
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SCHEDULE 6 - INTELLECTUAL PROPERTY RIGHTS
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SCHEDULE 7 - PROPERTIES
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SCHEDULE 8 - EQUIPMENT LEASES
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SCHEDULE 9 - EMPLOYEE DETAILS
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SCHEDULE 10 - DISCLOSED DOCUMENTS INDEX
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SCHEDULE 11 - FIXED ASSET REGISTER
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SCHEDULE 12 - AUDITED ACCOUNTS
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SCHEDULE 12 - MANAGEMENT ACCOUNTS
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SIGNING PAGE
EXECUTED as an agreement.
SIGNED for and on behalf of The /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇.▇. ▇▇▇▇▇▇▇ Company by its duly
authorised officer in the presence of ___________________________________
Signature of officer
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
_____________________________________ ___________________________________
Signature of witness Name of officer (print)
▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ Vice President - Corporate Development
_____________________________________ ___________________________________
Name of witness (print) Office held
SIGNED for and on behalf of SPC /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
Ardmona Limited by its duly
authorised officer in the presence of ___________________________________
Signature of officer
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
_____________________________________ ___________________________________
Signature of witness Name of officer (print)
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Managing Director
_____________________________________ ___________________________________
Name of witness (print) Office held