EXHIBIT 4.(a).6
Final
CDC AUSTRALIA LIMITED
as Purchaser
PRAXA LIMITED
as Company
MANTECH INTERNATIONAL CORPORATION
AND
MANTECH AUSTRALIA INTERNATIONAL INC.
as Sellers
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SHARE PURCHASE AGREEMENT
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This SHARE PURCHASE AGREEMENT is dated as of December 31, 2002, is made by
and among CDC AUSTRALIA LIMITED, a company organized and existing under the laws
of the British Virgin Islands (the "Purchaser"); PRAXA LIMITED, ACN 006 126 496
having a registered office of 000 Xxxxxxx Xxxx Xxxxx Xxxxxxxxx Xxxxxxxx (the
"Company"); and MANTECH INTERNATIONAL CORPORATION, a company organized and
existing under the laws of the state of Delaware and having an address of 00000
Xxx Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx, Xxxxxx Xxxxxx of America, 22033-3300 and
MANTECH AUSTRALIA INTERNATIONAL INC. organized and existing under the laws of
Virginia and having and address of 00000 Xxx Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx,
Xxxxxx Xxxxxx of America 22033-3300 (collectively the "Sellers"), all of whom
may be collectively referred to herein as the "Parties" or individually as a
"Party".
WHEREAS, prior to the Closing (defined herein), the Sellers are the only
legal and beneficial owners of 100% of the issued and outstanding shares of the
Company on a fully diluted basis which they desire to sell 100% of the Shares
(defined herein) to the Purchaser (the "Equity Interest") and Purchaser wishes
to purchase the Equity Interest from the Sellers.
WHEREAS concurrently with the closing of this Agreement, the Purchaser
will receive an Employment Release (defined herein) duly executed by Xxxxx
Xxxxxxx and the Company will use its best endeavours to enter into a Consultancy
Agreement with Xxxxx Xxxxxxx (defined herein).
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for other good and valuable consideration, the receipt of
which is hereby acknowledged, the Parties agree as follows:
Section 1. Definitions and Principles of Construction
1.01 Defined Terms. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"$" shall mean, when used by itself, the Australian dollar, the legal
currency of Australia.
"2002 Financial Statements" shall mean the calendar year ending December
2002 audited Financial Statements of the Company.
"2003 Financial Statements" shall mean the calendar year ending December
2003 audited Financial Statements of the Company.
"2003 Tax Assessment" shall have the meaning given to such term in Section
2.06(b)(ii).
"Accounts Receivable" shall have the meaning given to such term in Section
3.22(e) herein.
"Actual EBITDA" shall mean, with respect to EBITDA, the actual
consolidated audited earnings before interest, taxes depreciation and
amortization of the Company in accordance with GAAP for the calendar year ending
December 31, 2003 as determined by the Purchaser's Auditor or any other auditor
elected by the Purchaser in its sole discretion provided that such auditor is
selected from one of the top five (5) largest accounting firm in Australia.
"Adjusted Consideration" shall have the meaning given in Section 2.05.
"Affiliate" shall mean any Person that directly, or indirectly through one
or more intermediaries, controls or is controlled by or is under common control
with the Person specified. For purposes of this definition, control of a Person
means the power, direct or indirect, to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
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"Agreement" shall mean this Share Purchase Agreement, the exhibits and
schedules hereto, the certificates and Disclosure Schedule delivered in
accordance herewith, as the same may be amended, supplemented or modified from
time to time.
"Assets" shall mean all of the assets of the Company including but not
limited to the Intellectual Property, the IP Assets, the Material Contracts, the
Equipment Leases, and the Property Leases.
"Board" shall mean the board of directors of the Company.
"Business Day" shall mean a day other than Saturday, Sunday or any day on
which banks located in Australia or Hong Kong are authorized or obligated to
close.
"Claim Notice" shall mean written notification pursuant to Section
10.02(a) enclosing a copy of all papers served, if any, and specifying the
nature of and basis for such claim together with the amount or, if not then
reasonably ascertainable, the estimated amount of such claim.
"Closing" shall have the meaning given to such term in Section 2.03.
"Closing Date" shall mean the later of:
(a) the date two (2) days after the conditions precedent set out in Sections 2
and 7 are either satisfied as determined by the Purchaser or waived by the
Purchaser, in its sole and absolute discretion and the conditions precedent set
out in Section 8 are either satisfied as determined by the Seller or waived by
the Seller, in its sole and absolute discretion; and
(b) such other date as the Purchaser and the Sellers shall agree in writing.
"Company's Pre-Closing Auditor" shall mean KPMG, Melbourne.
"Constitution" shall mean the memorandum of association, articles of
association, certificate or articles of incorporation and by-laws, or similar
charter documents, as may be amended from time to time.
"Consultancy Agreement" shall mean the consultancy agreement in a form
satisfactory to the Purchaser and substantially similar to that attached as
Attachment A dated the Closing Date and duly signed by Xxxxx Xxxxxxx and the
Company.
"Corporations Act" shall mean the Corporations Act of Australia as amended
from time to time.
"Disclosure Schedule" shall mean the records and documents delivered to
the Purchaser by the Sellers and the Company herewith and dated as of the
Effective Date containing all lists, descriptions, exceptions and other
information and materials as are required to be included therein by the Sellers
pursuant to this Agreement. For the avoidance of doubt, all references to any
Schedule herein are to be produced by the Sellers and deemed to be produced by
them.
"EBITDA" shall mean shall mean earnings before interest, taxes
depreciation and amortization of the Company in accordance with GAAP.
"Effective Date" shall mean the date of this Agreement.
"Employee Litigation" shall have the meaning given in Section 3.12(h).
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"Employment Release" shall mean the executed settlement deed and general
release in a form satisfactory to the Purchaser and substantially similar to
that attached as Attachment B duly signed by all parties thereto and dated the
Closing Date releasing and forever discharging the Company, the Purchaser and
the Sellers from all employment related claims that Xxxxx Xxxxxxx could
otherwise bring.
"Equity Interest" shall mean those shares representing 100% of the total
issued and outstanding shares in the Company on a fully diluted basis which are
currently owned by the Sellers and which shall be purchased by the Purchaser in
accordance with the terms of this Agreement, as of the Closing.
"Equipment Leases" shall mean leases of, and agreements to hire, equipment
(including motor vehicles) to the Company including, without limitation, those
listed in Section 3.14(c) of the Disclosure Schedule.
"Estimated EBITDA" shall mean, for the calendar year 2003 up to and
including the month of December 2003, AU$3,662,000.
"Financial Statements" shall mean: (a) the audited consolidated financial
statements of the Company for the twelve (12) months preceding June 30, 2001,
for the six (6) months preceding December 31, 2001 and for the twelve (12)
months preceding December 31, 2002, and such Financial Statements shall include
true and complete copies of the balance sheets of the Company and the related
consolidated statements of operations, shareholders' equity and cash flow
statements for each such period prepared in accordance with GAAP, together with
a true and correct copy of the report on such audited information along with all
existing management letters from the auditors, with respect to the results of
such audits (The Sellers will use its best endeavors to obtain such management
letters prior to the execution of this Agreement); and (b) the management
accounts for the eleven (11) months preceding November 30, 2002 and such
Financial Statements shall include true and complete copies of the balance
sheets of the Company and the related statements of operations, shareholders'
equity and cash flow statements for each such period.
"First Installment" shall have the meaning given in Section 2.02.
"First Retained Sum" shall have the meaning given in Section 2.06(b).
"Fund" shall mean the AMP CustomSuper Fund.
"GAAP" shall mean generally accepted accounting principles of the United
States.
"Governmental Licenses" shall have the meaning given to such term in
Section 3.17.
"Governmental or Regulatory Authority" shall mean any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality of
Australia or any applicable foreign country or any domestic or foreign state,
county, city or other political subdivision.
"Hong Kong" shall mean Hong Kong Special Administrative Region of the
People's Republic of China.
"Inception Date" shall mean September 3, 1987, the date of incorporation
of the Company.
"Indemnified Party" shall have the meaning given in Section 10.01.
"Indemnifying Party" shall have the meaning given in Section 10.01.
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"Insolvency Proceeding" means proceedings by or against a Person under the
United States Bankruptcy Code or other insolvency law, or the bankruptcy or
insolvency law of any jurisdiction in Australia (including without limitation
Federal, New South Wales, Victoria, Queensland and the Australian Capital
Territory) which proceedings may include assignments for the benefit of
creditors or proceedings seeking reorganization, arrangement or other similar
relief.
"Installments" shall mean the First Installment and the Retained Amount
and "any Installment" shall mean any of the First Installment or the Retained
Amount.
"Intellectual Property" shall mean: (a) all copyrightable works,
copyrights, design rights including all improvements, revisions, amendments,
modifications or alternations and all applications, registrations, and renewals
in connection therewith; (b) all trademarks, service marks, trade dress, logos,
trade names, and corporate names, together with all translations, adaptations,
derivations, and combinations thereof and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith; (c) all inventions discoveries and patents (whether patentable or
unpatentable and whether or not reduced to practice), all improvements,
revisions, amendments, modifications or alternations thereto; (d) all trade
secrets and confidential information (including ideas, research and development,
know-how, formulas, manufacturing and production processes and techniques,
technical data, designs, drawings, specifications, customer and supplier lists,
pricing and cost information, and business and marketing plans and proposals);
(e) all computer software (including data and related documentation) or source
or object code, including all improvements, revisions, amendments, modifications
or alternations; (f) all other proprietary, intellectual and industrial rights
in whatever form or medium, including moral rights; and (g) the IP Assets.
"IP Assets" shall mean the computer software in part or whole created,
developed, designed, owned and/or licensed by the Company including, without
limitation, Starfire, SwitchGate, a council ratings package known as "RIMS" and
a product known as "TDMSe".
"Key Employees" shall mean the employees listed in Section 3.12(s) of the
Disclosure Schedule.
"Known Proceedings" shall have the meaning given in Section 10.01(a)(v).
"Law" shall mean all laws, statutes, rules, regulations, ordinances and
other pronouncements having the effect of law in any jurisdiction of Australia
(including without limitation Australian federal, Xxx Xxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxx and the Australian Capital Territory) or any other applicable foreign
country or any domestic or foreign state, county, city or other political
subdivision or of any Governmental or Regulatory Authority.
"Liability" as used either singularly or in the plural shall mean any
liability, debt or obligation of the Company, including any drawdowns under any
loans made to the Company after the Closing Date.
"Lien" shall mean any lien, pledge, hypothecation, mortgage, security
interest, claim, lease, charge, option, right of first refusal, easement,
encroachment, transfer restriction, or other encumbrance of any kind.
"Loss" shall mean any and all damages, fines, fees, penalties,
deficiencies, losses and expenses (including without limitation interest,
reasonable court costs, reasonable fees of attorneys, reasonable retainers,
reasonable fees of accountants and other experts or other reasonable expenses of
litigation, reasonable witnesses costs/expenses or other proceedings or of any
claim, default or assessment).
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"Material Adverse Effect" shall mean a material adverse effect upon the
business, assets or operations of the Company.
"Material Contracts" shall have the meaning given in Section 3.16(f).
"Net Asset Value" shall mean the total balance sheet assets less the total
balance sheet liabilities.
"Order" shall mean any writ, judgement, decree, injunction or similar
order of any Governmental or Regulatory Authority (in each such case whether
preliminary or final).
"Overage" shall have the meaning given in Section 2.05(c)(ii).
"PE" shall mean the product of the Total Consideration divided by the
Estimated EBITDA: the PE is 3.004.
"Person" shall mean an individual, partnership, corporation, association,
trust, joint venture, unincorporated organization, and any government,
governmental department or agency or political subdivision thereof.
"Proceeding" shall have the meaning give in Section 3.10.
"Property Leases" shall mean all property leases executed by the Company
that are effective as at the Closing including, without limitation, the leases
relating to the following premises: (a) Xxxxx 0, 0 Xxxxxxx Xxxxx Xxxxxx,
Xxxxxxxxxx; (b) 00 Xxxxxxxxxxx Xxxxxx, Xxxxxx XXX; (c) 000 Xxxxxxx Xxxx Xxxxx
Xxxxxxxxx, Xxxxxxxx; and (d) Riverside Corporate Park, 00 Xxxxxx Xxxxxx Xxxxx
Xxxx, 0000 Xxx Xxxxx Xxxxx.
"Purchaser's Auditor" shall mean Ernst & Young, Australia.
"Records" means originals and copies, of all books, files, reports,
records, correspondence, documents and other material of or relating to or used
in connection with the Company and including, without limitation: (a) minute
books, statutory books and registers, books of account and copies of taxation
returns; (b) sales literature, market research reports, brochures and other
promotional material; (c) all sales and purchasing records; and (d) lists of all
regular suppliers and customers.
"Retained Amount" shall have the meaning given in Section 2.02.
"Retention Stakeholder" shall have the meaning given in Section 2.06(a).
"Second Retained Sum" shall have the meaning given in Section 2.06(b).
"Sellers" shall have the meaning given in the Recitals hereto and "Seller"
shall mean either of the Sellers.
"Shortage" shall have the meaning given in Section 2.05(c)(i).
"Subsidiaries" when used in plural or "Subsidiary" when used singly shall
mean, in relation to the Company, a corporate entity whose voting shares are
owned more than 50% by the Company and over which managing body the Company
exercises actual control.
"Tax Claim" shall mean any assessment notice (including a notice of
adjustment of a loss in a manner adversely affecting the Company), demand or
other document issued or action taken by or on behalf of any Governmental or
Regulatory Authority, whether before or after the date of this
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Agreement relating to or based up any facts or circumstances (or part thereof)
arising or existing prior to Closing, as a result of which the Company is liable
to make a payment for any tax, levy, impost, deduction, charges, withholdings
and duties (excluding stamp duties) or has suffered a lost, together with
related interest, penalties, fines and other statutory charges whether accrued
before or after Closing.
"Tax Losses" shall mean any income tax losses inherent in and disclosed as
"Future Income Tax Benefits" in the balance sheet of the Company as at October
31, 2002.
"Threatened" shall mean those threats that are received by or on behalf of
the Company: (i) in writing by any of the Company or any of its directors,
managers, officers, employees or contractors of the Company; or (ii) verbally by
any of the Company or any of it's directors or Key Employees.
"Total Consideration" shall have the meaning given to such term in Section
2.02.
"Transaction Documents" shall mean this Agreement (and all relevant share
transfers, share certificates, board and shareholder resolutions and any other
ancillary documents required for the consummation of this Agreement), the
Consultancy Agreement and the Employment Release.
"Transfer" shall mean the making of any sale, exchange, assignment or
gift, the granting of any security interest, pledge or other encumbrance in, or
the creation of, any voting trust or other agreement or arrangement with respect
to the transfer of voting rights in the Equity Interest, or the creation of any
other claim thereof or any other transfer or disposition whatsoever, whether
voluntary or involuntary, affecting the right, title or interest or possession
in or of the Equity Interest.
"Trust Deed" shall mean the trust deed that established the Fund as
amended.
"U.S." or "US" shall mean the United States of America.
"US$" shall mean the U.S. dollar, the legal currency of the U.S.
"Warranties" shall have the meaning given in Section 9 and "Warranty"
shall have a corresponding meaning.
Section 1. Definitions and Principles of Construction.
1.01 Principles of Construction.
(a) All references to sections, schedules and exhibits are to sections,
schedules and exhibits in or to this Agreement unless otherwise specified. The
words "hereof," "herein," and "hereunder" and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provisions of this Agreement.
(b) All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United States.
(c) The singular terms include the plural and the plural terms include
the singular.
(d) The headings used in this Agreement have been inserted for
convenience of reference only and do not define or limit the provisions hereof.
Section 2. Sale and Purchase of the Equity Interest and Consideration.
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2.01 Sale and Purchase of the Equity Interest.
(a) Subject to the terms and conditions hereof, and in reliance upon the
representations, warranties and covenants contained in this Agreement as of the
date hereof and on the Closing Date the Purchaser agrees to purchase the Equity
Interest from the Sellers and each Seller agrees, jointly and severally, to
sell, transfer, convey, assign and deliver the Equity Interest to the Purchaser.
(b) Each of the Sellers hereby waives in favor of the Purchaser any
pre-emptive or other rights that each Seller has now or might otherwise have in
respect of any of the Equity Interest held by the Sellers prior to Closing. Each
Seller agrees that the Equity Interest will be transferred free from any
mortgage, charge, lien, pledge or other encumbrance and with all rights,
including dividend rights, attached or accruing to them on and from the Closing
Date.
2.02 Consideration.
(a) Subject to Section 2.02(b), the consideration to be paid for the
Equity Interest by the Purchaser shall be AU$11 million (the "Total
Consideration") paid in the following manner:
(i) AU$6,000,000 of the Total Consideration at Closing to be paid
to the Sellers and apportioned between them on a pro-rata basis relative
to each Sellers' percentage ownership of Equity Interest (the "First
Installment"); and
(ii) AU$5,000,000 of the Total Consideration to be retained by the
Purchaser and dealt in accordance with Sections 2.05 and 2.06 hereof
("Retained Amount").
(b) The Total Consideration will be subject to adjustment in accordance
with Sections 2.05 and 2.06.
(c) All amounts paid to the Sellers under this Agreement shall be
apportioned between them on a pro-rata basis relative to each Sellers'
percentage ownership of Equity Interest and shall only be payable upon receipt
of each Seller's banking details by the Purchaser.
(d) Each payment referred to in this Section 2 shall be paid by
electronic transfer and shall be deemed to be made when it leaves the bank
account of the payer.
2.03 Closing. The closing for the purchase and sale of the Equity
Interest and the payment of the First Installment (the "Closing") shall be the
Closing Date at the offices of the Company in Melbourne, Australia , or some
other time, date and place as the Parties may agree. At the Closing, the
Purchaser agrees to purchase the Equity Interest from the Sellers and the
Company and the Company and the Sellers jointly and severally agree to: (i)
sell, transfer, convey, assign and deliver the Equity Interest to the Purchaser;
and (ii) give the undertakings and make the covenants set forth in this
Agreement. Such issuance, sale, transfer, conveyance, assignment and delivery of
the Equity Interest shall convey good and marketable title to each of the Equity
Interest, free and clear of any and all Liens. At the Closing, the Sellers and
the Company will deliver to the Purchaser share transfers and certificate(s) in
a registrable form evidencing the Purchaser's relevant Equity Interest duly
endorsed in blank or with stock powers duly executed together with all duly
executed documents and forms required for the stamping of the transfers in
respect of the conveyance of the Equity Interest to the Purchaser in accordance
with the Company's Constitution. At the Closing, there shall also be delivered
to the Purchaser the opinions, certificates and further assurances as
contemplated herein.
The payment of any consideration by the Purchaser (in accordance with
Section 2.02(d)) including any of the Installments, shall be the last action
performed at Closing, and shall be unequivocally conditioned upon: (a) each of
the Sellers' due performance of the covenants herein; (b)
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the truth of the Sellers' and the Company's representations and warranties
contained herein; (c) the execution of the other Transaction Documents; and (d)
each of the other conditions precedent set out in this Section 2 and Section 7.
2.04 [Intentionally left blank]
2.05 Adjusted Consideration - Projections
(a) The Total Consideration shall be adjusted up or down if the 2003
Financial Statements determine that there is any difference between the
Estimated EBITDA and the Actual EBITDA.
(b) The product of the Actual EBITDA multiplied by the PE shall be
referred to as the "Adjusted Consideration".
(c) Subject always to Section 2.05(d), 2.05(e) and 2.05(f), after the
receipt of the 2003 Financial Statements by the Purchaser, if the Total
Consideration is:
(i) greater than the Adjusted Consideration (a "Shortage"), then
the Purchaser may deduct from the Retained Amount and not repay to the
Sellers in accordance with Section 2.06(b), the difference between the
Total Consideration and the Adjusted Consideration. For the avoidance of
doubt, any difference between the Total Consideration and the Adjusted
Consideration will be permanently deducted from the Retained Amount by the
Purchaser; or
(ii) less than the Adjusted Consideration (an "Overage"), then the
Sellers shall obtain a credit against any amounts that would otherwise
result in a right of set-off in favor of the Purchaser under Section 2.06
for the difference between the Total Consideration and the Adjusted
Consideration.
(d) The downwards adjustment of a Shortage as set out in Section
2.05(c)(i) shall not exceed the available balance of the Retained Amount
such that the downwards adjustment shall not result in an aggregate
Adjusted Consideration of less than AU$6,000,000. The upwards adjustment
of an Overage as set out in Section 2.05(c)(ii) shall be limited to the
aggregate amount of all claims made by the Purchaser in accordance with
Section 2.06 such that the upwards adjustment shall not result in an
aggregate Adjusted Consideration amount that is greater than the Total
Consideration. For the avoidance of doubt: (i) there shall be no upwards
adjustment of the Total Consideration if the Purchaser has not made any
claims in accordance with Section 2.06; and (ii) any downwards adjustment
shall be made in accordance with Section 2.06.
(e) The amount of any Shortage or Overage shall be reduced by ten
percent (10%) so that only ninety percent (90%) of the amount of any Shortage or
Overage may be used to make an adjustment or credit as the case may be.
(f) With the exception of any corporate allocation or any other cost
allocation which is in the ordinary course of business, if, after Closing, the
Company incurs a corporate allocation or other cost allocation emanating from
the Purchaser, its Affiliates or the Company not incurred by the Company prior
to Closing, such costs shall be excluded from the calculation of Actual EBITDA.
For the avoidance of doubt, no such corporate allocation or other cost
allocation shall be excluded from the calculation of Actual EBITDA if the
Company incurred such cost prior to Closing and the corporate allocation or
other cost allocation results in such cost (whether in whole or in part) no
longer being required to be expended by the Company.
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(g) Refer to Exhibit 2.05 for examples of the calculation of the
Adjusted Consideration as outlined above.
2.06 Retained Amounts.
(a) Use of Retained Amounts. Each Seller agrees that the Retained Amount
is to be retained by an Affiliate of the Purchaser (the "Retention Stakeholder")
(that shall be a company incorporated in Australia, and that shall prior to
Closing execute an agreement agreeing to be bound by the terms, conditions and
obligations of the Purchaser hereunder in a form satisfactory to the Sellers,
the Purchaser and the Retention Stakeholder, all acting reasonably) which shall
invest the Retained Amount in an interest bearing account with an Australian
bank, as defined in the Corporations Act, which shall be solely in the control
of the Purchaser and which shall be available to the Purchaser for the
satisfaction of any:
(i) claims for breaches of, or inaccuracies in, the
representations and warranties given by the Sellers and the Company herein
or the nonfulfillment of, or failure to perform, any covenant or agreement
on the part of either Seller or the Company contained in this Agreement or
the Transaction Documents;
(ii) indemnification claims brought by the Purchaser against
either Seller or the Company pursuant to the indemnifications granted
under Section 10;
(iii) amounts that the Purchaser is entitled to deduct as a result
of a Shortage in accordance with Section 2.05;
(iv) claims up to a maximum of AU$1,000,000 associated with the
fact that the Tax Losses (or any part thereof) are unable to be used by
the Company in any year subsequent to the Closing as determined by the
Australian Taxation Office in any subsequent assessment, declaration or
notification to, or regarding, the Company; and
(v) claims associated with any balance sheet adjustments relating
to the write-down of tangible assets or previously under or non-disclosed
liabilities as determined by either the Purchaser's Auditor or the
Company's Pre-Closing Auditor that emerge from the 2002 Financial
Statements in the event of and to the extent that, the Net Asset Value of
the Company as at December 31, 2002 and included in the 2002 Financial
Statements, shows a net liability (and the Sellers acknowledge that the
total amount of any such net liability will be payable to the Purchaser
pursuant to Section 2.06(b)(i)). The Net Asset Value of the Company as at
December 31, 2002 shall be calculated so that the provisions made in
accordance with Section 5.01(c) are not taken into account. The accounting
effect of the forgiveness or writing off of any inter-company loan between
the Company and its Subsidiaries as described in Section 7.25 shall be
excluded from the calculation of Net Asset Value to the extent that such
accounting effect does not exceed $250,000.
(b) Payment of Retained Amount.
(i) Payment of First Retained Sum. Upon the Purchaser's receipt
from the Sellers' of the Sellers' banking details and within twenty (20)
days of the earlier of:
(A) receipt by the Purchaser of the 2003 Financial
Statements; and
(B) June 30, 2004,
the Retention Stakeholder shall deduct from the Retained Amount and
pay to the
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Purchaser all claims or amounts payable to it in accordance with
this Agreement (net of any credit amount generated under Section
2.05) and shall pay the balance of the Retained Amount less AU$1
million to the Sellers on a pro-rata basis. The Retained Amount less
AU$1 million shall be the "First Retained Sum". The AU$1 million
that is retained shall become the "Second Retained Sum".
(ii) Payment of Second Retained Sum. Subject to Section 2.06(e),
upon receipt from the Sellers' of the Sellers' required banking details
and within twenty (20) days of the earlier of:
(A) receipt by the Purchaser of the Company's tax assessment
in relation to its 2003 Income Tax Return from the Australian
Taxation Office for the calendar year end 2003 ("2003 Tax
Assessment"); and
(B) October 31, 2004,
the Retention Stakeholder shall pay the balance of the Second
Retained Sum to the Sellers (on a pro rata basis), after deducting
and forwarding to the Purchaser all claims as set out in Section
2.06(a)(iv).
(iii) Payment of Interest. Interest accruing on the Retained Amount
shall be paid by the Retention Stakeholder as follows: (A) at the time
that the payment of the First Retained Sum (or portion thereof) is due,
the Sellers (on a pro-rata basis) shall be entitled to collect the portion
of interest that resulted from the investment of the First Retained Sum
(or any portion thereof) that is payable to the Sellers and the Purchaser
shall be entitled to retain the portion of interest that resulted from the
investment of the First Retained Sum (or any portion thereof) that is
payable to the Purchaser; (B) at the time that the payment of the Second
Retained Sum (or portion thereof) is due, the Sellers (on a pro-rata
basis) shall be entitled to collect the portion of interest that resulted
from the investment of the Second Retained Sum (or any portion thereof)
that is payable to the Sellers and the Purchaser shall be entitled to
retain the portion of interest that resulted from the investment of the
Second Retained Sum (or any potion thereof) that is payable to the
Purchaser.
(c) For the avoidance of doubt, this Section does not limit in any way
the liability of the Sellers to the Purchaser and the Company for any breach of
this Agreement. The limit of the liability of the Sellers is set out in Section
10.03.
(d) The Purchaser's shall use all reasonable endeavors to ensure that
all filings of the Company required for it to obtain the 2003 Tax Assessment are
lodged with the Australian Taxation Department in accordance with the statutory
requirements for such filings. In the event that the Company fails to file any
filing required for it to obtain it 2003 Tax Assessment in accordance with the
statutory requirements, the Purchaser shall pay the Second Retained Sum by
August 31, 2004. In the event that no response is received by the Company or
Purchaser from the Australian Taxation Office in relation to the Company's 2003
Tax Assessment, the Purchaser shall pay the Second Retained Sum to the Sellers
(on a pro-rata basis) by October 31, 2004.
2.07 Right to Set-off. (a) Any amounts owed or owable from the Purchaser
with respect to payments for the Retained Amount shall be available for: (i)
satisfaction of any amounts set out in Section 2.06(a); or (ii) satisfaction of
indemnification claims pursuant to Section 10 in the event that the Sellers fail
to comply strictly with each of their obligations under Section 10, including
without limitation, Section 10.01(d). The Purchaser may set off and apply any
such amounts owed to it by the Sellers or the Company against its payment
obligations with respect to any amounts owned to the Sellers from the Retained
Amount.
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(b) Upon delivery by the Purchaser to either Seller at any time on or
before the last day of the relevant indemnity period as set out in Section
10.03(b)(iii) of a written communication from the Purchaser in the form of a
certificate signed by a duly authorized officer (an "Officer's Certificate"):
(i) stating that the Purchaser has a Loss that has accrued, will accrue, is paid
or will be paid; and (ii) specifying in reasonable detail the individual items
of Loss including the amount so stated, the Purchaser shall, subject to the
provisions of Sections 2.07(c) and (d), become entitled to access the relevant
portion of the Retained Amount in an amount equal to such Loss. In the event
that the Purchaser receives notice of, or discovers a claim, that is likely to
result in a Loss but no Loss has been realized or properly accrued for, such
Purchaser shall be obligated to follow the indemnification procedures contained
in Section 10.
(c) Objections to Claims. After the time of delivery of any Officer's
Certificate to either Seller, such Seller shall have a period of fifteen (15)
business days to raise an objection in a written statement to any claim made in
the Officer's Certificate (a "Notice of Objection") by delivering a Notice of
Objection to the Purchaser. Such Notice of Objection shall be signed by a duly
authorized officer of such Seller and shall specify in reasonable detail each
objection raised by such Seller and each ground for such objection. For the
avoidance of doubt, in the event that a Notice of Objection is not received by
the Purchaser within fifteen (15) days from its delivery of the Officer's
Certificate or only raises an objection to some (but not all) of the claims
raised in the Notice of Objection the Purchaser may immediately set off and
retain from the Retained Amount the amount of such claim(s) that has not been
objected to.
(d) Resolutions of Conflicts. If the Purchaser receives a Notice of
Objection within the timeframe provided for in Section 2.07(c), each Sellers and
the Purchaser shall attempt in good faith to agree upon the rights of the
respective parties with respect to each such claim. If the Sellers and the
Purchaser should reach agreement on terms, a memorandum setting forth such
agreement shall be prepared and signed by such Seller and the Purchaser
("Settlement Memorandum"). The Purchaser shall be entitled to set-off and retain
from the Retained Amount in accordance with the Settlement Memorandum. If, after
fifteen (15) days from the receipt of the Notice of Objection by the Purchaser,
no such agreement is reached between the parties, the matters under dispute
shall be escalated to: (i) Xx. Xxxxx Xxx (or his successor) on behalf of the
Purchaser and Xx. Xxxxxx Xxxxxxxx (or his successor) on behalf of the Sellers.
Xx. Xxx (or his successor) and Xx. Xxxxxxxx (or his successor) shall attempt in
good faith to agree upon the rights of the respective parties with respect to
each such claim. If after thirty (30) days from the receipt of the Notice of
Objection by the Purchaser, no such agreement is reached between Xx. Xxx (or his
successor) and Xx. Xxxxxxxx (or his successor), the Purchaser shall be entitled
to immediately set-off and retain from the Retained Amount the amount of such
claim.
2.08 Integration of the Business of the Company. The Parties acknowledge
and agree that the business of the Company shall not be integrated with the
business of the Purchaser or any Affiliate of the Purchaser until after December
31, 2003. After December 31, 2003, the Parties acknowledge and agree that the
business of the Company shall, at the Purchaser's sole discretion, be integrated
with the business, or other businesses, of the Purchaser or any Affiliate of the
Purchaser.
Section 3 Representations and Warranties of the Sellers. Each Seller
jointly and severally represents and warrants to, and for the benefit of the
Purchaser, the following:
3.01 Authority. (a) The Company has all requisite corporate authority and
corporate approval required to enter into, execute and deliver this Agreement
and the Transaction Documents and to perform its obligations hereunder and each
of the other documents required to be entered into pursuant hereto. The Board
has approved the transactions contemplated by this Agreement and each of the
Transaction Documents. This Agreement and the Transaction Documents have been
duly and
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validly executed and delivered by the Company and constitutes a legal, valid and
binding obligation of the Company enforceable against the Company (and the
Sellers as appropriate) in accordance with there terms. No meeting has been
convened or resolution proposed, or petition presented, and no order has been
made, for the winding-up of the Company. No distress, execution or other similar
order or process has been levied on any of the property or assets of the
Company. No voluntary arrangement has been proposed or reached with any
creditors of the Company. No receiver, receiver and manager, provisional
liquidator, liquidator or other officer of the court has been appointed in
relation to the Company. The Company is able to pay its debts as and when they
fall due and the Company is not insolvent (net liabilities greater than net
assets).
Each of the Sellers has full legal capacity, power and authority to enter
into, execute and deliver this Agreement and, where applicable, the Transaction
Documents, and to perform each of their obligations hereunder, thereunder and
under each of the other documents required to be entered into pursuant hereto.
This Agreement and each applicable Transaction Documents have been duly and
validly executed and delivered by each Seller and when executed will constitute
a legal, valid and binding obligation of each Seller enforceable against each
Seller in accordance with its terms. No meeting has been convened or resolution
proposed, or petition presented, and no order has been made, for the winding-up
of either Seller. No voluntary arrangement has been proposed or reached with any
creditors of either Seller. Each Seller is able to pay its debts as and when
they fall due and neither Seller is insolvent (net liabilities greater than net
assets).
3.02 Organization of the Company. (a) The Company is a corporation duly
organized and validly existing under the laws of Victoria, Australia, and has
full corporate power and authority to conduct its business as and to the extent
now conducted and to own, use and lease its assets and properties. Section
3.02(a) of the Disclosure Schedule lists all lines of business in which the
Company is participating or engaged.
(b) During the calender year of 2002, the Company has only conducted
business in Xxx Xxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx and the Australian Capital
Territory and is duly qualified, licensed or admitted to do business in each of
such jurisdiction to the extent that such qualification, licensure or admission
is required by that jurisdiction's laws. The Company has full corporate power to
own its properties, assets and business and to carry on its business operations
and to the best of the knowledge and belief of the Company and each Seller,
having made due and proper inquiries, has done everything necessary to do
business lawfully in the aforementioned jurisdictions.
(c) The name of each director and officer of the Company on the date
hereof, and the position with the Company held by each, are listed in Section
3.02(c) of the Disclosure Schedule.
(d) Prior to the execution of this Agreement, the Sellers and the
Company have made available to the Purchaser true and complete copies of the
Constitution and Records of the Company as in effect on the date hereof. The
Records are: (i) complete, true and accurate in all material respects; (ii) give
a true and fair view of the trading transactions, financial and contractual
position of the Company and of its assets and liabilities; (iii) as far as is
relevant, have been prepared in accordance with the Corporations Act; (vi) are
in the possession of the Company in their original form.
(e) The issued and outstanding capital stock of the Company consists of
6,304,478 shares, of which 3,364,478 (or 53.37%) have been issued to ManTech
Australia International Inc and 2,940,000 (or 46.63%) have been issued to
ManTech International Corporation. All of the issued shares have been duly
authorized and validly issued to the Sellers and are fully paid, have been
issued in compliance with all applicable Law, including securities Laws, and was
not issued in violation of or subject to any preemptive rights, put or call
rights or obligations, rights of first refusal, anti-dilution rights or
liquidation rights or other rights to subscribe for or purchase securities of
the Company.
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(f) The Company and each Subsidiary has filed and/or registered all
annual returns and other Records as and where required to be filed and/or
registered.
3.03 Total Equity. (a) Aside from the Equity Interest, there are no
authorized, issued or outstanding shares of the Company. The Equity Interest
comprise the whole of the issued ordinary share capital of the Company. The
Sellers are the registered holders and beneficial owners of the Equity Interest.
Upon the consummation of the Closing, 6,304,478 shares will be issued and
outstanding to the Purchaser.
(b) The Equity Interest, when sold to the Purchaser by the Sellers,
shall be duly authorized, validly issued and outstanding, and fully paid. The
Equity Interest is not, and shall not be, encumbered by any Lien or other
interests of any other third party whatsoever.
(c) There is no option, right to acquire, pre-emptive rights, conversion
rights, mortgage, charge, pledge, Lien or other form of security or any other
agreement or commitment of any nature whatsoever, over or affecting the Equity
Interest and there is no agreement or commitment to give or create any of the
foregoing.
(d) There are no commitments in place under which the Company is
obligated at any time to issue any shares or other securities of the Company.
(e) There are no outstanding options with respect to the Company or the
Equity Interest.
(f) There is no restriction(s) on the sale or transfer of any of the
Equity Interest to the Purchaser whatsoever.
3.04 Subsidiaries. (a) Except for the companies as disclosed in Section
3.04(a) of the Disclosure Schedule, the Company has no subsidiaries. The Company
will, prior to Closing, sell, transfer and assign its shares in each and every
of its Subsidiaries to an Affiliate of a Seller so that at Closing the Company
will have no Subsidiaries. Subsequent to such transfer of the shares of each
Subsidiary in accordance with the preceding sentence, the Company shall have no
liability whatsoever for the liabilities or obligations of any Subsidiary.
(b) Except as disclosed in Section 3.04(b) of the Disclosure Schedule,
as at the Effective Date, the Closing Date and since December 31, 2001, none of
the Subsidiaries has: (i) had, or will have, any operations; (ii) owned, or will
own, any Assets, any Intellectual Property, any Plant and Equipment, any real
property or any tangible personal property; (iii) employed, or will employ, any
employee or executed, or will execute, any contracts with contractors or other
service providers; (iv) leased, or will lease, any premises or equipment; or (v)
executed, or will execute, any revenue generating contracts including without
limitation, any Material Contracts. Except as disclosed in Section 3.04(b) of
this Disclosure Schedule, without limiting the generality of the preceding
sentence, as at the Effective Date and as at the Closing Date, each Subsidiary
is dormant.
(c) The financial performance and financial position of the Company will
not be negatively affected in any way by the transfer of the Subsidiaries to an
Affiliate of a Seller prior to Closing.
3.05 No Conflicts. The execution and delivery by the Sellers and the
Company of this Agreement and the Transaction Documents do not, and the
performance by the Sellers and the Company of their respective obligations under
this Agreement and the Transaction Documents and the consummation of the
transactions contemplated hereby will not:
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(a) conflict with or result in a violation or breach of any of the
terms, conditions or provisions of the Constitution or any resolutions of the
shareholders or directors of the Company;
(b) to the best of the knowledge and belief of the Company and each
Seller, having made due and proper inquiries, conflict with or result in a
violation or breach of any term or provision of any Law or Order of any
Governmental or Regulatory Authority of Australia or any other governmental,
administrative or regulatory bodies applicable to either Seller or the Company
or any of their respective assets and properties; nor
(c) (i) conflict with or result in a violation or breach of, (ii)
constitute a default under, (iii) require the Sellers or the Company to obtain
any consent, approval or action under, (iv) result in or give to any Person any
right of termination, cancellation, acceleration or modification in or with
respect to, (v) result in or give to any Person any additional rights or
entitlement to increased, additional, accelerated or guaranteed payments under,
or (vi) result in the creation or imposition of any Lien upon the Sellers or the
Company or any of their respective assets or properties under, any contract or
license to which the Sellers or the Company is a party or by which any of their
respective assets or properties is bound.
3.06 Governmental Approvals and Filings. Other than stamping and
registration, no consent, approval or action of, filing with or notice to any
applicable Governmental or Regulatory Authority on the part of any shareholder
of the Company is required in connection with the execution, delivery and
performance of this Agreement, the Transaction Documents or the consummation of
the transactions contemplated hereby.
3.07 Books and Records. The minute books, statutory books and registers
and other similar records of the Company, as made available to the Purchaser
prior to the execution of this Agreement, contain a true and complete record of
all actions taken at all Board, Board committee and shareholder meetings and by
all written consents in lieu of meetings of the equityholders, the boards of
directors and committees of the boards of directors of the Company,
respectively. The share transfer ledgers and other similar records of the
Company, as made available to the Purchaser prior to the execution of this
Agreement, accurately reflect all record transfers prior to the execution of
this Agreement in the equity of the Company.
3.08 No Undisclosed Liabilities or Indebtedness. (a) Except for
liabilities reflected in the unaudited balance sheet of the Company as of
October 31, 2002 and liabilities of an immaterial nature, the Company does not
have any liability or obligation of any nature (whether known or unknown and
whether absolute, accrued, contingent, or otherwise). Without limiting the
preceding paragraph, except as set forth on Section 3.08 of the Disclosure
Schedule, the Company does not have any liability for: (i) indebtedness for
money borrowed; (ii) the deferred purchase price of property or services; (iii)
capital lease obligations; (iv) conditional sale or other title retention
agreements; or (v) guarantees or other third party undertakings for any
liability or obligation of any other Person for any matter which relates to or
affects or will affect such parties or any of the Assets.
(b) The total amount borrowed by the Company does not exceed its
accommodation with Macquarie Bank as set out in the Disclosure Schedule and the
total amount borrowed or raised by the Company from any source does not exceed
any limitation in its Constitution or in any deed or agreement executed by it.
3.09 Taxes. (a) Except as set forth on Section 3.09(a) of the Disclosure
Schedule, the Company and each Subsidiary have duly filed all returns,
computations, notices and information required to be made or provided by it for
any tax purpose (including without limitation, income tax, capital gains tax,
goods and services tax, fringe benefits tax, payroll tax, group tax, water and
municipal rates and stamp and customs duty) (the "Tax or Duty Return") and the
same have been made or given
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within the requisite periods and on a proper basis and when made were true and
accurate in all material respects and are up to date and none of them is or
likely to be the subject of any dispute with any tax authority.
(b) No Tax or Duty Return contains any statement that is either: (i)
false; (ii) misleading in any material respects; or (iii) omits to refer to any
matter which is required to be included or without which the statement is false
or misleading.
(c) Except as set forth on Section 3.09(a) of the Disclosure Schedule,
the Company and each Subsidiary have paid when due, and has withheld, deducted
and accounted to the relevant authorities for, all taxes, levies, assessments,
contributions, fees, rates, duties, and other governmental or municipal charges
or impositions (including without limitation provisional taxation, income tax,
capital gains tax, goods and services tax, fringe benefits tax, payroll tax,
group tax, water and municipal rates and stamp and customs duty) which it has
become liable to pay, withhold, deduct or account for on or before the date
hereof. For the purposes of this Section 3.09(c) "a liability to pay" includes a
liability to pay any penalty or interest. Neither the Company, nor any
Subsidiary, nor any respective director or officer of the Company or any
Subsidiary has paid or become liable to pay any fine, penalty, surcharge or
interest in relation to tax in relation to the activities of the Company.
(d) [Intentionally left blank]
(e) The Company and each Subsidiary has complied in all material
respects with all legislation, regulations, executive orders and directions
relating to or associated with any taxes, levies, assessments, contributions,
fees, rates, duties, and other governmental or municipal charges or impositions.
(f) There are no outstanding or likely disputes or questions or demands
between the Company and any Governmental or Regulatory Authority or agent
thereof (whether in Australia, any state of Australia or elsewhere) including
without limitation the Commonwealth of Australia or other federal state or
municipal body or authority responsible for the collection of tax or duty.
(g) Except in respect of this Agreement and the Transactional Documents,
all taxes payable in respect of every deed, agreement or other document or
transaction to which the Company or any Subsidiary is or has been a party or by
which it derives, has derived or will derive a material benefit have been duly
paid and no such deed, agreement or other document is unstamped or
insufficiently stamped. All stamp duty payable on any transfer of the Equity
Interest before the Closing has been duly paid.
(h) No asset of the Company has been the subject of a claim for rollover
relief.
(i) All amounts of income tax required by any Law to be deducted by the
Company and any Subsidiary from the salary or wages of employees have been duly
deducted and, where required, duly paid.
3.10 Legal Proceedings. (a) Except as set forth in Section 3.10(a) of the
Disclosure Schedule, there is no action, suit, arbitration proceeding, inquiry,
claim or investigation either before or brought by any Governmental or
Regulatory Authority or other Person pending or Threatened in, or before any
court or quasi-judicial or administrative agency of any jurisdiction or before
any arbitrator (whether or not the defense thereof or liabilities in respect
thereof are covered by insurance) (any "Proceeding"), against or affecting the
Company or either Seller (as it relates to the Company). So far as the Company
and each Seller is aware, having made due and proper inquiries, there are no
facts likely to give rise to any Proceeding.
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(b) Except as set forth in Section 3.10(b) of the Disclosure Schedule,
neither the Company, nor either Seller (as it relates to the Company) have
commenced or settled any legal proceedings within the last two (2) years
including ordinary routine litigation incidental to the Company's business.
There are no outstanding Orders by which the Company or either Seller (as it
relates to the Company) or any of their securities, assets, properties or
businesses are bound.
(c) Except as set forth in Section 3.10(a), (b) and (c) of the
Disclosure Schedule, no claim has been made against the Company or any
Subsidiary in connection with any defective product or services supplied by it
in the course of carrying on its business and the Company has maintained
insurance that is customary to the applicable industry and type of business, for
at least the last three (3) years against any such claim. To the best of the
knowledge and belief of the Company and each Seller, having made due and proper
inquiries, the Company has not breached the provisions of the Trade Practices
Act or any equivalent state or territory enactments or the requirements of
consumer product safety standard or consumer product information standard
prescribed by law. Except as set forth in Section 3.10(a), (b) and (c) of the
Disclosure Schedule within the last two (2) years, there has not been any
litigation where proceedings have involved breaches of the provisions of the
Trade Practices Act.
(d) None of the operations of the Company are subject to any unsatisfied
judgment or any order, award or decision handed down in any litigation or
arbitration proceedings.
3.11 Compliance With Laws and Orders. (a) The Company and each Seller has
complied in all material respects with each Law and Order applicable to it and
no Order has been filed or commenced against any of the Company, either Seller
(as it relates to the Company), their respective directors, officers, employees
or agents alleging any failure so to comply. Without limiting the generality of
the preceding sentence, so far as each Seller or the Company is aware, having
made due and proper inquiries, the Company has not done or omitted to do any act
or thing in contravention or breach of any of the provisions of: (i) any
exchange control regulation, taxation or revenue statute, (ii) the Corporations
Act; or (iii) the Trade Practices Act in force at Closing, and that pending
Closing the Company will not do or omit to do any such act or thing.
(b) To the best of the knowledge and belief of the Company and each
Seller, having made due and proper inquiries, the Company has conducted its
business and corporate affairs in accordance with the Corporations Act and all
other applicable laws and regulations of Australia and there is no violation of,
or default with respect to, any statute, regulation, order, decree or judgment
of any court or any governmental agency of Australia which could have a Material
Adverse Effect upon the assets, operation, business or financial performance of
the Company.
(c) Since January 1, 2001, the Company has not received any notice that
it is, or has been, in violation of or in default under, in any respect, any Law
or Order of any Governmental or Regulatory Authority applicable to the Company
or any of its assets or properties. Neither the Sellers nor the Company, nor any
of their directors, officers, or key employees (including the Key Employees) in
relation to the Company, has committed any felony or any material breach of the
requirements or conditions of any Law relating to the Company or the carrying on
of the Company's business.
3.12 Employment, Benefits and Superannuation. (a) Section 3.12(a) of the
Disclosure Schedule contains: (i) the names and commencement date of employment
of all current employees, and directors of the Company who will serve in such
capacity on the Closing Date for the Company and the names and commencement date
of all contractors who are serving in such capacity as at December, 31 2002;
(ii) details of all remuneration payable (including any bonus or commission
entitlements) and any other benefits provided or which the Company is bound to
provide (whether now or in the future) to all such persons or otherwise; and
(iii) details of any other material terms and conditions of employment and
contractors of such persons, all of which information is true and complete in
all respects.
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(b) Section 3.12(b) of the Disclosure Schedule contains an accurate and
complete list of each employee benefit plan provided by the Company and the
Company has not made any commitments to establish new or to expand existing
employee benefit plans. The Company has performed all obligations required to be
performed under the employee benefit plans and each employee benefit plan has
been established and maintained in accordance with its terms and in compliance
with all applicable Laws and Orders. There are no actions, suits or claims which
have been filed, or, Threatened or anticipated against any employee benefit
plan. Each employee benefit plan can be amended, terminated or otherwise
discontinued after the Closing Date in accordance with its terms, applicable
Laws or Orders, without liability to the Company (other than ordinary
administration expenses incurred in a termination event). There are no inquiries
or proceedings that have been filed, or, Threatened by any Governmental or
Regulatory Authority with respect to any employee benefit plan.
(c) The Company have paid to the relevant Governmental and Regulatory
Authority, all taxes, all contributions and other levies due in respect of all
of the Company's employees and contractors (past and present) in respect of
their employment or services up to the Closing Date, including but not limited
to any payments due to the Australian State and/or Federal Commissioner of
Taxation in respect of Group Tax and all superannuation contributions. As at
Closing and since January 1, 2002, no Subsidiary has employed or employees any
employee or has executed any service or contractor agreements in favour of any
contractors.
(d) With respect to each agreement with employees and contractors of the
Company, the Company has duly performed and complied with all of its obligations
(including, but not limited to, the making all payments for services rendered,
superannuation and other benefits). The Company has duly complied with
applicable employment regulations. Each of the contracts entered into with
employees, consultants or contractors of the Company is enforceable against the
parties to it and there is no party in breach of, or in default under, such
contract.
(e) Each of the employees and contractors of the Company have executed a
contractual agreement that contains: (i) a confidentiality clause; and (ii) an
assignment of all rights that each employee or contractor might have in any of
the Intellectual Property to the Company. No employee or contractor has any
rights to the Intellectual Property and IP Assets, including the right to
receive royalties or other payments from the Company.
(f) Neither the Company nor either Seller has offered, promised or
agreed for the future any variation in any employment or contractor/service
agreement. Without limiting the generality of the preceding sentence, since
October, 31 2002 there has been no material change in the remuneration or
benefits of any executives, directors, officers or Key Employees of the Company.
(g) There is not in existence and neither the Company nor either Seller
has proposed or are proposing to introduce any bonus, profit sharing scheme,
share option scheme, share incentive scheme or any other scheme or arrangement
under which the employees, any contractors or any of them are or is or would be
entitled to participate in the profits or shares of the Company.
(h) Except as set forth in Section 3.12(h) of the Disclosure Schedule,
there is no industrial action or dispute Threatened or existing or anticipated
in respect of or concerning any of the employees of the Company relating to or
based on any facts or circumstances (or part thereof) arising or existing prior
to Closing ("Employee Litigation"). As far as the Company and each Seller is
aware, having made due and proper inquiries, there are no facts or circumstances
which are likely to result in such a dispute.
(i) To the best of the knowledge of the Company and each Seller, having
made due and
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proper inquiries, each employee of the Company has been devoting 100% of his/her
business time during the Company's business hours to the conduct of the
Company's business. To the best of the knowledge of the Company and each Seller,
having made due and proper inquiries, each contractor of the Company has been
devoting 100% of his/her contracted time (as specified in his/her service or
contractor agreement) to the conduct of the Company's business.
(j) No loans or other advances have been made to any director, officer,
employee or contractor of the Company.
(k) Since October 31, 2002, the Company has not considered dismissing
any employee or terminating any contractor of the Company.
(l) To the best of the knowledge of the Company and each Seller, having
made due and proper inquiries, the Fund is validly established under the Trust
Deed. To the best of the knowledge of the Company and each Seller, having made
due and proper inquiries, no amendments have been made to the Trust Deed other
than those disclosed in Section 3.12(l) of the Disclosure Schedule, and those
amendments have been validly made other than as required by statute. There are
no proposals to amend the Trust Deed. Section 3.12(l) of the Disclosure Schedule
provides a full listing of the employees that use the Fund as well as employees
that use other funds.
(m) To the best of the knowledge of the Company and each Seller, having
made due and proper inquiries, no order has been made by any court or industrial
commission in relation to the Trust Deed, the Fund or any of the assets of the
Fund and at all times from 1 July, 1988 the Fund has satisfied the
superannuation fund conditions of the Occupational Superannuation Standards Xxx
0000; The Superannuation Industry (Supervision) Xxx 0000, the Income Tax
Assessment Act and any other applicable legislation.
(n) Section 3.12(n) of the Disclosure Schedule provides all material
facts relating to contributions and benefit arrangements in connection with the
Fund and all other superannuation funds to which contributions are made. There
are no superannuation or other benefit schemes, other than those listed in
Section 3.12(n) of the Disclosure Schedule , to which the Company is
contributing or has entered into a commitment which could involve future
contributions, or under which any employee of the Company receives or is
entitled to receive or reasonably expects to receive any benefits. No employer
other than the Company participates in the Fund. Except for the Fund and those
listed in Section 3.12(n) of this Disclosure Schedule, there is no other Fund
that the Company or any employee of the Company participates in.
(o) The trustees of the Fund have lodged all necessary returns and other
filings under any applicable legislation in a timely manner, accompanied by all
applicable fees (other than those which are immaterial in nature and may still
be paid without penalty or interest). No return contains a statement that is
either: (i) false; (ii) misleading in a material particular; or (iii) omits to
refer to any matter which is required to be included or without which the
statement is false or misleading. All taxes, levies, assessments, contributions,
fees, rates, duties and other governmental or municipal charges or impositions
(other than those which may still be paid without penalty or interest) for which
the trustees of the Fund are liable, including any penalty or interest, have
been paid. Full and proper records and accounts of the Fund have been kept, are
up to date, and disclose a true and fair view of the affairs of the Fund.
(p) The Company and each Seller has complied with all their obligations
under the Trust Deed, including making all contributions to the Fund required to
be made under the Trust Deed. Neither the Company, either Seller nor the
trustees of the Fund have received notice of any claim or dispute in relation to
the Fund.
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(q) The transfer of the Equity Interest will not cause any increase in
the obligations of the Company to make contributions to the Fund.
(r) None of the Company, or any director, officer or manager of the
Company has misrepresented to any person the benefits which are or may be
available in respect of the Fund.
(s) Section 3.12(s) of the Disclosure Schedule contains a list of the
key employees of the Company as at Closing (the "Key Employees").
3.13 Real Property and Business Premises. (a) The Company owns no real
property whatsoever.
(b) All of the commercial leases and subleases executed by the Company
are in full force and effect, and the Company has not received notice of any
claim of any sort that is currently outstanding and that has been asserted by
anyone adverse to the rights of the Company under any of the leases or subleases
mentioned above, or affecting or questioning the rights of the Company to the
continued possession of the commercial leased or subleased premises under any
such commercial lease or sublease.
(c) Section 3.13(c) of the Disclosure Schedule accurately describes all
the business premises leased or occupied by the Company (the "Business
Premises"). The Company has exclusive occupation of the Business Premises. The
Company is not in breach of any term or obligation of any leases or licenses
relating to the Business Premises. The Company has made all payments required by
and has otherwise complied with the terms of each of the leases and/or licenses
relating to the Business Premises. There are no current disputes relating to any
of the Business Premises or their use.
3.14 Tangible Personal Property and Plant & Equipment. (a) The Company is
in possession of and has good title to, or has valid leasehold interests in or
valid rights under contract to use, all tangible personal property including all
plant and equipment used in the conduct of its business, including all tangible
personal property reflected on the balance sheets included in the Financial
Statements of the Company and tangible personal property acquired since the
Inception Date other than property disposed of since such date in the ordinary
course of business. All such tangible personal property including all plant and
equipment that is owned by the Company is free and clear of all Liens and is in
good working order and condition, ordinary wear and tear excepted, and its use
complies in all material respects with all applicable Laws.
(b) Section 3.14(b) of the Disclosure Schedule is a complete list of all
items of plant and equipment owned by the Company with a written down value in
excess of AU$10,000 as at October 30, 2002 ("Plant and Equipment"). Except as
set forth in Section 3.14(b) of the Disclosure Schedule, each item of Plant and
Equipment is in good repair taking into account normal wear and tear, is in
satisfactory working condition and capable of doing the work for which it is
designed and is physically in the possession of the Company.
(c) Section 3.14(c) of the Disclosure Schedule is a complete list of all
Equipment Leases. The Company has made all payments required by and has
otherwise complied with the terms of each of the Equipment Leases.
3.15 Intellectual Property. (a) The Company owns or has the right to use
pursuant to license, sublicense, agreement or permission all the Intellectual
Property set out in Section 3.15(c) and 3.15(d) of the Disclosure Schedule. With
the exception of the software products of TDMSe and Starfire, the Company has
taken all necessary, proper and reasonable steps and actions to maintain and
protect its own Intellectual Property in the form of registrations.
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(b) To the best of the knowledge of the Company and each Seller, having
made due and proper inquiries, the Company has not, on its own behalf or through
an agent, infringed upon, misappropriated, or used without a required license,
any Intellectual Property of third parties. The Company has not on its own
behalf or through an agent, received any written charge, complaint, claim,
demand, or notice alleging any such infringement, misappropriation, or misuse
that has not been finally resolved (including any claim that the Company must
license or refrain from using any Intellectual Property of any third party). To
the best of the knowledge of the Company and each Seller, having made due and
proper inquiries, no third party has infringed upon, misappropriated, or
otherwise misused any Intellectual Property that would have a Material Adverse
Effect on the Company.
(c) Section 3.15(c) of the Disclosure Schedules identifies each
registered and unregistered (as indicated) copyright, trademark, trade name,
service xxxx, domain name, patent or other registration or other Intellectual
Property which is owned by the Company and identifies each license, agreement,
or other permission currently in effect pursuant to which the Company has
granted to any third party rights with respect to any of the Intellectual
Property other than in the ordinary course of business. The Company has
delivered to the Purchaser correct and complete copies of all such registered
and unregistered copyrights, trademarks, trade names, mask works, service marks,
domain names, patents, registrations, applications, licenses, agreements, and
permissions or other Intellectual Property (as amended to date) and have made
available to the Purchaser correct and complete copies of all other written
documentation evidencing ownership and prosecution (if applicable) of rights of
each such item. With respect to each item of Intellectual Property identified in
Section 3.15(c) of the Disclosure Schedule:
(i) the Company possess all right, title, and interest in and
each item, or has the valid right to use each item, free and clear of any
Liens and the Company has not assigned or in any way disposed of any
right, title or interest in any item;
(ii) each item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(iii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand has been filed or is Threatened which
challenges the legality, validity, enforceability, use, or ownership of
each item;
(iv) except for indemnifications provided in the ordinary course
of business, the Company has not agreed to indemnify any Person for or
against any interference, infringement, misappropriation, or other
conflict with respect to each item; and
(v) to the best of the knowledge and belief of each Seller and
the Company, having made due and proper inquiries, each item is valid and
enforceable throughout Australia and each and every state of Australia;
and
(vi) the Company has taken all necessary steps to obtain and
maintain appropriate registrations for each item and to protect and defend
each item.
(d) Section 3.15(d) of the Disclosure Schedules lists the items of
Intellectual Property that any third party owns and that the Company use
pursuant to applicable licenses, sublicenses, agreements, or permission (other
than pursuant to shrinkwrap software licenses, shareware/open source or site
licenses). With respect to each item of Intellectual Property required to be
identified on Section 3.15(d) of the Disclosure Schedule:
(i) to the best of the knowledge and belief of the Company and
each Seller, having made due and proper inquiries, the license,
sublicense, agreement, or permission
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covering the item is legal, valid, binding, enforceable according to the
applicable terms by the applicable party against the other party thereto,
and in full force and effect;
(ii) to the best of the knowledge and belief of the Company and
each Seller, having made due and proper inquiries, the license,
sublicense, agreement, or permission will continue to be legal, valid,
binding, enforceable, and in full force and effect on identical terms
immediately following the consummation of the transactions contemplated
hereby;
(iii) the Company is not in breach or default of any such license,
sublicense, agreement or permission, and no event has occurred which with
notice or lapse of time would constitute a breach or default or permit
termination, modification, or acceleration thereunder;
(iv) to the best of the knowledge and belief of the Company and
each Seller, no current or former customer to such license, sublicense,
agreement or permission is in breach or default, and no event has occurred
which with notice or lapse of time would constitute a breach or default or
permit termination, modification, or acceleration thereunder;
(v) no party to the license, sublicense, agreement, or permission
has overtly repudiated any provision thereof by written notice to the
Company or any representatives thereof;
(vi) to the best of the knowledge of the Company and each Seller,
no underlying item of Intellectual Property is subject to any outstanding
injunction, judgment, order, decree, ruling or charge;
(vii) no action, suit, proceeding, hearing, investigation, charge,
complaint, claim, or demand has been filed or is pending against the
Company in relation to any underlying item of Intellectual Property and no
owner of such Intellectual Property has Threatened any action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand
which challenges the legality, validity, or enforceability of the
underlying item of Intellectual Property;
(viii) the Company has no granted any sublicense or similar right
with respect to the license, sublicense, agreement or permission other
than pursuant to in the ordinary course of business; and
(ix) the Company has not taken any action or inaction or assisted
any other person to take any action or inaction with such Intellectual
Property that infringes upon, misappropriate, or otherwise misuses any
such Intellectual Property.
(e) To the best of the knowledge of the Company and each Seller, having
made due and proper inquiries, there has not been:
(i) any infringement of any of the Company's Intellectual
Property rights by any third party or any infringement by the Company of
any third party's Intellectual Property rights;
(ii) any misuse or unauthorised disclosure of the Company's
confidential information; or
(iii) any other act which may affect the validity or enforceability
of the Intellectual Property rights of the Company.
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(f) None of the Company or any Seller are aware, having made due and
proper inquiries, of any inappropriate, improper, unpermitted or infringing use
by any other person of any of the business names or the trade marks owned or
used by the Company.
3.16 Contracts.
(a) [Intentionally left blank]
(b) There are no contracts or obligations, agreements or arrangements
involving the Company and no practices in which the Company is engaged, which
are void, illegal, unenforceable, registerable or under which contravene in any
material respect, any fair competition legislation or regulations of any
applicable Governmental or Regulatory Authority, nor has the Company received
any threat or complaint or request for information or investigation in relation
to or in connection with any such legislation or regulations.
(c) The Company has duly performed and complied at all times with its
obligations under all Material Contracts. None of the Material Contracts entered
into by the Company are known to the Company or either Seller to be likely to
result in a loss for the Company . The Company has not made any offers, tenders
or quotations which are still outstanding and capable of giving rise to a
contract by the unilateral act of a third party, other than in the ordinary
course of business and on customary terms.
(d) Except as set forth in Section 3.15(d) of the Disclosure Schedule,
with respect to the Material Contracts:
(i) the Company is not under any obligation which cannot readily
be fulfilled, performed or discharged by it on a timely basis and without
undue or unusual expenditure or effort or loss;
(ii) there are no grounds for rescission, avoidance, repudiation
or termination (other than those as set out in the respective contracts)
and neither the Company nor any officer, director or any Key Employees of
the Company have received notice of rescission or termination;
(iii) each is valid, binding and enforceable against the parties to
it and there is no party in material breach of, or in default under, any
such contract and each will be enforceable by the Company after Closing;
(iv) none contain any provision or covenant prohibiting or
limiting the ability of the Company to engage in any business activity or
compete with any Person or prohibits or limits the ability of any Person
to compete with the Company; and
(v) none contain any onerous, unusual or other provision that
could cause a Material Adverse Effect to the Company.
(e) Except for the Material Contracts disclosed as Known Proceedings,
the Sellers and the Company are not aware of any circumstances, having made due
and proper enquiries, whereby, following a change in the: (i) control of the
Company, (ii) composition of the Board; or (iii) ownership of the Equity
Interest, any of the Company's customers, suppliers or licensors which relate to
Material Contracts would, cease to remain customers, suppliers or licensors to
the same extent and of the same nature as prior to the date hereof or a right to
terminate or vary the Material Contract would be created.
(f) Section 3.16(f) of the Disclosure Schedule contains a true and
correct complete list of
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all of the following agreements, instruments, written contract or other
arrangement, together with any related amendments, waivers, supplements, work
orders, notices as to termination or change thereunder, to which the Company or
either Seller (as it relates to the Company) are a party (the "Material
Contracts"), complete and accurate descriptions of which are contained Section
3.16(f) of the Disclosure Schedule:
(i) all end user license agreements or other license agreements
(or group of related agreements) pursuant to which the Company has on a
consolidated basis recognized annual revenue in excess of $50,000 in the
year of 2002;
(ii) all indirect resellers, original equipment manufacturer's,
distributorship, franchise, dealer, sales agent, joint venture and partner
agreements pursuant to which the Company has on a consolidated basis
recognized annual revenue in excess of $50,000 in the year of 2002;
(iii) all support agreements (or group of related agreements)
pursuant to the Company has on a consolidated basis recognized annual
revenue in excess of $50,000 in the year of 2002;
(iv) all service, consultancy or advisory agreements or agreements
to provide work to third parties (or group of related agreements) pursuant
to which the Company has on a consolidated basis recognized annual revenue
in excess of $50,000 the year of 2002;
(v) all agreements for the purchase or sale of products (or group
of related agreements) pursuant to which the Company has on a consolidated
basis recognized annual revenue in excess of $50,000 in the year of 2002.
(vi) any agreement (or group of related agreements) for the
purchase or sale of supplies, products, or other personal property, or for
the furnishing or receipt of services, the performance of which will
extend over a rolling period of more than one year or involve
consideration in excess of $10,000 annually;
(vii) any agreement (or group of related agreements) under which
the Company has created, incurred, assumed, or guaranteed any indebtedness
for borrowed money or other obligation, having a value in excess of
$10,000 annually;
(viii) any currently effective profit sharing, stock option, stock
purchase, stock appreciation, deferred compensation, severance, or other
plan or arrangement for the benefit of the Company's current or former
directors, officers, and employees;
(ix) any outstanding agreement under which the Company has
advanced or loaned any amount in excess of $10,000 (excluding loans
associated with travel and meal expenses);
(x) any agreement pursuant to which the Company has an obligation
to pay royalties or make other payments in connection with the sale of
products or services;
(xi) any other agreement (or group of related agreements), other
than employment-related agreements or agreements with contracts, the
performance of which involves payment by the Company of annual
consideration in excess of $50,000 after the Closing;
(xii) all contracts related to the disposition or acquisition of
assets in excess of $50,000, including any contracts related to the
merger, consolidation, reorganization or any similar transaction of the
Company;
(xiii) all contracts or certified summaries of the relevant
provisions that limit payment of dividends or require financial ratios or
financial covenants to be met or which have the effect of altering any of
the rights or obligations of or encumbering any of the Assets;
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(xiv) all agreements or related agreements for the lease
obligations of real property or plant and equipment of the Company in
excess of $10,000 annually;
(xv) all insurance contracts of the Company;
(xvi) all escrow agreements (including software escrow agreements),
arrangements or promises of the Company;
(xvii) any other contract creating or relating to any sharing of
revenues, profits, losses, costs or liabilities pursuant to which the
Company has on a consolidated basis recognized annual revenue in excess of
$50,000 in the year of 2002;
(xvii) any contract creating or involving any agency relationship,
distribution arrangement or franchise relationship pursuant to which the
Company has on a consolidated basis recognized annual revenue in excess of
$50,000 in the year of 2002 ;
(xix) any contract which provides for indemnification of any
officer, director, employee or agent of the Company; and
(xxi) any contracts with any of the following third parties:
Australia Post, Brisbane City Council, Optus, Telstra, Golden Casket,
ROCLA, Unisys, Screensound, TotalCare, Education of Victoria and Melbourne
Port.
3.17 Licenses. The Company possesses such permits, licenses, approvals,
consents and other authorizations (collectively, "Governmental Licenses") issued
by regulatory agencies or bodies in Australia (including without limitation, New
South Wales, Queensland, Australian Capital Territory and Victoria) and other
applicable jurisdictions necessary to conduct the business now operated by the
Company. The Company is in compliance with the terms and conditions of all such
Governmental Licenses. All of the Governmental Licenses are valid and in full
force and effect. The Company has not received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses.
All consents, approvals and actions of, filings with and notices to any third
party, Governmental or Regulatory Authority necessary to permit either Seller or
the Company to perform their respective obligations under this Agreement and
each of the Transaction Documents and to consummate the transactions
contemplated hereby and thereby shall have been duly obtained, made or given,
and shall be in full force and effect.
3.18 Insurance. Section 3.18 of the Disclosure Schedule contains a true
and complete list of all material liability, property, workers' compensation,
directors' and officers' liability and other insurance policies currently in
effect that insure the business, operations or employees of the Company or
affect or relate to the ownership, use or operation of any of the material
assets and properties of the Company and that have been issued to the Company.
The insurance coverage provided by such policies will not terminate or lapse by
reason of the transactions contemplated by this Agreement. Each policy listed in
Section 3.18 of the Disclosure Schedule is valid and binding and in full force
and effect, no premiums due thereunder have not been paid and neither the
Company nor the Person to whom such policy has been issued has received any
notice of cancellation or termination in respect of any such policy or is in
default thereunder. To the best of the knowledge and belief of the Company and
each Seller, having made due and proper inquiries, the insurance policies listed
in Section 3.18 of the Disclosure Schedule have coverage levels that are
reasonable and customary for Persons engaged in such businesses and operations
and having such assets and properties as the Company. All of the tangible person
property and Plant and Equipment of the Company of an insurable nature are
insured against fire and other risks normally insured against and that have
coverage levels that are reasonable and customary for Persons engaged in such
businesses and operations. The Company has not received any notice that any
insurer under any policy referred to in this Section 3.18 is denying liability
with respect to a claim thereunder or defending under a reservation of rights
clause.
3.19 Brokers or Finders. The Company has not incurred, or will incur,
directly or
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indirectly, any liability for brokerage or finders' fees or agents' commissions
or any similar charges in connection with this Agreement. For the avoidance of
doubt, any brokerage, finders' fee, agents' commissions or any similar charge(s)
in relation to or associated with this Agreement, will be paid by the Sellers.
3.20 Disclosure and Information. (a) No representation or warranty
contained in this Agreement and given by, or on behalf of, either Seller or the
Company or any Key Employee and no statement contained in the Disclosure
Schedule or in any certificate, list or other writing furnished to the Purchaser
pursuant to any provision of this Agreement (including, without limitation, the
Company's Financial Statements), contains any untrue statement or omits to state
a fact necessary in order to make the statements herein or therein, in the light
of the circumstances under which they were made, not misleading in any respect.
The facts set out in the Disclosure Schedule are true and accurate in all
respects.
(b) (i) There are no material facts or circumstances relating to the
Equity Interest, the Company, any of the Assets or the financial position,
operations, profitability or prospects of the Company which have not been fully
and properly disclosed to the Purchaser... (ii) So far as each Seller and
Company are aware, having made due and proper inquiries, there are no facts or
circumstances which might reasonably be expected adversely to affect the
financial position, operations, profitability or prospects of the Company.
(c) (i) All information given either in writing (whether in document,
email, spreadsheet or other form) or verbally by, or on behalf of, the Company,
either Seller, (including, without limitation, any director, or Key Employee) to
the Purchaser in the course of negotiations leading to this Agreement and
Closing is true and correct in all respects. (ii) None of the information
provided to the Purchaser by, or on behalf of, the Company or either Seller,
(including, without limitation, any Key Employee) is misleading in any
particular, whether by omission or otherwise.
3.21 [Intentionally left blank]
3.22 Financial Representations. (a) The revenue for the Company for the
twelve (12) months ending June 30, 2001 is $61,425,319. The revenue for the
Company for the six (6) months ending December 31, 2001 is $27,407,827. The
revenue for the Company for the ten months ending October 31, 2002 is not less
than $50,626,000. On a comparable audit with that conducted on December 31,
2001, for the twelve (12) months ending December 31, 2002, the revenue of the
Company will be no less than $55,000,000. For the purpose of this warranty,
"revenue" means the gross revenue of the Company including commissions paid to
channels and intermediaries.
(b) The EBITDA of the Company for the twelve (12) months ending June 30,
2001 is an EBITDA loss of $6,985,931. The EBITDA for the Company for the six (6)
months ending December 31, 2001 is $619,597. The EBITDA for the Company for the
ten months ending October 31, 2002 is $2,349,000. On a comparable audit with
that conducted on December 31, 2001, for the twelve (12) months ending December
31, 2002, the EBITDA of the Company will be no less than $2,500,000.
(c) The audited Net Asset Value of the Company as at December 31, 2002
will show net assets. For the avoidance of doubt, Net Assets shall mean a
surplus of total assets after deducting total liabilities.
(d) The Financial Statements are true and correct in all respects and
disclose a true and correct view of the state of the affairs, financial position
and assets and liabilities of the Company as at the dates of such accounts and
the income, expenses and results of operations of the Company for the financial
period ending on such dates.
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(e) Except for those identified in Known Proceedings, all accounts
receivable reflected on each of the consolidated and audited balance sheets for
the twelve (12) months preceding June 30, 2001, the six (6) months preceding
December 31, 2001, the twelve (12) months preceding December 31, 2002 and in the
unaudited balance sheet for the eleven (11) months preceding November 30, 2002
of the Company and all accounts receivable arising subsequent to the Effective
Date (collectively the "Accounts Receivable"): (i) have arisen from bona fide
sales transactions in the ordinary course of the business on ordinary trade
terms; (ii) represent valid, enforceable and binding obligations due to the
Company; (iii) have been collected or are collectible in the ordinary course of
business in the aggregate recorded amounts thereof without valid set-off or
counterclaim; and (iv) are not subject to any counter claim or set off.
(f) Section 3.22(f) of the Disclosure Schedule describes the names and
locations of all banks and financial institutions in which there are accounts or
safe deposit boxes maintained by, or for the benefit of, the Company, the
designation of each such account and safe deposit box, and the names of all
persons authorized to draw on or have access to each such account and safe
deposit box.
(g) All forecasts and projections of any future financial results or
sales pipeline activities of the Company provided to the Purchaser by or on
behalf of the Company, any of the Company's management or any Seller including,
without limitation, those for the twelve (12) months ending December 31, 2003
(by month) and those set out in Section 3.22(g) of the Disclosure Statement were
prepared in good faith and were based upon reasonable assumptions.
Nothwithstanding any potential shortfall in the Actual EBITDA (as compared with
the Estimated EBITDA) relating to the Company's Enterprise Business Solutions
business unit, the Actual EBITDA of the Company will be no less than $3,662,000.
To the best of the knowledge of the Company and each Seller, having made due and
proper inquiries, there was at the time of the Closing no matters or
circumstances that were known by the Company, either Seller or any Key Employee
that would have had a material impact on the actual and projected financial
results of the Company.
(h) There have not been any transactions between the Company and any
Subsidiary, the Sellers, Affiliates of the Sellers or any other Related Parties
("Inter-company Transactions"), either recorded or not recorded on the balance
sheet of the Company since October 31, 2002 and that there will be no further
Inter-company Transactions recorded, or required to be recorded, in the balance
sheet of the Company prior to Closing.
(i) The Company is not directly or indirectly obliged in any way to
guarantee, assume or provide funds to satisfy an obligation of any Person. No
letter of comfort has been given by the Company.
(j) The Financial Statements and all accounting issues associated with
the Company are in accordance with US GAAP.
3.23. Ownership of the Company.
(a) The Sellers are the sole owner of all issued and outstanding Equity
Interest.
(b) None of the Equity Interest have been transferred, sold, exchanged,
assigned or given as a gift, granted as a security interest, pledged or
encumbered, made part of any voting trust or other agreement or arrangement with
respect to the transfer of voting rights therein.
3.24. Absence of Changes. Except as set forth in Section 3.24 of the
Disclosure Schedule, since June 30, 2002, there has not been any change in the
business, condition (financial or otherwise), operations or results of
operations of the Company that would result in a Material Adverse Effect.
Without limiting the generality of the foregoing, since October 31, 2002:
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(a) The Company has not sold, leased, transferred, or assigned any of
its Assets, tangible or intangible other than in the ordinary course of
business;
(b) The Company has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
relating to the Assets or for any liabilities other than in the ordinary course
of business;
(c) No Person (including each Seller and the Company) has accelerated,
terminated, modified or cancelled any agreement, contract, lease or license (or
series of related agreements, contracts, leases and licenses) involving more
than $25,000 to which the Company is a party or by which they or any of them are
bound, other than terminations and cancellations of agreements which occur in
the ordinary course of business;
(d) The Company has not imposed, or agreed to, or suffered the
imposition of any lien in excess of $25,000 upon any of the Assets, tangible or
intangible;
(e) The Company has not made any capital expenditure (or series of
related capital expenditures) involving more than $25,000;
(f) The Company has not made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other Person (or series of
related capital investments, loans and acquisitions) involving individually more
than $25,000 other than pursuant to agreements with suppliers that were entered
into in the ordinary course of business;
(g) The Company has not issued any note, bond, debenture or other debt
security or created, incurred, assumed or guaranteed any indebtedness for
borrowed money or capitalized lease obligation either involving more than
$25,000 individually;
(h) Excepting Known Proceedings, the Company has not cancelled,
compromised, waived or released any right or claim (or series of related rights
and claims) involving more than $10,000;
(i) There has been no change made or authorized in the Constitution of
the Company other than necessary or desirable to effectuate the actions
contemplated in this Agreement;
(j) The Company has not issued, sold or otherwise disposed of any of
their capital stock, or granted any options, warrants or other rights to
purchase or obtain (including upon conversion, exchange or exercise) any of
their capital stock other than necessary or desirable to effectuate the actions
contemplated in this Agreement;
(k) The Company has not declared, set aside or paid any dividend or made
any distribution with respect to their capital stock (whether in cash or in
kind) or redeemed, purchased or otherwise acquired any of their capital stock;
(l) The Company has not experienced any damage, destruction, loss
(whether or not covered by insurance) or material interruption to the Assets in
excess of $50,000;
(m) The Company has not made any loan to any of its directors, officers
or employees, or entered into any other compensation transaction with any of
their directors, officers or employees in excess of $50,000;
(n) The Company has not entered into or modified the terms of any
employment or
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severance agreement or arrangement;
(o) The Company has not granted any increase in the base compensation or
any other forms of compensation of any of their directors, officers or
employees;
(p) The Company has not changed any of its methods of accounting or
material accounting practices in any respect;
(q) The Company has not entered into any transaction, commitment or
obligation or taken any other action inconsistent with their past practices;
(r) The business of the Company has been carried on in the ordinary and
usual course and no contracts or commitments differing from those ordinarily
necessitated by the nature of that business have been entered into or incurred;
(s) There has been no change in the assets, the liabilities or the
financial position or profits of the Company except changes in the ordinary
course of business, none of which individually or in the aggregate is materially
adverse to the Company;
(t) The business or financial position of the Company has not been
materially and adversely affected by any matter, either financial or otherwise
and whether covered by insurance or not;
(u) There has been no alteration to the rights attached to any of the
Equity Interest or to the capital structure of the Company;
(v) No additional directors have been appointed to the Company; and
(w) The Company has not made or pledged to make any charitable or other
capital contribution outside the ordinary course of business.
3.25 Powers of Attorney. There are no outstanding powers of attorney
executed on behalf of the Company.
3.26 No Illegal Payments, etc. Neither the Company nor any of its
officers, employees, agents or Affiliates has directly or indirectly given or
agreed to give any illegal gift, contribution, payment or similar benefit to any
supplier, customer, governmental official or employee or other Person who was or
is in a position to help or hinder the business (or assist in connection with
any actual transaction) or made or agreed to make any illegal contribution, or
reimbursed any illegal political gift or contribution made by any other person,
to any candidate for federal, state, local or foreign public office.
3.27 Product, Services and Assets.
(a) There are no current or Threatened disputes with regards to the
Company's current version of its IP Assets. The Company's software product of
Starfire has been successfully installed and utilized by customers of the
Company or have been delivered successfully and satisfactorily to all such
customers of the Company.
(b) No IP Assets sold, leased or delivered by the Company and no support
or service provided by the Company to customers on or prior to the Closing Date
is subject to any express guaranty, express warranty or other indemnity
(including without limitation as to product or service reliability, security,
interoperability, compatibility (forward and backward), upgrade path or upgrade
timing) except as expressly set forth on those contracts with customers copies
of which have been
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provided to the Purchaser and are listed in Section 3.27(b) of the Disclosure
Schedule.
(c) The Company is the legal and beneficial owner of all its Assets.
Except as set out in Section 3.27(c) of the Disclosure Schedule, there are no
mortgages, pledges, liens, encumbrances, charges or other security interests
over or affecting any Asset.
(d) The Assets are sufficient to enable the effective conduct of the
business of the Company after Closing as it is carried on at the date of this
agreement and at Closing.
3.28 Substantial Customers and Suppliers. (a) For purposes of this
Section 3.28(a), a "Material Customer" shall mean any of the twenty (20)
customers of the Company, taken as a whole, with the highest attributed revenues
for the period of January 1, 2002 through November 30, 2002. Section 3.28(a) of
the Disclosure Schedule lists the Material Customers (whether direct or
indirect) and applicable contracts of the Company. Each of the Material
Customers, related contracts and attributed revenues are not duplicative or
redundant. With respect to the applicable contracts with Material Customers,
there exists no event of default and no event has occurred which would result in
any such event of default or prevent the Company from obtaining the benefit
thereunder. Except in relation to Known Proceedings, the Company's relationship
with each Material Customer is good and there are no facts or circumstances
known to either the Company or any Seller, or ought to be known by either the
Company or any Seller of: (a) any dispute Threatened, actual or pending between
the Company and any Material Customer; or (b) any desire or plan of any Material
Customer to terminate or modify such relationship.
(b) For purposes of this Section 3.28(b), a "Material Supplier" shall
mean any of the top ten (10) third party suppliers of the Company, taken as a
whole with the highest attributed costs or the basis of costs for the period
January 1, 2002 through November 30, 2002. Section 3.28(b) of the Disclosure
Schedule lists the material suppliers. With respect to the applicable contracts
with Material Suppliers, there exists no event of default and no event has
occurred which would result in any such event of default or prevent the Company
from obtaining the benefit thereunder. The Company's relationship with each
Material Supplier is good and there are no facts or circumstances known to
either the Company or any Seller, or ought to be known by either the Company or
any Seller of: (a) any dispute Threatened, actual or pending between the Company
and any Material Supplier; or (b) any desire or plan of any Material Supplier to
terminate or modify such relationship.
(c) None of the Sellers or the Company has notice, or is aware of any
facts or circumstances, that any Material Customer or Material Supplier is
Threatened with, or involved in, any Insolvency Proceeding or has ceased,
materially reduced or Threatened to cease or materially reduce, its purchases or
supplies (as the case may be).
(d) Except in relation to Known Proceedings, there is no existing
Material Customer of the Company who is likely to materially reduce its trading
with the Company as a result of the acquisition of the Equity Interest by the
Purchaser.
3.29 Related Party Transactions. There are no loans or other benefits
enjoyed by and between the Company on one hand and its officers, directors
employees or shareholder on the other hand. Except as set forth in Section 3.29
of the Disclosure Schedule, no director, officer, employee or shareholder of the
Company, including the Sellers, or member of the family of any such person, or
any corporation, partnership, trust or other entity in which any such person, or
any member of the family of any such person, has a substantial interest or is an
officer, director, trustee, partner or holder of more than 5% of the outstanding
capital stock thereof, is a party to any transaction with the Company, including
any contract, agreement or other arrangement providing for the employment of,
furnishing of services by rental of real or personal property from or otherwise
requiring payments to any such person or firm, other than employment-at-will
arrangements in the ordinary course of
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business.
3.30 No Bankruptcy or Insolvency (a) No order has been made, or petition
presented, or resolution passed for the winding-up of the Company or either
Seller. Neither Seller nor the Company has had:
(i) any petition or order for winding-up filed against it;
(ii) any appointment of a receiver over the whole or part of the
undertaking of its assets;
(iii) any petition or order for administration against it;
(iv) any voluntary arrangement between any creditor and it;
(v) any distress or execution or other process levied in respect of it
which remain undischarged; or
(vi) any unfulfilled or unsatisfied judgment or court order against it
over the amount of $5,000.
(b) Neither Seller nor the Company is insolvent (total liabilities
greater than total assets) and each can pay its debts as and when they fall due.
(c) There are no circumstances which would entitle any Person to present
a petition for the winding-up or administration of the Company or either Seller
or to appoint a receiver over the whole or any part of the undertaking or assets
of the Company or either Seller.
Section 4. Representations and Warranties of the Purchaser.
4.01 Organization of the Purchaser. The Purchaser represents and warrants
that the Purchaser is a corporation duly organized validly existing and in good
standing under the laws of the British Virgin Islands and has all requisite
power and authority to enter into and perform its obligations under this
Agreement. Once executed by the Purchaser, this Agreement and the Transaction
Documents required to be executed by the Purchaser have been duly and validly
executed and delivered by the Purchaser and when duly executed will constitute a
legal, valid and binding obligation of the Purchaser enforceable against such
Purchaser subject to bankruptcy, reorganization, insolvency, moratorium,
restructuring or similar laws of general applicability relating to or affecting
creditors' rights generally and to general principles of equity.
Section 5. Covenants of the Sellers and the Company. Each Seller and the
Company, jointly and severally, covenants and agrees with the Purchaser that, at
all times from and after the Effective Date until the Closing and, with respect
to any covenant, agreement or appointment by its terms to be performed in whole
or in part after the Closing, for the period specified herein or, if no period
is specified herein, indefinitely, each Seller and the Company will comply with
all covenants and provisions of this Section, except to the extent the Purchaser
otherwise consent in writing.
5.01 Financial Statements. (a) Prior to Closing, the Company and the
Sellers shall deliver to the Purchaser true and complete copies of the: (i)
audited consolidated financial statements of the Company for the twelve (12)
months preceding June 30, 2001, for the six (6) months preceding December 31,
2001 and for the twelve (12) months preceding December 31, 2002, together with a
true and correct copy of the report on such audited information and all letters
from the auditors, with respect to the results of such audits; and (ii) the
management accounts for the eleven (11) months preceding November 30, 2002. All
such financial statements will be reconciled to GAAP and fairly present the
financial condition and results of the consolidated operations of the Company as
of the respective dates
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thereof and for the respective period covered thereby.
(b) Prior to Closing, the Company and the Sellers shall deliver to the
Purchaser: (i) projected consolidated statements of operations, shareholders'
equity and cash flows for the calendar years 2002 and 2003 (by month); and (ii)
the Company's operating budget for calendar years 2002 and 2003 (by month). Such
projections noted in Sections 5.01(b)(i) and (ii) were prepared based on
assumptions which in the Company's and the Sellers' determination were
reasonable and made in good faith.
(c) Prior to Closing, each Seller and the Company shall make full
provision in the balance sheet of the Company as at December 31, 2002 and prior
to the execution of this Agreement for costs including the full write-off of all
costs associated with excess leased office accommodation and any potential staff
redundancies and/or terminations including Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx,
Xxxxxxxx Xxxx, Ingrib Glastonbury, Xxxxx Xxxxxxx Hassum, Uma Xxxxxxxxx, Xxxx
Xxxxxx Xxxx, Xxxxx Xxxxx, and Xxxxxxxx Xxx Xxx.
5.02 Books and Records. If at any time after the Closing, any Seller
discovers in its possession or under its control any other Records, such Seller
shall forthwith deliver as make available such Records to the Purchaser at the
offices of the Company.
5.03 Fulfilment of Conditions. Each Seller and the Company will execute
and deliver at the Closing each instrument that the Sellers and the Company are
required under this Agreement to execute and deliver as a condition to the
Closing, shall take all commercially reasonable steps necessary or desirable and
proceed diligently and in good faith to satisfy all other conditions to the
obligations of the Purchaser contained in this Agreement and shall not permit
the Company to take, or fail to take, any action that could reasonably be
expected to result in the non-fulfilment of any such condition. Without limiting
the generality of the foregoing, each Seller and the Company shall not take or
omit to take any reasonable action, or permit such action or omission if it
reasonably can be expected that as a result of such action or omission, any
representation or warranty made by the Sellers or the Company under this
Agreement shall not be true and correct in all respects at and as of the Closing
Date as if made on that date.
5.04 Notice and Cure. The Sellers and the Company shall notify the
Purchaser promptly in writing of, and contemporaneously, shall provide true and
complete copies of any and all information or documents relating to, and will
use all commercially reasonable efforts to cure before the Closing, any event,
transaction or circumstance occurring after the Effective Date that causes or
shall cause any covenant or agreement of the Sellers or the Company under this
Agreement to be breached or that renders or shall render untrue any
representation or warranty of such party contained in this Agreement as if the
same were made on or as of the date of such event, transaction or circumstance.
The Company and the Sellers shall notify the Purchaser promptly in writing of,
and shall use all commercially reasonable efforts to cure, before the Closing,
any violation or breach of any representation, warranty, covenant or agreement
made by such party in this Agreement, whether occurring or arising before, on or
after the Effective Date. No notice given pursuant to this Section shall have
any effect on the representations, warranties, covenants or agreements contained
in this Agreement for purposes of determining satisfaction of any condition
contained herein or shall in any way limit the right of the Purchaser to seek
indemnity under this Agreement.
5.05 Conduct of Business in Ordinary Course. From and after the Effective
Date and prior to the Closing Date, the Company will not and the Sellers will
not cause the Company to take any actions inconsistent with Section 3.24 or
which will lead to a Material Adverse Effect occurring. With the exception of
the provisions set forth in this Agreement and the transaction contemplated
herein, the Company will carry on (and the Sellers shall cause the Company to
carry on) their business in the ordinary course in substantially the same manner
as heretofore conducted and, to the
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extent consistent with such business, use efforts consistent with past practice
and policies to preserve intact their respective present business organization,
keep available the services of their respective present officers, consultants
and employees and preserve their relationships with customers, suppliers and
distributors and others having business dealings with them. The Sellers shall
cause the officers of the Company to confer at such times as the Purchaser may
reasonably request with representatives of the Purchaser to report operational
matters of a material nature and to report the general status of the ongoing
operations of the business of the Company. Nothwithstanding the foregoing, the
Sellers and the Company may not and will not without the prior written consent
of the Purchaser (which shall not be unreasonably withheld):
(a) other than in the ordinary course of business consistent with prior
practice, enter into any commitment or transaction, including but not limited to
any purchase of assets (other than supplies or cash equivalents) for a purchase
price in excess of $25,000;
(b) other than in the ordinary course of business consistent with prior
practice, enter into or amend any agreements pursuant to which any other party
is granted support, service, marketing or publishing rights;
(c) other than in the ordinary course of business consistent with prior
practice, enter into or terminate any contracts, arrangements, plans,
agreements, leases, licenses, franchises, permits, indentures, authorizations,
instruments, or commitments, or amend or otherwise change in any respect the
terms thereof in an adverse manner; or
(d) modify in any material respect existing discounts or other terms and
conditions with third parties in a manner adverse to the Company.
5.06 Indebtedness. Without obtaining the prior written consent of the
Purchaser (which shall not be unreasonably withheld) neither any Seller nor the
Company will: (a) incur any indebtedness for borrowed money by way of direct
loan, sale of debt securities, purchase money obligation, conditional sale,
guarantee or otherwise; (b) cause any existing debt facility to be drawn down.
5.07 Cooperation. Each Seller and the Company agree and undertakes to
promptly use their reasonable efforts to assist the Purchaser to effect the
transfer of the Equity Interest to the Purchaser and to execute all documents,
papers, forms, authorizations, declarations or oaths, obtain the consents,
releases and waivers of third parties and Governmental or Regulatory, and take
any other steps that may be necessary to do so in order to consummate the
transactions contemplated under this Agreement and each Transaction Document.
Without limiting the generality of the preceding sentence, the following are
items that the Sellers acknowledges must be completed pursuant to this Section
5.07: (i) prior to Closing, each Seller and the Company shall make full
provision in the balance sheet of the Company as at December 31, 2002 for costs
including without limitation the full write-off of all costs associated with
excess leased office accommodation and any potential staff redundancies and/or
termination, including Xxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxxxx Xxxx, Ingrib
Glastonbury, Xxxxx Xxxxxxx Hassum, Uma Xxxxxxxxx, Xxxx Xxxxxx Xxxx, Xxxxx Xxxxx
and Xxxxxxxx Xxx Xxx as at December 31, 2002 and prior to the execution of this
Agreement; and (ii) procure any needed corporate governance requirements for the
Company such as voting trust arrangement among the required resident directors,
conveying director replacement and appointment rights and satisfying applicable
legal requirements.
5.08 Tax Returns. The Sellers and the Company will promptly provide or
make available to the Purchaser copies of all tax returns, reports and
information statements that have been filed or are filed prior to the Closing
Date.
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5.09 Insurance. The Sellers and the Company will maintain in force up to
the Closing Date policies of insurance of the same character and coverage as
those described in Section 3.18 of the Disclosure Schedule, and the Sellers will
promptly notify the Purchaser in writing of any changes in such insurance
coverage occurring prior to the Closing Date.
5.10 Power of Attorney. Upon Closing, each Seller hereby appoints the
Purchaser to be its attorney in relation to the Purchaser's relevant Equity
Interest from the Closing until the relevant Equity Interest is registered in
the name of the Purchaser. The Purchaser may do in the name of each Seller and
on its behalf everything necessary or expedient, in the Purchaser's sole
discretion to: (a) transfer the relevant shares; (b) exercise any rights,
including rights to appoint a proxy or representative and voting rights,
attaching to the relevant Equity Interest; (c) receive any dividend or other
entitlement paid or credited to any Seller in respect of the relevant Equity
Interest; (d) do any other act or thing in respect of the relevant Equity
Interest. Each Seller declares that all acts and things done by the Purchaser in
exercising powers under this power of attorney will be as good and valid as if
they had been done by such Seller and agrees to ratify and confirm whatever the
Purchaser does in exercising powers under this power of attorney. Each Seller
declares that this power of attorney of the Purchaser is given for valuable
consideration and is irrevocable from the Closing until the relevant Equity
Interest is registered in the name of the Purchaser.
5.11 GST Matters. The Sellers, the Company and the Purchaser agree that
the supply of any assets or business pursuant to this Agreement is the supply of
a going concern for the purposes of any Goods and Services Tax Act and that the
supply is "GST-free" for that purpose. The Sellers agree to take all reasonable
steps and do all reasonable things necessary to ensure that the supply of any
assets or business under this Agreement is classified as a GST-free supply under
any Goods and Services Tax Act. Without limiting the generality of the preceding
sentence, the Sellers warrant that they will carry on the business until the day
the Closing.
Section 6. Covenants of the Purchaser. The Purchaser covenants and agrees
with the Sellers and the Company that, at all times from and after the Effective
Date until the Closing, the Purchaser will comply with all covenants and
provisions of this Section, except to the extent the Sellers and the Company may
otherwise consent in writing.
6.01 Notice and Cure. The Purchaser shall notify the Company in writing
of, and contemporaneously, shall provide true and complete copies of any and all
information or documents relating to, and will use all commercially reasonable
efforts to cure before the Closing, any event, transaction or circumstance
occurring after the Effective Date that causes or shall cause any covenant or
agreement of the Purchaser under this Agreement to be breached or that renders
or shall render untrue any representation or warranty of such party contained in
this Agreement as if the same were made on or as of the date of such event,
transaction or circumstance. The Purchaser shall notify the Company promptly in
writing of, and shall use all commercially reasonable efforts to cure, before
the Closing, any violation or breach of any representation, warranty, covenant
or agreement made by such party in this Agreement, whether occurring or arising
before, on or after the Effective Date. No notice given pursuant to this Section
shall have any effect on the representations, warranties, covenants or
agreements contained in this Agreement for purposes of determining satisfaction
of any condition contained herein or shall in any way limit the right of the
Company or the Sellers to seek indemnity under this Agreement.
6.02 Fulfilment of Conditions. The Purchaser will execute and deliver at
the Closing each instrument that the Purchaser is required to execute and
deliver as a condition to the Closing, shall take all commercially reasonable
steps necessary or desirable and proceed diligently and in good faith to satisfy
all other conditions to the obligations of the Sellers and the Company contained
in this Agreement and shall not permit the Company to take, or fail to take, any
action that could reasonably be expected to result in the non-fulfilment of any
such condition. Without limiting the generality of the
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foregoing, the Purchaser shall not take or omit to take any reasonable action,
or permit such action or omission if it reasonably can be expected that as a
result of such action or omission, any representation or warranty made by the
Sellers or the Company under this Agreement shall not be true and correct in all
respects at and as of the Closing Date as if made on that date.
6.03 Cooperation. The Purchaser agrees and undertakes to promptly use its
reasonable efforts to assist the Sellers to effect the transfer of the Equity
Interest to the Purchaser and to execute all documents, papers, forms,
authorizations, declarations or oaths, obtain the consents, releases and waivers
of third parties and Governmental or Regulatory Authorities, and take any other
steps that may be necessary to do so in order to consummate the transactions
contemplated under this Agreement and each Transaction Document.
6.04 Tax Losses. Until the Second Retained Sum is released or dealt with
in accordance with Section 2.06(b), the Purchaser agrees and undertakes: (a) to
cause the Company to continue the business of the Company in the same business
lines so as to comply with the Australian Tax Office's regulations regarding the
so-called "same business test" and the Australian Tax Office's other
requirements regarding the preservation of Tax Losses; and (b) to avoid any
action or inaction that could result in a denial of the use of such Tax Losses
by the Company on its 0000 Xxxxxxxxxx Income Tax Return. To the extent that the
Australian Tax Office issues a final denial of the Company's use of Tax Losses
on the Company's 0000 Xxxxxxxxxx Income Tax Return and the basis of such denial
is resulting from any action or inaction of the Company after the Closing, the
Second Retained Sum shall become immediately payable to the Sellers (on a
pro-rata basis).
6.05 Financial Statements. Subsequent to Closing and until December 31,
2003, the Purchaser shall deliver to ManTech International Corporation a copy of
the: (i) 2003 Financial Statements; and (ii) monthly balance sheet and profit &
loss statements of the Company.
Section 7. Conditions to Obligations of the Purchaser. The obligations of
the Purchaser under this Agreement are subject to the fulfilment, at or before
the Closing of each of the following conditions the satisfaction of which will
be determined by the Purchaser acting reasonably (all or any of which may be
waived in whole or in part by the Purchaser in its sole discretion):
7.01 Representations and Warranties. Each of the representations and
warranties made by the Sellers and/or the Company in this Agreement and the
Transaction Documents and all facts specified in the Disclosure Schedules shall
be true and correct in all respects in which they are given on and as of the
Effective Date, the Closing Date and if specified on any other date, on such
date, as though such representation or warranty was made on each of those dates.
7.02 Performance. Each Seller and the Company shall have performed and
complied with, each agreement, covenant and obligation required by this
Agreement and the Transaction Documents to be so performed or complied with by
either Seller or the Company at or before the Closing.
7.03 Certificates. On or before the Closing Date, the Seller shall have
delivered to the Purchaser a certificate from the company secretaries of the
Company and a certificate from at least one director of the Company prior to
Closing substantially in the form and to the effect of Exhibits 7.03(a) and
7.03(b) attached hereto.
7.04 Consents and Approvals. All consents, approvals and actions of,
filings with and notices to any third party, Governmental or Regulatory
Authority necessary to permit either Seller and the Company to perform their
respective obligations under this Agreement and each of the Transaction
Documents and to consummate the transactions contemplated hereby and thereby
shall have been duly obtained, made or given, and shall be in full force and
effect as at the Closing Date. Each such consent, approval and actions of,
filings with and notices to any third party, Governmental or Regulatory
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Authority are set out in Section 7.04 of the Disclosure Statement. The Purchaser
shall have received duly executed copies of all such consents and releases and
there will not be any consents or releases which have not been received and are
required to be received. No statute, rule or regulation, and no final and
nonappealable order, decree or injunction will have been enacted, entered,
promulgated or enforced by any court or Governmental or Regulatory Authority of
competent jurisdiction which enjoins or prohibits the consummation of the
transactions contemplated by this Agreement.
7.05 Opinion of Counsel. The Purchaser shall have received the opinion of
the Company's and the Sellers' legal counsel on the Closing Date, substantially
in the form and to the effect of Exhibit 7.05 attached hereto.
7.06 Key Employees. Each of the Key Employees executing an amendment to
their current employment agreements that contain confidentiality provisions,
assignments of inventions and non-solicitation provisions in a form reasonably
satisfactory to the Purchaser except to the extent that the current employment
agreements of the Key Employees contain adequate confidentiality provisions,
assignment of inventions and non-solicitation. Xxx Xxxxx Xxxxxxx having executed
an employment contract on standard terms and conditions of the Company.
7.07 Proceedings. All proceedings to be taken on the part of the Sellers
or the Company in connection with the transactions contemplated by this
Agreement, the Transaction Document and all documents incident thereto shall be
reasonably satisfactory in form and substance to the Purchaser, and the
Purchaser shall have received copies of all such documents and other evidences
as the Purchaser may reasonably request in order to establish the consummation
of such transactions and the taking of all proceedings in connection therewith.
7.08 Legal Action. As of the Closing Date, there will not be any actual
written threats or any action, proceeding or other application pending before
any court or Governmental or Regulatory Authority brought by any Person or
Governmental or Regulatory Authority: (i) challenging or seeking to restrain or
prohibit the consummation of the transactions contemplated by this Agreement, or
seeking to obtain any material damages from any of the Parties or their
Affiliates as a result of such transactions; (ii) seeking to prohibit or impose
any limitations on the Purchaser's ownership or operation of all or any portion
of the Equity Interest or the underlying assets of the Company, or to compel the
Purchaser's to dispose of or hold separate all or any portion of its or the
Equity Interest or the Company's business or assets as a result of the
transactions contemplated by the Agreement; or (iii) cause any of the
transactions contemplated by this Agreement to be rescinded following
consummation.
7.09 No Material Adverse Change. From the Effective Date to the Closing
Date and as at the Closing Date, there shall not have occurred any Material
Adverse Effect on the Equity Interest, any of the Assets or any operation or
financial performance of the Company.
7.10 Share Transfers/Certificates. The Purchaser shall have received duly
executed transfers of the Equity Interest in its favor, in a registrable form
and in accordance with the Company's Constitution representing the Equity
Interest, together with share certificates for such Equity Interest and all
other consents, approvals and/or documents needed by the Purchaser to register
the transfers and obtain ownership of the Equity Interest as the Purchaser may
require.
7.11 Termination of Rights and Certain Securities. Any registration
rights, rights of refusal, voting rights, rights to any liquidation preference
or redemption rights relating to any security of the Company will be terminated,
waived or satisfied as of the Closing Date.
7.12 Closing Documents. All closing documentation must be received by the
Purchaser, including but not limited to: (i) the Company and Xxxxx Xxxxxxx
having entered into the Consultancy
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Agreement; and (ii) the Sellers and Xxxxx Xxxxxxx having entered into the
Employment Release.
7.13 Board Approval of the Company. The Board of the Company shall have:
(a) approved the execution of the Transaction Documents and the transactions
contemplated herein and therein; (b) approved the transfer of the Equity
Interest; (c) resolved and directed that subject to the payment of stamp duty,
the transfers of the Equity Interest are, registered; and (d) approved the
appointment of the representatives of the Board from the and the resignation of
all directors who were on the Board prior to the Closing, but so that a properly
constituted board of directors is in existence at all times.
7.14 Board Appointee. Effective as of the Closing Date, the designees of
the Purchaser shall have been elected to the Board and the current directors of
the Company shall have resigned, but so that a properly constituted board of
directors is in existence at all times.
7.15 Shareholders Approval. On or before the Closing Date, each Seller
shall have approved the execution of this Agreement, each Transactional Document
and the transactions contemplated herein and therein by both the Company and
each such Seller.
7.16 Completion of Due Diligence. The Purchaser shall have completed all
necessary due diligence investigations to its satisfaction.
7.17 Approval of the Purchaser's Board of Directors or delegated
subcommittee and Approval of each of the Seller's Boards.
(a) The board of directors of the Purchaser or its delegated
subcommittee shall have authorized and approved each of: (i) the terms and
conditions of this Agreement and each Transaction Document; and (ii) the
execution and performance of this Agreement and each Transaction Document by a
duly authorized officer or director of the Purchaser and the transactions
contemplated herein and therein; and
(b) The board of directors of each Seller shall have authorized and
approved each of: (i) the terms and conditions of this Agreement and each
Transaction Document; and (ii) the execution and performance of this Agreement
and each Transaction Document by a duly authorized officer or director of each
such Seller and the transactions contemplated herein and therein.
7.18 Third Party Consent. Each of the following Persons consenting to the
change of control of the Company as anticipated by this Agreement and agreeing
not to terminate their respective agreements in a form satisfactory to the
Purchaser:
(a) lessors' of the Property Leases;
(b) the third party to the Outsourcing Agreement in relation to
Screensound;
(c) the third party to the licence agreement between the Company and
Optus in relation to the Switchgate product;
(d) the third parties to the following Material Contracts: Australia
Post; Brisbane City Council; Optus; Telstra; ROCLA; Unisys; Screensound;
TotalCare and Education of Victoria; and
(e) the third party to the Compaq supply/reseller arrangements.
7.19 FIRB AND ACCC Issues. The Purchaser having received, if it deems it
necessary, any notice, clearance or authorization (whether formal or otherwise)
which is required by the ACCC, by reason of the Australian Trade Practices Act
1974 and/or by reason of the Australian Foreign Acquisitions and Xxxxxxxx Xxx
0000.
7.20 Change of Bank Authorities. The delivery to the Purchaser duly
completed bank
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authorities approved by each of the Company's bankers and the Board authorising
the operation of each of the Company's bank accounts by nominees of the
Purchaser.
7.21 Release of Sellers Charge. The delivery to the Purchaser of: (a)
executed discharges in registrable form such that the release of any charge over
the Company's assets in favour of the Sellers (or any of them) is released and
forever discharged; (b) executed deed of release, in a form satisfactory to the
Purchaser, from each Seller releasing and forever discharging the Company from
repaying any such amounts or loans owed or outstanding to any Seller as at
Closing.
7.22 Delivery of Company Seal and Books & Records. The delivery to the
Purchaser of the Company's books and records, the common seal and any other
company seals of the Company.
7.23 Sellers able to Complete. The Purchaser is not obligated to close
unless each Seller and the Company is ready, willing and able to close
simultaneously.
7.24 Audited Accounts. The delivery to the Purchaser of true and correct
copies of each of the Financial Statements (as defined herein) and such
statements shall include true and complete copies of the balance sheets of the
Company and the related consolidated statements of operations, shareholders'
equity and cash flow statements for each such period, together with a true and
correct copy of the report on such audited information and all existing
management letters from the auditors, with respect to the results of such
audits.
7.25 Inter-company Loans. The Purchaser having received executed deeds of
release, in a form satisfactory to the Purchaser, from each previous subsidiary
of the Company and each Seller or any of the Sellers' Affiliates that has, as at
the Closing, any amounts due or outstanding to such Subsidiary, Seller or
Seller's Affiliate, releasing and forever discharging the Company from repaying
all such amounts or loans owed or outstanding to such subsidiary, Seller or
Sellers' Affiliates.
7.26 Transfer of Subsidiaries. All of the shares of each Subsidiary held
by the Company being sold, transferred and assigned from the Company to either
of the Sellers for AU$1.00 and all required filings and registrations relating
to such shares being duly filed and registered.
Section 8. Conditions to Obligations of the Sellers and the Company. The
obligations of the Sellers and the Company hereunder are subject to the
fulfilment, at or before the Closing, of each of the following conditions (all
or any of which may be waived in whole or in part by the Sellers or the Company
in their sole discretion):
8.01 Representations and Warranties. Each of the representations and
warranties made by the Purchaser in this Agreement shall be true and correct in
all respects in which they are given on and as of the Closing Date as though
such representation or warranty was made on and as of the Closing Date.
8.02 Performance. The Purchaser shall have performed and complied with
each agreement, covenant and obligation required by this Agreement to be so
performed or complied with by such Purchaser at or before the Closing.
8.03 Consents and Approvals. All consents, approvals and actions of,
filings with and notices to any third party, Governmental or Regulatory
Authority necessary to permit the Purchaser to perform its obligations under
this Agreement and to consummate the transactions contemplated hereby and
thereby shall have been duly obtained, made or given, and shall be in full force
and effect.
8.04 Closing Documentation. The Company and Xxxxx Xxxxxxx having entered
into the Consultancy Agreement and the Purchaser having executed the Employment
Release.
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8.05 Approval of the Purchaser's Board of Directors or delegated
subcommittee. The board of directors of the Purchaser or its delegated
subcommittee shall have authorized and approved each of: (i) the terms and
conditions of this Agreement and each Transaction Document; and (ii) the
execution and performance of this Agreement and each Transaction Document by a
duly authorized officer or director of the Purchaser and the transactions
contemplated herein and therein.
8.06 Board Appointments. On or before 17 February 2003, the Purchaser
shall designate in writing and deliver same to the Company and the Sellers the
Purchaser's designees for the replacement Board of the Company who shall become
the directors of the Company as of the Closing Date.
8.07 Retention Stakeholder. The Retention Stakeholder shall be
incorporated in Australia and shall execute an agreement as described in Section
2.06(a) in a form satisfactory to the Purchaser, the Sellers and the Retention
Stakeholder, all acting reasonably.
8.08 Macquarie Bank facility. (the "Facility"). Subsequent to Closing but
provided always that all drawdowns under the Facility have been made by the
Company in the ordinary course of business, the Purchaser shall either: (i) make
arrangements to close out the balance of the Facility; or (ii) provide Macquarie
Bank with alternative security in a form satisfactory to Macquarie Bank.
Section 9 Representations, Warranties, Covenants and Agreements. Unless
otherwise expressly provided for in this Agreement:
(a) All representations and warranties contained in this Agreement, any
schedule, exhibit, the Disclosure Schedule or certificate or document delivered
pursuant hereto in connection with the transactions contemplated by this
Agreement or the Transaction Documents (the "Warranties") shall survive through
to the date prescribed by Section 10.03 of this Agreement.
(b) The covenants and agreements of the Parties shall survive the
Closing.
(c) Each of the Warranties are true and correct in all respects on and
as of the Effective Date, the Closing Date and if specified on any other date,
on such date, as though such representation or warranty was made on each of
those dates.
(d) None of the Warranties are extinguished or affected by any
investigation made by or on behalf of a Party into the affairs of another Party.
Each Party acknowledges that it has made and given the Warranties with the
intention of inducing the other Parties to enter into this Agreement and the
Purchaser has entered into this Agreement in full reliance on the Warranties
given hereunder.
Section 10. Indemnification; Limitations on Liabilities
10.01 Indemnification. (a) By Seller(s). Each Seller (each an
"Indemnifying Party" and collectively "Indemnifying Parties"), shall jointly and
severally indemnify the Company, the Purchaser and the Purchaser's and the
Company's officers, directors, shareholders and Affiliates (each an "Indemnified
Party" and collectively "Indemnified Parties") in respect of, and hold each of
them harmless from and against, any and all Loss or liability suffered, incurred
or sustained by any of them, resulting from, arising out of or associated with:
(i) any misrepresentation, inaccuracy in or breach of any
representation or warranty or the nonfulfillment of, or failure to
perform, any covenant or agreement on the part of any Seller or the
Company contained in this Agreement or the Transaction Documents;
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(ii) any amounts that the Purchaser is entitled to in accordance
with Section 2.05;
(iii) any claims associated with any balance sheet adjustments
relating to the write-down of tangible assets or previously under or
non-disclosed liabilities as determined by the Purchaser's Auditor or the
Company's Pre-Closing Auditor that emerge from the 2002 Financial
Statements in the event of and to the extent that, the Net Asset Value of
the Company as at December 31, 2002, and included in the 2002 Financial
Statements, shows a net liability;
(iv) any claims as a result of, or associated with, the fact that
the Tax Losses (or any part thereof) are unable to be used by the Company
in any year subsequent to Closing as determined by the Australian Taxation
Office in any subsequent assessment, declaration or notification to, or
regarding, the Company;
(v) any current, pending or Threatened Proceeding, Employee
Litigation or dispute, or any future Proceeding, Employee Litigation or
dispute that relates to, or is associated with, any act or omission of the
Company, any Seller or any individual for or on behalf of the Company or
any Seller which took place prior to the Closing including, without
limitation, all current, pending, Threatened or future Proceedings or
disputes relating to or associated with any of the following known actual
or potential Proceedings ("Known Proceedings"):
(A) any Employee Litigation;
(B) the Moyne Shire Council;
(C) the company known as "Golden Casket";
(D) the XXXX System and/or associated or related matters
thereto;
(E) the ObiCare System and/or associated or related matters
thereto;
(F) any of the Queensland Health District Hospitals;
(G) any matter associated with, or resulting from, the US
Federal Government Investigation as disclosed in any
ManTech International Corporation's filings with the US
Securities and Exchange Commission including its
Registration Statement on Form S-1 and amendments
thereof;
(H) any matter associated with, or resulting from, the
public reporting by ManTech International Corporation of
the financial results of the Company as a discontinued
operation;
(I) the entity known as "Melbourne Ports Corporation";
(J) Xxxxxxx Xxxxxx;
(K) Xxxx Xxxxxxxxx;
(L) C31 - employment agency claim;
(M) Corvu Australia Pty Ltd;
(N) GEAC's purchase of the Company's local government
business;
(O) any fact or matter relating to any Local Government
Resolutions associated with either Pathway or GEMS;
(P) any fact or matter relating to Xxxxx Xxxxxxx, his
termination from the Company or change of relationship
with the Company from an employee to a consultant.
(vi) any Tax Claim that relates to an act or omission of the
Company, or occurrence affecting the Company prior to the Closing Date.
(b) For the avoidance of doubt, the indemnification contained in Section
10.01 and any set-off of the Retained Amount shall not include any matters that
have resulted from any act or omission of the Purchaser (to the extent that such
matter resulted from an act or omission of the Purchaser) based on any fact or
circumstance which occurred after the Closing or at its request in writing after
the execution of the Agreement including, without limitation the termination
and/or redundancy of Xxxxxx Xxxxxxx,
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Xxxxxxxx Xxxx, Ingrib Glastonbury, Xxxxx Xxxxxxx Hassum, Uma Xxxxxxxxx, Xxxx
Xxxxxx Xxxx, Xxxxx Xxxxx and Xxxxxxxx Xxx Xxx.
(c) If any Indemnified Party is entitled to indemnification under this
Section 10.01 for some or a portion of the Loss or liability suffered, incurred
or sustained by it but not for the total amount, each Indemnifying Party shall,
jointly and severally, indemnify such Indemnified Party for the portion of such
Loss or liability as to which the Indemnified Party is so entitled.
(d) Without in any way limiting any of its other rights or remedies
under Section 10.01, Section 10.02 or at law, if the Purchaser is entitled to
indemnification under this Section 10.01, it may, in its sole and absolute
discretion, set-off and deduct any Loss or liability suffered, incurred or
sustained by it from the Retained Amount PROVIDED ALWAYS that it has delivered a
Claim Notice (as defined below) to the Indemnifying Party and any of the
following has taken place:
(i) no response is received from the Indemnifying Parties within
10 days from delivery of the Claim Notice;
(ii) a response is received that the Indemnifying Parties desire
to dispute the Claim;
(iii) either Indemnifying Party has failed to make the Indemnified
Party whole in accordance with Section 10.02(c); or
(iv) either Indemnifying Party or its appointed legal
representative is not performing any of its obligations under Section
10.02 promptly or adequately as determined by such Purchaser in its sole
and absolute discretion.
(e) For the avoidance of doubt, it is not necessary for an Indemnified
Party to incur expense or make payment before enforcing a right of indemnity
conferred by this Section and in any dispute the onus of disproving that a Claim
(as defined below) falls within this Section 10.01 shall be on the Indemnifying
Party.
10.02 Method of Asserting Claims. All claims for indemnification by any
Indemnified Party will be asserted and resolved as follows:
(a) In the event any claim or demand in respect of which an Indemnified
Party might seek indemnity under Section 10.01 arises by way of discovery by the
Indemnified Party or by way of a third-party asserting or threatening a claim
against or seeking to collect a related obligation against such Indemnified
Party ("Claim"), the Indemnified Party shall deliver a notice ("Claim Notice")
to the Indemnifying Party. Failure by an Indemnified Party to provide a Claim
Notice with reasonable promptness of the Indemnified Party receiving notice of a
Claim will not prevent the Indemnified Party from so making a claim and being
indemnified under this Section 10 provided: (i) that the Indemnifying Party's
ability to defend has not been irreparably and substantially prejudiced by such
failure of the Indemnified Party; and (ii) that the delay does not result in the
delivery of notice after the relevant indemnification period has expired. Upon
receipt of a Claim Notice, the Indemnifying Party will notify the Indemnified
Party promptly (and in any event within 10 days), whether in the case of a Claim
under Section 10.01(a), the Indemnifying Party desires, at its sole cost and
expense, to defend the Indemnified Party against such Claim (or in the case
where no third party is involved, whether the Indemnifying Party desires at its
sole cost and expense, to make the Indemnified Party whole). In the case of a
Claim under Section 10.01(b), each Indemnifying Party hereby agrees, at its sole
cost and expense, to vigorously defend either the Indemnified Party or the
Company (as the case may be) against any Claim and any current, pending or
Threatened Proceeding, Employee Litigation or dispute (or in the case where no
third party is involved, the Indemnifying Party will, at its sole cost and
expense, make the Indemnified Party whole).
(b) Where an Indemnifying Party defends a Claim, the Indemnifying Party
must choose legal representatives satisfactory to the Indemnified Party, at the
sole cost and expense of the
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Indemnifying Party, and must defend such Claim by all appropriate proceedings,
which proceedings must be vigorously and diligently prosecuted or defended (as
the case may be) by the Indemnifying Party to a final conclusion or will be
settled at the discretion of the Indemnifying Party (but only with the consent
of the Indemnified Party in the case of any settlement that provides for any
relief other than the payment of monetary damages or that provides for the
payment of monetary damages as to which the Indemnified Party will not be
indemnified in full pursuant to Section 10.01). The Indemnifying Party will have
full control of such defense and proceedings, including any compromise or
settlement thereof; provided, however, that the Indemnified Party may file any
motion, answer or other pleadings or take any other action that the Indemnified
Party reasonably believes to be necessary or appropriate to protect its
interests, at the sole cost and expense of the Indemnifying Party. The
Indemnified Party may participate in, but not control, any defense or settlement
of any Claim controlled by the Indemnifying Party pursuant to this Section, at
the Indemnifying Party's sole cost and expense. Notwithstanding the foregoing,
the Indemnified Party may take over the control of the defense or settlement of
any Claim at any time if it irrevocably waives its right to indemnity under
Section 10.01 with respect to such Claim.
(c) If the Indemnifying Party desires, or is required, to make the
Indemnified Party whole, then the Indemnifying Party shall, within fourteen (14)
days of receiving the Claim Notice, make an offer to settle the Claim to the
Indemnified Party. The Indemnifying Party shall be liable for the full amount of
any Claim plus interest at a commercial rate.
10.03 Limitations on Liability.
(a) For the avoidance of doubt, the Parties agree that any claim
or claims made by an Indemnified Party pursuant to Section 10.01(a)(iii) and/or
Section 10.01(a)(v) shall not be limited in any way whatsoever including by any
period of time or any amount claimed.
(b) This Section 10.03(b) shall operate to limit the liability of
the Indemnifying Parties to claims made by an Indemnified Party pursuant to
Section 10.01(a)(i), Section 10.01(a)(ii), Section 10.01(a)(iv), and/or Section
10.01(a)(vi).
(i) An Indemnified Party may only make a claim or claims
pursuant to Section 10.01(a)(i), Section 10.01(a)(ii), Section
10.01(a)(iv), and/or Section 10.01(a)(vi) if the aggregate amount of such
claim or claims exceeds $25,000, after which time the Indemnified Party
shall be entitled, subject to the terms and conditions of this Section, to
recover any and all amount of the indemnified claim sought, including that
part which is less than $25,000.
(ii) The aggregate liability of the Indemnifying Parties
pursuant to claims made under Section 10.01(a)(i), Section 10.01(a)(ii),
Section 10.01(a)(iv), and/or Section 10.01(a)(vi) shall be limited to Five
Million Australian Dollars (AU$5,000,000) of which:
(A) the aggregate liability of the Indemnifying
Parties pursuant to, or associated with Section 10.01(a)(i), Section
10.01(a)(ii) and/or Section 10.01(a)(vi) shall be limited to Four
Million Australian Dollars (AU$4,000,000); and
(B) the aggregate liability of the Indemnifying
Parties pursuant to, or associated with Section 10.01(a)(iv) shall
be limited to One Million Australian Dollars (AU$1,000,000).
(iii) An Indemnified Party may only make a claim or claims
pursuant any of Section 10.01(a)(i), Section 10.01(a)(ii), Section
10.01(a)(iv), and/or Section 10.01(a)(vi) if a Claim Notice is sent by an
Indemnified Party to an Indemnifying Party by the corresponding date
mentioned below:
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(A) Section 10.01(a)(i) and Section 10.01(a)(vi), on
or before June 30, 2004;
(B) Section 10.01(a)(ii), on or before twenty (20)
days after the earlier of receipt by the Purchaser of the 2003
Financial Statements and June 30, 2004; and
(C) Section 10.01(a)(iv), on or before twenty (20)
days after the earlier of receipt by the Purchaser of the 2003
Tax Assessment and October 31, 2004.
Section 11. Termination
11.01 Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned:
(a) at any time after February 21, 2003 in the event that Closing has
not taken place by that date, by either the Purchaser or either Seller upon
written notice to the other; or
(b) at any time before the Closing, by the Sellers or the Purchaser, in
the event (i) of a material breach hereof by any non-terminating party if such
non-terminating party fails to cure such breach within seven (7) Business Days
following notification thereof by the terminating party or (ii) upon notice to
the non-terminating party by the terminating party that the satisfaction of any
material condition to the terminating party's obligations under this Agreement
becomes impossible or impracticable with the use of commercially reasonable
efforts if the failure of such condition to be satisfied is not caused by a
material breach hereof by the terminating party (but not otherwise).
11.02 Effect of Termination. If this Agreement is validly terminated
pursuant to Section 11.01, this Agreement will forthwith become null and void,
and there will be no liability or obligation on the part of any Seller or the
Purchaser (or any of their respective officers, directors, employees, agents or
other representatives or Affiliates), except that the provisions with respect to
the indemnifications in Section 10, expenses in Section 12.02, and
confidentiality in Section 12.12 shall continue to apply following any such
termination.
Section 11A Non-Competition
11A.01 Definitions. For the purpose of this Section 11A, the following
definitions shall have the following meaning:
"Business" means the business conducted by the Company as at the date of this
Agreement and during the preceding calender year.
"Restrained Business" means a business or operation substantially similar to, or
competitive with, the Business as at Closing.
"Restraint Area" means each of the following:
(a) Australia and New Zealand;
(b) Australia;
(c) Queensland, New South Wales, Victoria and the Australian Capital
Territory; and
(d) Victoria.
"Restraint Period" means each of the following periods:
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(a) from Closing until twenty-four (24) months after Closing;
(b) from Closing until eighteen months (18) months after Closing;
(c) from Closing until twelve (12) months after Closing;
(d) from Closing until nine (9) months after Closing;
(e) from Closing until six (6) months after Closing.
11A.02 Non-Competition Undertaking. With the exception of the subsequent
sentence, neither Seller shall, and each Seller shall procure its Affiliates not
to, during any of the Restraint Periods and within any of the Restraint Areas
conduct, carry on or promote (whether on its own account, in partnership, in
joint venture or as employee or agent of or manager for any other person) any
Restrained Business. Nothwithstanding the preceding sentence, the Sellers and
their Affiliates shall be entitled to acquire companies and/or businesses (a
"Target") during the Restraint Periods, within the Restraint Areas which
conducts, carries on or promotes a Restrained Business, PROVIDED ALWAYS that the
core business of any such Target is not any Restrained Business.
11A.03 Further Undertakings. During any Restraint Period and within any
Restraint Area, the Sellers must not, and must make sure that each of its
Affiliates does not:
(a) secure or seek to attract the custom of any person who is at
Closing, a customer of the Company provided that such customer was not an
existing customer of either Seller at Closing;
(b) represent itself as being in any way connected with or associated
with the Company (except as the prior owner of the Equity Interest) or any
business carried on by the Company;
(c) use a name which is similar to the present name of the Company or
use any of the Intellectual Property or the Intellectual Property;
(d) disclose or use to its advantage or the disadvantage of the
Purchaser: (i) the name of any customer of the Company or of the Sellers in
connection with the Company; (ii) any of the IP; or (iii) any of the trade
secrets, secret or confidential operations, processes or dealings of, or any
confidential information relating to, the Company or its organisation, finances,
transactions or affairs;
(e) seek to engage or engage the services of any person who is or
becomes an employee of or service provider to the Company.
11A.03 Restraints Cumulative. Each of the restraints in Section 11A.01 and
Section 11A.02 resulting from the various combinations of the Restraint Periods
and the Restraint Areas is a separate, severable and independent restraint and
the invalidity or unenforceability of any of such restraints does not affect the
validity or enforceability of any of the other restraints in those sections.
11A.04 Restraints Reasonable. The Sellers acknowledge that each of the
restraints in Section 11A.01 and Section 11A.02 is reasonable in its extent (as
to duration, geographical area and restrained conduct) having regard to the
interests of each party to this Agreement and goes no further than is reasonably
necessary to protect the Purchaser as buyer of the Equity Interest in respect of
the goodwill of the Company and the Business.
Section 12. Miscellaneous
12.01 Notices. All notices, requests, demands, consents, instructions or
other communications required or permitted hereunder shall be in writing and by
by fed ex, courier or fax to each party as follows:
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If to the Sellers, to:
ManTech International Corporation
00000 Xxx Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx
Xxxxxx Xxxxxx of America 00000-0000
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Attention: General Counsel
If to the Company, to:
Praxa Limited
000 Xxxxxxx Xxxx
Xxxxx Xxxxxxxxx
Xxxxxxxx 0000
Attn: The Board of Directors
Telephone No.: 00 0 0000 0000
Facsimile No.: 61 3 9699 1506
If to the Purchaser, to:
CDC Australia Limited
00/X Xxxxxxxx Xxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx, Xxxx Xxxx
Telephone No.: (000) 0000-0000
Facsimile No.: (000) 0000-0000
Attn: Company Secretary
All such notices, requests, demands, consents, instructions or other
communications shall be effective: (a) when sent by Federal Express or other
overnight service of recognized standing, on the second business day following
the deposit with such service; and (b) when faxed, upon confirmation of receipt
regardless of whether such notice, request or other communication is received by
any other Person to whom a copy of such notice is to be delivered pursuant to
this Section. Any party from time to time may change its address, facsimile
number or other information for the purpose of notices to that party by giving
notice specifying such change to the other party hereto.
12.02 Expenses. Each of Sellers (and not the Company) shall pay for each
of their costs and expenses relating to the negotiation, execution and closing
of this Agreement and the transactions contemplated hereby. The costs and
expenses of the Purchaser relating to the negotiation, execution and closing of
this Agreement and the transactions contemplated hereby shall be paid by the
Company after the Closing up to an amount of One Hundred Thousand Australian
Dollars (AU$100,000).
12.03 Public Announcements. Subject to the subsequent sentences, at all
times at or before the Closing, each Seller, the Company and the Purchaser shall
not issue or make any reports, statements or releases to the public or generally
to the employees, customers, suppliers or other Persons to whom the Company
provides services or with whom the Company otherwise has significant business
relationships with respect to this Agreement or the transactions contemplated
hereby without the consent of the other parties, which consent shall not be
unreasonably withheld. If any party is unable to obtain the approval of its
public report, statement or release from the other party and such report,
statement or release is, in the opinion of legal counsel to such party, required
by Law or by any Court of competent jurisdiction or governmental or regulatory
body in order to discharge such party's disclosure obligations, then such party
may make or issue the legally required report, statement or release and promptly
furnish the other party with a copy thereof.
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12.04 Waiver. Any term or condition of this Agreement may be waived at any
time by the party that is entitled to the benefit thereof, but no such waiver
shall be effective unless set forth in a written instrument duly executed by or
on behalf of the party waiving such term or condition. No waiver by any party of
any term or condition of this Agreement, in any one or more instances, shall be
deemed to be or construed as a waiver of the same or any other term or condition
of this Agreement on any future occasion.
12.05 Amendment. This Agreement may be amended, supplemented or modified
only by a written instrument duly executed by or on behalf of each party hereto.
12.06 No Third Party Beneficiary. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto and their
respective successors or permitted assigns, and it is not the intention of the
parties to confer third-party beneficiary rights upon any other Person other
than any Person entitled to indemnity under Section 10.
12.07 Assignment; Binding Effect. Subject always to the subsequent
sentence, neither this Agreement nor any right, interest or obligation hereunder
may be assigned by any party hereto without the prior written consent of the
other party hereto and any attempt to do so will be void, except for assignments
and transfers by operation of Law. At any time after the execution of this
Agreement, the Purchaser may assign any or all of its rights, interests and
obligations hereunder (including without limitation its rights under Section 10)
provided that, each such assignee agrees in writing to be bound by all of the
terms, conditions and provisions contained herein. Subject to the preceding
sentence, this Agreement is binding upon, inures to the benefit of and is
enforceable by the parties hereto and their respective successors and assigns.
12.08 Invalid Provisions. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under any present or future Law, and if the
rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby: (a) such provision will be fully
severable; (b) the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provision or by its severance herefrom; and (c) in lieu of such
illegal, invalid or unenforceable provision, there will be added automatically
as a part of this Agreement a legal, valid and enforceable provision as similar
in terms to such illegal, invalid or unenforceable provision as may be possible.
12.09 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Victoria, Australia without giving effect to the
conflicts of laws principles thereof.
12.10 Jurisdiction. Any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Agreement or the transactions contemplated hereby shall be brought against any
of the parties in the courts of Victoria, Australia and each of the parties
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts) in any such suit, action or proceeding and waives
any objection to venue laid therein. For purposes of this Agreement, process in
any such suit, action or proceeding in any such courts may be served on the
parties hereto anywhere in the world.
12.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
12.12 Confidentiality. Each party hereto will hold, and will use its
reasonable endeavors to cause its Affiliates to hold, in strict confidence from
any Person (other than any such Affiliate, unless: (i) compelled to disclose by
judicial or administrative process (including without limitation in connection
with obtaining the necessary approvals of this Agreement and the transactions
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contemplated hereby of Governmental or Regulatory Authorities) or by other
requirements of Law; or (ii) disclosed in any action, suit, proceeding, inquiry,
investigation either before or brought by Governmental or Regulatory Authority
or otherwise, brought by a party hereto in pursuit of its rights or in the
exercise of its remedies hereunder, all documents and information concerning the
other party or any of its Affiliates furnished to it by the other party in
connection with this Agreement or the transactions contemplated hereby,
including, without limitation, the terms and conditions of this Agreement except
to the extent that such documents or information can be shown to have been: (a)
previously known by the party receiving such documents or information; (b) in
the public domain (either prior to or after the furnishing of such documents or
information hereunder) through no fault of such receiving party; or (c) later
acquired by the receiving party from another source if the receiving party is
not aware that such source is under an obligation to another party hereto to
keep such documents and information confidential. In the event the transactions
contemplated hereby are not consummated, upon the request of the other party,
each party hereto shall, and shall cause its Affiliates to, promptly redeliver
or cause to be redelivered all copies of documents and information furnished by
the other party in connection with this Agreement or the transactions
contemplated hereby and destroy or cause to be destroyed all notes, memoranda,
summaries, analyses, compilations and other writings related thereto or based
thereon prepared by the party furnished such documents and information.
12.13 Exercise of Rights. A party may exercise a right, power or remedy at
its discretion, and separately or concurrently with another right, power or
remedy. A single or partial exercise of a right, power or remedy by a party does
not prevent a further exercise of that or of any other right, power or remedy.
Failure by a party to exercise or delay in exercising a right, power or remedy
does not prevent its exercise. The rights, powers and remedies provided in this
Agreement are cumulative with and not exclusive of the rights, powers or
remedies provided by law independently of this Agreement.
12.14 [Intentionally left blank]
12.15 Further Assurances. Each party agrees, at its own expense, on the
request of any other party, to do everything reasonably necessary to give effect
to this Agreement and the transactions contemplated by it (including, without
limitation, the execution of documents) and to use all reasonable endeavours to
cause relevant third parties to do likewise.
12.16 Rule of Construction. As each of the parties has reviewed this
Agreement and has had the opportunity to make revisions, the parties agree that
any rule of construction to the effect that any ambiguities are to be construed
against the drafting party shall not apply in the interpretation of this
Agreement or any of the Transaction Documents.
Initialled by Sellers ____ 47
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Final
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party hereto, and shall be effective as of
the date first above written
Signed, sealed and delivered by )
MANTECH INTERNATIONAL CORPORATION )
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Signature of authorised person
Chairman of the Board, CEO and President
-------------------------------------------
Office held
Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name of authorised person
Signed, sealed and delivered by )
MANTECH AUSTRALIA INTERNATIONAL INC. )
/s/ Xxxxxx X. Xxxxxxxx
-------------------------------------------
Signature of authorised person
President and Director
-------------------------------------------
Office held
Xxxxxx X. Xxxxxxxx
-------------------------------------------
Name of authorised person
Signed, sealed and delivered by CDC AUSTRALIA LIMITED)
/s/ Xxxxx X. Xxx
-------------------------------------------
Signature of authorised person
Authorized Officer
-------------------------------------------
Office held
Xxxxx X. Xxx
-------------------------------------------
Name of authorised person
Initialled by Sellers ____ 48
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Final
The Common Seal of PRAXA LIMITED is affixed )
in accordance with its Constitution in the )
presence of )
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. XxxXxxxxx
------------------------------------------ -----------------------------------
Signature of authorised person Signature of authorised person
Director Secretary / Secretary
------------------------------------------ -----------------------------------
Office held Office held
Xxxxxx X. Xxxxxxxx Xxxxxxx X. XxxXxxxxx
------------------------------------------ -----------------------------------
Name of authorised person Name of authorised person
Initialled by Sellers ____ 49
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Final
EXHIBIT 2.05
EXAMPLES OF THE CALCULATION OF THE CONSIDERATION ADJUSTMENT AS SET OUT IN
SECTION 2.05
Shortage Scenario:
The Actual EBITDA is $3,100,000, which means that the Adjusted Consideration is
$9,312,400 (3,100,000 x PE of 3.004). The Total Consideration is greater than
the Adjusted Consideration by $1,687,600 ($11,000,000 - $9,312,400). The
$1,687,600 Shortage is subject to a ten percent (10%) reduction, which means
that the Purchaser is entitled to remove an amount equal to $1,518,840
($1,687,600 x .9) from the Retained Amount.
Overage Scenario:
The Actual EBITDA is $3,900,000, which means that the Adjusted Consideration is
$11,715,600 (3,900,000 x PE of 3.004). The Total Consideration is less than the
Adjusted Consideration by $715,600 ($11,715,600 - $11,000,000). The $715,600
Overage is subject to a ten percent (10%) reduction, which means that the
Sellers shall be entitled to a $644,040 ($715,600 x .9) credit against a
Purchaser's claim or claims for offset from the Retained Amount.
Initialled by Sellers ____ 50
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Final
EXHIBIT 7.03(a)
COMPANY SECRETARY'S CERTIFICATE
PRAXA LIMITED (ACN 006 126 496)
We, Xxxxxxx Xxxxx XxxXxxxxx and Xxxxxxx Xxxxxx Xxxxxxxxxxx, dual company
Secretaries of PRAXA LIMITED (ACN 006 126 496), a corporation organized and
existing under the laws of Victoria, Australia (the "Company") and having a
registered address of 00 Xxxxxxxx Xxxxxx Xxxx Xxxxxxxxx, Xxxxxxxx, pursuant to
Section 7.03(a) of the Share Purchase Agreement dated as of __________ (the
"Share Purchase Agreement") by and among [ ], (the "Purchaser") the Company and
the Sellers named therein, do hereby certify on behalf of the Company as
follows:
(1) Attached hereto as Exhibit A is a true, complete and correct copy of the
Memorandum and Articles of Association of the Company and all amendments thereto
(as so amended, the "Constitution"), and no amendment to the Constitution has
been authorized or become effective since the date of the last such amendment,
no amendment of other document relating to or affecting the Articles of
Association has been filed with the Australian Securities and Investment
Commission ("ASIC") since such date and no action has been taken by the Company,
its equity holders, directors or officers in contemplation of the filing of any
such amendment or other document or in contemplation of the liquidation or
dissolution of the Company.
(2) Attached hereto as Exhibit B is a true, complete and correct copy of the
resolutions adopted by the Board of Directors of the Company with respect to the
Share Purchase Agreement and the transactions contemplated thereby, which
resolutions were duly and validly adopted by a meeting of the Board of Directors
of the Company on [_______________]. All such resolutions are in full force and
effect on the date hereof in the form in which adopted and no other resolutions
have been adopted by the Board of Directors of the Company or any committee
thereof relating to the Share Purchase Agreement and the transactions
contemplated thereby.
(3) Each of the following named individuals is a duly elected or appointed,
qualified and acting officer of the Company who holds, and at all times since
date of execution of Share Purchase Agreement has held, the offices set opposite
such individual's name, and the signature written opposite the name and title of
such officer is such officer's genuine signature:
Xxxxxxx Xxxxx XxxXxxxxx Secretary ____________________________
Xxxxxxx Xxxxxx Xxxxxxxxxxx Secretary ____________________________
Xxxx Xxxxxxxx Xxxxx Junior Director ____________________________
Xxxxxx Xxxxxx Xxxxx Director ____________________________
Xxxxxx Xxxx Xxxxxxxx Director ____________________________
Xxxxxxx Xxxxx Xxxxxxxxx Director ____________________________
Colin Xxxxxx Xxxxxxx Director ____________________________
Initialled by Sellers ____ 51
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Final
IN WITNESS WHEREOF, the Company has caused this Certificate to be executed on
its behalf by the undersigned on and as of [ ], 2002.
PRAXA LIMITED (ACN 006 126 496).
By: ____________________________
Name: Xxxxxxx Xxxxx XxxXxxxxx
Title: Secretary
By: ____________________________
Name: Xxxxxxx Xxxxxx Xxxxxxxxxxx
Title: Secretary
I, Xxxxxx Xxxx Xxxxxxxx, Director of the Company, DO HEREBY CERTIFY on
behalf of the Company that Xxxxxxx Xxxxx XxxXxxxxx and Xxxxxxx Xxxxxx
Xxxxxxxxxxx are the duly elected or appointed, qualified and acting Secretaries
of the Company, and the signatures set forth above are the genuine signatures of
such officers.
By: __________________________
Name: Xxxxxx Xxxx Xxxxxxxx
Title: Director
Initialled by Sellers ____ 52
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Final
EXHIBIT 7.03(B)
DIRECTOR'S CERTIFICATE - [ ]
PRAXA LIMITED (ACN 006 126 496)
I, [ ], Director of PRAXA LIMITED (ACN 006 126 496), a corporation
organized and existing under the laws of Victoria, Australia (the "Company"),
pursuant to Section 7.03 of the Share Purchase Agreement dated as of December
31, 2002 (the "Share Purchase Agreement") by and among the Purchaser, the
Company and the Sellers named therein, do hereby certify on behalf of the
Company as follows:
(1) Each of the representations and warranties made by the Company in the Share
Purchase Agreement is true and correct in all material respects on and as of the
Closing Date
(2) Each of the agreements, covenants and obligations required by the Share
Purchase Agreement to be performed or complied with by the Company at or before
the Closing has been duly performed or complied with in all material respects.
IN WITNESS WHEREOF, the Company has caused this Certificate to be executed
on behalf by the undersigned on and as of [ ], 2002.
PRAXA LIMITED (ACN 006 126 496)
By: _________________________________
Name: [ ]
Title: Director
Initialled by Sellers ____ 53
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Final
EXHIBIT 7.05
FORM OF OPINION OF COMPANY'S AND SELLER'S COUNSEL
[Date]
By Hand
[Names of Purchaser]
x/x 00/X Xxxxxxxx Xxxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxx Xxxx
Attn: Xxxxxxx Xxxxxxxx
Dear Sir,
Re : Sale and Purchase of Equity Interest in PRAXA LIMITED, ACN 006 126 496 (the
"Company") to [Name of Purchaser] (the "Purchaser")
We are solicitors qualified to practise in the State of Victoria, Australia
("Victoria") and have been requested by our client, the Company, to issue this
opinion to you in connection with a share purchase agreement ("Agreement") dated
[o] between the Purchaser, the Company, ManTech Australia International, Inc.
("MAII") and ManTech International Corporation ("MIC") (MAII and MIC are
collectively known herein as the "Sellers");
A. For the purpose of rendering this opinion, we have examined originals/copies
of:-
the executed Agreement dated December 31, 2002;
the Constitution of the Company;
Results of company search at ASIC against the Company made on December 31, 2002
and on Closing (as defined in the Share Purchase Agreement); and
Winding-up and bankruptcy searches against the Company and the Sellers made on
Closing (as defined in the Share Purchase Agreement).
B. Our opinion is based on the following assumptions:
The genuineness and authenticity of all signatures and the conformity to the
originals of all copies (whether or not certified) examined by us and the
authenticity and completeness of the originals from which such copies were
taken; and documents examined by us in draft form will be or have been executed
in that form;
The due capacity, power and authority of each of the directors and shareholders
of the Company to enter into any directors and shareholders' resolutions
respectively and the due execution of such directors and shareholders'
resolutions;
The directors' and shareholders' resolutions of the Company remain in full force
and effect and have not been rescinded, superseded or amended and that all
filings by the Company required to be made with
Initialled by Sellers ____ 54
Initialled by Purchaser __
Final
ASIC have been so made within statutory time limits;
C. Based upon the foregoing, we are of the opinion that:
The Company is duly incorporated with limited liability and validly existing
under the laws of Victoria, Australia, is a separate legal entity, is capable of
suing and being sued and has the power and authority to own its assets and
conduct its business in accordance with its Constitution.
The Company has full power and authority under its Constitution to enter into,
execute the Agreement.
The execution and delivery of the Agreement by the Company does not conflict
with or result in a breach of any of the terms or provisions of the Constitution
of the Company.
The directors of the Company are as follows: [ ].
The Shareholders of the Company are as follows: [ ].
Based on the searches referred to above, no petition for the winding
up/bankruptcy against the Company or any of the Sellers has been presented in
Victoria, Australia as at the date of the searches.
Resolutions of the board of directors and/or shareholders of the Company
concerning the execution and delivery of the Agreement have been validly passed
in accordance with its Constitution.
D. Our opinion is rendered subject to the following qualifications:
We express no opinion other than the effect of Victorian law on the Agreement or
otherwise as in force at the date hereof. We are not qualified to, and we do
not, express an opinion on the laws of any other jurisdiction.
Claims under the Agreement may become barred under the laws relating to
limitation of actions in Victoria, or may become subject to defences or set-off
or counterclaims and equitable remedies such as injunctions and orders for
specific performance, are discretionary and will not be granted automatically by
a Victoria court.
Our opinion is issued solely for your benefit and is not to be made available
to, or relied upon by, any other person, firm or entity.
Yours faithfully,
[ ]
Solicitor
Initialled by Sellers ____ 55
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Final
ATTACHMENT A - FORM OF CONSULTANCY AGREEMENT
See attached.
Initialled by Sellers ____ 56
Initialled by Purchaser __
CONSULTING AGREEMENT
This Consulting Agreement (the "Agreement") is dated January , 2003, by
and between PRAXA LIMITED A.C.N. 006 126 496, the registered office of which is
situated at 000 Xxxxxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx (the
"Company") and COLIN XXXXXX XXXXXXX of 0 Xxxxx Xxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
(the "Consultant")
RECITALS
A. The Company desires to obtain the services of Consultant, on its own
behalf and on behalf of all existing and future Affiliated Companies (as
defined) and Consultant desires to secure consulting services from the Company
upon the terms and conditions set forth herein.
B. The Company has executed various previous agreements with the
Consultant including, without limitation, the services agreement dated [ ], the
variation agreement dated August 2, 2002 and the unexecuted Share Option
Agreement (the "Old Employment Agreements").
C. The parties hereto agree that the Old Employment Agreements are
hereby terminated and the Consultant has agreed to execute the Settlement Deed
and Release in the form attached as Attachment A.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
AGREEMENT
1. DEFINITIONS.
"$" shall mean the Australian currency, unless otherwise specifically
provided.
"Affiliated Companies" shall mean any corporation or other business entity
or entities that directly or indirectly controls, is controlled by, or is under
common control with the Company after the Closing as defined in the Share
Purchase Agreement and "Affiliated Company" shall have a corresponding meaning.
"Board" shall mean the board of directors of the Company.
"Business" means the business conducted by the Company as at the date of
this Agreement and during the preceding calender year.
"Group CEO" shall mean Xxxxx Xxx or his designated successor.
"Restraint Area" means each of the following: (i) Australia; (ii)
Queensland, New South Wales, Victoria and the Australian Capital Territory; and
(iii) Victoria.
"Restrained Business" means a business or operation substantially similar
to, or competitive with, the Business.
1
"Restraint Period" means each of the following periods: (i) three (3)
months from the expiry of the Consultancy Period or termination in accordance
with Section 5; and (ii) one (1) month from the expiry of the Consultancy Period
or termination in accordance with Section 5.
"Settlement Sum" shall have the meaning given under the Settlement Deed
and Release.
"Settlement Deed and Release" shall mean the Settlement Deed and Release
dated the date of this Agreement by and between the Company, Consultant and
ManTech International Corporation.
"Share Purchase Agreement" shall mean the agreement dated December 31,
2002 by and among CDC Australia Limited, ManTech International Corporation,
ManTech Australia International Inc and the Company relating to the sale and
purchase of the Company.
2. CONSULTING PERIOD AND TERMINATION OF OLD EMPLOYMENT AGREEMENTS.
(a) BASIC TERM. The Company hereby agrees to retain the Consultant and
Consultant agrees to render to the Company those services described in Section 3
for the period commencing on the date of this Agreement and ending six (6)
months thereafter (the "Consulting Period"). The parties may agree to an
extension (or extensions) of the Consulting Period prior to the expiration of
the Consulting Period (or prior extended period, as the case may be) in writing
in which case the Consulting Period shall continue for such extended period(s)
(each an "Extended Period").
(b) TERMINATION OF OLD EMPLOYMENT AGREEMENTS. The Company and the
Consultant agree that this Agreement shall supersede and replace all of the Old
Employment Agreements and that each of the Old Employment Agreements is hereby
and forever terminated. In consideration of the Company offering this Agreement
and the payment of the Settlement Sum, the Consultant agrees to execute the
Settlement Deed and General Release.
3. SERVICES, RESPONSIBILITIES AND AUTHORITY.
(a) SERVICES. Consultant hereby agrees to provide and perform for the
Company those services set forth in Schedule A and such other services for
either the Company or any Affiliated Companies as the Board or Group CEO shall
designate from time to time (the "Services").
(b) BEST EFFORTS. Consultant shall devote his best efforts to the
performance of the Services and hereby agrees to devote, unless otherwise
requested in writing by the Company, a minimum of forty-five (45) hours of
service per week. Consultant shall keep the Board fully informed (in writing if
requested by the Board) of the progress of any matter that is within the scope
of the Services.
(c) TITLE AND REPORTING. The title of Consultant shall be Chief
Executive Officer and Consultant shall be required to report to both the Board
and to the Group CEO, unless otherwise determined by the Group CEO from time to
time.
(d) LOCATION. The Consultant shall be based initially in Sydney,
Australia. The Board or the Group CEO may require the Consultant to be based at
another location within Australia at any time during the Consultancy Period. In
the performance of the Services, the Consultant may be required to undertake
national or international travel at the request of the Group CEO. Such travel
will be in accordance with the travel policies of the Affiliated Company's
travel policies, as they may be amended from time to time during the course of
this Agreement.
2
4. PROFESSIONAL FEE, BONUS, TAXES, BENEFITS AND EXPENSES.
(a) PROFESSIONAL FEE. In consideration of the Services to be rendered
hereunder, including, without limitation, services to any Affiliated Company,
Consultant shall be paid a professional fee of AU$[ ] per month ("Professional
Fee"). The Professional Fee shall be payable in accordance with the usual
practice of the Company as at the date hereof which may be amended from time to
time by the Company during the course of this Agreement. The Company will not be
obliged to increase the Professional Fee at any time during the Consultancy
Period.
(b) BONUS. In consideration for the Services to be rendered hereunder
and only upon the obtaining by the Company of the targets set out in Schedule B
(the "Targets"), a bonus shall be payable to Consultant in accordance with
Schedule B ("Bonus"). Whether or not the Targets are established, shall be
determined by the Board in its sole and absolute discretion. The Company will
not be obliged to increase the Bonus at any time during the Consultancy Period.
(c) TAXES ETC. There shall be no withholdings from either the
Professional Fee or the Bonus. The Consultant shall be solely responsible, and
liable, for all social security, income tax, superannuation, any required
insurance including without limitation, professional indemnity and other state
and federal taxes or assessments. The Consultant hereby warrants to the Company,
and indemnifies the Company against, Consultant's non-payment of any and all
social security, income tax, superannuation, any required insurance including
without limitation, professional indemnity and other state and federal taxes or
assessments.
(d) BENEFITS. Other than the Professional Fee and the Bonus, Consultant
shall not be entitled to any direct or indirect compensation or fringe benefits
for services performed hereunder, nor shall Consultant be eligible to
participate in any employee benefit plans provided by the Company or any
Affiliated Company to its employees.
(e) EXPENSES. Upon the prior written approval of the Board or the Group
CEO, the Company shall reimburse Consultant for reasonable travel and other
business expenses incurred by Consultant in the performance of his duties
hereunder in accordance with the Affiliated Company's general policies, as they
may be amended from time to time during the course of this Agreement. Consultant
shall submit for reimbursement to the Company for expenses as incurred
incidental to the services performed, referencing all travel and expenses
incurred with appropriate purchase orders and receipts.
5. TERMINATION/SUSPENSION OF CONSULTING RELATIONSHIP.
(a) BY DEATH. In the event of Consultant's death during the Consulting
Period, this Agreement shall be deemed to have terminated on the last day of the
calendar month during which Consultant's death shall occur, and the Company
shall: (i) pay to the Consultant's estate, in full discharge of its obligations
hereunder, compensation for Consultant's services performed up to the
termination of this Agreement; and (ii) reimburse Consultant's estate for any
expenses properly incurred prior to the termination of this Agreement.
Thereafter, the Company's obligations hereunder shall terminate.
(b) BY DISABILITY. In the event Consultant is unable to perform the
normal duties by reason of disability, then at the sole discretion of the Group
CEO or the Board, this Agreement may be treated as having been terminated on the
last day of the calendar month during which Consultant shall have become
disabled, and the Company shall: (i) pay to the Consultant's estate, in full
discharge of its obligations hereunder, compensation for Consultant's services
up to the termination of this Agreement; and (ii)
3
reimburse Consultant's estate for any expenses properly incurred prior to the
termination of this Agreement. Thereafter, the Company's obligations hereunder
shall terminate. For purposes of this section, "disability" shall mean the
inability of Consultant to perform the normal duties under this Agreement for a
fifteen (15) consecutive day period due to illness, injury, incapacity or other
disability, either physical or mental. If required by either party, a physician
appointed by the Company shall determine whether Consultant is so disabled.
(c) BY THE COMPANY FOR CAUSE. The Company may terminate, without
liability, this Agreement for Cause (as defined below) at any time during the
Consultancy Period or any Extended Period immediately and without notice. The
Company shall pay Consultant the Professional Fee and Bonus to which he is
entitled pursuant to Section 4 through the date of termination and thereafter
the Company's obligations hereunder shall terminate. For the avoidance of doubt,
no Bonus will be payable unless the Targets have been achieved and the relevant
time periods have past prior to the Termination.
Termination shall be for "Cause" if:
(i) Consultant is convicted of, pleads guilty to or does not
contest a felony or a crime of moral turpitude;
(ii) Consultant wilfully disobeys reasonable and lawful
instructions of the Board or Group CEO as determined by the Group CEO or
the Board as the case may be;
(iii) Group CEO or the Board determines in good faith that
Consultant has been grossly negligent or acted dishonestly;
(iv) Group CEO or the Board makes a good faith determination that
Consultant has failed to perform the Services and such failure continues
after Consultant has been warned in writing that such non-performance is
unacceptable; or
(v) Consultant has, in the opinion of the Group CEO or the Board,
breached any term of this Agreement and such breach continues after
Consultant is afforded a reasonable opportunity to cure such breach.
(d) AT WILL. At any time after the Consultancy Period and if , either
the Company or Consultant may terminate, without liability, this Agreement for
any reason, with or without cause, by giving one (1) month advance written
notice to the other party. Upon the termination of this Agreement in accordance
with this Section 5(d), the Company shall pay Consultant the Professional Fee
and Bonus to which he is entitled pursuant to Section 4 for services rendered
through the date of termination, and thereafter all obligations of the Company
shall terminate.
(e) SUSPENSION. If Consultant is indicted or otherwise formally charged
with a felony or a crime of moral turpitude, the Board or Group CEO may, upon
immediate written notice, suspend the rendering of Consultant's services to the
Company. Thereafter, the Professional Fee payment, if any, to which Consultant
otherwise would be entitled under this Agreement shall be paid into an
interest-bearing account. In the event that Consultant is acquitted of such
charges or such charges shall otherwise be dismissed, Consultant shall be
reinstated as a consultant and the Professional Fee paid into the account, shall
be paid to Consultant. In the event Consultant is convicted, plead guilty or no
contest to such charges and this Agreement is terminated, the professional fee
paid into an interest-bearing account plus accrued interest, shall be paid over
to the Company. For the purposes of this Agreement, this Agreement shall be
deemed to have terminated as of the date of suspension.
6. TERMINATION OBLIGATIONS.
4
(a) Consultant hereby acknowledges and agrees that all personal
property, including, without limitation, all books, manuals, records, reports,
notes, contracts, lists, blueprints, and other documents, or materials, or
copies thereof, Proprietary Information (as defined below), and equipment
furnished to or prepared by Consultant in the course of or incidental to his
rendering of services to the Company, including, without limitation, records and
any other materials, belong to the Company and shall be promptly returned to the
Company upon termination of the Consulting Period or Extended Period if such
extended period is agreed in accordance Section 2. Following termination, the
Consultant will not retain any written or other tangible material containing any
Proprietary Information.
(b) The representations and warranties contained herein and Consultant's
obligations under Sections 4, 6, 6A, 7 and 8 shall survive termination of the
Consulting Period and any Extended Periods.
6A. NON COMPETE.
(a) Non-Competition Undertaking. The Consultant shall not during any of
the Restraint Periods and within any of the Restraint Areas conduct, carry on or
promote (whether on his own account, in partnership, in joint venture or as
employee or agent of or manager for any other person) any Restrained Business.
During any Restraint Period and within any Restraint Area, the Consultant must
not secure or seek to attract the custom of any person who is a customer of the
Company or seek to engage or engage the services of any person who is or becomes
an employee of, contractor to or service provider to the Company.
(b) Restraints Cumulative. Each of the restraints in Section 6A(a)
resulting from the various combinations of the Restraint Periods and the
Restraint Areas is a separate, severable and independent restraint and the
invalidity or unenforceability of any of such restraints does not affect the
validity or enforceability of any of the other restraints in that section.
(c) Restraints Reasonable. The Consultant acknowledges that each of the
restraints in Section 6A(a) are reasonable in its extent (as to duration,
geographical area and restrained conduct) and that his experience, capabilities
and circumstances are such that the section will not prevent Consultant from
earning a livelihood and that the limitations set forth are required for the
adequate protection of the Company.
7. PROPRIETARY INFORMATION.
(a) DEFINED. "Proprietary Information" is all information and any idea
in whatever form, tangible or intangible, pertaining in any manner to the
business of the Company or any Affiliated Company, or to its clients,
consultants, or business associates, unless: (i) the information is or becomes
publicly known through lawful means; (ii) the information was rightfully in
Consultant's possession or part of his general knowledge prior to the Consulting
Period exclusive of knowledge acquired as part of Consultant's prior employment
with the Company; or (iii) the information is disclosed to Consultant without
confidential or proprietary restrictions by a third party who rightfully
possesses the information (without confidential or proprietary restriction) and
did not learn of it, directly or indirectly, from the Company.
(b) GENERAL RESTRICTIONS ON USE. Consultant agrees to hold all
Proprietary Information in strict confidence and trust for the sole benefit of
the Company and not to, directly or indirectly, disclose, use, copy, publish,
summarize, or remove from Company's premises any Proprietary Information (or
remove from the premises any other property of the Company), except (i) during
the Consulting Period or any Extended Period(s) to the extent necessary to carry
out Consultant's responsibilities under this
5
Agreement, and (ii) after termination of the Consulting Period or any Extended
Period(s) as specifically authorized in writing by the Board.
8. DISCLOSURE.
Consultant shall disclose promptly to the Company all new discoveries,
ideas, formulae, products, methods, processes, designs, trade secrets,
copyrightable material, patentable inventions, or other useful technical
information or know-how and all improvements, modifications or alterations of
existing discoveries made, discovered, or developed by Consultant, either alone
or in conjunction with any other person during the Consulting Period or any
Extended Period(s), or using the Company's materials or facilities, which
discoveries or developments are based on, derived from, or make use of any
information directly related to the business disclosed to, or otherwise acquired
by, Consultant from the Company during the Consulting Period or any Extended
Period(s). Consultant agrees that any copyright, patent, trademark, or other
proprietary rights in any such discoveries shall be the sole and exclusive
property of the Company, and the Company needs not account to Consultant for any
revenue or profit derived therefrom. If by operation of law or otherwise, any or
all of the items of this section or any component or element thereof, is
considered to be the intellectual property right of Consultant, Consultant
hereby agrees to irrevocably assign to the Company, its successor and assigns,
ownership of all copyrights and all other intellectual property rights available
with respect to each such element or item. Consultant shall be deemed to have
granted the Company an irrevocable power of attorney to execute as Consultant's
agent any and all documents (including copyright registrations) deemed necessary
by the Company to perfect Company's intellectual property rights in and to each
of the items in this section.
9. INDEPENDENT CONTRACTOR RELATIONSHIP.
(a) NATURE OF RELATIONSHIP. In performing the Services pursuant to this
Agreement, Consultant's relationship with the Company will be that of an
independent contractor and nothing in this Agreement should be construed to
create a partnership, joint venture, or Company-employee relationship.
Consultant acknowledges and agrees that neither Consultant nor any person
associated with Consultant shall be entitled to receive or otherwise participate
in any employee benefits of any nature which the Company provides or makes
available to any of its employees.
(b) TAXES AND RECORDS. Consultant agrees that it will be solely
responsible for, and will file and pay on a timely basis, all withholding and
other taxes required by federal, state or local law with respect to Consultant's
performance of the Services.
10. NO CONFLICT OF INTEREST.
Consultant agrees during the term of this Agreement not to accept work or
enter into a contract or accept an obligation, inconsistent or incompatible with
Consultant's obligations under this Agreement or the scope of services rendered
for Company. Consultant warrants that to the best of his knowledge, there is no
other contract or duty on his part now in existence inconsistent with this
Agreement. Consultant further agrees not to disclose to the Company, or bring
onto the Company's premises, or induce the Company to use any confidential
information that belongs to anyone other than the Company or Consultant.
Consultant agrees to indemnify the Company from any and all loss or liability
incurred by reason of the alleged breach by Consultant of any confidentiality or
services agreement with anyone other than the Company.
11. ASSIGNMENT, SUCCESSORS AND ASSIGNS.
6
Consultant agrees that he will not assign, sell, transfer, delegate or
otherwise dispose of, whether voluntarily or involuntarily, or by operation of
law, any rights or obligations under this Agreement, nor shall Consultant's
rights be subject to encumbrance or the claims of creditors. Any purported
assignment, transfer, or delegation shall be null and void. Nothing in this
Agreement shall prevent the consolidation of the Company with, or its merger
into, any other corporation, or the sale by the Company of all or substantially
all of its properties or assets, or the assignment by the Company of this
Agreement and the performance of its obligations hereunder to any successor in
interest or any Affiliated Company. Subject to the foregoing, this Agreement
shall be binding upon and shall inure to the benefit of the parties and their
respective heirs, legal representatives, successors, and permitted assigns, and
shall not benefit any person or entity other than those enumerated above.
12. NOTICES.
All such notices and communications shall be effective (a) when sent by
Fedex or other overnight service of recognized standing, on the second business
day following the deposit with such service; and (b) when faxed, upon
confirmation of receipt. Consultant shall be obligated to notify the Company in
writing of any change in his address. Notice of change of address shall be
effective only when done in accordance with this Section. All notices, requests,
demands, consents, instructions or other communications required or permitted
hereunder shall be in writing and faxed or delivered via courier to each party
as follows:
If to the Company, to:
Praxa Limited
000 Xxxxxxx Xxxx
Xxxxx Xxxxxxxxx
Xxxxxxxx 0000
Attn: The Board of Directors
Fax: 00 0 0000 0000
If to the Consultant, to:
Xxxxx Xxxxxxx
0 Xxxxx Xxxxx
Xxxxxx
Xxx Xxxxx Xxxxx
Fax: [confirm]
Notice of change of address shall be effective only when done in accordance with
this Section.
13. ENTIRE AGREEMENT.
The terms of this Agreement are intended by the parties to be the full and
final expression of their agreement with respect to the retention of Consultant
by the Company and may not be contradicted by evidence of any prior or
contemporaneous agreement. The parties further intend that this Agreement shall
constitute the complete and exclusive statement of its terms and that no
extrinsic evidence whatsoever may be introduced in any judicial, administrative,
or other legal proceeding involving this Agreement. This Agreement fully
supersedes any prior oral or written consulting or other agreements between the
Consultant and the Company.
14. AMENDMENTS AND WAIVERS.
7
This Agreement may not be modified or amended, except by an instrument in
writing, signed by the Consultant and by a duly authorized representative of the
Company. By an instrument in writing similarly executed, either party may waive
compliance by the other party with any provision of this Agreement that such
other party was or is obligated to comply with or perform, provided, however,
that such waiver shall not operate as a waiver of, or estoppel with respect to,
any other or subsequent failure. No failure to exercise and no delay in
exercising any right, remedy, or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, remedy, or power
hereunder preclude any other or further exercise thereof or the exercise of any
other right, remedy, or power provided herein or by law or in equity.
15. GOVERNING LAW.
This Agreement shall be governed by and construed in accordance with the
law of the Hong Kong Special Administrative Region, China. Any suit, action or
proceeding seeking to enforce any provision of, or based on any matter arising
out of or in connection with, this Agreement or the transactions contemplated
hereby shall be brought by any of the parties in the courts of Hong Kong Special
Administration Region, and each of the parties hereby consent to the exclusive
jurisdiction of such courts in any such suit, action or proceeding and waives
any objection to venue laid therein.
16. ACKNOWLEDGMENT.
The parties acknowledge that (i) they have had the opportunity to consult
counsel in regard to this Agreement if they so desire; (ii) they have read and
understand the Agreement and they are fully aware of its legal effect; and (iii)
they are entering into this Agreement freely and voluntarily, and based on each
party's own judgment and not on any representations or promises made by the
other party, other than those contained in this Agreement.
17. INVALID PROVISIONS.
If any provisions of this Agreement is held to be illegal, invalid or
unenforceable under any present or future law, such provision will be fully
severable and the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or
unenforceable provisions or by its severance herefrom. In lieu of such illegal,
invalid or unenforceable provision, there will be add automatically as a part of
this Agreement a legal, valid and enforceable provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible.
8
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officer of each party hereto, and shall be effective as of
the date first above written
The Common Seal of PRAXA LIMITED is affixed )
in accordance with its Constitution in the )
presence of )
________________________________________________
Signature of authorised person
Office held:
Name of authorised person:
________________________________________________
Signature of authorised person
Office held:
Name of authorised person:
Signed, sealed and delivered by XXXXX XXXXXXX
________________________________________________
9
SCHEDULE A - SERVICES
The services of Consultant shall include, but not be limited to, the following:
- Performing the duties under this Agreement.
- Complying with the terms and conditions of this Agreement.
- Acting in the best interests of the Company and the Affiliated Companies,
including upholding Consultant's duty of care and fiduciary duty to the
Company and the Affiliated Companies.
- Cooperating with the Company in the completion or transfer of Consultant's
previous duties and responsibilities in the Company or Affiliated
Companies to other employees.
- Notwithstanding the fact that such obligations shall be principally
rendered outside of Hong Kong, Consultant shall 1) provide weekly reports
to the CEO and CFO of the Company; and 2) attend meetings either in person
or via teleconferencing with the Company's management team or any other
third parties as deemed necessary.
- Sourcing and meeting with potential business partners and look for
business opportunities for the Company including mergers and acquisitions
- Providing timely feedback to instructions and requests from managers of
the Company.
- Complying with Company's applicable rules and regulations, as may be
amended from time to time.
- Responsible for the overall health and performance of the Company and each
of the groups and/or practices on a variety of metrics including client
development, recruiting, staff development, retention, total revenues,
gross revenues, revenue growth, revenue/capita, profitability, employee
turn-over, chargeability, utilization, etc
- Establishing long-term corporate objectives and promoting and assuring
full adoption and adherence to all chinadotcom corporate policies.
- Responsibility for aligning your staff with the chinadotcom company-wide
philosophy, strategy, and operating models (including strategy,
operations, systems) and working with the existing staff as best as
possible to achieve the basic goals of controlled, sustainable growth,
professional development, and healthy net profitability for the Company.
- Responsibility for building up the core competencies of each of the
employees and consultants.
- Responsibility for overall financial and corporate administration of the
business you manage including the approval of all major purchases and
capital expenditures.
- Responsibility for servicing key clients of Praxa as needed and for
maintaining contact with senior personnel in client.
- Responsibility for supervising all managers under your direction and
providing direction and assistance as required to senior managers and /or
other employees.
- Conducting executive performance reviews and overall responsibility for
the successful completion of all employee salary reviews.
- Interviewing applicants for senior positions and making final decisions on
all offers of employment.
- Making final decisions on client contracts and providing final arbitration
on billing to clients.
- Allowing sufficient time for new business activities, signing all
important new business correspondence, and attending new business
presentations (but not necessarily all contacts).
- Maintaining the appropriate corporate image in the community and being
publicity conscious. Playing the role of "new business ambassador."
- Position yourself as a recognized thought leader in your industry group
across your geographic jurisdiction.
- Lead routine industry group gatherings, WIP meetings, conference calls and
other forms of collaboration. Look for opportunities to cross-fertilize
best practices across the chinadotcom network.
10
- Establish senior executive contacts and long lasting relationships at
high-potential clients and prospects and actively manage relationships
with senior executives of our key accounts.
- Be accountable and assure account profitability, on-time delivery, quality
of Praxa client service, and management to budgeted time and costs across
project activities.
- Provide accurate and timely updates to the new business forecasts and
backlog reports.
- Routinely provide updates to the Group CEO and the Board on business
development activities and opportunities.
- Any other service requested by the Board or the Group CEO during the
Consulting Period or Extended Period.
11
SCHEDULE B - BONUSES
The Consultant may be entitled to the following bonus payments payable in
accordance with Section 6 of this Schedule B if each of the requirements of the
relevant bonus are satisfied as set out below and as determined by the Board and
the Group CEO in their sole and absolute discretion:
For the purpose of this Schedule B, the term "Bonuses" shall mean each of the
Performance Bonus (as defined below), Sales Pipeline Bonus (as defined below),
the Outsourcing Bonus (as defined below), Key Staff Retention Bonus (as defined
below) and Praxa Growth Plan Bonus (as defined below).
[Details to be discussed and agreed prior to Closing]
12
Final
ATTACHMENT B - FORM OF EMPLOYMENT RELEASE
See Attached.
Initialled by Sellers ____
Initialled by Purchaser __
SETTLEMENT DEED AND GENERAL RELEASE
This SETTLEMENT DEED AND GENERAL RELEASE (this "Deed") is dated as of __,
2002, and is made by and among PRAXA LIMITED (A.C.N. 006 126 496), a company
incorporated in Victoria, Australia and having a registered office of which is
situated at 000 Xxxxxxx Xxxx, Xxxxx Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx (the
"Employer"); COLIN XXXXXX XXXXXXX of 0 Xxxxx Xxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
(either "you" or the "Employee) and MANTECH INTERNATIONAL CORPORATION having an
address of 00000 Xxx Xxxxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx, Xxxxxx Xxxxxx of
America (the "Seller")
RECITALS
A. Employee is employed by Employer as the Chief Executive Officer of
the Employer.
B. Employer, its Affiliates (defined below) and Employee desire to
resolve all claims as described in this Deed with respect to the Employee's
employment by the Employer under the Service Agreement dated [ ], the Variation
Agreement dated August 2, 2002, the Share Option Agreement unexecuted and any
other agreement between the Employer and Employee as amended or supplemented
from time to time (the "Old Employment Agreements") and thereby avoid the
expense and uncertainty of further negotiations or other actions.
C. The Employee and the Employer desire to enter into a Independent
Consulting Agreement dated as of the date hereof covering a term of consultancy
for a period of six (6) months beginning from Closing Date (as defined below)
and continuing month to month thereafter on terms and conditions provided
therein (the "Consulting Agreement").
D The Seller has agreed to sell the Employer to [ ] (the "Purchaser")
on terms and conditions of the Share Purchase Agreement and has agreed to pay
the Settlement Sum (as defined) to the Employee as part of terms and conditions
of the Share Purchase Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. DEFINITIONS.
"Released Parties" shall mean the Employer, its ultimate parent both prior
to the Closing Date and post the Closing Date, the Seller, the Purchaser, any
Affiliate, any related company and each of their directors, officers, managers
and with respect to each such entity, all of its past, present, and future
employees, officers, directors, stockholders, owners, representatives, assigns
and any other persons acting by, through, under or in concert with any of the
persons or entities listed in hereto, and their successors.
"Affiliate" shall mean any person or entity that directly or indirectly
controls, is controlled by, or is under common control with the Employer either
before or after the Closing Date including without limitation any Affiliate of
the Seller or the Purchaser.
Initialed
Employee___
Company_____
"Closing Date" shall mean the Closing Date of the Share Purchase Agreement
which shall be no later than February 21, 2003 and shall be the date set out in
Schedule A.
"Share Purchase Agreement" shall mean the agreement dated prior to
December 31, 2002 by and among the Purchaser, the Seller, ManTech Australia
International Inc and the Employer relating to the sale and purchase of the
Employer.
2. TERMINATION.
The Employee's termination of his employment is effective as of the
Closing Date (the "Termination Date") and shall be deemed a resignation by the
Employee. Both parties acknowledge and agree that the Employee's termination was
voluntary and the Employer hereby accepts the Employee's voluntary termination.
As of the Termination Date, Employee shall be deemed to have resigned from all
offices and directorships then held with Employer, and Employer shall owe
Employee no compensation or obligations other than those provided by in this
Deed and pursuant to the Consultancy Agreement.
3. SETTLEMENT SUM.
In exchange for the execution of this Deed, the Seller will make a payment
to the Employee in the total amount of AU$ [complete the amount] upon the
signing of this Deed by all parties ("Settlement Sum").
All payments to Employee shall be less withholdings required by law.
Upon payment of the Settlement Sum and to the maximum extent permitted by
law, all of the Employer's obligations to Employee with respect to compensation,
car payments, bonus, salary, severance, redundancy payments, stock options or
equity, benefits, expense reimbursement, accrual of holiday payments, sick
leave, vacation pay, life or health insurance, payment in lieu of notice or
similar payments or any other fringe benefit or other forms of consideration or
obligation shall cease. Any continuing obligation of Employer to Employee shall
be governed by the Consultancy Agreement.
4. COVENANT NOT TO XXX.
The Employee expressly represents and warrants that he has not filed, and
agrees not to file in the future, any claim, charge, complaint or any other
legal action against any of the Released Parties in relation to any aspect of
his employment with Employer or any of the Old Employment Agreements. Without
limiting the generality of the preceding sentence, Employee shall not xxx or
initiate, any compliance review, action, or proceeding against any Released
Party, or participate in the same, individually or as a member of a class, under
any contract (express or implied), or any federal, state, or local law, statute,
or regulation pertaining in any manner relating to the Released Claims (as
defined).
Employee further represents and agrees that he will not engage in any
conduct or take any action to cause or influence (or which reasonably could be
anticipated to cause or influence) any person or entity, including but not
limited to any past, present or prospective employee, client,
Initialed
Employee___
2
customer, or vendor, of the Employer, to initiate litigation, assert any other
kind of claim or take other adverse action against the Released Parties.
5. RELEASE.
In consideration of the Settlement Sum and effective as at the Termination
Date, Employee and his representatives, heirs, successors, and assigns do hereby
completely release and forever discharge each of the Released Parties from all
claims, rights, demands, actions, obligations, liabilities, and causes of action
of every kind and character, known or unknown, mature or unmatured, which
Employee may now have or has ever had, whether based on tort, contract (express
or implied), or any federal, state, or local law, statute, or regulation
(collectively, the "Released Claims"). The Employee understands that the
Released Claims he is releasing might arise under many laws in different
jurisdictions (including statutes, regulations, other administrative guidance,
and common law doctrines). Employee likewise releases the Released Parties from
any and all obligations for attorneys' fees incurred in regard to the above
claims or otherwise.
Without limiting the generality of the preceding paragraph, the Employee
understands that the Released Claims may be know or unknown to him and may
include, without limitation any of the following: (i) claims that in any way
relate to or arose during his employment with Employer; (ii) claims that in any
way relate to the termination of the Old Employment Agreements, such as claims
for payments in lieu of notice, redundancy payments, discrimination,
retaliation, harassment, constructive discharge, compensation, bonuses,
commissions, lost wages, or unused accrued vacation or sick pay; (iii) claims
that in any way relate to the design or administration of any employee benefit
program; (iv) claims to irrevocable or vested rights to severance or similar
benefits or to post-employment health or group insurance benefits; (v) claims
for, or relating to, any share options or other similar benefits; and (vi) any
claims to attorneys' fees with respect to Released Claims he is releasing.
6. UNKNOWN CLAIMS WAIVER.
The Employee fully understands, and it is his knowing and voluntary intent
that he is releasing Released Claims that he may not know about at the date of
signing this Deed and that the Released Claims include not only claims presently
known to Employee, but also include all unknown or unanticipated claims, rights,
demands, actions, obligations, liabilities, and causes of action of every kind
and character that would otherwise come within the scope of the Released Claims
as described in this Section. Employee understands that he may hereafter
discover facts different from what he now believes to be true, which if known,
could have materially affected this Deed, but he nevertheless waives any claims
or rights based on different or additional facts. Employee knowingly and
voluntarily waives any and all rights or benefits that he may now have, or in
the future may have, with respect to the Released Claims.
7. NO DISPARAGEMENT OR HARM AND EXISTING OBLIGATIONS.
The Employee agrees to not criticize, denigrate, or disparage any Released
Party and to remain bound by any Employer or any of its Affiliate's policies
relating to confidential information, invention, nonsolicitation,
noncompetition, or similar matters to which he is now subject.
Initialed
Employee___
3
8. CONFIDENTIALITY.
Employee understands and agrees that this Deed and each of its terms, and
the negotiations surrounding it, are confidential and shall not be disclosed by
Employee to any entity or person, for any reason, at any time, without the prior
written consent of Employer, unless required by law.
9. NON ADMISSION.
The parties understand and agree that this is a compromise settlement of
claims and that the furnishing of the consideration for this Deed shall not be
deemed or construed at any time or for any purpose as an admission of liability
by Employer, Seller or Purchaser. The liability for any and all claims is
expressly denied by Employer, Seller and Purchaser.
10. VOLUNTARY DEED.
The Employee represents and agrees that he:
(a) has carefully read and fully understands all of the provisions of
this Deed;
(b) has had ample time to consider this Deed;
(c) has voluntarily and freely entering into this Deed;
(d) has the capacity to enter into this Deed;
(e) has received independent legal advice with respect to the Deed; and
(f) is entering this Deed based on his own judgement and advice and not
on any representations or promises made by the other party, other than
those expressly provided for in this Deed.
11. INDEMNITY FOR BREACH OF RELEASE.
Employee hereby indemnifies each of the Released Parties and the Company
against:
(a) any and all claims, losses, demands or actions made by Employee, any
of his successors or assigns or any third party on the Employee's behalf as a
result of, or in connection with, any matters in which Employee has released
liability for in Section 5 hereof; and
(b) all legal costs (on a solicitor and own client basis or full
indemnity basis, whichever is the greater) and other expenses incurred in
connection with a demand, action, arbitration or other proceeding (including
mediation, compromise, out of court settlement or appeal) arising directly or
indirectly as a result of, or in connection with, any matter in which Employee
has released liability for in Section 5 hereof.
12. MISCELLANEOUS PROVISIONS.
(a) Integration. The parties understand and agree that this Deed: (i)
recites the sole terms and conditions for this Deed; (ii) that no representation
or promise has been made by Employer, or any other Released Party on any subject
whatsoever, except as expressly set forth in this Deed; and (iii) that all
agreements and understandings between the parties on any subject whatsoever are
embodied and expressed in this Deed. This Deed shall supersede all prior or
contemporaneous agreements and understandings among Employee, Employer, and any
other
Initialed
Employee___
4
Released Party, whether written or oral, express or implied, with respect to any
subject whatsoever, including without limitation, any employment-related
agreement or benefit plan, except to the extent that the provisions of any such
agreement or plan have been expressly referred to in this Deed as having
continued effect.
(b) Amendments; Waivers. This Deed may not be modified or amended,
except by an instrument in writing, signed by the Employee and the Employer. By
an instrument in writing similarly executed, either party may waive compliance
by the other party with any provision of this Deed that such other party was or
is obligated to comply with or perform, provided, however, that such waiver
shall not operate as a waiver of, or estoppel with respect to, any other or
subsequent failure. No failure to exercise and no delay in exercising any right,
remedy, or power hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, remedy, or power hereunder preclude any
other or further exercise thereof or the exercise of any other right, remedy, or
power provided herein or by law or in equity.
(c) Assignment; Successors and Assigns. Employee agrees that he will not
assign, sell, transfer, delegate or otherwise dispose of, whether voluntarily or
involuntarily, or by operation of law, any rights or obligations under this
Deed, nor shall Employee's rights be subject to encumbrance or the claims of
creditors. Any purported assignment, transfer, or delegation shall be null and
void. Nothing in this Deed shall prevent the consolidation of the Employer with,
or its merger into, any other corporation, or the sale by the Employer of all or
substantially all of its properties or assets, or the assignment by the Employer
of this Deed and the performance of its obligations hereunder to any successor
in interest or any Affiliates of the Employer. Subject to the foregoing, this
Deed shall be binding upon and shall inure to the benefit of the parties and
their respective heirs, legal representatives, successors, and permitted
assigns, and shall not benefit any person or entity other than those enumerated
above. This Deed shall also inure to the benefit of any Released Party.
(d) Invalid Provisions. If any provision of this Deed is held to be
illegal, invalid or unenforceable under any present or future law: (i) such
provision will be fully severable; (ii) the remaining provisions of this Deed
will remain in full force and effect and will not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom; and (iii) in
lieu of such illegal, invalid or unenforceable provision, there will be added
automatically as a part of this Deed a legal, valid and enforceable provision as
similar in terms to such illegal, invalid or unenforceable provision as may be
possible.
(e) Attorneys' Fees. In any legal action, arbitration, or other
proceeding brought to enforce or interpret the terms of this Deed, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
costs.
(f) Jurisdiction and Governing Law. This Deed shall be governed by and
construed in accordance with the law of the Hong Kong Special Administrative
Region, China. Any suit, action or proceeding seeking to enforce any provision
of, or based on any matter arising out of or in connection with, this Deed or
the transactions contemplated hereby shall be brought by any of the parties in
the courts of Hong Kong, and each of the parties hereby consent to the exclusive
jurisdiction of such courts in any such suit, action or proceeding and waives
any objection to venue laid therein.
Initialed
Employee___
5
(g) Interpretation. This Deed shall be construed as a whole, according
to its fair meaning, and not in favor of or against any party. By way of example
and not in limitation, this Deed shall not be construed in favor of the party
receiving a benefit nor against the party responsible for any particular
language in this Deed. Captions are used for reference purposes only and should
be ignored in the interpretation of this Deed.
Initialed
Employee___
6
The parties have duly executed this Deed as of the date first written above.
The Common Seal of PRAXA LIMITED is affixed )
in accordance with its Constitution in the )
presence of )
____________________________________________
Signature of authorised person
Office held:
Name of authorised person:
____________________________________________
Signature of authorised person
Office held:
Name of authorised person:
Signed, sealed and delivered by XXXXX XXXXXXX
____________________________________________
Before me:
____________________________________________
Name of Witness
Title of Witness
Address of Witness
Signed, sealed and delivered by )
MANTECH INTERNATIONAL CORPORATION )
____________________________________________
Signature of authorised person
____________________________________________
Office held
____________________________________________
Name of authorised person
Initialed
Employee___
7
SCHEDULE A - CLOSING DATE
The Closing Date and the Termination Date for the purposes of this Deed is
_______________.
Initialed
Employee___
8
