Share Exchange Agreement
This Share Exchange Agreement, dated as of November 16, 2005, is made by
and among Advanced Medical Institute Inc., a Nevada corporation (the "Acquiror
Company"), PE Patent Holdco Pty Limited (ACN 116 786 737), a company formed in
Australia (the "Company"), each of the Persons listed on Exhibit A hereto
(collectively, the "Shareholders", and individually a "Shareholder").
BACKGROUND
The Shareholders have agreed to transfer to the Acquiror Company, and the
Acquiror Company has agreed to acquire from the Shareholders, all of the Shares,
which Shares constitute 100% of the outstanding capital stock of the Company, in
exchange for 5,000,000 shares of the Acquiror Company's Common Stock to be
issued on the Closing Date (the "Acquiror Company Shares"), which Acquiror
Company Shares shall constitute 13.84% of the issued and outstanding shares of
Acquiror Company's Common Stock immediately after the closing of the
transactions contemplated herein, in each case, on the terms and conditions as
set forth herein.
SECTION I
DEFINITIONS
Unless the context otherwise requires, the terms defined in this Section 1
will have the meanings herein specified for all purposes of this Agreement,
applicable to both the singular and plural forms of any of the terms herein
defined.
1.1 "Accredited Investor" has the meaning set forth in Regulation D under
the Securities Act and set forth on Exhibit B.
1.2 "Acquired Companies" means, collectively, the Company and the Company
Subsidiaries (if any).
1.3 "Acquiror Company Balance Sheet" means the Acquiror Company's audited
balance sheet at June 30, 2005.
1.4 "Acquiror Company Board" means the Board of Directors of the Acquiror
Company.
1.5 "Acquiror Company Common Stock" means the Acquiror Company's common
stock, par value US $0.001 per share.
1.6 "Acquiror Company Shares" means the Acquiror Company Common Stock
being issued to the Shareholders pursuant hereto.
1.7 "Affiliate" means any Person that directly or indirectly controls, is
controlled by or is under common control with the indicated Person.
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1.8 "Agreement" means this Share Exchange Agreement, including all
Schedules and Exhibits hereto, as this Share Exchange Agreement may be from time
to time amended, modified or supplemented.
1.9 "Approved Plans" means a stock option or similar plan for the benefit
of employees or others which has been approved by the stockholders of the
Acquiror Company.
1.10 "Closing Acquiror Company Shares" means the aggregate number of
Acquiror Company Shares issuable to the Shareholders at the Closing Date.
1.11 "Closing Date" has the meaning set forth in Section 3.
1.12 "Code" means the Internal Revenue Code of 1986, as amended.
1.13 "Common Stock" means the Company's common shares, US $0.001 nominal
or par value per share.
1.14 "Commission" means the Securities and Exchange Commission or any
other federal agency then administering the Securities Act.
1.15 "Company Board" means the Board of Directors of the Company.
1.16 "Company Indemnified Party" has the meaning set forth in Section
10.3.
1.17 "Company Subsidiaries" means all of the direct and indirect
Subsidiaries of the Company.
1.18 "Covered Persons" means all Persons, other than Acquiror Company, who
are parties to indemnification and employment agreements with Acquiror Company
existing on or before the Closing Date.
1.19 "Damages" has the meaning set forth in Section 10.3.
1.20 "Distributor" means any underwriter, dealer or other Person who
participates, pursuant to a contractual arrangement, in the distribution of the
securities offered or sold in reliance on Regulation S.
1.21 "Environmental Laws" means any Law or other requirement relating to
the environment, natural resources, or public or employee health and safety.
1.22 "Environmental Permit" means all licenses, permits, authorizations,
approvals, franchises and rights required under any applicable Environmental Law
or Order.
1.23 "Equity Security" means any stock or similar security, including,
without limitation, securities containing equity features and securities
containing profit participation features, or any security convertible into or
exchangeable for, with or without consideration, any stock or similar security,
or any security carrying any warrant, right or option to subscribe to or
purchase any shares of capital stock, or any such warrant or right.
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1.24 "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
1.25 "Exchange" has the meaning set forth in Section 2.1.
1.26 "Exchange Act" means the Securities Exchange Act of 1934 or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will then be in effect.
1.27 "Exhibits" means the several exhibits referred to and identified in
this Agreement.
1.28 "GAAP" means, with respect to any Person, United States generally
accepted accounting principles applied on a consistent basis with such Person's
past practices.
1.29 "Governmental Authority" means any federal or national, state or
provincial, municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, commission, court, tribunal,
official, arbitrator or arbitral body, in each case whether U.S. or non-U.S.
1.30 "Indebtedness" means any obligation, contingent or otherwise. Any
obligation secured by a Lien on, or payable out of the proceeds of, or
production from, property of the relevant party will be deemed to be
Indebtedness.
1.31 "Intellectual Property" means all industrial and intellectual
property, including, without limitation, all U.S. and non-U.S. patents, patent
applications, patent rights, trademarks, trademark applications, common law
trademarks, Internet domain names, trade names, service marks, service xxxx
applications, common law service marks, and the goodwill associated therewith,
copyrights, in both published and unpublished works, whether registered or
unregistered, copyright applications, franchises, licenses, know-how, trade
secrets, technical data, designs, customer lists, confidential and proprietary
information, processes and formulae, all computer software programs or
applications, layouts, inventions, development tools and all documentation and
media constituting, describing or relating to the above, including manuals,
memoranda, and records, whether such intellectual property has been created,
applied for or obtained anywhere throughout the world and includes in the case
of the Company Australian Innovation Patent No 2005100183 and Application for
Australian Standard Patent No 2004222783.
1.32 "Laws" means, with respect to any Person, any U.S. or non-U.S.
federal, national, state, provincial, local, municipal, international,
multinational or other law (including common law), constitution, statute, code,
ordinance, rule, regulation or treaty applicable to such Person.
1.33 "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind, including, without limitation, any conditional sale
or other title retention agreement, any lease in the nature thereof and the
filing of or agreement to give any financing statement under the Uniform
Commercial Code of any jurisdiction and including any lien or charge arising by
Law.
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1.34 "Material Acquiror Company Contract" means any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of the Acquiror
Company, of the type and nature that the Acquiror Company is required to file
with the Commission.
1.35 "Material Adverse Effect" means, when used with respect to the
Acquiror Company or the Acquired Companies, as the case may be, any change,
effect or circumstance which, individually or in the aggregate, would reasonably
be expected to (a) have a material adverse effect on the business, assets,
financial condition or results of operations of the Acquiror Company or the
Acquired Companies, as the case may be, in each case taken as a whole or (b)
materially impair the ability of the Acquiror Company or the Company, as the
case may be, to perform their obligations under this Agreement, excluding any
change, effect or circumstance resulting from (i) the announcement, pendency or
consummation of the transactions contemplated by this Agreement, (ii) changes in
the United States securities markets generally, or (iii) changes in general
economic, currency exchange rate, political or regulatory conditions in
industries in which the Acquiror Company or the Acquired Companies, as the case
may be, operate.
1.36 "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.
1.37 "Organizational Documents" means (a) the articles or certificate of
incorporation and the by-laws or code of regulations of a corporation; (b) the
partnership agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate of limited partnership
of a limited partnership; (d) the articles or certificate of formation and
operating agreement of a limited liability company; (e) any other document
performing a similar function to the documents specified in clauses (a), (b),
(c) and (d) adopted or filed in connection with the creation, formation or
organization of a Person; and (f) any and all amendments to any of the
foregoing.
1.38 "Permitted Liens" means (a) Liens for Taxes not yet payable or in
respect of which the validity thereof is being contested in good faith by
appropriate proceedings and for the payment of which the relevant party has made
adequate reserves; (b) Liens in respect of pledges or deposits under workmen's
compensation laws or similar legislation, carriers, warehousemen, mechanics,
laborers and materialmen and similar Liens, if the obligations secured by such
Liens are not then delinquent or are being contested in good faith by
appropriate proceedings conducted and for the payment of which the relevant
party has made adequate reserves; (c) statutory Liens incidental to the conduct
of the business of the relevant party which were not incurred in connection with
the borrowing of money or the obtaining of advances or credits and that do not
in the aggregate materially detract from the value of its property or materially
impair the use thereof in the operation of its business; and (d) Liens that
would not have a Material Adverse Effect.
1.39 "Person" means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.
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1.40 "Proceeding" means any action, arbitration, audit, hearing,
investigation, litigation, or suit (whether civil, criminal, administrative or
investigative) commenced, brought, conducted, or heard by or before, or
otherwise involving, any Governmental Authority.
1.41 "Regulation S" means Regulation S under the Securities Act, as the
same may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission.
1.42 "Rule 144" means Rule 144 under the Securities Act, as the same may
be amended from time to time, or any successor statute.
1.43 "Schedules" means the several schedules referred to and identified
herein, setting forth certain disclosures, exceptions and other information,
data and documents referred to at various places throughout this Agreement.
1.44 "SEC Documents" has the meaning set forth in Section 6.26.
1.45 "Section 4(2)" means Section 4(2) under the Securities Act, as the
same may be amended from time to time, or any successor statute.
1.46 "Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute, and the rules and regulations of the Commission
thereunder, all as the same will be in effect at the time.
1.47 "Shares" means the 5,000,000 issued and outstanding ordinary shares
of the Company.
1.48 "Subsidiary" means, with respect to any Person, any corporation,
limited liability company, joint venture or partnership of which such Person (a)
beneficially owns, either directly or indirectly, more than 50% of (i) the total
combined voting power of all classes of voting securities of such entity, (ii)
the total combined equity interests, or (iii) the capital or profit interests,
in the case of a partnership; or (b) otherwise has the power to vote or to
direct the voting of sufficient securities to elect a majority of the board of
directors or similar governing body.
1.49 "Survival Period" has the meaning set forth in Section 10.1.
1.50 "Taxes" means all foreign, federal, state or local taxes, charges,
fees, levies, imposts, duties and other assessments, as applicable, including,
but not limited to, any income, alternative minimum or add-on, estimated, gross
income, gross receipts, sales, use, transfer, transactions, intangibles, ad
valorem, value-added, franchise, registration, title, license, capital, paid-up
capital, profits, withholding, payroll, employment, unemployment, excise,
severance, stamp, occupation, premium, real property, recording, personal
property, federal highway use, commercial rent, environmental (including, but
not limited to, taxes under Section 59A of the Code) or windfall profit tax,
custom, duty or other tax, governmental fee or other like assessment or charge
of any kind whatsoever, together with any interest, penalties or additions to
tax with respect to any of the foregoing; and "Tax" means any of the foregoing
Taxes.
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1.51 "Tax Group" means any federal, state, local or foreign consolidated,
affiliated, combined, unitary or other similar group of which the Acquiror
Company is now or was formerly a member.
1.52 "Tax Return" means any return, declaration, report, claim for refund
or credit, information return, statement or other similar document filed with
any Governmental Authority with respect to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
1.53 "Transaction Documents" means, collectively, all agreements,
instruments and other documents to be executed and delivered in connection with
the transactions contemplated by this Agreement.
1.54 "U.S." means the United States of America.
1.55 "U.S. Dollars" or "US $" means the currency of the United States of
America.
1.56 "U.S. Person" has the meaning set forth in Regulation S under the
Securities Act and set forth on Exhibit C hereto.
SECTION II
EXCHANGE OF SHARES AND SHARE CONSIDERATION
2.1 Share Exchange. At the Closing, each Shareholder shall transfer to the
Acquiror Company the number of Shares set out forth in Exhibit A, and, in
consideration therefor, subject to Section 2.2, Acquiror Company shall issue to
such Shareholder the number of shares of Acquiror Company Common Stock so set
forth (the "Exchange"). The total amount of Acquiror Company Common Stock to be
issued to the Shareholders shall be 5,000,000 shares.
2.2 Withholding. The Acquiror Company shall be entitled to deduct and
withhold from the Acquiror Company Shares otherwise payable pursuant to this
Agreement to the Shareholder such amounts as it is required to deduct and
withhold with respect to the making of such payment under the Code or any
provision of state, local, provincial or foreign tax Law. To the extent that
amounts are so withheld, such withheld amounts shall be treated for all purposes
of this Agreement as having been paid to the Shareholder in respect of which
such deduction and withholding was made.
2.3 Section 368 Reorganization. For U.S. federal income tax purposes, the
Exchange is intended to constitute a "reorganization" within the meaning of
Section 368(a)(1)(B) of the Code. The parties to this Agreement hereby adopt
this Agreement as a "plan of reorganization" within the meaning of Sections
1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations.
Notwithstanding the foregoing or anything else to the contrary contained in this
Agreement, the parties acknowledge and agree that no party is making any
representation or warranty as to the qualification of the Exchange as a
reorganization under Section 368 of the Code or as to the effect, if any, that
any transaction consummated prior to the Closing Date has or may have on any
such reorganization status. The parties acknowledge and agree that each (i) has
had the opportunity to obtain independent legal and tax advice with respect to
the transaction contemplated by this Agreement, and (ii) is responsible for
paying its own Taxes, including without limitation, any adverse Tax consequences
that may result if the transaction contemplated by this Agreement is not
determined to qualify as a reorganization under Section 368 of the Code.
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SECTION III
CLOSING DATE
3.1 Closing Date. The closing of the Exchange will occur upon execution of
this Agreement on October 31, 2005 or at such later date as all of the closing
conditions set forth in Sections 8 and 9 have been satisfied or waived (the
"Closing Date").
SECTION IV
REPRESENTATIONS AND WARRANTIES OF SHAREHOLDERS
4.1 Generally. Each Shareholder, severally and not jointly, hereby
represents and warrants to the Acquiror Company:
4.1.1 Authority. Such Shareholder has the right, power, authority
and capacity to execute and deliver this Agreement and each of the Transaction
Documents to which such Shareholder is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which
such Shareholder is a party, and to perform such Shareholder's obligations under
this Agreement and each of the Transaction Documents to which such Shareholder
is a party. This Agreement has been, and each of the Transaction Documents to
which such Shareholder is a party will be, duly and validly authorized and
approved, executed and delivered by such Shareholder. Assuming this Agreement
and the Transaction Documents have been duly and validly authorized, executed
and delivered by the parties thereto other than such Shareholder, this Agreement
is, and each of the Transaction Documents to which such Shareholder is a party
have been, duly authorized, executed and delivered by such Shareholder and
constitutes the legal, valid and binding obligation of such Shareholder,
enforceable against such Shareholder in accordance with their respective terms,
except as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
4.1.2 No Conflict. Neither the execution or delivery by such
Shareholder of this Agreement or any Transaction Document to which such
Shareholder is a party, nor the consummation or performance by such Shareholder
of the transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of such Shareholder (if such Shareholder is not a
natural person); (b) contravene, conflict with, constitute a default (or an
event or condition which, with notice or lapse of time or both, would constitute
a default) under, or result in the termination or acceleration of, any agreement
or instrument to which such Shareholder is a party or by which the properties or
assets of such Shareholder are bound; or (c) contravene, conflict with, or
result in a violation of, any Law or Order to which such Shareholder, or any of
the properties or assets of such Shareholder, may be subject.
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4.1.3 Ownership of Shares. Such Shareholder owns, of record and
beneficially, and has good, valid and indefeasible title to and the right to
transfer to the Acquiror Company pursuant to this Agreement, such Shareholder's
Shares free and clear of any and all Liens. There are no options, rights, voting
trusts, stockholder agreements or any other contracts or understandings to which
such Shareholder is a party or by which such Shareholder or such Shareholder's
Shares are bound with respect to the issuance, sale, transfer, voting or
registration of such Shareholder's Shares. At the Closing Date, the Acquiror
Company will acquire good, valid and marketable title to such Shareholder's
Shares free and clear of any and all Liens.
4.1.4 Litigation. There is no pending Proceeding against such
Shareholder that challenges, or may have the effect of preventing, delaying or
making illegal, or otherwise interfering with, any of the transactions
contemplated by this Agreement and, to the knowledge of such Shareholder, no
such Proceeding has been threatened, and no event or circumstance exists that is
reasonably likely to give rise to or serve as a basis for the commencement of
any such Proceeding.
4.1.5 No Brokers or Finders. Except as disclosed in Schedule 4.1.5,
no Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against such Shareholder for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and such
Shareholder will indemnify and hold the Acquiror Company harmless against any
liability or expense arising out of, or in connection with, any such claim.
4.2 Investment Representations. Each Shareholder, severally and not
jointly, hereby represents and warrants to the Acquiror Company:
4.2.1 Acknowledgment. Each Shareholder understands and agrees that
the Acquiror Company Shares to be issued pursuant to has not been registered
under the Securities Act or the securities laws of any state of the U.S. and
that the issuance of the Acquiror Company Shares is being effected in reliance
upon an exemption from registration afforded either under Section 4(2) of the
Securities Act for transactions by an issuer not involving a public offering or
Regulation S for offers and sales of securities outside the U.S.
4.2.2 Status. By its execution of this Agreement, each Shareholder,
severally and not jointly, represents and warrants to the Acquiror Company as
indicated on its signature page to this Agreement, either that:
(a) such Shareholder is an Accredited Investor; or
(b) such Shareholder is not a U.S. Person.
Each Shareholder severally understands that the Acquiror
Company Shares are being offered and sold to such Shareholder in reliance upon
the truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of such Shareholder set forth in this
Agreement, in order that the Acquiror Company may determine the applicability
and availability of the exemptions from registration of the Acquiror Company
Shares on which the Acquiror Company is relying.
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4.2.3 Additional Representations and Warranties of Accredited
Investors. The Shareholder indicating that such Shareholder is an Accredited
Investor on its signature page to this Agreement, severally and not jointly,
further makes the representations and warranties to the Acquiror Company set
forth on Exhibit D.
4.2.4 Additional Representations and Warranties of Non-U.S. Persons.
Each Shareholder indicating that it is not a U.S. person on its signature page
to this Agreement, severally and not jointly, further makes the representations
and warranties to the Acquiror Company set forth on Exhibit E.
4.2.5 Stock Legends. The Shareholder hereby agrees with the Acquiror
Company as follows:
(a) Securities Act Legend - Accredited Investors. The
certificates evidencing the Acquiror Company Shares issued to those
Shareholders who are Accredited Investors, and each certificate issued in
transfer thereof, will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
AND APPLICABLE STATE SECURITIES LAWS OR (2) PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE THE HOLDER MUST, PRIOR TO
SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION OF COUNSEL, WHICH COUNSEL
AND OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT SUCH
SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE
TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE
STATE SECURITIES LAWS.
(b) Securities Act Legend - Non-U.S. Persons. The certificates
evidencing the Acquiror Company Shares issued to those Shareholders who
are not U.S. Persons, and each certificate issued in transfer thereof,
will bear the following legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY STATE
SECURITIES LAWS AND NEITHER SUCH SECURITIES NOR ANY INTEREST THEREIN MAY
BE OFFERED, SOLD, PLEDGED, ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (1) IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S PROMULGATED UNDER THE
SECURITIES ACT, AND BASED ON AN OPINION OF COUNSEL, WHICH COUNSEL AND
OPINION ARE REASONABLY SATISFACTORY TO THE COMPANY, THAT THE PROVISIONS OF
REGULATION S HAVE BEEN SATISFIED (2) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS OR
(3) PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, IN WHICH CASE
THE HOLDER MUST, PRIOR TO SUCH TRANSFER, FURNISH TO THE COMPANY AN OPINION
OF COUNSEL, WHICH COUNSEL AND OPINION ARE REASONABLY SATISFACTORY TO THE
COMPANY, THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED, ASSIGNED OR
OTHERWISE TRANSFERRED IN THE MANNER CONTEMPLATED PURSUANT TO AN AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE
SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.
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(c) Other Legends. The certificates representing such Acquiror
Company Shares, and each certificate issued in transfer thereof, will also
bear any other legend required under any applicable Law, including,
without limitation, any U.S. state corporate and state securities law, or
contract.
(d) Opinion. No Shareholder will transfer any or all of the
Acquiror Company Shares pursuant to Regulation S or absent an effective
registration statement under the Securities Act and applicable state
securities law covering the disposition of such Shareholder's Acquiror
Company Shares, without first providing the Acquiror Company with an
opinion of counsel (which counsel and opinion are reasonably satisfactory
to the Acquiror Company) to the effect that such transfer will be made in
compliance with Regulation S or will be exempt from the registration and
the prospectus delivery requirements of the Securities Act and the
registration or qualification requirements of any applicable U.S. state
securities laws.
(e) Consent. Each Shareholder understands and acknowledges
that the Acquiror Company may refuse to transfer the Acquiror Company
Shares, unless such Shareholder complies with this Section 4.2.5 and any
other restrictions on transferability set forth in Exhibits D and E. Each
Shareholder consents to the Acquiror Company making a notation on its
records or giving instructions to any transfer agent of the Acquiror
Company's Common Stock in order to implement the restrictions on transfer
of the Acquiror Company Shares.
SECTION V
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Acquiror Company as follows:
5.1 Organization and Qualification. The Company is duly incorporated and
validly existing under the laws of Australia, has all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents and
approvals to carry on its business as presently conducted and as contemplated to
be conducted, to own, hold and operate its properties and assets as now owned,
held and operated by it, to enter into this Agreement, to carry out the
provisions hereof except where the failure to be so organized, existing and in
good standing or to have such authority or power will not, in the aggregate,
either (i) have a material adverse effect on the business, assets, financial
condition, or prospects of the Company, or (ii) materially impair the ability of
the Company and the Shareholders each to perform their material obligations
under this Agreement (any of such effects or impairments, a "Material Adverse
Effect"). The Company is duly qualified, licensed or domesticated as a foreign
corporation in good standing in each jurisdiction wherein the nature of its
activities or its properties owned or leased makes such qualification, licensing
or domestication necessary, except where the failure to be so qualified,
licensed or domesticated will not have a Material Adverse Effect. Set forth on
Schedule 5.1 is a list of those jurisdictions in which the Company presently
conducts its business, owns, holds and operates its properties and assets.
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5.2 Subsidiaries. The Company does not own directly or indirectly, any
equity or other ownership interest in any corporation, partnership, joint
venture or other entity or enterprise.
5.3 Articles of Association and Governing Rules. The Company does not have
any Memorandum and Articles of Association and is governed by the replaceable
rules under the Corporations Act. The Company is not in violation or breach of
any of the provisions of the replaceable rules, except for such violations or
breaches as, in the aggregate, will not have a Material Adverse Effect.
5.4 Authorization and Validity of this Agreement. The recording of the
transfer of the Shares and the delivery of new certificates representing the
Shares registered in the name of Acquiror Company are within the Company's
corporate powers, have been duly authorized by all necessary corporate action,
do not require from the Board or Shareholders of the Company any consent or
approval that has not been validly and lawfully obtained, require no
authorization, consent, approval, license, exemption of or filing or
registration with any court or governmental department, commission, board,
bureau, agency or instrumentality of government that has not been validly and
lawfully obtained, filed or registered, as the case may be, except for those
that, if not obtained or made would not have a Material Adverse Effect.
5.5 No Violation. None of the execution, delivery or performance by the
Company of this Agreement or any Transaction Document to which the Company is a
party, nor the consummation by the Company of the transactions contemplated
hereby violates any provision of its Organizational Documents, or violates or
conflicts with, or constitute a default (or an event or condition which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination or acceleration of, or result in the creation of imposition of
any Lien under, any agreement or instrument to which the Company is a party or
by which the Company is or will be bound or subject, or violate any laws.
5.6 Binding Obligations. Assuming this Agreement has been duly and validly
authorized, executed and delivered by the Acquiror Company, the Company and the
Shareholders of the Company, this Agreement is and all agreements or instruments
contemplated hereby to which the Company is a party, have been duly authorized,
executed and delivered by the Company and are the legal, valid and binding
Agreement of the Company and is enforceable against the Company in accordance
with its terms, except as such enforcement is limited by general equitable
principles, or by bankruptcy, insolvency and other similar laws affecting the
enforcement of creditors rights generally.
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5.7 Capitalization and Related Matters.
5.7.1 Capitalization. The issued capital stock of the Company
consists of 5,000,000 ordinary fully paid shares. Except as set forth in
Schedule 5.7.1, there are no outstanding or authorized options, warrants, calls,
subscriptions, rights (including any preemptive rights or rights of first
refusal), agreements or commitments of any character obligating the Company to
issue any ordinary shares or any other capital stock of the Company. All issued
and outstanding shares of the Company's capital stock are duly authorized,
validly issued, fully paid and nonassessable and have not been issued in
violation of any preemptive or similar rights.
5.7.2 No Redemption Requirements. Except as set forth in Schedule
5.7.2, there are no outstanding contractual obligations (contingent or
otherwise) of the Company to retire, repurchase, redeem or otherwise acquire any
outstanding shares of capital stock of, or other ownership interests in, the
Company or to provide funds to or make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity.
5.7.3 Duly Authorized. The exchange of the Shares has been duly
authorized, and the Shares have been validly issued and are fully paid and
nonassessable.
5.8 Shareholders. Exhibit A contains a true and complete list of the names
and addresses of the record and beneficial holders of all of the outstanding
capital stock of the Company. Except as expressly provided in this Agreement, no
holder of Shares or any other security of the Company or any other Person is
entitled to any preemptive right, right of first refusal or similar right as a
result of the issuance of the shares or otherwise. There is no voting trust,
agreement or arrangement among any of the Shareholders of any capital stock of
the Company affecting the exercise of the voting rights of any such capital
stock.
5.9 Compliance with Laws and Other Instruments. Except as would not have a
Material Adverse Effect, the business and operations of the Company have been
and are being conducted in accordance with all applicable foreign, federal,
state and local laws, rules and regulations and all applicable orders,
injunctions, decrees, writs, judgments, determinations and awards of all courts
and governmental agencies and instrumentalities. Except as would not have a
Material Adverse Effect, the Company is not, and is not alleged to be, in
violation of, or (with or without notice or lapse of time or both) in default
under, or in breach of, any term or provision of its Organizational Documents or
of any indenture, loan or credit agreement, note, deed of trust, mortgage,
security agreement or other material agreement, lease, license or other
instrument, commitment, obligation or arrangement to which the Company is a
party or by which any of the Company's properties, assets or rights are bound or
affected. To the knowledge of the Company, no other party to any material
contract, agreement, lease, license, commitment, instrument or other obligation
to which the Company is a party is (with or without notice or lapse of time or
both) in default thereunder or in breach of any term thereof. The Company is not
subject to any obligation or restriction of any kind or character, nor is there,
to the knowledge of the Company, any event or circumstance relating to the
Company that materially and adversely affects in any way its business,
properties, assets or prospects or that would prevent or make burdensome its
performance of or compliance with all or any part of this Agreement or the
consummation of the transactions contemplated hereby or thereby.
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5.10 Certain Proceedings. There is no pending Proceeding that has been
commenced against the Company and that challenges, or may have the effect of
preventing, delaying, making illegal, or otherwise interfering with, any of the
transactions contemplated in this Agreement. To the Company's knowledge, no such
Proceeding has been threatened.
5.11 No Brokers or Finders. Except as disclosed in Schedule 5.11, no
person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the Company for any commission, fee or other
compensation as a finder or broker, or in any similar capacity, and the Company
will indemnify and hold the Acquiror Company harmless against any liability or
expense arising out of, or in connection with, any such claim.
5.12 Title to and Condition of Properties. The Company owns or holds under
valid leases or other rights to use all real property, plants, machinery and
equipment necessary for the conduct of the business of the Company as presently
conducted, except where the failure to own or hold such property, plants,
machinery and equipment would not have a Material Adverse Effect on the Company.
The material buildings, plants, machinery and equipment necessary for the
conduct of the business of the Company as presently conducted are structurally
sound, are in good operating condition and repair and are adequate for the uses
to which they are being put, in each case, taken as a whole, and none of such
buildings, plants, machinery or equipment is in need of maintenance or repairs,
except for ordinary, routine maintenance and repairs that are not material in
nature or cost.
5.13 Intellectual Property. The Company owns its Intellectual Property
free from any third party interests other than any interest which has been
disclosed to the Company in writing prior to the date of this Agreement.
5.14 Board Recommendation. The Board has, by unanimous written consent,
determined that this Agreement and the transactions contemplated by this
Agreement, are advisable and in the best interests of the Shareholders.
SECTION VI
REPRESENTATIONS AND WARRANTIES OF THE ACQUIROR COMPANY
6.1 The Acquiror Company represents and warrants to the Shareholder and
the Company as follows:
6.2 Organization and Qualification. The Acquiror Company is duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, has all requisite authority and power (corporate
and other), governmental licenses, authorizations, consents and approvals to
carry on its business as presently conducted and to own, hold and operate its
properties and assets as now owned, held and operated by it, except where the
failure to be so organized, existing and in good standing, or to have such
authority and power, governmental licenses, authorizations, consents or
approvals would not have a Material Adverse Effect. The Acquiror Company is duly
qualified, licensed or domesticated as a foreign corporation in good standing in
each jurisdiction wherein the nature of its activities or its properties owned,
held or operated makes such qualification, licensing or domestication necessary,
except where the failure to be so duly qualified, licensed or domesticated and
in good standing would not have a Material Adverse Effect. The SEC Documents set
forth the Acquiror Company's jurisdiction of organization and each other
jurisdiction in which the Acquiror Company presently conducts its business or
owns, holds and operates its properties and assets.
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6.3 Subsidiaries. Except as set forth in the SEC Documents, the Acquiror
Company does not own, directly or indirectly, any equity or other ownership
interest in any corporation, partnership, joint venture or other entity or
enterprise.
6.4 Organizational Documents. True, correct and complete copies of the
Organizational Documents of the Acquiror Company have been delivered to the
Company prior to the execution of this Agreement, and no action has been taken
to amend or repeal such Organizational Documents. The Acquiror Company is not in
violation or breach of any of the provisions of its Organizational Documents,
except for such violations or breaches as would not have a Material Adverse
Effect.
6.5 Authorization. The Acquiror Company has all requisite authority and
power (corporate and other), governmental licenses, authorizations, consents and
approvals to enter into this Agreement and each of the Transaction Documents to
which the Acquiror Company is a party, to consummate the transactions
contemplated by this Agreement and each of the Transaction Documents to which
the Acquiror Company is a party and to perform its obligations under this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party. The execution, delivery and performance by the Acquiror Company of this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party have been duly authorized by all necessary corporate action and do not
require from the Acquiror Company Board or the stockholders of the Acquiror
Company any consent or approval that has not been validly and lawfully obtained.
The execution, delivery and performance by the Acquiror Company of this
Agreement and each of the Transaction Documents to which the Acquiror Company is
a party requires no authorization, consent, approval, license, exemption of or
filing or registration with any Governmental Authority or other Person other
than such other customary filings with the Commission for transactions of the
type contemplated by this Agreement.
6.6 No Violation. Neither the execution nor the delivery by the Acquiror
Company of this Agreement or any Transaction Document to which the Acquiror
Company is a party, nor the consummation or performance by the Acquiror Company
of the transactions contemplated hereby or thereby will, directly or indirectly,
(a) contravene, conflict with, or result in a violation of any provision of the
Organizational Documents of the Acquiror Company; (b) contravene, conflict with,
constitute a default (or an event or condition which, with notice or lapse of
time or both, would constitute a default) under, or result in the termination or
acceleration of, or result in the imposition or creation of any Lien under, any
agreement or instrument to which the Acquiror Company is a party or by which the
properties or assets of the Acquiror Company are bound; (c) contravene, conflict
with, or result in a violation of, any Law or Order to which the Acquiror
Company, or any of the properties or assets owned or used by the Acquiror
Company, may be subject; or (d) contravene, conflict with, or result in a
violation of, the terms or requirements of, or give any Governmental Authority
the right to revoke, withdraw, suspend, cancel, terminate or modify, any
licenses, permits, authorizations, approvals, franchises or other rights held by
the Acquiror Company or that otherwise relate to the business of, or any of the
properties or assets owned or used by, the Acquiror Company, except, in the case
of clause (b), (c), or (d), for any such contraventions, conflicts, violations,
or other occurrences as would not have a Material Adverse Effect.
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6.7 Binding Obligations. Assuming this Agreement and the Transaction
Documents have been duly and validly authorized, executed and delivered by the
parties thereto other than the Acquiror Company, this Agreement and each of the
Transaction Documents to which the Acquiror Company is a party are duly
authorized, executed and delivered by the Acquiror Company and constitutes the
legal, valid and binding obligations of the Acquiror Company, enforceable
against the Acquiror Company in accordance with their respective terms, except
as such enforcement is limited by general equitable principles, or by
bankruptcy, insolvency and other similar Laws affecting the enforcement of
creditors rights generally.
6.8 Securities Laws. Assuming the accuracy of the representations and
warranties of the Shareholders contained in Section 4 and Exhibits D and E, the
issuance of the Acquiror Company Shares pursuant to this Agreement are (a)
exempt from the registration and prospectus delivery requirements of the
Securities Act, (b) have been registered or qualified (or are exempt from
registration and qualification) under the registration permit or qualification
requirements of all applicable state securities laws, and (c) accomplished in
conformity with all other applicable federal and state securities laws.
6.9 Capitalization and Related Matters.
6.9.1 Capitalization. The authorized capital stock of the Acquiror
Company consists of 100,000,000 shares of the Acquiror Company's Common Stock,
of which 31,112,450 shares are issued and outstanding. All issued and
outstanding shares of the Acquiror Company's Common Stock are duly authorized,
validly issued, fully paid and nonassessable, and have not been issued in
violation of any preemptive or similar rights. At the Closing Date, the Acquiror
Company will have sufficient authorized and unissued Acquiror Company's Common
Stock to consummate the transactions contemplated hereby. Except as disclosed in
the SEC Documents, there are no outstanding options, warrants, purchase
agreements, participation agreements, subscription rights, conversion rights,
exchange rights or other securities or contracts that could require the Acquiror
Company to issue, sell or otherwise cause to become outstanding any of its
authorized but unissued shares of capital stock or any securities convertible
into, exchangeable for or carrying a right or option to purchase shares of
capital stock or to create, authorize, issue, sell or otherwise cause to become
outstanding any new class of capital stock. There are no outstanding
stockholders' agreements, voting trusts or arrangements, registration rights
agreements, rights of first refusal or other contracts pertaining to the capital
stock of the Acquiror Company. The issuance of all of the shares of Acquiror
Company's Common Stock described in this Section 6.8.1 have been in compliance
with U.S. federal and state securities laws.
15
6.9.2 No Redemption Requirements. Except as set forth in the SEC
Documents, there are no outstanding contractual obligations (contingent or
otherwise) of the Acquiror Company to retire, repurchase, redeem or otherwise
acquire any outstanding shares of capital stock of, or other ownership interests
in, the Acquiror Company or to provide funds to or make any investment (in the
form of a loan, capital contribution or otherwise) in any other Person.
6.9.3 Duly Authorized. The issuance of the Acquiror Company Shares
has been duly authorized and, upon delivery to the Shareholders of certificates
therefor in accordance with the terms of this Agreement, the Acquiror Company
Shares will have been validly issued and fully paid, and will be nonassessable,
have the rights, preferences and privileges specified, will be free of
preemptive rights and will be free and clear of all Liens and restrictions,
other than Liens created by the Shareholders and restrictions on transfer
imposed by this Agreement and the Securities Act.
6.10 Compliance with Laws. Except as would not have a Material Adverse
Effect, the business and operations of the Acquiror Company have been and are
being conducted in accordance with all applicable Laws and Orders. Except as
would not have a Material Adverse Effect, the Acquiror Company has not received
notice of any violation (or any Proceeding involving an allegation of any
violation) of any applicable Law or Order by or affecting the Acquiror Company
and, to the knowledge of the Acquiror Company, no Proceeding involving an
allegation of violation of any applicable Law or Order is threatened or
contemplated. Except as would not have a Material Adverse Effect, the Acquiror
Company is not subject to any obligation or restriction of any kind or
character, nor is there, to the knowledge of the Acquiror Company, any event or
circumstance relating to the Acquiror Company that materially and adversely
affects in any way its business, properties, assets or prospects or that
prohibits the Acquiror Company from entering into this Agreement or would
prevent or make burdensome its performance of or compliance with all or any part
of this Agreement or the consummation of the transactions contemplated hereby.
6.11 Certain Proceedings. There is no pending Proceeding that has been
commenced against the Acquiror Company and that challenges, or may have the
effect of preventing, delaying, making illegal, or otherwise interfering with,
any of the transactions contemplated by this Agreement. To the knowledge of the
Acquiror Company, no such Proceeding has been threatened.
6.12 No Brokers or Finders. Except as set forth in the SEC Documents, no
Person has, or as a result of the transactions contemplated herein will have,
any right or valid claim against the Acquiror Company for any commission, fee or
other compensation as a finder or broker, or in any similar capacity, and the
Acquiror Company will indemnify and hold the Company harmless against any
liability or expense arising out of, or in connection with, any such claim.
6.13 Absence of Undisclosed Liabilities. Except as set forth in the SEC
Documents, the Acquiror Company has no debt, obligation or liability (whether
accrued, absolute, contingent, liquidated or otherwise, whether due or to become
due, whether or not known to the Acquiror Company) arising out of any
transaction entered into at or prior to the Closing Date or any act or omission
at or prior to the Closing Date, except to the extent set forth on or reserved
against on the Acquiror Company Balance Sheet. All debts, obligations or
liabilities with respect to directors and officers of the Acquiror Company will
be cancelled prior to the Closing. The Acquiror Company has not incurred any
liabilities or obligations under agreements entered into, in the usual and
ordinary course of business since January 1, 2005.
16
6.14 Changes. Except as set forth in the SEC Documents, the Acquiror
Company has, since June 30, 2005:
6.14.1 Ordinary Course of Business. Conducted its business or
entered into any transaction other than in the usual and ordinary course of
business, except for this Agreement.
6.14.2 Adverse Changes. Not suffered or experienced any change in,
or affecting, its condition (financial or otherwise), properties, assets,
liabilities, business, operations, results of operations or prospects other than
changes, events or conditions in the usual and ordinary course of its business,
none of which would have a Material Adverse Effect;
6.14.3 Loans. Made any loans or advances to any Person other than
travel advances and reimbursement of expenses made to employees, officers and
directors in the ordinary course of business;
6.14.4 Liens. Created or permitted to exist any Lien on any material
property or asset of the Acquiror Company, other than Permitted Liens;
6.14.5 Capital Stock. Issued, sold, disposed of or encumbered, or
authorized the issuance, sale, disposition or encumbrance of, or granted or
issued any option to acquire any shares of its capital stock or any other of its
securities or any Equity Security, or altered the term of any of its outstanding
securities or made any change in its outstanding shares of capital stock or its
capitalization, whether by reason of reclassification, recapitalization, stock
split, combination, exchange or readjustment of shares, stock dividend or
otherwise;
6.14.6 Dividends. Declared, set aside, made or paid any dividend or
other distribution to any of its stockholders;
6.14.7 Material Acquiror Company Contracts. Terminated or modified
any Material Acquiror Company Contract, except for termination upon expiration
in accordance with the terms thereof;
6.14.8 Claims. Released, waived or cancelled any claims or rights
relating to or affecting the Acquiror Company in excess of US $10,000 in the
aggregate or instituted or settled any Proceeding involving in excess of US
$10,000 in the aggregate;
6.14.9 Discharged Liabilities. Paid, discharged or satisfied any
claim, obligation or liability in excess of US $10,000 in the aggregate, except
for liabilities incurred prior to the date of this Agreement in the ordinary
course of business;
6.14.10 Indebtedness. Created, incurred, assumed or otherwise become
liable for any Indebtedness in excess of US $10,000 in the aggregate, other than
professional fees;
17
6.14.11 Guarantees. Guaranteed or endorsed in a material amount any
obligation or net worth of any Person;
6.14.12 Acquisitions. Acquired the capital stock or other securities
or any ownership interest in, or substantially all of the assets of, any other
Person;
6.14.13 Accounting. Changed its method of accounting or the
accounting principles or practices utilized in the preparation of its financial
statements, other than as required by GAAP;
6.14.14 Agreements. Except as set forth in the SEC Documents,
entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.
6.15 Material Acquiror Company Contracts. Except to the extent filed with
the SEC Documents, the Acquiror Company has made available to the Company, prior
to the date of this Agreement, true, correct and complete copies of each written
Material Acquiror Company Contract, including each amendment, supplement and
modification thereto.
6.15.1 No Defaults. Each Material Acquiror Company Contract is a
valid and binding agreement of the Acquiror Company that is party thereto, and
is in full force and effect. Except as would not have a Material Adverse Effect,
the Acquiror Company is not in breach or default of any Material Acquiror
Company Contract to which it is a party and, to the knowledge of the Acquiror
Company, no other party to any Material Acquiror Company Contract is in breach
or default thereof. Except as would not have a Material Adverse Effect, no event
has occurred or circumstance exists that (with or without notice or lapse of
time) would (a) contravene, conflict with or result in a violation or breach of,
or become a default or event of default under, any provision of any Material
Acquiror Company Contract or (b) permit the Acquiror Company or any other Person
the right to declare a default or exercise any remedy under, or to accelerate
the maturity or performance of, or to cancel, terminate or modify any Material
Acquiror Company Contract. The Acquiror Company has not received notice of the
pending or threatened cancellation, revocation or termination of any Material
Acquiror Company Contract to which it is a party. There are no renegotiations
of, or attempts to renegotiate, or outstanding rights to renegotiate any
material terms of any Material Acquiror Company Contract.
6.16 Employees.
6.16.1 The Acquiror Company has no employees, independent
contractors or other Persons providing research or other services to them.
Except as would not have a Material Adverse Effect, the Acquiror Company is in
full compliance with all Laws regarding employment, wages, hours, benefits,
equal opportunity, collective bargaining, the payment of Social Security and
other taxes, occupational safety and health and plant closing. The Acquiror
Company is not liable for the payment of any compensation, damages, taxes,
fines, penalties or other amounts, however designated, for failure to comply
with any of the foregoing Laws.
6.16.2 No director, officer or employee of the Acquiror Company is a
party to, or is otherwise bound by, any contract (including any confidentiality,
noncompetition or proprietary rights agreement) with any other Person that in
any way adversely affects or will materially affect (a) the performance of his
or her duties as a director, officer or employee of the Acquiror Company or (b)
the ability of the Acquiror Company to conduct its business. Except as set forth
in the SEC Documents, each employee of the Acquiror Company is employed on an
at-will basis and the Acquiror Company has no contract with any of its employees
which would interfere with the Acquiror Company's ability to discharge its
employees.
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6.17 Tax Returns and Audits.
6.17.1 Tax Returns. The Acquiror Company has filed all material Tax
Returns required to be filed by or on behalf of the Acquiror Company and have
paid all material Taxes of the Acquiror Company required to have been paid
(whether or not reflected on any Tax Return). Except as set forth in the SEC
Documents, (a) no Governmental Authority in any jurisdiction has made a claim,
assertion or threat to the Acquiror Company that the Acquiror Company is or may
be subject to taxation by such jurisdiction; (b) there are no Liens with respect
to Taxes on the Acquiror Company's property or assets other than Permitted
Liens; and (c) there are no Tax rulings, requests for rulings, or closing
agreements relating to the Acquiror Company for any period (or portion of a
period) that would affect any period after the date hereof.
6.17.2 No Adjustments, Changes. The Acquiror Company nor any other
Person on behalf of the Acquiror Company (a) has executed or entered into a
closing agreement pursuant to Section 7121 of the Code or any predecessor
provision thereof or any similar provision of state, local or foreign law; or
(b) has agreed to or is required to make any adjustments pursuant to Section
481(a) of the Code or any similar provision of state, local or foreign law.
6.17.3 No Disputes. There is no pending audit, examination,
investigation, dispute, proceeding or claim with respect to any Taxes of the
Acquiror Company, nor is any such claim or dispute pending or contemplated. The
Acquiror Company has delivered to the Company true, correct and complete copies
of all Tax Returns, if any, examination reports and statements of deficiencies
assessed or asserted against or agreed to by the Acquiror Company since their
inception and any and all correspondence with respect to the foregoing.
6.17.4 Not a U.S. Real Property Holding Corporation. The Acquiror
Company is not and has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code at any time
during the applicable period specified in Section 897(c)(1)(A)(ii) of the Code.
6.17.5 No Tax Allocation, Sharing. The Acquiror Company is not a
party to any Tax allocation or sharing agreement. Other than with respect to the
Tax Group of which the Acquiror Company is the common parent, the Acquiror
Company (a) has been a member of a Tax Group filing a consolidated income Tax
Return under Section 1501 of the Code (or any similar provision of state, local
or foreign law), and (b) has any liability for Taxes for any Person under
Treasury Regulations Section 1.1502-6 (or any similar provision of state, local
or foreign law) as a transferee or successor, by contract or otherwise.
6.17.6 No Other Arrangements. The Acquiror Company is not a party to
any agreement, contract or arrangement for services that would result,
individually or in the aggregate, in the payment of any amount that would not be
deductible by reason of Section 162(m), 280G or 404 of the Code. The Acquiror
Company is not a "consenting corporation" within the meaning of Section 341(f)
of the Code. The Acquiror Company does not have any "tax-exempt bond financed
property" or "tax-exempt use property" within the meaning of Section 168(g) or
(h), respectively of the Code. The Acquiror Company does not have any
outstanding closing agreement, ruling request, request for consent to change a
method of accounting, subpoena or request for information to or from a
Governmental Authority in connection with any Tax matter. During the last two
years, the Acquiror Company has not engaged in any exchange with a related party
(within the meaning of Section 1031(f) of the Code) under which gain realized
was not recognized by reason of Section 1031 of the Code. The Company is not a
party to any reportable transaction within the meaning of Treasury Regulation
Section 1.6011-4.
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6.18 Material Assets. The financial statements of the Acquiror Company set
forth in the SEC Documents reflect the material properties and assets (real and
personal) owned or leased by the Acquiror Company.
6.19 Insurance Coverage. The Acquiror Company has made available to the
Company, prior to the date of this Agreement, true, correct and complete copies
of any insurance policies maintained by the Acquiror Company on its properties
and assets. Except as would not have a Material Adverse Effect, all of such
policies (a) taken together, provide adequate insurance coverage for the
properties, assets and operations of each Acquiror Company for all risks
normally insured against by a Person carrying on the same business as such
Acquiror Company, and (b) are sufficient for compliance with all applicable Laws
and Material Acquiror Company Contracts. Except as would not have a Material
Adverse Effect, all of such policies are valid, outstanding and in full force
and effect and, by their express terms, will continue in full force and effect
following the consummation of the transactions contemplated by this Agreement.
Except as set forth in the SEC Documents, the Acquiror Company has not received
(a) any refusal of coverage or any notice that a defense will be afforded with
reservation of rights, or (b) any notice of cancellation or any other indication
that any insurance policy is no longer in full force or effect or will not be
renewed or that the issuer of any policy is not willing or able to perform its
obligations thereunder. All premiums due on such insurance policies on or prior
to the date hereof have been paid. There are no pending claims with respect to
the Acquiror Company or its properties or assets under any such insurance
policies, and there are no claims as to which the insurers have notified the
Acquiror Company that they intend to deny liability. There is no existing
default under any such insurance policies.
6.20 Litigation; Orders. Except as set forth in the SEC Documents, there
is no Proceeding (whether federal, state, local or foreign) pending or, to the
knowledge of the Acquiror Company, threatened against or affecting the Acquiror
Company or the Acquiror Company's properties, assets, business or employees. To
the knowledge of the Acquiror Company, there is no fact that might result in or
form the basis for any such Proceeding. The Acquiror Company is not subject to
any Orders.
6.21 Licenses. Except as would not have a Material Adverse Effect, the
Acquiror Company possesses from the appropriate Governmental Authority all
licenses, permits, authorizations, approvals, franchises and rights that are
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties and
assets in the manner in which it currently owns and uses such properties and
assets (collectively, "Acquiror Company Permits"). The Acquiror Company has not
received notice from any Governmental Authority or other Person that there is
lacking any license, permit, authorization, approval, franchise or right
necessary for the Acquiror Company to engage in its business as currently
conducted and to permit the Acquiror Company to own and use its properties and
assets in the manner in which it currently owns and uses such properties and
assets. Except as would not have a Material Adverse Effect, the Acquiror Company
Permits are valid and in full force and effect. Except as would not have a
Material Adverse Effect, no event has occurred or circumstance exists that may
(with or without notice or lapse of time): (a) constitute or result, directly or
indirectly, in a violation of or a failure to comply with any Acquiror Company
Permit; or (b) result, directly or indirectly, in the revocation, withdrawal,
suspension, cancellation or termination of, or any modification to, any Acquiror
Company Permit. The Acquiror Company has not received notice from any
Governmental Authority or any other Person regarding: (a) any actual, alleged,
possible or potential contravention of any Acquiror Company Permit; or (b) any
actual, proposed, possible or potential revocation, withdrawal, suspension,
cancellation, termination of, or modification to, any Acquiror Company Permit.
All applications required to have been filed for the renewal of such Company
Permits have been duly filed on a timely basis with the appropriate Persons, and
all other filings required to have been made with respect to such Acquiror
Company Permits have been duly made on a timely basis with the appropriate
Persons. All Acquiror Company Permits are renewable by their terms or in the
ordinary course of business without the need to comply with any special
qualification procedures or to pay any amounts other than routine fees or
similar charges, all of which have, to the extent due, been duly paid.
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6.22 Interested Party Transactions. Except as set forth in the SEC
Documents, no officer, director or stockholder of the Acquiror Company or any
Affiliate or "associate" (as such term is defined in Rule 405 of the Commission
under the Securities Act) of any such Person, has or has had, either directly or
indirectly, (1) an interest in any Person which (a) furnishes or sells services
or products which are furnished or sold or are proposed to be furnished or sold
by the Acquiror Company, or (b) purchases from or sells or furnishes to, or
proposes to purchase from, sell to or furnish any Acquiror Company any goods or
services; or (2) a beneficial interest in any contract or agreement to which the
Acquiror Company is a party or by which it may be bound or affected.
6.23 Governmental Inquiries. The Acquiror Company has provided to the
Company a copy of each material written inspection report, questionnaire,
inquiry, demand or request for information received by the Acquiror Company from
any Governmental Authority, and the Acquiror Company's response thereto, and
each material written statement, report or other document filed by the Acquiror
Company with any Governmental Authority.
6.24 Intellectual Property. The Acquiror Company does not own, use or
license any Intellectual Property in its business as presently conducted, except
as set forth in the SEC Documents.
6.25 Title to and Condition of Properties. Except as would not have a
Material Adverse Effect, the Acquiror Company owns (with good and marketable
title in the case of real property) or holds under valid leases or other rights
to use all real property, plants, machinery, equipment and other personal
property necessary for the conduct of its business as presently conducted, free
and clear of all Liens, except Permitted Liens. The material buildings, plants,
machinery and equipment necessary for the conduct of the business of the
Acquiror Company as presently conducted are structurally sound, are in good
operating condition and repair and are adequate for the uses to which they are
being put, and none of such buildings, plants, machinery or equipment is in need
of maintenance or repairs, except for ordinary, routine maintenance and repairs
that are not material in nature or cost.
21
6.26 SEC Documents; Financial Statements. The Acquiror Company has filed
all reports required to be filed by it under the Exchange Act, including
pursuant to Section 13(a) or 15(d) thereof, for the three (3) years preceding
the date hereof (or such shorter period as the Acquiror Company was required by
law to file such material) (the foregoing materials being collectively referred
to herein as the "SEC Documents") and, while not having filed all such SEC
Documents prior to the expiration of any extension(s), is nevertheless current
with respect to its Exchange Act filing requirements. As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act and the rules and regulations of the
Commission promulgated thereunder, and none of the SEC Documents, when filed,
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statement
therein, in light of the circumstances under which they were made, not
misleading. All material agreements to which the Acquiror Company is a party or
to which the property or assets of the Acquiror Company are subject have been
appropriately filed as exhibits to the SEC Documents as and to the extent
required under the Exchange Act. The financial statements of the Acquiror
Company included in the SEC Documents comply in all material respects with
applicable accounting requirement and the rules and regulations of the
Commission with respect thereto as in effect at the time of filing, were
prepared in accordance with GAAP applied on a consistent basis during the
periods involved (except as may be indicated in the notes thereto, or, in the
case of unaudited statements as permitted by Form 10-QSB of the Commission), and
fairly present in all material respects (subject in the case of unaudited
statements, to normal, recurring audit adjustments) the financial position of
the Acquiror Company as at the dates thereof and the results of its operations
and cash flows for the periods then ended.
6.27 Stock Option Plans; Employee Benefits.
6.27.1 The Acquiror Company has no stock option plans providing for
the grant by the Acquiror Company of stock options to directors, officers or
employees.
6.27.2 The Acquiror Company has no employee benefit plans or
arrangements covering their present and former employees or providing benefits
to such persons in respect of services provided the Acquiror Company.
6.27.3 Neither the consummation of the transactions contemplated
hereby alone, nor in combination with another event, with respect to each
director, officer, employee and consultant of the Acquiror Company, will result
in (a) any payment (including, without limitation, severance, unemployment
compensation or bonus payments) becoming due from the Acquiror Company, (b) any
increase in the amount of compensation or benefits payable to any such
individual or (c) any acceleration of the vesting or timing of payment of
compensation payable to any such individual. No agreement, arrangement or other
contract of the Acquiror Company provides benefits or payments contingent upon,
triggered by, or increased as a result of a change in the ownership or effective
control of the Acquiror Company.
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6.28 Environmental and Safety Matters. Except as set forth in the SEC
Documents and except as would not have a Material Adverse Effect:
6.28.1 The Acquiror Company has at all time been and is in
compliance with all Environmental Laws applicable to the Acquiror Company.
6.28.2 There are no Proceedings pending or threatened against the
Acquiror Company alleging the violation of any Environmental Law or
Environmental Permit applicable to the Acquiror Company or alleging that the
Acquiror Company is a potentially responsible party for any environmental site
contamination.
6.28.3 Neither this Agreement nor the consummation of the
transactions contemplated by this Agreement shall impose any obligations to
notify or obtain the consent of any Governmental Authority or third Persons
under any Environmental Laws applicable to the Acquiror Company.
6.29 Money Laundering Laws. The operations of the Acquiror Company is and
has been conducted at all times in compliance with applicable financial
recordkeeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, as amended, the money laundering statutes of
all U.S. and non-U.S. jurisdictions, the rules and regulations thereunder and
any related or similar rules, regulations or guidelines, issued, administered or
enforced by any Governmental Authority (collectively, the "Money Laundering
Laws") and no Proceeding involving the Acquiror Company with respect to the
Money Laundering Laws is pending or, to the knowledge of the Acquiror Company,
threatened.
6.30 Board Recommendation. The Acquiror Company Board, at a meeting duly
called and held, has determined that this Agreement and the transactions
contemplated by this Agreement are advisable and in the best interests of the
Acquiror Company's stockholders and has duly authorized this Agreement and the
transactions contemplated by this Agreement.
SECTION VII
COVENANTS OF THE ACQUIROR COMPANY
7.1 Indemnification and Insurance.
7.1.1 The Acquiror Company shall to the fullest extent permitted
under applicable Law or its Organizational Documents, indemnify and hold
harmless, each present and former director, officer or employee of the Acquiror
Company (collectively, the "Indemnified Parties") against any costs or expenses
(including attorneys' fees), judgments, fines, losses, claims, damages,
liabilities and amounts paid in settlement in connection with any Proceeding (x)
arising out of or pertaining to the transactions contemplated by this Agreement
or (y) otherwise with respect to any acts or omissions occurring at or prior to
the Closing Date, to the same extent as provided in the Acquiror Company's
Organizational Documents or any applicable contract or agreement as in effect on
the date hereof, in each case for a period of two years after the Closing Date.
In the event of any such Proceeding (whether arising before or after the Closing
Date), (i) any counsel retained by the Indemnified Parties for any period after
the Closing Date shall be reasonably satisfactory to the Acquiror Company, (ii)
after the Closing Date, the Acquiror Company shall pay the reasonable fees and
expenses of such counsel, promptly after statements therefor are received,
provided that the Indemnified Parties shall be required to reimburse the
Acquiror Company for such payments in the circumstances and to the extent
required by the Acquiror Company's Organizational Documents, any applicable
contract or agreement or applicable Law, and (iii) the Acquiror Company will
cooperate in the defense of any such matter; provided, however, that the
Acquiror Company shall not be liable for any settlement effected without its
written consent (which consent shall not be unreasonably withheld); and
provided, further, that, in the event that any claim or claims for
indemnification are asserted or made within such two (2) year period, all rights
to indemnification in respect of any such claim or claims shall continue until
the disposition of any and all such claims. The Indemnified Parties as a group
may retain only one law firm to represent them in each applicable jurisdiction
with respect to any single action unless there is, under applicable standards of
professional conduct, a conflict on any significant issue between the positions
of any two or more Indemnified Parties, in which case each Indemnified Person
with respect to whom such a conflict exists (or group of such Indemnified
Persons who among them have no such conflict) may retain one separate law firm
in each applicable jurisdiction.
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7.1.2 This Section 7.1 shall survive the consummation of the
transactions contemplated by this Agreement upon execution, is intended to
benefit the Indemnified Parties and the Covered Persons, shall be binding on all
successors and assigns of the Acquiror Company and shall be enforceable by the
Indemnified Parties and the Covered Persons.
7.2 Rule 144 Reporting. Subject to the Acquiror Company not being in
material breach of the warranties and representations in Section 6, with a view
to making available to the Acquiror Company's stockholders the benefit of
certain rules and regulations of the Commission which may permit the sale of the
Acquiror Company Common Stock to the public without registration, from and after
the Closing Date, the Acquiror Company agrees to:
7.2.1 Make and keep public information available, as those terms are
understood and defined in Rule 144; and
7.2.2 File with the Commission, in a timely manner, all reports and
other documents required of the Acquiror Company under the Exchange Act.
7.3 SEC Documents. From and after the Closing Date, in the event the
Commission notifies the Acquiror Company of its intent to review any SEC
Document filed prior to the Closing Date or the Acquiror Company receives any
oral or written comments from the Commission with respect to any SEC Document
filed prior to the Closing Date, the Acquiror Company shall promptly notify the
Acquiror Company and the Acquiror Company shall fully cooperate with the
Acquiror Company.
7.4 Scrip for Scrip Rollover. Acquiror and Shareholders jointly choose a
scrip for scrip rollover for Australian tax purposes in accordance with
subdivision 124-M of the Income Tax Assessment Act in respect of this Agreement
and Acquiror Company and Shareholders must execute all documents required to
effect this. This clause does not merge on Closing.
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SECTION VIII
CONDITIONS PRECEDENT OF THE ACQUIROR COMPANY
The Acquiror Company's obligation to acquire the Shares and to take the
other actions required to be taken by the Acquiror Company at the Closing Date
is subject to the satisfaction, at or prior to the Closing Date, of each of the
following conditions (any of which may be waived by the Acquiror Company, in
whole or in part):
8.1 Accuracy of Representations. The representations and warranties of the
Company and the Shareholders set forth in this Agreement or in any Schedule or
certificate delivered pursuant hereto that are not qualified as to materiality
shall be true and correct in all material respects as of the date of this
Agreement except to the extent a representation or warranty is expressly limited
by its terms to another date and without giving effect to any supplemental
Schedule. The representations and warranties of the Company and the Shareholders
set forth in this Agreement or in any Schedule or certificate delivered pursuant
hereto that are qualified as to materiality shall be true and correct in all
respects as of the date of this Agreement, except to the extent a representation
or warranty is expressly limited by its terms to another date and without giving
effect to any supplemental Schedule.
8.2 Performance by the Company and Shareholders.
8.2.1 All of the covenants and obligations that the Company and
Shareholder are required to perform or to comply with pursuant to this Agreement
(considered collectively), and each of these covenants and obligations
(considered individually), must have been duly performed and complied with in
all material respects.
8.2.2 Each document required to be delivered by the Company and the
Shareholder pursuant to this Agreement must have been delivered.
8.3 No Force Majeure Event. There shall not have been any delay, error,
failure or interruption in the conduct of the business of any Acquired Company,
or any loss, injury, delay, damage, distress, or other casualty, due to force
majeure including but not limited to (a) acts of God; (b) fire or explosion; (c)
war, acts of terrorism or other civil unrest; or (d) national emergency.
8.4 Certificate of Officer. The Company will have delivered to the
Acquiror Company a certificate executed by an officer of the Company, certifying
the satisfaction of the conditions specified in Sections 8.1, 8.2, and 8.3.
8.5 Consents.
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8.5.1 All material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Company and/or the Shareholders for the authorization, execution and delivery of
this Agreement and the consummation by them of the transactions contemplated by
this Agreement, shall have been obtained and made by the Company or the
Shareholders, as the case may be, except where the failure to receive such
consents, waivers, approvals, authorizations or orders or to make such filings
would not have a Material Adverse Effect on the Company or the Acquiror Company.
8.6 Documents. The Company and the Shareholders must deliver to the
Acquiror Company at the Closing:
8.6.1 (i) share certificates evidencing the number of Shares held by
each Shareholder (as set forth in Exhibit A), along with executed share transfer
forms transferring such Shares to the Acquiror Company together with a certified
copy of a board resolution of the Company approving the registration of the
transfer of such shares to Acquiror Company (subject to Closing and payment of
stamp duty);
8.6.2 a Secretary's Certificate, dated the Closing Date certifying
attached copies of (A) the Organizational Documents of the Company, (B) the
resolutions of the Company Board approving this Agreement and the transactions
contemplated hereby, (C) a Certificate of Good Standing of the Company and (D)
the incumbency of each authorized officer of the Company signing this Agreement
and any other agreement or instrument contemplated hereby to which the Company
is a party; and
8.6.3 each of the Transaction Documents to which the Company and/or
the Shareholders is a party, duly executed, and such other documents as the
Acquiror Company may reasonably request for the purpose of (A) evidencing the
accuracy of any of the representations and warranties of the Company and the
Shareholders pursuant to Section 8.1, (B) evidencing the performance of, or
compliance by the Company and the Shareholders with, any covenant or obligation
required to be performed or complied with by the Company or the Shareholders, as
the case may be, (C) evidencing the satisfaction of any condition referred to in
this Section, or (D) otherwise facilitating the consummation or performance of
any of the transactions contemplated by this Agreement.
8.7 No Proceedings. There must not have been commenced or threatened
against the Acquiror Company, the Company or any Shareholder, or against any
Affiliate thereof, any Proceeding (which Proceeding remains unresolved as of the
Closing Date) (a) involving any challenge to, or seeking damages or other relief
in connection with, any of the transactions contemplated by this Agreement, or
(b) that may have the effect of preventing, delaying, making illegal, or
otherwise interfering with any of the transactions contemplated by this
Agreement.
8.8 No Claim Regarding Stock Ownership or Consideration. There must not
have been made or threatened by any Person any claim asserting that such Person
(a) is the holder of, or has the right to acquire or to obtain beneficial
ownership of the Shares or any other stock, voting, equity, or ownership
interest in, the Company, or (b) is entitled to all or any portion of the
Acquiror Company Shares.
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SECTION IX
CONDITIONS PRECEDENT OF THE COMPANY
AND THE SHAREHOLDERS
The Shareholders' obligation to transfer the Shares and the obligations of
the Company to take the other actions required to be taken by the Company in
advance of or at the Closing Date are subject to the satisfaction, at or prior
to the Closing Date, of each of the following conditions (any of which may be
waived by the Company and the Shareholders jointly, in whole or in part):
9.1 Accuracy of Representations. The representations and warranties of the
Acquiror Company set forth in this Agreement or in any Schedule or certificate
delivered pursuant hereto that are not qualified as to materiality shall be true
and correct in all material respects as of the date of this Agreement except to
the extent a representation or warranty is expressly limited by its terms to
another date and without giving effect to any supplemental Schedule. The
representations and warranties of the Acquiror Company set forth in this
Agreement or in any Schedule or certificate delivered pursuant hereto that are
qualified as to materiality shall be true and correct in all respects as of the
date of this Agreement, except to the extent a representation or warranty is
expressly limited by its terms to another date and without giving effect to any
supplemental Schedule.
9.2 Performance by the Acquiror Company.
9.2.1 All of the covenants and obligations that the Acquiror Company
and are required to perform or to comply with pursuant to this Agreement
(considered collectively), and each of these covenants and obligations
(considered individually), must have been performed and complied with in all
respects.
9.2.2 Each document required to be delivered by the Acquiror Company
pursuant to this Agreement must have been delivered.
9.3 No Force Majeure Event. There shall not have been any delay, error,
failure or interruption in the conduct of the business of the Acquiror Company,
or any loss, injury, delay, damage, distress, or other casualty, due to force
majeure including but not limited to (a) acts of God; (b) fire or explosion; (c)
war, acts of terrorism or other civil unrest; or (d) national emergency.
9.4 Certificate of Officer. The Acquiror Company will have delivered to
the Company a certificate, dated the Closing Date, executed by an officer of the
Acquiror Company, certifying the satisfaction of the conditions specified in
Sections 9.1, 9.2, and 9.3.
9.5 Consents.
9.5.1 All material consents, waivers, approvals, authorizations or
orders required to be obtained, and all filings required to be made, by the
Acquiror Company for the authorization, execution and delivery of this Agreement
and the consummation by it of the transactions contemplated by this Agreement,
shall have been obtained and made by the Acquiror Company, except where the
failure to receive such consents, waivers, approvals, authorizations or orders
or to make such filings would not have a Material Adverse Effect on the Company
or the Acquiror Company.
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9.6 Documents. The Acquiror Company must have caused the following
documents to be delivered to the Company and/or the Shareholders:
9.6.1 share certificates evidencing each Shareholder's pro rata
share of the Closing Acquiror Company Shares (as set forth in Exhibit A);
9.6.2 a Secretary's Certificate, dated the Closing Date certifying
attached copies of (A) the Organizational Documents of the Acquiror Company, (B)
the resolutions of the Acquiror Company Board approving this Agreement and the
transactions contemplated hereby, (C) a Certificate of Good Standing of the
Acquiror Company and (D) the incumbency of each authorized officer of the
Acquiror Company signing this Agreement and any other agreement or instrument
contemplated hereby to which the Acquiror Company is a party;
9.6.3 each of the Transaction Documents to which the Acquiror
Company is a party, duly executed; and
9.6.4 such other documents as the Company may reasonably request for
the purpose of (i) evidencing the accuracy of any representation or warranty of
the Acquiror Company pursuant to Section 9.1, (ii) evidencing the performance by
the Acquiror Company of, or the compliance by the Acquiror Company with, any
covenant or obligation required to be performed or complied with by the Acquiror
Company, (iii) evidencing the satisfaction of any condition referred to in this
Section 10, or (iv) otherwise facilitating the consummation of any of the
transactions contemplated by this Agreement.
9.7 No Proceedings. Since the date of this Agreement, there must not have
been commenced or threatened against the Acquiror Company, the Company or any
Shareholder, or against any Affiliate thereof, any Proceeding (which Proceeding
remains unresolved as of the date of this Agreement) (a) involving any challenge
to, or seeking damages or other relief in connection with, any of the
transactions contemplated hereby, or (b) that may have the effect of preventing,
delaying, making illegal, or otherwise interfering with any of the transactions
contemplated hereby.
9.8 No Claim Regarding Stock Ownership or Consideration. There must not
have been made or threatened by any Person any claim asserting that such Person
is the holder of, or has the right to acquire or to obtain beneficial ownership
of the Acquiror Company Common Stock or any other stock, voting, equity, or
ownership interest in, the Acquiror Company.
SECTION X
INDEMNIFICATION; REMEDIES
10.1 Survival. All representations, warranties, covenants, and obligations
in this Agreement shall expire on the first (1st) anniversary of the date this
Agreement is executed (the "Survival Period"). The right to indemnification,
payment of Damages or other remedy based on such representations, warranties,
covenants, and obligations will not be affected by any investigation conducted
with respect to, or any knowledge acquired (or capable of being acquired) at any
time, whether before or after the execution and delivery of this Agreement, with
respect to the accuracy or inaccuracy of or compliance with, any such
representation, warranty, covenant, or obligation. The waiver of any condition
based on the accuracy of any representation or warranty, or on the performance
of or compliance with any covenant or obligation, will not affect the right to
indemnification, payment of Damages, or other remedy based on such
representations, warranties, covenants, and obligations.
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10.2 Limitations on Amount - the Acquiror Company. No Company Indemnified
Party shall be entitled to indemnification pursuant to Section 10.3, unless and
until the aggregate amount of Damages to all Company Indemnified Parties with
respect to such matters under Section 10.4 exceeds US$20,000, at which time, the
Company Indemnified Parties shall be entitled to indemnification for the total
amount of such Damages in excess of US$20,000.
10.3 Determining Damages. Materiality qualifications to the
representations and warranties of the Company and the Acquiror Company shall not
be taken into account in determining the amount of Damages occasioned by a
breach of any such representation and warranty for purposes of determining
whether the baskets set forth in Section 10.3 has been met.
SECTION XI
GENERAL PROVISIONS
11.1 Expenses. Except as otherwise expressly provided in this Agreement,
each party to this Agreement will bear its respective expenses incurred in
connection with the preparation, execution, and performance of this Agreement
and the transactions contemplated by this Agreement, including all fees and
expenses of agents, representatives, counsel, and accountants. In the event of
termination of this Agreement, the obligation of each party to pay its own
expenses will be subject to any rights of such party arising from a breach of
this Agreement by another party.
11.2 Public Announcements. The Acquiror Company shall promptly, but no
later than two (2) days following the effective date of this Agreement, issue a
press release disclosing the transactions contemplated hereby. Prior to the
Closing Date, the Company and the Acquiror Company shall consult with each other
in issuing any other press releases or otherwise making public statements or
filings and other communications with the Commission or any regulatory agency or
stock market or trading facility with respect to the transactions contemplated
hereby and neither party shall issue any such press release or otherwise make
any such public statement, filings or other communications without the prior
written consent of the other, which consent shall not be unreasonably withheld
or delayed, except that no prior consent shall be required if such disclosure is
required by law, in which case the disclosing party shall provide the other
party with prior notice of such public statement, filing or other communication
and shall incorporate into such public statement, filing or other communication
the reasonable comments of the other party.
11.3 Confidentiality.
29
11.3.1 Subsequent to the date of this Agreement, the Acquiror
Company, the Shareholders and the Company will maintain in confidence, and will
cause their respective directors, officers, employees, agents, and advisors to
maintain in confidence, any written, oral, or other information obtained in
confidence from another party in connection with this Agreement or the
transactions contemplated by this Agreement, unless (a) such information is
already known to such party or to others not bound by a duty of confidentiality
or such information becomes publicly available through no fault of such party,
(b) the use of such information is necessary or appropriate in making any
required filing with the Commission, or obtaining any consent or approval
required for the consummation of the transactions contemplated by this
Agreement, or (c) the furnishing or use of such information is required by or
necessary or appropriate in connection with legal proceedings.
11.3.2 In the event that any party is required to disclose any
information of another party pursuant to clause (b) or (c) of Section 11.3.1,
the party requested or required to make the disclosure (the "disclosing party")
shall provide the party that provided such information (the "providing party")
with prompt notice of any such requirement so that the providing party may seek
a protective order or other appropriate remedy and/or waive compliance with the
provisions of this Section 11.3. If, in the absence of a protective order or
other remedy or the receipt of a waiver by the providing party, the disclosing
party is nonetheless, in the opinion of counsel, legally compelled to disclose
the information of the providing party, the disclosing party may, without
liability hereunder, disclose only that portion of the providing party's
information which such counsel advises is legally required to be disclosed,
provided that the disclosing party exercises its reasonable efforts to preserve
the confidentiality of the providing party's information, including, without
limitation, by cooperating with the providing party to obtain an appropriate
protective order or other relief assurance that confidential treatment will be
accorded the providing party's information.
11.3.3 If the transactions contemplated by this Agreement are not
consummated, each party will return or destroy as much of such written
information as the other party may reasonably request.
11.4 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), or (c) when received
by the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by written notice to the other parties):
30
If to Acquiror Company: with a copy to
Advanced Medical Institute, Inc. Loeb & Loeb LLP
c/o Advanced Medical Institute Pty Ltd. 000 Xxxx Xxxxxx
Xxxxx 0, 000, -000 Xxxxxx Xxxx Xxx Xxxx, Xxx Xxxx 10154
Xxxxxxxxxx XXX 0000 Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Australia Telephone No.: 000-000-0000
Attention: Xxxxx Xxxxxxx, President Facsimile No.: 000-000-0000
Telephone No.: 00 0 0000 0000
Facsimile No.: 61 2 9640 5264
If to the Company: with a copy to
Xxxxx & XxXxxxxx
XX Patent Holdco Pty Limited Xxxxx 00, 00 Xxxxxx Xxxxxx
Xxxxx 0, 000, -000 Xxxxxx Road Sydney NSW 1223
Xxxxxxxxxx XXX 0000 Xxxxxxxxx
Xxxxxxxxx Attention: Xxxxxxx Xxxxx, Esq.
Attention: Xxxx Xxxxxx, Director Telephone No.: 00 0 0000 0000
Telephone No.: 00 0 0000 0000 Facsimile No.: 61 2 9225 1595
Facsimile No.: 61 2 9640 5264
11.5 Arbitration. Any dispute or controversy under this Agreement shall be
settled exclusively by arbitration in the City of New York, County of New York
in accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitration award in any court having
jurisdiction.
11.6 Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
11.7 Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
11.8 Entire Agreement and Modification. This Agreement supersedes all
prior agreements between the parties with respect to its subject matter and
constitutes (along with the documents referred to in this Agreement) a complete
and exclusive statement of the terms of the agreement between the parties with
respect to its subject matter. This Agreement may not be amended except by a
written agreement executed by the party against whom the enforcement of such
amendment is sought.
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11.9 Assignments, Successors, and No Third-Party Rights. No party may
assign any of its rights under this Agreement without the prior consent of the
other parties. Subject to the preceding sentence, this Agreement will apply to,
be binding in all respects upon, and inure to the benefit of and be enforceable
by the respective successors and permitted assigns of the parties. Except as set
forth in Section 7.1 and Section 10.3, nothing expressed or referred to in this
Agreement will be construed to give any Person other than the parties to this
Agreement any legal or equitable right, remedy, or claim under or with respect
to this Agreement or any provision of this Agreement. This Agreement and all of
its provisions and conditions are for the sole and exclusive benefit of the
parties to this Agreement and their successors and assigns.
11.10 Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
11.11 Section Headings, Construction. The headings of Sections in this
Agreement are provided for convenience only and will not affect its construction
or interpretation. All references to "Section" or "Sections" refer to the
corresponding Section or Sections of this Agreement. All words used in this
Agreement will be construed to be of such gender or number as the circumstances
require. Unless otherwise expressly provided, the word "including" does not
limit the preceding words or terms.
11.12 Governing Law. This Agreement will be governed by the laws of the
State of New York without regard to conflicts of laws principles.
11.13 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
11.14 Costs. The parties acknowledge that Global Corporate Consultants
Ltd. is responsible for all costs, expenses, fees and charges of Acquiror
Company in relation to this Agreement.
32
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
Acquiror Company: Company:
Advanced Medical Institute Inc. PE Patent Holdco Pty Limited
By: By:
----------------------------- -----------------------------
Name: Xxxxx Xxxxxxxx Name: Xxxx Xxxxxx
Title: Chief Financial Officer Title: Director
Shareholder: Shareholder:
Xxxxxxxx Holdings Limited Oriental Holdings Limited
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Shareholder: Shareholder:
Burgenstock Holdings Limited Glenealy International Limited
By: By:
----------------------------- -----------------------------
Name: Name:
Title: Title:
Shareholder:
Celebrity International Limited
By:
-----------------------------
Name:
Title:
COUNTERPART SIGNATURE PAGE
(FOR ISSUANCES PURSUANT TO REGULATION S)
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
ENTITY NAME:
By:
-----------------------------
Name:
Title:
OFFSHORE DELIVERY INSTRUCTIONS:
------------------------------
------------------------------------------------------------------
PRINT EXACT NAME IN WHICH YOU WANT THE SECURITIES TO BE REGISTERED
Attn:
-----------------------------------------------------
Address:
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Phone No.
-----------------------------------------------------
Facsimile No.
-----------------------------------------------------
COUNTERPART SIGNATURE PAGE
(FOR ISSUANCES PURSUANT TO SECTION 4(2))
IN WITNESS WHEREOF, the parties have executed and delivered this Share
Exchange Agreement as of the date first written above.
ENTITY NAME:
By:
-----------------------------
Name:
Title:
Circle the category under which you are an "accredited investor" pursuant to
Exhibit B:
1 2 3 4 5 6 7 8
------------------------------------------------------------------
PRINT EXACT NAME IN WHICH YOU WANT THE SECURITIES TO BE REGISTERED
Attn:
-----------------------------------------------------
Address:
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Phone No.
-----------------------------------------------------
Facsimile No.
-----------------------------------------------------
SCHEDULES
Schedule 4.1.5 Shareholder Brokers or Finders
Schedule 5.1 Company Jurisdiction
Schedule 5.2 Company Subsidiaries
Schedule 5.7.1 Capitalization of the Company
Schedule 5.7.2 Company Redemption Requirements
Schedule 5.11 Company Brokers or Finders
EXHIBIT A
SHARES AND ACQUIROR COMPANY SHARES TO BE EXCHANGED
--------------------------------------------------------------------------------------------------------------------
Name and Address of Shareholder Number of Shares to be delivered by Number of Acquiror Company Shares to
Shareholder be issued to Shareholder
--------------------------------------------------------------------------------------------------------------------
Xxxxxxxx Holdings Limited 1,250,000 1,250,000
0 Xxxxxxx Xxxxx
#00-00 XXX Xxxxxx
Xxxxxxxxx
--------------------------------------------------------------------------------------------------------------------
Burgenstock Holdings Limited 1,250,000 1,250,000
#00-00 XXX Xxxxxx
Xxxxxxxxx
--------------------------------------------------------------------------------------------------------------------
Celebrity International Limited 500,000 500,000
XX Xxx 000
00 Xxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxxxx
--------------------------------------------------------------------------------------------------------------------
Oriental Holdings Limited 1,250,000 1,250,000
00 Xxxxxx Xxxxxx
Castries
St Lucia
--------------------------------------------------------------------------------------------------------------------
Glenealy International Limited 750,000 750,000
00 Xxxxxx Xxxxxx
Castries
St Lucia
--------------------------------------------------------------------------------------------------------------------
EXHIBIT B
Definition of "Accredited Investor"
The term "accredited investor" means:
(1) A bank as defined in Section 3(a)(2) of the Securities Act, or a savings
and loan association or other institution as defined in Section 3(a)(5)(A)
of the Securities Act, whether acting in its individual or fiduciary
capacity; a broker or dealer registered pursuant to Section 15 of the
Securities Exchange Act of 1934; an insurance company as defined in
Section 2(13) of the Securities Act; an investment company registered
under the Investment Company Act of 1940 (the "Investment Company Act") or
a business development company as defined in Section 2(a)(48) of the
Investment Company Act; a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; a plan established and maintained
by a state, its political subdivisions or any agency or instrumentality of
a state or its political subdivisions for the benefit of its employees, if
such plan has total assets in excess of US $5,000,000; an employee benefit
plan within the meaning of the Employee Retirement Income Security Act of
1974 ("ERISA"), if the investment decision is made by a plan fiduciary, as
defined in Section 3(21) of ERISA, which is either a bank, savings and
loan association, insurance company, or registered investment advisor, or
if the employee benefit plan has total assets in excess of US $5,000,000
or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors.
(2) A private business development company as defined in Section 202(a)(22) of
the Investment Advisers Act of 1940.
(3) An organization described in Section 501(c)(3) of the Internal Revenue
Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of US $5,000,000.
(4) A director or executive officer of the Acquiror Company.
(5) A natural person whose individual net worth, or joint net worth with that
person's spouse, at the time of his or her purchase exceeds US $1,000,000.
(6) A natural person who had an individual income in excess of US $200,000 in
each of the two most recent years or joint income with that person's
spouse in excess of US $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current
year.
(7) A trust, with total assets in excess of US $5,000,000, not formed for the
specific purpose of acquiring the securities offered, whose purchase is
directed by a sophisticated person as described in Rule 506(b)(2)(ii)
(i.e., a person who has such knowledge and experience in financial and
business matters that he is capable of evaluating the merits and risks of
the prospective investment).
(8) An entity in which all of the equity owners are accredited investors. (If
this alternative is checked, the Shareholder must identify each equity
owner and provide statements signed by each demonstrating how each is
qualified as an accredited investor.)
EXHIBIT C
Definition of "U.S. Person"
(1) "U.S. person" (as defined in Regulation S) means:
(i) Any natural person resident in the United States;
(ii) Any partnership or corporation organized or incorporated under the
laws of the United States;
(iii) Any estate of which any executor or administrator is a U.S. person;
(iv) Any trust of which any trustee is a U.S. person;
(v) Any agency or branch of a foreign entity located in the United
States;
(vi) Any non-discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary for the benefit
or account of a U.S. person;
(vii) Any discretionary account or similar account (other than an estate
or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States;
and
(viii) Any partnership or corporation if: (A) organized or incorporated
under the laws of any foreign jurisdiction; and (B) formed by a U.S.
person principally for the purpose of investing in securities not
registered under the Securities Act, unless it is organized or
incorporated, and owned, by accredited investors (as defined in Rule
501(a)) who are not natural persons, estates or trusts.
(2) Notwithstanding paragraph (1) above, any discretionary account or similar
account (other than an estate or trust) held for the benefit or account of
a non-U.S. person by a dealer or other professional fiduciary organized,
incorporated, or (if an individual) resident in the United States shall
not be deemed a "U.S. person."
(3) Notwithstanding paragraph (1), any estate of which any professional
fiduciary acting as executor or administrator is a U.S. person shall not
be deemed a U.S. person if:
(i) An executor or administrator of the estate who is not a U.S. person
has sole or shared investment discretion with respect to the assets
of the estate; and
(ii) The estate is governed by foreign law.
(4) Notwithstanding paragraph (1), any trust of which any professional
fiduciary acting as trustee is a U.S. person shall not be deemed a U.S.
person if a trustee who is not a U.S. person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of the
trust (and no settlor if the trust is revocable) is a U.S. person.
(5) Notwithstanding paragraph (1), an employee benefit plan established and
administered in accordance with the law of a country other than the United
States and customary practices and documentation of such country shall not
be deemed a U.S. person.
(6) Notwithstanding paragraph (1), any agency or branch of a U.S. person
located outside the United States shall not be deemed a "U.S. person" if:
(i) The agency or branch operates for valid business reasons; and
(ii) The agency or branch is engaged in the business of insurance or
banking and is subject to substantive insurance or banking
regulation, respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for Reconstruction
and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, and
their agencies, affiliates and pension plans, and any other similar
international organizations, their agencies, affiliates and pension plans
shall not be deemed "U.S. persons."
EXHIBIT D
ACCREDITED INVESTOR REPRESENTATIONS
Each Shareholder indicating that it is an Accredited Investor, severally and not
jointly, further represents and warrants to the Acquiror Company as follows:
1. Such Shareholder qualifies as an Accredited Investor on the basis set
forth on its signature page to this Agreement.
2. Such Shareholder has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect
such Shareholder's interests in connection with the transactions
contemplated by this Agreement.
3. Such Shareholder has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Acquiror Company Shares.
4. Such Shareholder understands the various risks of an investment in the
Acquiror Company Shares and can afford to bear such risks for an
indefinite period of time, including, without limitation, the risk of
losing its entire investment in the Acquiror Company Shares.
5. Such Shareholder has had access to the Acquiror Company's publicly filed
reports with the SEC.
6. Such Shareholder has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding
the Acquiror Company that such Shareholder has requested and all such
public information is sufficient for such Shareholder to evaluate the
risks of investing in the Acquiror Company Shares.
7. Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
8. Such Shareholder is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or any
officer, employee or agent of the Acquiror Company, other than those
contained in this Agreement.
9. Such Shareholder is acquiring the Acquiror Company Shares for such
Shareholder's own account, for investment and not for distribution or
resale to others.
10. Such Shareholder will not sell or otherwise transfer the Acquiror Company
Shares, unless either (a) the transfer of such securities is registered
under the Securities Act or (b) an exemption from registration of such
securities is available.
11. Such Shareholder understands and acknowledges that the Acquiror Company is
under no obligation to register the Acquiror Company Shares for sale under
the Securities Act.
12. Such Shareholder consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially in
the form set forth in Section 4.2.5(a).
13. Such Shareholder represents that the address furnished by such Shareholder
on its signature page to this Agreement and in Exhibit A is such
Shareholder's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
14. Such Shareholder understands and acknowledges that the Acquiror Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities have
not confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such Shareholder
and that any representation to the contrary is a criminal offense.
15. Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Acquiror Company
Shares.
EXHIBIT E
NON U.S. PERSON REPRESENTATIONS
Each Shareholder indicating that it is not a U.S. person, severally and not
jointly, further represents and warrants to the Acquiror Company as follows:
1. At the time of (a) the offer by the Acquiror Company and (b) the
acceptance of the offer by such Shareholder, of the Acquiror Company
Shares, such Shareholder was outside the United States.
2. No offer to acquire the Acquiror Company Shares or otherwise to
participate in the transactions contemplated by this Agreement was made to
such Shareholder or its representatives inside the United States.
3. Such Shareholder is not purchasing the Acquiror Company Shares for the
account or benefit of any U.S. person, or with a view towards distribution
to any U.S. person, in violation of the registration requirements of the
Securities Act.
4. Such Shareholder will make all subsequent offers and sales of the Acquiror
Company Shares either (x) outside of the United States in compliance with
Regulation S; (y) pursuant to a registration under the Securities Act; or
(z) pursuant to an available exemption from registration under the
Securities Act. Specifically, such Shareholder will not resell the
Acquiror Company Shares to any U.S. person or within the United States
prior to the expiration of a period commencing on the Closing Date and
ending on the date that is one year thereafter (the "Distribution
Compliance Period"), except pursuant to registration under the Securities
Act or an exemption from registration under the Securities Act.
5. Such Shareholder is acquiring the Acquiror Company Shares for such
Shareholder's own account, for investment and not for distribution or
resale to others.
6. Such Shareholder has no present plan or intention to sell the Acquiror
Company Shares in the United States or to a U.S. person at any
predetermined time, has made no predetermined arrangements to sell the
Acquiror Company Shares and is not acting as a Distributor of such
securities.
7. Neither such Shareholder, its Affiliates nor any Person acting on such
Shareholder's behalf, has entered into, has the intention of entering
into, or will enter into any put option, short position or other similar
instrument or position in the U.S. with respect to the Acquiror Company
Shares at any time after the Closing Date through the Distribution
Compliance Period except in compliance with the Securities Act.
8. Such Shareholder consents to the placement of a legend on any certificate
or other document evidencing the Acquiror Company Shares substantially in
the form set forth in Section 4.2.5(b).
9. Such Shareholder is not acquiring the Acquiror Company Shares in a
transaction (or an element of a series of transactions) that is part of
any plan or scheme to evade the registration provisions of the Securities
Act.
10. Such Shareholder has sufficient knowledge and experience in finance,
securities, investments and other business matters to be able to protect
such Shareholder's interests in connection with the transactions
contemplated by this Agreement.
11. Such Shareholder has consulted, to the extent that it has deemed
necessary, with its tax, legal, accounting and financial advisors
concerning its investment in the Acquiror Company Shares.
12. Such Shareholder understands the various risks of an investment in the
Acquiror Company Shares and can afford to bear such risks for an
indefinite period of time, including, without limitation, the risk of
losing its entire investment in the Acquiror Company Shares.
13. Such Shareholder has had access to the Acquiror Company's publicly filed
reports with the SEC.
14. Such Shareholder has been furnished during the course of the transactions
contemplated by this Agreement with all other public information regarding
the Acquiror Company that such Shareholder has requested and all such
public information is sufficient for such Shareholder to evaluate the
risks of investing in the Acquiror Company Shares.
15. Such Shareholder has been afforded the opportunity to ask questions of and
receive answers concerning the Acquiror Company and the terms and
conditions of the issuance of the Acquiror Company Shares.
16. Such Shareholder is not relying on any representations and warranties
concerning the Acquiror Company made by the Acquiror Company or any
officer, employee or agent of the Acquiror Company, other than those
contained in this Agreement.
17. Such Shareholder will not sell or otherwise transfer the Acquiror Company
Shares, unless either (A) the transfer of such securities is registered
under the Securities Act or (B) an exemption from registration of such
securities is available.
18. Such Shareholder understands and acknowledges that the Acquiror Company is
under no obligation to register the Acquiror Company Shares for sale under
the Securities Act.
19. Such Shareholder represents that the address furnished by such Shareholder
on its signature page to this Agreement and in Exhibit B is such
Shareholder's principal residence if he is an individual or its principal
business address if it is a corporation or other entity.
20. Such Shareholder understands and acknowledges that the Acquiror Company
Shares have not been recommended by any federal or state securities
commission or regulatory authority, that the foregoing authorities have
not confirmed the accuracy or determined the adequacy of any information
concerning the Acquiror Company that has been supplied to such Shareholder
and that any representation to the contrary is a criminal offense.
21. Such Shareholder acknowledges that the representations, warranties and
agreements made by such Shareholder herein shall survive the execution and
delivery of this Agreement and the purchase of the Acquiror Company
Shares.
