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EXHIBIT 10.4
SHARE PURCHASE AGREEMENT
made as of November 4, 1996 (Pacific Standard Time)
by SVI Holdings, Inc. a Nevada corporation ("Buyer"),
Landreef Pty., Ltd.,
and
Hookmond Pty. Ltd.
(each, a "Seller" and collectively, "Sellers")
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SHARE PURCHASE AGREEMENT
This Share Purchase Agreement ("Agreement") is made as of November 4, 1996
(Pacific Standard Time), by SVI HOLDINGS, INC., a Nevada corporation or its
designee ("Buyer"), Landreef Pty. Ltd. (ACN 066347126), and Hookmond Pty. Ltd.
(ACN 067238546), (each, a "Seller" and collectively, "Sellers").
1. Recital. This Agreement is made with reference to the following recital
of essential facts: 1.1. Sellers desire to sell, and Buyer desires to purchase,
1,500,000 shares of Ordinary Shares (the "Shares") of Divergent Technologies
Pty, Ltd., an Australian corporation (the "Company"), representing one-hundred
percent (100%) of the issued and outstanding shares of capital stock of the
Company, for the consideration and on the terms set forth in this Agreement.
1.2. The parties, intending to be legally bound, agree as set forth
below:
2. Definitions. For purposes of this Agreement, the following definitions
shall apply:
2.1. "Applicable Contract" means any Contract (a) under which any
Subject Company has or may acquire any rights, (b) under which any Subject
Company has or may become subject to any obligation or liability, or (c) by
which any Subject Company or any of the assets owned or used by it is or
may become bound.
2.2. "Balance Sheet" has the meaning defined in Section 4.4.
2.3. "Breach" means a "Breach" of a representation, warranty,
covenant, obligation, or other provision of this Agreement or any
instrument delivered pursuant to this Agreement will be deemed to have
occurred if there is or has been any inaccuracy in or breach of, or any
failure to perform or comply with, such representation, warranty, covenant,
obligation, or other provision.
2.4. "Buyer" has the meaning defined in the first paragraph of this
Agreement.
2.5. "Closing" has the meaning defined in Section 3.3.
2.6. "Closing Date" means December 14, 1996 or such other date as the
parties may agree.
2.7. "Company" has the meaning defined in the Recitals of this
Agreement.
2.8. "Company Plans" has the meaning defined in Section 4.12.
2.9. "Consent" means any approval, consent, ratification, waiver, or
other authorization (including any Governmental Authorization).
2.10. "Contemplated Transactions" means all of the transactions
contemplated by
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this Agreement, including:
(a) the sale of the Shares by Sellers to Buyer;
(b) the execution, delivery, and performance of the Employment
Agreements;
(c) the performance by Buyer and Sellers of their respective
covenants and obligations under this Agreement; and
(d) Buyer's acquisition and ownership of the Shares and exercise
of control over the Subject Companies.
(e) [Intentionally Omitted]
(f) [Intentionally Omitted]
2.11. "Contract" means any agreement, contract, obligation, promise,
or undertaking (whether written or oral and whether express or implied) that is
legally binding.
2.12. "Corporations Law" means the Corporations Law introduced by the
Corporations Act of 1989, a statute of Commonwealth of Australia.
2.13. "Damages" has the meaning defined in Section 11.2.
2.14. "Disclosure Letter" means the disclosure letter delivered by
Sellers to Buyer concurrently with the execution and delivery of
this Agreement.
2.15. "Employment Agreements" has the meaning defined in Section
3.4(a)(ii).
2.16. "Encumbrance" means any charge, claim, community
property interest, condition, equitable interest, lien, option, pledge, security
interest, right of first refusal, or restriction of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.
2.17. [Intentionally Omitted]
2.18. "GAAP" means generally accepted Australian accounting
principles, applied on a basis consistent with the basis on which the Balance
Sheet and the other financial statements referred to in Section 4.4(b) were
prepared.
2.19. "Governmental Authorization" means any approval, consent,
license, permit, waiver, or other authorization issued, granted, given,
or otherwise made available by or under the authority of any Governmental Body
or pursuant to any Legal Requirement.
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2.20. "Governmental Body" means any:
(a) nation, state, county, city, town, village, district, or
other jurisdiction of any nature;
(b) federal, state, local, municipal, foreign, or other
government;
(c) governmental or quasi-governmental authority of any
nature (including any governmental agency, branch, department, official, or
entity and any court or other tribunal);
(d) multi-national organization or body; or
(e) body exercising, or entitled to exercise, any
dministrative, executive, judicial, legislative, police, regulatory, or taxing
authority or power of any nature.
2.21. "Intellectual Property Assets" has the meaning defined in
Section 4.19.
2.22. "Interim Balance Sheet" has the meaning defined in
Section 4.4.
2.23. "Knowledge" means an individual will be deemed to have
"Knowledge" of a particular fact or other matter if such individual: (a) is
actually aware of such fact or other matter; or (b) has received written notice
of such fact or other matter.
2.24. "Legal Requirement" means any federal, state, local,
municipal, foreign, international, multinational, or other administrative order,
constitution, law, ordinance, principle of common law, regulation, statute, or
treaty.
2.25. "MSE" has the meaning defined in Section 4.22.
2.26. "Order" means any award, decision, injunction, judgment,
order, ruling, subpoena, or verdict entered, issued, made, or rendered by any
court, administrative agency, or other Governmental Body or by any arbitrator.
2.27. "Organizational Documents" means (a) the articles and
memorandum or certificate of incorporation and the bylaws of a corporation; (b)
the partnership agreement and any statement of partnership of a general
partnership; (c) the limited partnership agreement and the certificate of
limited partnership of a limited partnership; (d) any charter or similar
document adopted or filed in connection with the creation, formation, or
organization of a Person; and (e) any amendment to any of the foregoing.
2.28. "Normal Course of Trading" means an action taken by a
Person will be deemed to have been taken in the "Normal Course of Trading" only
if:
(a) such action is consistent with the past practices of such
Person and is taken in the ordinary course of the normal day-to-day operations
of such Person;
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(b) such action is not required to be authorized by the board
of directors of such Person (or by any Person or group of Persons exercising
similar authority); and
(c) such action is similar in nature and magnitude to actions
customarily taken, without any authorization by the board of directors (or by
any Person or group of Persons exercising similar authority), in the ordinary
course of the normal day-to-day operations of other Persons that are in the same
line of business as such Person.
2.29. "Person" means any individual, corporation (including any
non-profit corporation), general or limited partnership, limited liability
company, joint venture, estate, trust, association, organization, labor union,
or other entity or Governmental Body.
2.30. "Proceeding" means any action, arbitration, audit,
hearing, investigation, litigation, or suit (whether civil, criminal,
administrative, investigative, or informal) commenced, brought, conducted, or
heard by or before, or otherwise involving, any Governmental Body or arbitrator.
2.31. "Related Person" means with respect to a particular individual:
(a) each other member of such individual's Family;
(b) any Person that is directly or indirectly controlled by
such individual or one or more members of such individual's Family;
(c) any Person in which such individual or members of such
individual's Family hold (individually or in the aggregate) a Material Interest;
and
(d) any Person with respect to which such individual or one or
more members of such individual's Family serves as a director, officer, partner,
executor, or trustee (or in a similar capacity).
With respect to a specified Person other than an individual:
(a) any Person that directly or indirectly controls, is
directly or indirectly controlled by, or is directly or indirectly under common
control with such specified Person;
(b) any Person that holds a Material Interest in such specified
Person;
(c) each Person that serves as a director, officer, partner,
executor, or trustee of such specified Person (or in a similar capacity);
(d) any Person in which such specified Person holds a Material
Interest;
(e) any Person with respect to which such specified Person
serves as a general partner or a trustee (or in a similar capacity);
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(f) any "associate" of such specified person (as defined in
Division 2 of Par 1.2 of the Corporations Law);
(g) any Related Corporation with respect to such specified
individual; and
(h) any Related Person of any individual described in
clause (b) or (c).
For purposes of this definition, (a) the "Family" of an individual
includes (i) the individual, (ii) the individual's spouse, (iii) any other
natural person who is related to the individual or the individual's spouse
within the second degree, and (iv) any other natural person who resides with
such individual, (b) "Material Interest" means (i) any right to appoint a
majority of the directors to the board of directors of another Person who is a
corporation, (ii) direct or indirect beneficial ownership of voting securities
or other voting interests representing at least 51% of the outstanding voting
power of a Person or equity securities, or (iii) other equity interests
representing at least 51% of the outstanding equity securities or equity
interests in a Person and, (c) "Related Corporations" means a "related body
corporate" as that expression is defined in Section 50 of the Corporations Law
and includes a body corporate which is at any time after the date of this
Agreement a "related body corporate" but ceases to be a "related body corporate"
because of an amendment, consolidated or replacement of the Corporations Law.
2.32. "Representative" means with respect to a particular
Person, any director, officer, employee, agent, consultant, advisor, or other
representative of such Person, including legal counsel, accountants, and
financial advisors.
2.33. "Securities Act" means the Securities Act of 1933 or any
successor law, and regulations and rules issued pursuant to that Act or any
successor law.
2.34. "Sellers" has the meaning defined in the first
paragraph of this Agreement.
2.35. "Shares" has the meaning defined in the Recitals of
this Agreement.
2.36. "Subject Companies" means the Company and its
Subsidiaries, collectively.
2.37. "Subsidiary" means a "subsidiary" as defined in the
Corporations Law.
2.38. "Tax Return" means any return (including any information
return), report, statement, schedule, notice, form, or other document or
information filed with or submitted to, or required to be filed with or
submitted to, any Governmental Body in connection with the determination,
assessment, collection, or payment of any tax or in connection with the
administration, implementation, or enforcement of or compliance with any Legal
Requirement relating to any tax.
2.39. "Threatened" means a claim, Proceeding, dispute, action,
or other matter will be deemed to have been "Threatened" if any demand or
statement has been made in writing or any notice has been given in writing, or
if any other event has occurred or any other circumstances exist, that would
lead a prudent Person to conclude that such a claim, Proceeding, dispute,
action, or other matter is likely to be commenced, taken, or otherwise pursued
in the future.
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3. Sale and Transfer of Shares; Closing; Additional Agreements.
3.1. Shares. Subject to the terms and conditions of this
Agreement, at the Closing, Sellers will sell and transfer the Shares to Buyer or
Buyer's designee, and Buyer or Buyer' designee will purchase the Shares from
Sellers.
3.2. Purchase Price. The purchase price (the "Purchase Price")
for the Shares will be AUS. $5,177,720.
3.3. Closing. The purchase and sale (the "Closing") provided
for in this Agreement will take place after all conditions specified in Sections
8 and 9 are satisfied or waived by the appropriate party and at the offices of
Xxxxxxx Xxxx Seidenwurm and Xxxxx at 000 X Xxxxxx, Xxxxx 0000, Xxx Xxxxx,
Xxxxxxxxxx 00000, at 10:00 a.m. (local time) on December 14, 1996 or such other
date as the parties may agree. Subject to the provisions of Section 10, failure
to consummate the purchase and sale provided for in this Agreement on the date
and time and at the place determined pursuant to this Section 3.3 will not
result in the termination of this Agreement and will not relieve any party of
any obligation under this Agreement. Buyer and Seller acknowledge that the
Closing is contingent upon the prior or concurrent closing of the purchase and
sale of technology assets contemplated by that certain agreement between Buyer
and New Hope Trading Limited (the "New Hope Agreement").
3.4. Closing Obligations. At the Closing:
(a) Sellers will deliver to Buyer:
(i) certificates representing the Shares, duly
endorsed for transfer to Buyer;
(ii) employment agreements in a form satisfactory
to Buyer, in Buyer's sole discretion, acting reasonably, executed by Xxxx
Xxxxxxxxxxxx, Xxxxx Xxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxx Xxxxxxxx, Xxxxx
Xxx, Xxxxx Xxxx, Xxxx Xxxxxxxxxxx, Xxxx Xxxxxx and Xxxxx Xxxxxxx (collectively,
"Employment Agreements");
(iii) a certificate executed by each of the Sellers
severally, representing and warranting to Buyer that each of that Seller's
representations and warranties in this Agreement was accurate in all respects
as of the date of this Agreement and is accurate in all respects as of the
Closing Date as if made on the Closing Date (giving full effect to any
supplements to the Disclosure Letter that were delivered by Sellers to Buyer
prior to the Closing Date in accordance with Section 6.5);
(iv) [Intentionally Omitted]
(v) such other documents as may be required
pursuant to Section 8 below; and
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(b) Subject to Sellers' performing all their obligations
including, in accordance with Paragraph 3.4(a) above, Buyer will deliver to
Sellers:
(i) [Intentionally Omitted]
(ii) a bank cashier's or certified check payable to
the order of each of the Sellers, respectively, in the amount of the cash
portion of the Purchase Price;
(iii) a certificate executed by Buyer to the effect
that, except as otherwise stated in such certificate, each of Buyer's
representations and warranties in this Agreement was accurate in all respects
as of the date of this Agreement and is accurate in all respects as of the
Closing Date as if made on the Closing Date; and
(iv) the Employment Agreements, executed by the
Company.
3.5. [Intentionally Omitted]
3.6. Repurchase Agreement. Each of Buyer and Seller
acknowledge the provision set forth in the New Hope Agreement relating to New
Hope Trading Limited's right to cause Buyer, under certain conditions relating
to the market price of the Exchange Shares (as defined in that agreement), to
return the Technology Assets (also as defined in that agreement) to Seller in
exchange for a return of the Exchange Shares. In such event, Buyer shall return
to Seller the Shares and pay applicable stamp duty, if any, and Seller shall
refund the Purchase Price to Buyer in full. Buyer shall not sell, encumber, or
otherwise deal with or transfer or grant any interest in the Technology Assets
or the Shares until the period within which New Hope Trading Limited is to
exercise such option has lapsed. Such restriction on transfer shall not preclude
a transfer of the Shares to a subsidiary of Buyer if the subsidiary undertakes
to comply with this clause.
3.7. [Intentionally Omitted]
3.8. Sellers' Right to Appoint Director of Buyer. Landreef
Pty. Ltd. and Hookmond Pty. Ltd. may jointly designate for election one person
to Buyer's board of directors during any period that Xxxxxxxxxxxx or Xxxxx are
employed by or otherwise performing services for the Company. Landreef Pty.
Ltd. and Hookmond Pty. Ltd. agree to cause the designate to provide Buyer all
information regarding the designate as Buyer may request. Landreef Pty. Ltd.
and Hookmond Pty. Ltd. agree that Buyer will have the right to reject any
designate for reasonable cause.
4. Representations and Warranties of Sellers. Each of the Sellers,
severally, represent and warrant to Buyer as follows, subject to the matters
disclosed in the Disclosure Letter:
4.1. Organization and Good Standing.
(a) Part 4.1 of the Disclosure Letter contains a complete and
accurate list for each Subject Company of its name, its jurisdiction of
incorporation, other jurisdictions in which it is authorized to do business,
and its capitalization (including the identity of each shareholder and the
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number of shares held by each). Each Subject Company is a corporation duly
organized, validly existing, and in good standing under the laws of its
jurisdiction of incorporation, with full corporate authority to conduct its
business as it is now being conducted, to own or use the properties and assets
that it purports to own or use, and to perform all its obligations under
Applicable Contracts. Each Subject Company is duly qualified to do business
under the laws of each jurisdiction where applicable law requires such
qualification.
(b) Sellers have delivered to Buyer copies of the
Organizational Documents of each Subject Company, as currently in effect.
4.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Sellers, enforceable against Sellers in accordance with its terms.
Upon the execution and delivery by Xxxx Xxxxxxxxxxxx and Xxxxx Xxxxx of their
respective Employment Agreements, such agreements will constitute the legal,
valid, and binding obligations of such employees, enforceable against them in
accordance with their respective terms. Sellers have the absolute and
unrestricted right, power, authority, and capacity to execute and deliver this
Agreement and the Employment Agreements and to perform their obligations under
this Agreement and the Employment Agreements.
(b) Except as set forth in Part 4.2 of the Disclosure
Letter, neither the execution and delivery of this Agreement nor the
consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with, or result in a
violation of (A) any provision of the Organizational Documents of the Subject
Companies, or (B) any resolution adopted by the board of directors or the
shareholders of any Subject Company;
(ii) to the best of Sellers' Knowledge, contravene,
conflict with, or result in a violation of, or give any Governmental Body or
other Person the right to challenge any of the Contemplated Transactions or to
exercise any remedy or obtain any relief under, any Legal Requirement (other
than the Australian Tax Act) or any Order to which any Subject Company or
Sellers, or any of the assets owned or used by any Subject Company, may be
subject;
(iii) to the best of Sellers' Knowledge, contravene,
conflict with, or result in a violation of any of the terms or requirements of,
or give any Governmental Body the right to revoke, withdraw, suspend, cancel,
terminate, or modify, any Governmental Authorization that is held by any Subject
Company or that otherwise relates to the business of, or any of the assets owned
or used by, any Subject Company;]
(iv) to the best of Sellers' Knowledge, contravene,
conflict with, or result in a violation or breach of any provision of, or give
any Person the right to declare a default or exercise any remedy under, or to
accelerate the maturity or performance of, or to cancel, terminate, or modify,
any Applicable Contract; or
(v) result in the imposition or creation of any
Encumbrance upon or
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with respect to any of the assets owned or used by any Subject Company.
Except as set forth in Part 4.2 of the Disclosure Letter and except as
to the Company's bank and customer contracts, no Seller or Subject Company is or
will be required to give any notice to or obtain any Consent from any Person in
connection with the execution and delivery of this Agreement or the consummation
or performance of any of the Contemplated Transactions.
4.3. Capitalization. The authorized share capital of the
Company consists of 10,000,000 shares of Ordinary Shares, par value AUS$1.00 per
share and of which 1,500,000 shares are issued. Sellers are and will be on the
Closing Date the legal and beneficial owners and holders of the Shares, free and
clear of all Encumbrances. Sellers own the number of Shares as reflected in
Exhibit "4.3" attached hereto. With the exception of the Shares (which are owned
by Sellers), all of the issued share capital of each Subject Company is
beneficially owned by the Company, free and clear of all Encumbrances. No legend
or other reference to any purported Encumbrance appears upon any certificate
representing equity securities of any Subject Company. All of the outstanding
equity securities of each Subject Company have been duly authorized and validly
issued and are fully paid and nonassessable. There are no Contracts relating to
the issuance, sale, or transfer of any equity securities or other securities of
any Subject Company.
4.4. Financial Statements. Sellers have delivered or will
deliver to Buyer concurrently with the execution of this Agreement: (a) audited
consolidated balance sheets of the Subject Companies as at June 30 in each of
the years 1995 and 1996, and the related audited consolidated statements of
income, changes in stockholders' equity, and cash flow for each of the fiscal
years then ended, together with the report thereon by November 15, 1996,
independent certified public accountants (the "Audit Report"), (the June 30,
1996 balance sheet including the notes thereto shall be referred to as the
"Balance Sheet") (b) an unaudited consolidated balance sheet of the Subject
Companies as at September 30, 1996 (the "Interim Balance Sheet") and the related
unaudited consolidated statements of income, changes in stockholders' equity,
and cash flow for the three (3) months then ended, including in each case the
notes thereto. Such financial statements and notes fairly present the financial
condition and the results of operations, changes in stockholders' equity, and
cash flow of the Subject Companies as at the respective dates of and for the
periods referred to in such financial statements, all in accordance with GAAP
and the financial reporting requirements of the Corporations Law, other than as
specifically described in the Audit Report; the financial statements referred to
in this Section 4.4 reflect the consistent application of such accounting
principles throughout the periods involved, except as disclosed in the notes to
such financial statements. No financial statements of any Person other than the
Subject Companies are required by GAAP or the Corporations Law to be included in
the consolidated financial statements of the Company.
4.5. Real Property. Except as set forth in Part 4.5 of the
Disclosure Letter, none of the Subject Companies owns or holds any real
property, leaseholds, or other real property interests.
4.6. Accounts Receivable. All accounts receivable of the
Subject Companies that are reflected on the Balance Sheet or the Interim Balance
Sheet or on the accounting records of the Subject Companies as of the Closing
Date (collectively, the "Accounts Receivable") arise from sales actually made or
services actually performed in the Normal Course of Trading. At least fifty (50)
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percent of the collective amount of such Accounts Receivable either has been or
will be collected in an amount collected in the Normal Course of Trading,
without any set-off, within ninety days after the day on which it first becomes
due and payable. Part 4.6 of the Disclosure Letter contains a complete and
accurate list of all Accounts Receivable as of the date of the Interim Balance
Sheet, which list sets forth the aging of such Accounts Receivable.
4.7. Inventory. To the best of Sellers' Knowledge: (a) all
inventory of the Subject Companies, whether or not reflected in the Balance
Sheet or the Interim Balance Sheet, consists of a quality and quantity usable
and salable in the Normal Course of Trading, except for obsolete items and items
of below-standard quality, all of which have been written off or written down to
net realizable value in the Balance Sheet or the Interim Balance Sheet or on the
accounting records of the Subject Companies as of the Closing Date, as the case
may be; and (b) the quantities of each item of inventory (whether raw materials,
work-in-process, or finished goods) are not excessive, but are reasonable in the
present circumstances of the Subject Companies.
4.8. No Undisclosed Liabilities. To the best of Sellers'
Knowledge, except as set forth in Part 4.8 of the Disclosure Letter, the Subject
Companies have no liabilities or obligations of any nature (whether known or
unknown and whether absolute, accrued, contingent, or otherwise) except for
liabilities or obligations reflected or reserved against in the Balance Sheet or
the Interim Balance Sheet and current liabilities incurred in the Normal Course
of Trading since the respective dates thereof.
4.9. Taxes. To the best of Sellers' Knowledge, the Subject
Companies have filed or caused to be filed all Tax Returns that are or were
required to be filed by or with respect to any of them, either separately or as
a member of a group of corporations, pursuant to applicable Legal Requirements.
To the best of Sellers' Knowledge, the Subject Companies have paid, or made
provision for the payment of, all taxes or duties that have or may have become
due pursuant to those Tax Returns or otherwise, or pursuant to any assessment
received by Sellers or any Subject Company. None of the Subject Companies have
any permanent establishment (as that expression is defined in any relevant
double taxation agreement to which Australia is a party) outside Australia. Any
obligation under any tax law to withhold amounts as source has been complied
with. To the best of Sellers' Knowledge, there is no pending or Threatened tax
or duty audit.
To the best of Sellers' knowledge, the Company has maintained proper
and adequate records to enable it to comply with its obligations to:
(a) prepare and submit any information, notices,
computations, returns, and payments required in respect to any tax law;
(b) prepare any accounts necessary for the compliance of
any tax law; and
(c) retain necessary records as required by any tax law.
To the best of Sellers' knowledge, any information, notice, computation
and return which has been submitted by the Company to a Government Body in
respect to any tax or duty (a) discloses
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all material facts that should be disclosed under any tax law; (b) is not
misleading; and (c) has been submitted on time.
4.10. No Material Adverse Change. To the best of Sellers'
Knowledge, since the date of the Balance Sheet, there has not been any material
adverse change in the business, operations, properties, prospects, assets, or
condition of any Subject Company, and no event has occurred or circumstance
exists that may result in such a material adverse change.
4.11. Employee Benefits. None of the Subject Companies have
any plans, contracts, or arrangements for the benefit of employees, or persons
who were formerly employees, of the Subject Companies, including without
limitation pension, retirement, profit-sharing, thrift-savings, deferred
compensation, stock bonus, stock option, or employee stock ownership. Except as
set forth in Part 4.11 of the Disclosure Letter, none of the Subject Companies
is a party to any written employment or service agreement. None of the Subject
Companies owns or operates its own superannuation scheme or other pension
arrangement in connection with the employees of the Subject Companies and which
provides its directors or employees or their dependents with pensions, annuities
or lump sum payment.
4.12. Compliance with Legal Requirements; Governmental
Authorizations. To the best of Sellers' Knowledge and except as set forth in
Part 4.12 of the Disclosure Letter, (i) each Subject Company is in full
compliance with each Legal Requirement that is or was applicable to it or to the
conduct or operation of its business, and (ii) no Subject Company has received
any notice or other communication (whether oral or written) from any
Governmental Body or any other Person regarding any actual or alleged violation
of any Legal Requirement.
4.13. Legal Proceedings; Orders. Except as set forth in Part
4.13 of the Disclosure Letter, (a) there are no Proceedings by or against any
Subject Company or that otherwise relates to or may affect the business of, or
any of the assets owned or used by, any Subject Company, and (b) to the best of
Sellers' Knowledge no such Proceeding has been Threatened or is pending.
4.14. Absence of Certain Changes and Events. Except as set
forth in Part 4.14 of the Disclosure Letter, since the date of the Balance
Sheet, the Subject Companies have conducted their businesses only in the Normal
Course of Trading and there has not been any:
(a) change in any Subject Company's authorized or
issued share capital; grant of any option or right to purchase any shares of any
Subject Company; the issue of any debentures or notes convertible into any
shares of any Subject Company;
grant of any registration rights; purchase, redemption, retirement, or other
acquisition by any Subject Company of any shares of any such capital stock; or
declaration or payment of any dividend or other distribution or payment in
respect of any of the issued shares of any Subject Company;
(b) amendment to the Organizational Documents of any
Subject Company;
(c) payment or increase by any Subject Company of any
bonuses, salaries, or other compensation to any stockholder, director, officer,
or (except in the Normal Course of Trading)
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employee or entry into any employment, severance, or similar Contract with any
director, officer, or employee;
(d) adoption of, or increase in the payments to or
benefits under, any profit sharing, bonus, deferred compensation, savings,
insurance, pension, retirement, or other employee benefit plan for or with any
employees of any Subject Company other than in the Normal Course of Trading;
(e) damage to or destruction or loss of any asset or
property of any Subject Company, whether or not covered by insurance, materially
and adversely affecting the properties, assets, business, financial condition,
or prospects of the Subject Companies, taken as a whole;
(f) other than dealings with customers in the Normal
Course of Trading, entry into, termination of, or receipt of notice of
termination of (i) any license, distributorship, dealer, sales representative,
joint venture, credit, or similar agreement, or (ii) any Contract or transaction
involving a total remaining commitment by or to any Subject Company of at least
AUS$25,000.00;
(g) sale (other than sales of inventory in the Normal
Course of Trading), lease, or other disposition of any asset or property of any
Subject Company or mortgage, pledge, or imposition of any lien or other
encumbrance on any material asset or property of any Subject Company, including
the sale, lease, or other disposition of any of the Intellectual Property
Assets;
(h) other than dealings with customers in the Normal
Course of Trading, cancellation or waiver of any claims or rights with a value
to any Subject Company in excess of AUS$25,000.00;
(i) material change in the accounting methods used by
any Subject Company other than disclosed in the Audit Report; or
(j) agreement, whether oral or written, by any Subject
Company to do any of the foregoing.
4.15. Contracts; No Defaults. None of the Subject Companies is
in default (beyond any applicable cure period) under any contracts or agreements
which are material to the operation of such company's business. To the best of
Sellers' Knowledge, none of the parties to any contracts or agreements which are
material to the operation of the Subject Companies business as are in default
(beyond any applicable cure period). To the best of Sellers' Knowledge Seller
has delivered to Buyer copies or written details of the terms of all contracts
or agreements that are material to the operation of the businesses of the
Subject Companies. For purposes of this Section, a contract or agreement shall
be deemed to be material to the operation of a Subject Company's business if it
(a) involves performance of services or delivery of goods or materials of an
amount or value in excess of AUS.$25,000.00 (other than customer contracts
entered into in the Normal Course of Trading), or (b) any contract or agreement
the loss, termination, or revocation of which, individually or together in the
aggregate with other contracts or agreements, would constitute a material
adverse change in the business, operations, prospects, or condition of the
Subject Company. None of the Subject
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Companies is a party to any foreign currency transaction other than in the
Normal Course of Trading.
4.16. Insurance.
(a) Sellers have delivered or made available to Buyer:
(i) true and complete copies of all policies of
insurance to which any Subject Company is a party or under which any Subject
Company, or any director of any Subject Company, is or has been covered at any
time within the twelve month period preceding the date of this Agreement;
(ii) true and complete copies of all pending
applications for policies of insurance; and
(iii) any statement by the auditor of any Subject
Company's financial statements with regard to the adequacy of such entity's
coverage or of the reserves for claims.
(b) To the best of Sellers' Knowledge except as set
forth on Part 4.16(b) of the Disclosure Letter:
(i) All policies to which any Subject Company is
a party or that provide coverage to Sellers, any Subject Company, or any
director or officer of an Subject Company:
(A) are valid, outstanding, and enforceable;
(B) are issued by an insurer that is
financially sound and reputable;
(C) taken together, provide adequate insurance
coverage for the assets and the operations of the Subject Companies;
(D) to the best of Sellers' Knowledge, are
sufficient for compliance with all Legal Requirements and Contracts to which any
Subject Company is a party or by which any of them is bound;
(E) will continue in full force and effect
following the consummation of the Contemplated Transactions; and
(F) do not provide for any retrospective
premium adjustment or other experienced-based liability on the part of any
Subject Company.
(ii) Subject Company has not received (A) any
refusal of coverage or any notice that a defense will be afforded with
reservation of rights, or (B) any notice of cancellation or any other indication
that any insurance policy is no longer in full force or effect or will not be
renewed or that the issuer of any policy is not willing or able to perform its
obligations
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thereunder.
(iii) The Subject Companies have paid all premiums
due, and have otherwise performed all of their respective obligations, under
each policy to which any Subject Company is a party or that provides coverage to
any Subject Company or director thereof.
(iv) The Subject Companies have given notice to
the insurer of all claims that may be insured thereby.
4.17. Employees.
(a) Part 4.17 of the Disclosure Letter contains a complete
and accurate list of the following information for each employee or director of
the Subject Companies, including each employee on leave of absence or layoff
status: employer; name; job title; current compensation paid or payable and any
change in compensation during the 12-month period preceding the execution of
this Agreement; length of service, accrued holiday pay, accrued long service
leave, accrued other sick pay, and any other benefits, including without
limitation insurance coverage, and automobile allowance.
(b) To best of Sellers' Knowledge, no director, officer,
or other key employee of any Subject Company intends to terminate his employment
with such Subject Company.
(c) There are no benefits payable now or in the future by
any Subject Company to any retired employee or director or their dependents,
including without limitation pension benefit, pension option election, retiree
medical insurance coverage, retiree life insurance coverage, and other benefits.
(d) The employment of each employee can be lawfully
terminated on three months' notice or less without payment of any damages or
compensation, including any severance or redundancy payments.
(e) None of the Subject Companies have been involved in
any material industrial dispute with any employee at any time within the five
years preceding the date of this Agreement and none of the Sellers have any
Knowledge of any circumstances likely to give rise to any material industrial
dispute.
4.18. Labor Relations; Compliance. No Subject Company has been
or is a party to any collective bargaining, labor Contract, or any Contract with
a union or industrial organization in respect of employees. There is not
presently pending or existing, and to the best of Sellers' Knowledge there is
not Threatened any strike, slowdown, picketing, work stoppage, or employee
grievance process.
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4.19. Intellectual Property.
(a) Intellectual Property Assets. The term "Intellectual
Property Assets" includes:
(i) the name Divergent Technologies, all fictional
business names, trading names, registered and unregistered trademarks, service
marks, and applications (collectively, "Marks");
(ii) all patents, patent applications, and inventions
and discoveries that may be patentable (collectively, "Patents");
(iii) all copyrights in both published works and
npublished works (collectively, "Copyrights");
(iv) all rights in mask works (collectively, "Rights
in Mask Works"); and
(v) all know-how, trade secrets, confidential
information, customer lists, software, technical information, data, process
technology, plans, drawings, and blue prints (collectively, "Trade Secrets");
owned, used, or licensed by any Subject Company as licensee or licensor.
(b) Agreements. To the best of Sellers' Knowledge part
4.19(b) of the Disclosure Letter contains a complete and accurate list and
summary description, including any royalties paid or received by the Subject
Companies, of all Contracts (other than customer contracts entered into in the
Normal Course of Trading) relating to the Intellectual Property Assets to which
any Subject Company is a party or by which any Subject Company is bound, except
for any license implied by the sale of a product and perpetual, paid-up licenses
for commonly available software programs with a value of less than $1,000 AUS
under which a Subject Company is the licensee. There are no outstanding and, to
the best of Sellers' Knowledge, no Threatened disputes or disagreements with
respect to any such agreement.
(c) Know-How Necessary for the Business. To the best of
Sellers' Knowledge, the Intellectual Property Assets are all those necessary for
the operation of the Subject Companies' businesses as they are currently
conducted in Australia or as reflected in the business plan given to Buyer. One
or more of the Subject Companies is the owner of all right, title, and interest
in and to each of the Intellectual Property Assets, free and clear of all liens,
security interests, charges, encumbrances, equities, and other adverse claims,
has the right to use without payment to a third party all of the Intellectual
Property Assets and has not received any notice of a claim or assertion to the
contrary.
(d) Patents. To the best of Sellers' Knowledge, unless
stated to the contrary in Part 4.19(d) of the Disclosure Letter, none of the
Subject Company's is the owner or licensee with respect to any Patents.
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(e) Trademarks. Part 4.19(e) of Disclosure Letter
contains a complete and accurate list and summary description of all Marks. One
or more of the Subject Companies is the owner of all right, title, and interest
in and to each of the Marks, free and clear of all liens, security interests,
charges, encumbrances, equities, and other adverse claims. No Xxxx is infringed
or, to the best of Sellers' Knowledge, none of the Marks used by any Subject
Company infringes or is alleged to infringe any trade name, trademark, or
service xxxx of any third party.
(f) Copyrights. Part 4.19(f) of the Disclosure Letter
contains a complete and accurate list and summary description of all Copyrights.
One or more of the Subject Companies is the owner of all right, title, and
interest in and to each of the Copyrights, free and clear of all liens, security
interests, charges, encumbrances, equities, and other adverse claims. No
Copyright is infringed or, to the best of Sellers' Knowledge, infringes or is
alleged to infringe any copyright of any third party or is a derivative work
based on the work of a third party.
(g) Trade Secrets. To the best of Sellers' Knowledge, no
Trade Secrets are materially necessary for the conduct of the business as
presently conducted of any Subject Company in the Normal Course of Trading.
4.20. Disclosure.
(a) To the best of Sellers' Knowledge, no representation
or warranty of Sellers in this Agreement and no statement in the Disclosure
Letter omits to state a material fact necessary to make the statements herein or
therein, in light of the circumstances in which they were made, not misleading.
The information in the Disclosure Letter, and the exhibits and schedules
attached or prepared in connection with this Agreement are accurate and complete
and not misleading.
(b) To the best of Sellers' Knowledge, no notice given
pursuant to Section 6.5 will contain any untrue statement or omit to state a
material fact necessary to make the statements therein or in this Agreement, in
light of the circumstances in which they were made, not misleading.
(c) To the best of Sellers' Knowledge, there is no fact
known to any Seller that has specific application to either Seller or any
Subject Company (other than general economic or industry conditions) and that
materially adversely affects or, as far as any Seller can reasonably foresee,
materially threatens, the assets, business, prospects, financial condition, or
results of operations of the Subject Companies (on a consolidated basis) that
has not been set forth in this Agreement or the Disclosure Letter.
4.21. Brokers or Finders. Except for a South African finder
who is entitled to receive compensation equal to one percent of the Purchase
Price from each of Buyer and Sellers (for a total of two percent) for services
rendered, Sellers and their agents have incurred no obligation or liability,
contingent or otherwise, for brokerage or finders' fees or agents' commissions
or other similar payment in connection with this Agreement.
4.22. Value Added Reseller Agreement. The Company has a good
relationship with Magic Israel, an Israeli company ("MSE") and no event has
occurred that jeopardizes that
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relationship. Sellers have no reason to doubt that MSE will enter into a Value
Added Reseller ("VAR") agreement relating to MSE's point of sale system on terms
favorable to the Company and the Company expects to have a written VAR agreement
with MSE within 60 days after the execution of this Agreement.
4.23. [Intentionally Omitted]
4.24. [Intentionally Omitted]
4.25. Prior Shareholders. As at the Closing, Sellers have purchased
and/or caused to be redeemed all and any shares or other equity interests in the
Company of shareholders or interest holders, including without limitation
Techno Holdings Pty., Ltd., Xxxxx Xxxxxxx, holders of E Class Shares
and any other minority shareholders ("Minority Shareholders"). All such
transactions constitute the legal, valid and binding obligation of all parties
to such transactions enforceable against such parties in accordance with their
terms. The Minority Shareholders shall not have any claims of any nature
whatsoever against Buyer, the Company or any Subject Company. All such
transactions are in full compliance with each Legal Requirement that is or was
applicable and shall be deemed to be Contemplated Transactions for the purposes
of paragraph 4.2 above.
5. Representations and Warranties of Buyer. Buyer represents and warrants
to Sellers as follows:
5.1. Organization and Good Standing. Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
State of Nevada.
5.2. Authority; No Conflict.
(a) This Agreement constitutes the legal, valid, and binding
obligation of Buyer, enforceable against Buyer in accordance with its terms.
Buyer has the absolute and unrestricted right, power, and authority to execute
and deliver this Agreement and the Employment Agreements and to perform its
obligations under this Agreement.
(b) Except as set forth in Part 5.2 of the Disclosure Letter and
the right of the Foreign Investment Review Board ("FIRB") to approve the
Contemplated Transactions, neither the execution and delivery of this Agreement
by Buyer nor the consummation or performance of any of the Contemplated
Transactions by Buyer will give any Person the right to prevent, delay, or
otherwise interfere with any of the Contemplated Transactions pursuant to:
(i) any provision of Buyer's Organizational Documents;
(ii) any resolution adopted by the board of directors or the
stockholders of Buyer;
(iii) any Legal Requirement or Order to which Buyer may be
subject; or
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(iv) any Contract to which Buyer is a party or by which Buyer
may be bound.
Except as set forth in Part 5.2 of the Disclosure Letter, Buyer is not
and will not be required to obtain any Consent from any Person in connection
with the execution and delivery of this Agreement or the consummation or
performance of any of the Contemplated Transactions.
5.3. Investment Intent. Buyer is acquiring the Shares for its
own account and not with a view to their distribution within the meaning of
Section 2(11) of the Securities Act.
5.4. Certain Proceedings. There is no pending Proceeding that
has been commenced against Buyer and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
Contemplated Transactions. To Buyer's Knowledge, no such Proceeding has been
Threatened.
5.5. Brokers or Finders. Except for a South African finder who
is entitled to receive compensation equal to one percent of the Purchase Price
from each of Buyer and Sellers (for a total of two percent) for services
rendered, Buyer and its officers and agents have incurred no obligation or
liability, contingent or otherwise, for brokerage or finders' fees or agents'
commissions or other similar payment in connection with this Agreement and will
indemnify and hold Sellers harmless from any such payment alleged to be due by
or through Buyer as a result of the action of Buyer or its officers or agents.
6. Covenants of Sellers Prior to Closing Date.
6.1. Access and Investigation. Between the date of this
Agreement and the Closing Date, Sellers will, and will cause each Subject
Company and its Representatives to, (a) afford Buyer and its Representatives and
prospective lenders and their Representatives (collectively, "Buyer's Advisors")
full and free access to each Subject Company's personnel, properties (including
subsurface testing), contracts, books and records, and other documents and data,
(b) furnish Buyer and Buyer's Advisors with copies of all such contracts, books
and records, and other existing documents and data as Buyer may reasonably
request, and (c) furnish Buyer and Buyer's Advisors with such additional
financial, operating, and other data and information as Buyer may reasonably
request.
6.2. Operation of the Businesses of the Subject Companies.
Except to the extent otherwise agreed by Buyer in writing, between the date of
this Agreement and the Closing Date, Sellers will, and will cause each Subject
Company to:
(a) conduct the business of such Subject Company only in
the Normal Course of Trading;
(b) use their Best Efforts to preserve intact the
current business organization of such Subject Company, keep available the
services of the current officers, employees, and agents of such Subject Company,
and maintain the relations and good will with suppliers, customers, landlords,
creditors, employees, agents, and others having business relationships with such
Subject
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Company;
(c) confer with Buyer concerning operational matters of
a material nature; and
(d) otherwise report periodically to Buyer concerning the
status of the business, operations, and finances of such Subject Company.
6.3. Negative Covenant. Except as otherwise expressly
permitted by this Agreement, between the date of this Agreement and the Closing
Date, Sellers will not, and will cause each Subject Company not to, without the
prior consent of Buyer, take any affirmative action, or fail to take any
reasonable action within their or its control, as a result of which any of the
changes or events listed in Section 4.14 is likely to occur. Other than in the
Normal Course of Trading and as reflected in the Disclosure Letter, between the
date of this Agreement and the Closing Date, Sellers shall take all necessary
action to ensure that:
(a) no Subject Company will enter into any financial
commitment in an amount exceeding AUS$25,000;
(b) no Subject Company will declare any dividend or pay any
management fee to the Sellers or their Associates or Related Corporations other
than management fees which are payable and set out in the Disclosure Letter;
(c) no Subject Company will issue or allot any further
shares or grant any options in favor of any one over any unissued shares nor
will any of the Subject Companies buy back or cancel any of their shares;
(d) no Subject Company will enter into any employment
contract which may require a Subject Company to give more than one month's
notice to the employee concerned or provide any bonus to any employee;
(e) no Subject Company will do or omit to do anything as a
result of which any other warranties as qualified by the Disclosure Letter would
not be true if given at any time before Closing; and
(f) no Subject Company may alter its memorandum or articles
of association.
6.4. Required Approvals. As promptly as practicable after the
date of this Agreement, Sellers will, and will cause each Subject Company to,
make all filings required by Legal Requirements to be made by them in order to
consummate the Contemplated Transactions. Between the date of this Agreement and
the Closing Date, Sellers will, and will cause each Subject Company to, (a)
cooperate with Buyer with respect to all filings that Buyer elects to make or is
required by Legal Requirements to make in connection with the Contemplated
Transactions, and (b) cooperate with Buyer in obtaining all consents identified
in Part 4.2 of the Disclosure Letter.
6.5. Notification. Between the date of this Agreement and the
Closing Date, each
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Seller will promptly notify Buyer in writing if such Seller or any Subject
Company becomes aware of any fact or condition that causes or constitutes a
Breach of any of Sellers' representations and warranties as of the date of this
Agreement, or if such Seller or any Subject Company becomes aware of the
occurrence after the date of this Agreement of any fact or condition that would
(except as expressly contemplated by this Agreement) cause or constitute a
Breach of any such representation or warranty had such representation or
warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the
Disclosure Letter if the Disclosure Letter were dated the date of the occurrence
or discovery of any such fact or condition, Sellers will promptly deliver to
Buyer a supplement to the Disclosure Letter specifying such change. During the
same period, each Seller will promptly notify Buyer of the occurrence of any
Breach of any covenant of Sellers in this Section 6 or of the occurrence of any
event that may make the satisfaction of the conditions in Section 8 impossible
or unlikely.
6.6. Payment of Indebtedness by Related Persons. Except as
expressly provided in this Agreement, Sellers will cause all indebtedness owed
to a Subject Company by either Seller or any Related Person of either Seller to
be paid in full prior to Closing.
6.7. No Negotiation. Until such time, if any, as this
Agreement is terminated pursuant to Section 10, Sellers will not, and will cause
each Subject Company and each of their Representatives not to, directly or
indirectly solicit, initiate, or encourage any inquiries or proposals from,
discuss or negotiate with, provide any non-public information to, or consider
the merits of any unsolicited inquiries or proposals from, any Person (other
than Buyer) relating to any transaction involving the sale of the business or
assets (other than in the Normal Course of Trading) of any Subject Company, or
any of the capital stock of any Subject Company, or any merger, consolidation,
business combination, or similar transaction involving any Subject Company.
6.8. Best Efforts. Between the date of this Agreement and the
Closing Date, Sellers will use their Best Efforts to cause the conditions in
Sections 8 and 9 to be satisfied.
7. Covenants of Buyer Prior to Closing Date.
7.1. Approvals Of Governmental Bodies. As promptly as
practicable after the date of this Agreement, Buyer will, and will cause each of
its Related Persons to, make all filings required by Legal Requirements to be
made by them to consummate the Contemplated Transactions. Between the date of
this Agreement and the Closing Date, Buyer will, and will cause each Related
Person to, cooperate with Sellers with respect to all filings that Sellers are
required by Legal Requirements to make in connection with the Contemplated
Transactions, and (ii) cooperate with Sellers in obtaining all consents
identified in Part 4.2 of the Disclosure Letter; provided that this Agreement
will not require Buyer to dispose of or make any change in any portion of its
business or to incur any other burden to obtain a Governmental Authorization.
7.2. Best Efforts. Except as set forth in the proviso to
Section 7.1, between the date of this Agreement and the Closing Date, Buyer will
use its Best Efforts to cause the conditions in Sections 8 and 9 to be
satisfied.
8. Conditions Precedent to Buyer's Obligation to Close. Buyer's obligation
to purchase the
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Shares and to take the other actions required to be taken by Buyer at the
Closing is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by Buyer, in whole or in
part):
8.1. Foreign Investment Review Board Approval. The occurrence of the
following with respect to the approval by the FIRB of the Contemplated
Transactions:
(a) a notice in writing is issued by or on behalf of, the
Treasurer of the Commonwealth of Australia stating that the Commonwealth
Government does not object to the parties entering into and completing this
Agreement either unconditionally or on terms reasonably acceptable to the Buyer;
or
(b) the Treasurer of the Commonwealth of Australia becomes
precluded from making an order in respect of the acquisition of the Shares under
the Foreign Acquisitions and Takeover Act of 1975.
8.2 Accuracy of Representations.
(a) All of Sellers' representations and warranties in this
Agreement (considered collectively), and each of these representations and
warranties (considered individually and subject to qualifications set forth in
such representations and warranties), must have been accurate in all material
respects as of the date of this Agreement, and must be accurate in all material
respects as of the Closing Date as if made on the Closing Date, without giving
effect to any supplement to the Disclosure Letter.
(b) Each of Sellers' representations and warranties in
Sections 4.3, 4.4, and 4.10 must have been accurate in all respects as of the
date of this Agreement, and must be accurate in all respects as of the Closing
Date as if made on the Closing Date, without giving effect to any supplement to
the Disclosure Letter.
8.3. Sellers' Performance.
(a) All of the covenants and obligations that Sellers are
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been duly performed and
complied with in all material respects.
(b) Each document required to be delivered pursuant to
Section 3.4 must have been delivered, and each of the other covenants and
obligations in Sections 6.4 and 6.8 must have been performed and complied with
in all respects.
8.4. Consents. Each of the Consents identified in the Disclosure
Letter, and each Consent identified in Part 5.2 of the Disclosure Letter must
have been obtained and must be in full force and effect.
8.5. Additional Documents. Each of the following documents must have
been
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delivered to Buyer:
(a) [Intentionally Omitted]
(b) such other documents as Buyer may reasonably request for the
purpose of (i) evidencing the accuracy of any of Sellers' representations and
warranties, (ii) evidencing the performance by either Seller of, or the
compliance by either Seller with, any covenant or obligation required to be
performed or complied with by such Seller, (iii) evidencing the satisfaction of
any condition referred to in this Section 8, (iv) complying with applicable laws
and regulations, or (v) otherwise facilitating the consummation or performance
of any of the Contemplated Transactions.
8.6. No Proceedings. There must not have been commenced or Threatened
against any of the Subject Companies any proceeding (a) involving any challenge
to, or seeking damages or other relief in connection with, any of the
Contemplated Transactions, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the Contemplated
Transactions. Further, none of the Subject Companies may have gone into
liquidation or passed a winding up resolution or received notices under Sections
572 or 573 of the Corporations Law, and no petition or other process for winding
up has been presented or threatened against any of the Subject Companies. No
receiver or receivers and manager or administrator appointed under the
Corporation Law have been appointed or threatened to any part of the undertaking
of assets of any of the Subject Companies.
8.7. No Claim Regarding Share Ownership or Sale Proceeds. There must
not have been made or Threatened by any Person any claim asserting that such
Person (a) is the holder or the beneficial owner of, or has the right to acquire
or to obtain beneficial ownership of, any shares of, or any other voting,
equity, or ownership interest in, any of the Subject Companies, or (b) is
entitled to all or any portion of the Purchase Price payable for the Shares.
8.8. No Prohibition. Neither the consummation nor the performance of
any of the Contemplated Transactions will, directly or indirectly (with or
without notice or lapse of time), materially contravene, or conflict with, or
result in a material violation of, or cause Buyer or any Person affiliated with
Buyer to suffer any material adverse consequence under, (a) any applicable Legal
Requirement or Order, or (b) any Legal Requirement or Order that has been
published, introduced, or otherwise formally proposed by or before any
Governmental Body.
8.9 [Deleted ]
8.10 Consummation of New Hope Transaction. The purchase and sale of
technology assets pursuant to the New Hope Agreement (as defined in
Section 3.3 above) shall have been consummated, either prior to or concurrently
with the Closing.
8.11 Disclosure Letter. On or before 48 hours after the delivery to
Buyer of a complete Disclosure Letter plus exhibits, Buyer must be satisfied, in
its sole discretion, of the contents of the Disclosure Letter.
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9. Conditions Precedent to Sellers' Obligation to Close. Sellers'
obligation to sell the Shares and to take the other actions required to be taken
by Sellers at the Closing is subject to the satisfaction, at or prior to the
Closing, of each of the following conditions (any of which may be waived by
Sellers, in whole or in part):
9.1. Accuracy of Representations. All of Buyer's representations and
warranties in this Agreement (considered collectively), and each of these
representations and warranties (considered individually), must have been
accurate in all material respects as of the date of this Agreement and must be
accurate in all material respects as of the Closing Date as if made on the
Closing Date.
9.2. Buyer's Performance.
(a) All of the covenants and obligations that Buyer is
required to perform or to comply with pursuant to this Agreement at or prior to
the Closing (considered collectively), and each of these covenants and
obligations (considered individually), must have been performed and complied
with in all material respects.
(b) Buyer must have delivered each of the documents, funds,
and instruments required to be delivered by Buyer pursuant to Section 3.4.
9.3. Additional Documents. Buyer must have caused the following
documents to be delivered to Sellers such other documents as Sellers may
reasonably request for the purpose of (i) evidencing the accuracy of any
representation or warranty of Buyer, (ii) evidencing the performance by Buyer
of, or the compliance by Buyer with, any covenant or obligation required to be
performed or complied with by Buyer, (iii) evidencing the satisfaction of any
condition referred to in this Section 9, or (iv) otherwise facilitating the
consummation of any of the Contemplated Transactions.
9.4. No Injunction. There must not be in effect any Legal
Requirement or any injunction or other Order that (a) prohibits the sale of the
Shares by Sellers to Buyer, and (b) has been adopted or issued, or has otherwise
become effective, since the date of this Agreement.
9.5 Consummation of New Hope Transaction. The purchase and sale of
technology assets pursuant to the New Hope Agreement shall have been
consummated, either prior to or concurrently with the Closing.
10. Termination.
10.1. Termination Events. This Agreement may, by notice given
prior to or at the Closing, be terminated:
(a) by either Buyer or Sellers if a material Breach of any
provision of this Agreement has been committed by the other party and such
Breach has not been waived or cured on or before fourteen (14) days after
written notice from the non-breaching party;
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(b) (i) by Buyer if any of the conditions in Section 8
have not been satisfied as of the Closing Date or if satisfaction of such a
condition is or becomes impossible (other than through the failure of Buyer to
comply with its obligations under this Agreement) and Buyer has not waived such
condition on or before the Closing Date; or (ii) by Sellers, if any of the
conditions in Section 9 has not been satisfied of the Closing Date or if
satisfaction of such a condition is or becomes impossible (other than through
the failure of Sellers to comply with their obligations under this Agreement)
and Sellers have not waived such condition on or before the Closing Date;
(c) by mutual consent of Buyer and Sellers; or
(d) by either Buyer or Sellers if the Closing has not
occurred (other than through the failure of any party seeking to terminate this
Agreement to comply fully with its obligations under this Agreement) on or
before November 30, 1996, or such later date as the parties may agree upon.
10.2. Effect of Termination. Each party's right of termination
under Section 10.1 is in addition to any other rights it may have under this
Agreement or otherwise, and the exercise of a right of termination will not be
an election of remedies. If this Agreement is terminated pursuant to Section
10.1, all further obligations of the parties under this Agreement will
terminate, provided, however, that if this Agreement is terminated by a party
because of the Breach of the Agreement by the other party or because one or more
of the conditions to the terminating party's obligations under this Agreement is
not satisfied as a result of the other party's failure to comply with its
obligations under this Agreement, the terminating party's right to pursue all
legal remedies will survive such termination unimpaired.
11. Indemnification; Remedies.
11.1. Survival. All representations, warranties, covenants,
and obligations in this Agreement, the Disclosure Letter, the supplements to the
Disclosure Letter, the certificate delivered pursuant to Section 3.4(a)(iii),
and any other certificate or document delivered pursuant to this Agreement will
survive the Closing.
11.2. Indemnification and Payment of Damages by Sellers. Each
of the Sellers, severally, will indemnify and hold harmless Buyer and the
Subject Companies, (collectively, the "Indemnified Persons") for, and will pay
to the Indemnified Persons the amount of, any loss, liability, claim, damage
(including incidental and consequential damages), expense (including costs of
investigation and defense and reasonable attorneys' fees) or diminution of
value, whether or not involving a third-party claim (collectively, "Damages"),
arising, directly or indirectly, from or in connection with:
(a) any Breach of any representation or warranty made by
such Seller in this Agreement (without giving effect to any supplement to the
Disclosure Letter), the Disclosure Letter, the supplements to the Disclosure
Letter, or any other certificate or document delivered by Sellers pursuant to
this Agreement;
(b) any Breach of any representation or warranty made by
such Seller in this
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Agreement as if such representation or warranty were made on and as of the
Closing Date without giving effect to any supplement to the Disclosure Letter;
or
(c) any Breach by such Seller of any covenant or obligation
of such Seller in this Agreement;
Notwithstanding the foregoing, Sellers shall have no indemnification
obligations under this Section 11.2 unless and to the extent Buyer's Damages
exceeds $50,000.00 in Damages. The remedies provided in this Section 11.2 will
not be exclusive of or limit any other remedies that may be available to Buyer
or the other Indemnified Persons.
11.3. Indemnification and Payment of Damages by Buyer. Buyer
will indemnify and hold harmless Sellers, and will pay to Sellers the amount of
any Damages arising, directly or indirectly, from or in connection with (a) any
Breach of any representation or warranty made by Buyer in this Agreement or in
any certificate delivered by Buyer pursuant to this Agreement, (b) any Breach by
Buyer of any covenant or obligation of Buyer in this Agreement, or (c) any claim
by any Person for brokerage or finder's fees or commissions or similar payments
based upon any agreement or understanding alleged to have been made by such
Person with Buyer (or any Person acting on its behalf) in connection with any of
the Contemplated Transactions. Notwithstanding the foregoing, Buyer shall have
no indemnification obligations under this Section 11.3 unless and to the extent
Buyer's Damages exceeds $50,000.00 in Damages.
11.4. Time Limitations. If the Closing occurs, Sellers will
have no liability (for indemnification or otherwise) with respect to any
representation or warranty, or covenant or obligation to be performed and
complied with prior to the Closing Date, unless on or before the second
anniversary of the Closing Buyer notifies the Sellers of a claim specifying the
factual basis of that claim in reasonable detail to the extent then known by
Buyer; a claim with respect to Section 4.3, or a claim for indemnification or
reimbursement not based upon any representation or warranty or any covenant or
obligation to be performed and complied with prior to the Closing Date, may be
made at any time. If the Closing occurs, Buyer will have no liability (for
indemnification or otherwise) with respect to any representation or warranty, or
covenant or obligation to be performed and complied with prior to the Closing
Date, unless on or before the second anniversary of the Closing Sellers notify
Buyer of a claim specifying the factual basis of that claim in reasonable detail
to the extent then known by Sellers.
11.5. Procedure for Indemnification--Third Party Claims.
(a) Promptly after receipt by an indemnified party under
Section 11.2 or 11.3 of notice of the commencement of any Proceeding against it,
such indemnified party will, if a claim is to be made against an indemnifying
party under such Section, give notice to the indemnifying party of the
commencement of such claim, but the failure to notify the indemnifying party
will not relieve the indemnifying party of any liability that it may have to any
indemnified party, except to the extent that the indemnifying party demonstrates
that the defense of such action is prejudiced by the indemnifying party's
failure to give such notice.
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(b) If any Proceeding referred to in Section 11.5(a) is
brought against an indemnified party and it gives notice to the indemnifying
party of the commencement of such Proceeding, the indemnifying party will,
unless the claim involves taxes, be entitled to participate in such Proceeding
and, to the extent that it wishes (unless (i) the indemnifying party is also a
party to such Proceeding and the indemnified party determines in good faith that
joint representation would be inappropriate, or (ii) the indemnifying party
fails to provide reasonable assurance to the indemnified party of its financial
capacity to defend such Proceeding and provide indemnification with respect to
such Proceeding), to assume the defense of such Proceeding with counsel
satisfactory to the indemnified party and, after notice from the indemnifying
party to the indemnified party of its election to assume the defense of such
Proceeding, the indemnifying party will not, as long as it diligently conducts
such defense, be liable to the indemnified party under this Section 11 for any
fees of other counsel or any other expenses with respect to the defense of such
Proceeding, in each case subsequently incurred by the indemnified party in
connection with the defense of such Proceeding, other than reasonable costs of
investigation. If the indemnifying party assumes the defense of a Proceeding,
(i) it will be conclusively established for purposes of this Agreement that the
claims made in that Proceeding are within the scope of and subject to
indemnification; (ii) no compromise or settlement of such claims may be effected
by the indemnifying party without the indemnified party's consent unless (A)
there is no finding or admission of any violation of Legal Requirements or any
violation of the rights of any Person and no effect on any other claims that may
be made against the indemnified party, and (B) the sole relief provided is
monetary damages that are paid in full by the indemnifying party; and (iii) the
indemnified party will have no liability with respect to any compromise or
settlement of such claims effected without its consent. If notice is given to an
indemnifying party of the commencement of any Proceeding and the indemnifying
party does not, within ten days after the indemnified party's notice is given,
give notice to the indemnified party of its election to assume the defense of
such Proceeding, the indemnifying party will be bound by any determination made
in such Proceeding or any compromise or settlement effected by the indemnified
party.
(c) Notwithstanding the foregoing, if an indemnified party
determines in good faith that there is a reasonable probability that a
Proceeding may adversely affect it or its affiliates other than as a result of
monetary damages for which it would be entitled to indemnification under this
Agreement, the indemnified party may, by notice to the indemnifying party,
assume the exclusive right to defend, compromise, or settle such Proceeding, but
the indemnifying party will not be bound by any determination of a Proceeding so
defended or any compromise or settlement effected without its consent (which may
not be unreasonably withheld).
(d) Sellers and Buyer hereby consent to the non-exclusive
jurisdiction of any court in which a Proceeding is brought against any
Indemnified Person for purposes of any claim that an Indemnified Person may have
under this Agreement with respect to such Proceeding or the matters alleged
therein, and agree that process may be served on Sellers with respect to such a
claim anywhere in the world.
11.6. Procedure for Indemnification--Other Claims. A claim for
indemnification for any matter not involving a third-party claim may be asserted
by notice to the party from whom indemnification is sought.
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11.7. Guarantees.
(a) Xxxx Xxxxxxxxxxxx unconditionally and irrevocably
guarantees to the Buyer the payment by Landreef Pty Limited ("Landreef") of any
liability of Landreef to the Buyer under Section 11.2.
(b) Xxxxx Xxxxx unconditionally and irrevocably guarantees to
the Buyer the payment by Hookmond (Pty) Limited ("Hookmond") of any liability of
Hookmond to the Buyer under Section 11.2.
(c)
(i) the guarantees contained in Sections 11.7(a) and
(b) are continuing guarantees.
(ii) the obligations of Xxxx Xxxxxxxxxxxx and Xxxxx Xxxxx
under Sections 11.7(a) and (b) are principal obligations and are not released,
discharged or otherwise affected by anything which might have that effect,
including the grant to any person of any time, waiver, covenant not to xxx or
other indulgence, the release or discharge of any person, the cessation of the
obligations, in whole or in part, of any person under any document or agreement,
the liquidation of any person, any alteration, amendment, variation, supplement
to or replacement of this agreement or any other document or agreement, any
payment to the Buyer, or any amounts owing to the Buyer under this agreement
being irrecoverable for any reason or the death of either Xxxx Xxxxxxxxxxxx or
Xxxxx Xxxxx.
(iii) if the obligations of Xxxx Xxxxxxxxxxxx or Xxxxx
Xxxxx are unenforceable against either or both of them on the basis that the
guarantee referred to in Section 11.7(a) or as the case may be Section 11.7(b)
is invalid or unenforceable, then Xxxx Xxxxxxxxxxxx or as the case may be, Xxxxx
Xxxxx, indemnifies and continues to indemnify the Buyer against any claim,
action, damage, loss, liability, cost, expense or payment suffered, paid or
incurred by the Buyer arising out of or as a consequence of the guarantee
referred to in Section 11.7(a) or as the case may be Section 11.7(b) be invalid
or unenforceable.
(iv) each of Xxxx Xxxxxxxxxxxx and Xxxxx Xxxxx waives (A)
all rights he would have, but for this waiver (A) to require Buyer to proceed
against Sellers or pursue any other remedy available to Buyer, (B) all defenses
which may have arisen by reason of any disability of Sellers, including without
limitation the incapacity or lack of authority or failure of Buyer to file or
enforce a claim against the estate (in administration, bankruptcy, or any other
proceeding) of Sellers or any other person, (C) all defenses which may have
arisen due to failure of consideration, accord and satisfaction, impossibility
of performance, or mistake, (D) all rights to receive notice of any default by
Sellers, and (E) all rights of recourse against Sellers by reason of any
provision of this Agreement. Each of Xxxx Xxxxxxxxxxxx and Xxxxx Xxxxx
acknowledges that the waivers set forth above have the effect of eliminating
certain rights and protections which each of them would otherwise have
including, without limitation, (a) certain rights to require Buyer to act in a
particular manner as a condition to enforcing its rights against them under this
provision, and (b) certain rights
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to require Buyer to pursue other remedies available to it prior to pursuing
either of them.
11.8 Breach by Other Seller. Notwithstanding anything else contained
in this agreement:
(a) Neither Seller will be liable for a breach of this
agreement caused by the other Seller; and
(b) where a representation or warranty makes reference to
the Knowledge of the Sellers, a Seller will not be deemed to have breached that
representation or warranty if the matter giving rise to the breach was not
within the Knowledge of that Seller but was within the Knowledge of the other
Seller.
12. Covenant Not To Compete.
12.1. To the extent permitted by applicable law:
(a) None of Sellers, Xxxx Xxxxxxxxxxxx nor Xxxxx Xxxxx
(for purposes of this Section 12, Xxxxxxxxxxxx and Xxxxx, shall collectively be
referred to as "Principals"), will directly or indirectly, engage or invest in,
own, manage, operate, finance, control, or participate in the ownership,
management, operation, or control of, be employed by, associated with, or in any
manner connected with, lend any Sellers' or Principals' name or any similar name
to, lend Sellers' or Principals' credit to, or render services or advice to, any
business in each State and Territory in the Commonwealth of Australia whose
products or activities compete in whole or in part with the products or
activities of the Company; provided, however, that Sellers or Principals may
purchase or otherwise acquire up to (but not more than) five percent (5%) of any
class of securities of any enterprise (but without otherwise participating in
the activities of such enterprise) if such securities are listed on any national
or regional securities exchange or have been registered under Section 12(g) of
the Securities Exchange Act of 1934. The duration of this covenant shall be (a)
with respect to Landreef Pty. Ltd. and Xxxx Xxxxxxxxxxxx, three years after Xxxx
Xxxxxxxxxxxx ceases to be an employee of or render services to the Company, and
(b) with respect to Xxxxx Xxxxx and Hookmond Pty. Ltd., three years after Xxxxx
Xxxxx ceases to be an employee of or render services to the Company. Sellers and
Principals agree that this covenant is reasonable with respect to its duration,
geographical area, and scope.
(b) Neither Sellers nor Principals will, directly or
indirectly, either for themselves or any other Person, (A) induce or attempt to
induce any employee of a Subject Company to leave the employ of such Subject
Company, (B) in any way interfere with the relationship between a Subject
Company and any employee of such Subject Company, (C) employ, or otherwise
engage as an employee, independent contractor, or otherwise, any employee of a
Subject Company, or (D) induce or attempt to induce any customer, supplier,
licensee, or business relation of a Subject Company to cease doing business with
such Subject Company, or in any way interfere with the relationship between any
customer, supplier, licensee, or business relation of a Subject Company.
(c) Neither Sellers nor Principals will, directly or
indirectly, either for
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themselves or any other Person, solicit the business of any Person known to
Sellers or either Principal to be a customer of a Subject Company, whether or
not any Seller had personal contact with such Person, unless Sellers' or
Principals' solicitation of such Person is done in connection with a business
that is not competitive with that of any of the Subject Companies.
12.2. In the event of a breach by Sellers or Principals of any
covenant set forth in Subsection 12.1 of this Agreement, the term of such
covenant will be extended by the period of the duration of such breach.
12.3. Neither Sellers nor Principals will, at any time during
or after the three-year period, disparage Buyer or the Subject Company, or any
of their shareholders, directors, officers, employees, or agents. Buyer or a
Subject Company may serve notice upon each such employer that Sellers and
Principals are bound by this Agreement and furnish each such employer with a
copy of this Agreement or relevant portions thereof.
12.4. In addition to Buyer's right to damages and any other
rights it may have, to obtain injunctive or other equitable relief to restrain
any breach or threatened breach or otherwise to specifically enforce the
provisions of this Section Sellers and Principals agree that money damages alone
would be inadequate to compensate the Buyer and the Subject Company and would be
an inadequate remedy for such breach.
12.5. If a court of competent jurisdiction holds that the
obligations of Sellers or Principals pursuant to this covenant are unenforceable
due to the duration, geographical area and scope of this covenant, then such
duration, geographical area or scope of this covenant shall be reduced to the
least degree necessary to render this covenant enforceable.
13. General Provisions.
13.1. Expenses.
(a) Except as otherwise expressly agreed to by the parties
in writing, each party to this Agreement will bear expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the Contemplated Transactions, including the fees and expenses of agents,
representatives, counsel, and accountants. In the event of termination of this
Agreement, the obligation of each party to pay its own expenses will be subject
to any rights of such party arising from a breach of this Agreement by another
party.
(b) Buyer will reimburse Sellers for any reasonable legal
and accounting expenses incurred by Sellers due to Buyer's specific written
request to undertake due diligence which causes Sellers to incur said legal or
accounting expenses.
13.2. Public Announcements. Subject to Techno Holdings (Pty) Ltd.
fulfilling its obligations to the Australian Stock Exchange any public
announcement or similar publicity with respect to this Agreement or the
Contemplated Transactions will be issued, if at all, at such time and in such
manner as Buyer, with the reasonable consent of Xxxx Xxxxxxxxxxxx, as
representative of
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Sellers, determines. Unless consented to by Buyer in advance or required by
Legal Requirements, prior to the Closing Sellers shall, and shall cause the
Subject Companies to, keep this Agreement strictly confidential and may not make
any disclosure of this Agreement to any Person. Sellers and Buyer will consult
with each other concerning the means by which the Subject Companies' employees,
customers, and suppliers and others having dealings with the Subject Companies
will be informed of the Contemplated Transactions, and Buyer will have the right
to be present for any such communication.
13.3. Confidentiality. Subject to Techno Holdings (Pty) Ltd.
fulfilling its obligations to the Australian Stock Exchange between the date of
this Agreement and the Closing Date, Buyer and Sellers will maintain in
confidence, and will cause the directors, officers, employees, agents, and
advisors of Buyer and the Subject Companies to maintain in confidence, any
written, oral, or other information obtained in confidence from another party or
an Subject Company in connection with this Agreement or the Contemplated
Transactions, unless (a) such information is already known to such party or to
others not bound by a duty of confidentiality or such information becomes
publicly available through no fault of such party, (b) the use of such
information is necessary or appropriate in making any filing or obtaining any
consent or approval required for the consummation of the Contemplated
Transactions, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
If the Contemplated Transactions are not consummated, each party will
return or destroy as much of such written information as the other party may
reasonably request. Whether or not the Closing takes place, Sellers waive, and
will upon Buyer's request cause the Subject Companies to waive, any cause of
action, right, or claim arising out of the access of Buyer or its
representatives to any trade secrets or other confidential information of the
Subject Companies except for the intentional competitive misuse by Buyer of such
trade secrets or confidential information.
13.4. Notices. Each notice and other communication required or
permitted to be given under this Agreement ("Notice") must be in writing. Notice
is duly given to another party upon: (a) hand delivery to the other party, (b)
receipt by the other party when sent by facsimile to the address and number for
such party set forth below (provided, however, that the Notice is not effective
unless a duplicate copy of the facsimile Notice is promptly given by one of the
other methods permitted under this paragraph), (c) fourteen business days after
the Notice has been deposited with the United States postal service as first
class certified mail, return receipt requested, postage prepaid, and addressed
to the party as set forth below, or (d) the next business day after the Notice
has been deposited with a reputable overnight delivery service, postage prepaid,
addressed to the party as set forth below with next-business-day delivery
guaranteed, provided that the sending party receives a confirmation of delivery
from the delivery-service-provider.
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To Buyer: Xxxxx X. Xxxxxxxxx
Chief Executive Officer
SVI Holdings, Inc.
0000 Xxxxx Xxxxx, Xxxxx X
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Copy to: Xxxxxx X. Xxxxx, Esq.
Xxxxxxx Xxxx Seidenwurm & Xxxxx
000 X Xxxxxx, Xxxxx 0000
Xxx Xxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
To Sellers: Landreef Pty., Ltd.
00 Xxxxxxxxx Xxxx
Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxx XXX 0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Hookmond Pty., Ltd
Xxxxx 0, 00 Xxxxxx Xxxxxx
Bondi Junction
Sydney, Australia XXX 0000
Phone: (000) 000-0000
Fax: (000) 000-0000
Each party shall make a reasonable, good faith effort to ensure that it will
accept or receive Notices to it that are given in accordance with this
paragraph. A party may change its address for purposes of this paragraph by
giving the other party(ies) written notice of a new address in the manner set
forth above.
13.5. Jurisdiction; Service of Process. Except as provided
below, all actions and proceedings arising in connection with this Agreement
must be tried and litigated exclusively in the State and Federal courts located
in the County of San Diego, State of California, which courts have personal
jurisdiction and venue over each of the parties to this Agreement for the
purpose of adjudicating all matters arising out of or related to this Agreement.
Notwithstanding the foregoing sentence, Buyer and/or Seller may, at any time
Buyer or Seller deems that urgent or injunctive relief is necessary or
desirable, seek such relief in the courts of New South Wales, Commonwealth of
Australia. Each party authorizes and accepts service of process sufficient for
personal jurisdiction in any action against it as contemplated by this paragraph
by registered or certified mail, return receipt requested, postage prepaid, to
its address for the giving of notices set forth in this Agreement.
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13.6. Further Assurances. Each party to this Agreement shall
execute and deliver all instruments and documents and take all actions as may be
reasonably required or appropriate to carry out the purposes of this Agreement.
13.7. Waiver. Any waiver of a default or provision under this
Agreement must be in writing. No such waiver constitutes a waiver of any other
default or provision concerning the same or any other provision of this
Agreement. No delay or omission by a party in the exercise of any of its rights
or remedies constitutes a waiver of (or otherwise impairs) such right or remedy.
A consent to or approval of an act does not waive or render unnecessary the
consent to or approval of any other or subsequent act.
13.8. Entire Agreement and Modification. This Agreement and
all documents specifically referred to and executed in connection with this
Agreement: (a) contain the entire and final agreement of the parties to this
Agreement with respect to the subject matter of this Agreement, and (b)
supersede all negotiations, stipulations, understandings, agreements,
representations and warranties, if any, with respect to such subject matter,
which precede or accompany the execution of this Agreement. This Agreement may
be modified only by a contract in writing executed by the party to this
Agreement against whom enforcement of the modification is sought.
13.9. Disclosure Letter.
(a) The disclosures in the Disclosure Letter, and
those in any Supplement thereto, must relate only to the representations and
warranties in the Section of the Agreement to which they expressly relate and
not to any other representation or warranty in this Agreement.
(b) In the event of any inconsistency between the
statements in the body of this Agreement and those in the Disclosure Letter
(other than an exception expressly set forth as such in the Disclosure Letter
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
13.10. Assignments, Successors, and No Third-Party Rights.
Sellers may not voluntarily or by operation of law assign, hypothecate, delegate
or otherwise transfer or encumber all or any part of its rights, duties or other
interests in this Agreement without the prior written consent of Buyer, which
consent may be withheld in Buyer's sole and absolute discretion. Any such
transfer in violation of this paragraph is void. Subject to the foregoing and
any other restrictions on transferability contained in this Agreement, this
Agreement is binding upon and inures to the benefit of the
successors-in-interest and assigns of each party to this Agreement. Nothing in
this Agreement is intended to confer any rights or remedies on any person or
entity other than the parties to this Agreement and their respective
successors-in-interest and permitted assignees, unless such rights are expressly
granted in this Agreement to another person specifically identified as a "Third
Party Beneficiary."
13.11. Severability. Each provision of this Agreement is
valid and enforceable to the fullest extent permitted by law. If any provision
of this Agreement (or the application of such provision to any person or
circumstance) is or becomes invalid or unenforceable, the remainder of
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this Agreement, and the application of such provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
are not affected by such invalidity or unenforceability.
13.12. Section Headings, Construction. The headings of the
paragraphs of this Agreement have been included only for convenience, and shall
not be deemed in any manner to modify or limit any of the provisions of this
Agreement, or be used in any manner in the interpretation of this Agreement.
13.13. Time of Essence. Time and strict and punctual
performance are of the essence with respect to each provision of this Agreement.
13.14. Governing Law. This Agreement is governed by and
construed in accordance with the laws of the State of California, irrespective
of California's choice-of-law principles.
13.15. Counterparts. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
13.16. Arbitration. Except as to the right to seek urgent or
injunctive relief in the courts of New South Wales, Commonwealth of Australia,
pursuant to Section 13.5 above, any dispute, controversy or claim arising out of
or related to this Agreement shall be finally settled by arbitration in
accordance with the Rules of Conciliation and Arbitration of the International
Chamber of Commerce.
(a) In the event of any conflict between these Rules and
this Section, the provisions of this Section will govern. The arbitration shall
take place in San Diego, California. The selection of an arbitrator shall be
approved by agreement between the parties to this Agreement or, if the parties
cannot so agree within 30 days after written notice by either party that it
intends to seek arbitration with respect to a particular dispute, such
arbitrator shall be appointed by Presiding Judge of the Superior Court for the
County of San Diego, California.
(b) The arbitration shall be conducted in the English
language. Relevant documents in other languages shall be translated into English
if the arbitrators so direct. In arriving at their award, the arbitrators shall
make every effort to find a solution to the dispute in the provisions of this
Agreement and shall give full effect to all parts thereof. If a solution cannot
be found in the provisions of the Agreement, the arbitrators shall apply the
laws of the state of California.
(c) The parties agree that after either has filed a
notice of demand for arbitration of any dispute subject to arbitration under
this Agreement, they shall, upon request, make discovery and disclosure of all
materials relevant to the subject of the dispute. The arbitrators shall make the
final determination as to any discovery disputes between the parties.
Examination of witnesses by the parties and by the arbitrators shall be
permitted. A written transcript of the hearing shall be made and furnished to
the parties. The cost of this transcript shall be borne equally by the parties.
(d) The arbitrators shall state the reasons upon which
the award is based. The
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award of the arbitrators shall be final and binding upon the parties. Judgment
upon the award may be entered in any court having jurisdiction. An application
may be made to any such court for a judicial acceptance of the award and an
order for enforcement.
BUYER: SVI HOLDINGS, INC.,
a Nevada corporation
By:/s/Xxxxx Xxxxxxxxx
--------------------------
Xxxxx Xxxxxxxxx
Chief Executive Officer
SELLERS: LANDREEF PTY., LTD.,
an Australian corporation
By:/s/Xxxx Xxxxxxxxxxxx
--------------------------
Xxxx Xxxxxxxxxxxx
Managing Director
HOOKMOND PTY. LTD.,
an Australian corporation
By:/s/Xxxxx Xxxxx
--------------------------
Xxxxx Xxxxx
Managing Director
Xxxx Xxxxxxxxxxxx
Xxxxx Xxxxx
Exhibit 4.3
Name Class of Shares Number of Shares
Landreef Pty., Ltd. Ordinary 750,000
Hookmond Pty. Ltd. Ordinary 750,000
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TABLE OF CONTENTS
Page
1. Recital..................................................................................................1
2. Definitions..............................................................................................1
3. Sale and Transfer of Shares; Closing; Additional Agreements..............................................6
3.1. Shares.............................................................................................6
3.2. Purchase Price.....................................................................................6
3.3. Closing............................................................................................6
3.4. Closing Obligations................................................................................6
3.8. Sellers' Right to Appoint Director of Buyer........................................................7
4. Representations and Warranties of Sellers................................................................7
4.1. Organization and Good Standing.....................................................................7
4.2. Authority; No Conflict.............................................................................8
4.3. Capitalization.....................................................................................9
4.4. Financial Statements...............................................................................9
4.5. Real Property......................................................................................9
4.6. Accounts Receivable...............................................................................10
4.7. Inventory.........................................................................................10
4.8. No Undisclosed Liabilities........................................................................10
4.9. Taxes.............................................................................................10
4.10. No Material Adverse Change.......................................................................11
4.11. Employee Benefits................................................................................11
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4.12. Compliance with Legal Requirements; Governmental Authorizations..................................11
4.13. Legal Proceedings; Orders........................................................................11
4.14. Absence of Certain Changes and Events............................................................11
4.15. Contracts; No Defaults...........................................................................12
4.16. Insurance........................................................................................13
4.17. Employees........................................................................................14
4.18. Labor Relations; Compliance......................................................................15
4.19. Intellectual Property............................................................................15
4.20. Disclosure.......................................................................................16
4.21. Brokers or Finders...............................................................................17
4.22. Value Added Reseller Agreement...................................................................17
5. Representations and Warranties of Buyer.................................................................17
5.1. Organization and Good Standing....................................................................17
5.2. Authority; No Conflict............................................................................17
5.3. Investment Intent.................................................................................18
5.4. Certain Proceedings...............................................................................18
5.5. Brokers or Finders................................................................................18
6. Covenants of Sellers Prior to Closing Date..............................................................18
6.1. Access and Investigation..........................................................................18
6.2. Operation of the Businesses of the Subject Companies..............................................19
6.3. Negative Covenant.................................................................................19
6.4. Required Approvals................................................................................20
6.5. Notification......................................................................................20
6.6. Payment of Indebtedness by Related Persons........................................................20
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6.7. No Negotiation....................................................................................20
6.8. Best Efforts......................................................................................20
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39
7. Covenants of Buyer Prior to Closing Date................................................................21
7.1. Approvals Of Governmental Bodies..................................................................21
7.2. Best Efforts......................................................................................21
8. Conditions Precedent to Buyer's Obligation to Close.....................................................21
8.1. Foreign Investment Review Board Approval..........................................................21
8.2 Accuracy of Representations........................................................................21
8.3. Sellers' Performance..............................................................................22
8.4. Consents..........................................................................................22
8.5. Additional Documents..............................................................................22
8.6. No Proceedings....................................................................................22
8.7. No Claim Regarding Share Ownership or Sale Proceeds...............................................22
8.8. No Prohibition....................................................................................22
8.9. Arrangement of Financing..........................................................................23
9. Conditions Precedent to Sellers' Obligation to Close....................................................23
9.1. Accuracy of Representations.......................................................................23
9.2. Buyer's Performance...............................................................................23
9.3. Additional Documents..............................................................................23
9.4. No Injunction.....................................................................................24
10. Termination............................................................................................24
10.1. Termination Events...............................................................................24
10.2. Effect of Termination............................................................................24
11. Indemnification; Remedies..............................................................................25
11.1. Survival.........................................................................................25
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40
11.2. Indemnification and Payment of Damages by Sellers................................................25
11.3. Indemnification and Payment of Damages by Buyer..................................................25
11.4. Time Limitations.................................................................................25
11.5. Procedure for Indemnification--Third Party Claims................................................26
11.6. Procedure for Indemnification--Other Claims......................................................27
12. Covenant Not To Compete................................................................................28
13. General Provisions.....................................................................................30
13.1. Expenses.........................................................................................30
13.2. Public Announcements.............................................................................30
13.3. Confidentiality..................................................................................30
13.4. Notices..........................................................................................31
13.5. Jurisdiction; Service of Process.................................................................32
13.6. Further Assurances...............................................................................32
13.7. Waiver...........................................................................................32
13.8. Entire Agreement and Modification................................................................32
13.9. Disclosure Letter................................................................................32
13.10. Assignments, Successors, and No Third-Party Rights..............................................32
13.11. Severability....................................................................................33
13.12. Section Headings, Construction..................................................................33
13.13. Time of Essence.................................................................................33
13.14. Governing Law...................................................................................33
13.15. Counterparts....................................................................................33
13.16. Arbitration....................................................................................33
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