EXHIBIT 2.1
EXECUTION COPY
SHARE EXCHANGE AGREEMENT
This Share Exchange Agreement, dated as of January 28, 2005, is made by
and among Advanced Medical Institute Inc. a Nevada corporation formerly named
Hawksdale Financial Visions, Inc. (the "Acquiror Company"), each of the Persons
listed on Exhibit A hereto (collectively, the "Acquiror Company Shareholders",
and individually an "Acquiror Company Shareholder"), each of the Persons listed
on Exhibit B hereto (collectively, the "Shareholders", and individually a
"Shareholder"), and Advanced Medical Institute Pty Limited (ACN 095 238 645), a
company incorporated in Australia (the "Company").
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 14,600,000 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 58.4% 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 C.
1.2 "Acquired Companies" means, collectively, the Company and the
Company Subsidiaries.
1.3 "Acquiror Company Balance Sheet" means the Acquiror Company's
audited balance sheet at September 30, 2004.
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.
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, including, without limitation, Intelligent Medical
Technologies Pty Limited (ACN 107 047 496) (which entity is a 51% subsidiary 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 "Dragon" means Dragon Enterprises, Ltd.
1.22 "Environmental Laws" means any Law or other requirement relating
to the environment, natural resources, or public or employee health and safety.
1.23 "Environmental Permit" means all licenses, permits,
authorizations, approvals, franchises and rights required under any applicable
Environmental Law or Order.
2
1.24 "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.
1.25 "ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
1.26 "Exchange" has the meaning set forth in Section 2.1.
1.27 "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.
1.28 "Exhibits" means the several exhibits referred to and identified
in this Agreement.
1.29 "GAAP" means, with respect to any Person, United States generally
accepted accounting principles applied on a consistent basis with such Person's
past practices.
1.30 "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.
1.31 "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.
1.32 "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.
1.33 "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.
1.34 "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
3
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.
1.35 "Material Acquiror Company Contract" means any and all agreements,
contracts, arrangements, leases, commitments or otherwise, of the Acquiror
Company Companies, of the type and nature that the Acquiror Company is required
to file with the Commission.
1.36 "Material Adverse Effect" means, when used with respect to the
Acquiror Company Companies or the Acquired Company 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 Companies 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 Companies or
the Acquired Companies, as the case may be, operate.
1.37 "Order" means any award, decision, injunction, judgment, order,
ruling, subpoena, or verdict entered, issued, made, or rendered by any
Governmental Authority.
1.38 "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.
1.39 "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.
4
1.40 "Person" means all natural persons, corporations, business trusts,
associations, companies, partnerships, limited liability companies, joint
ventures and other entities, governments, agencies and political subdivisions.
1.41 "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.
1.42 "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.
1.43 "Rule 144" means Rule 144 under the Securities Act, as the same
may be amended from time to time, or any successor statute.
1.44 "Schedule 14(f) Filing" means an information statement filed by
the Acquiror Company on Schedule 14f-1 under the Exchange Act.
1.45 "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.
1.46 "SEC Documents" has the meaning set forth in Section 6.26.
1.47 "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.
1.48 "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.
1.49 "Shares" means the 1,360 issued and outstanding ordinary shares of
the Company.
1.50 "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.
1.51 "Survival Period" has the meaning set forth in Section 10.1.
1.52 "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
5
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.
1.53 "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.
1.54 "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.
1.55 "Transaction Documents" means, collectively, all agreements,
instruments and other documents to be executed and delivered in connection with
the transactions contemplated by this Agreement.
1.56 "U.S." means the United States of America.
1.57 "U.S. Dollars" or "US $" means the currency of the United States
of America.
1.58 "U.S. Person" has the meaning set forth in Regulation S under the
Securities Act and set forth on Exhibit D 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 B, 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 14,600,000 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 any 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
6
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.
2.4 DIRECTORS OF ACQUIROR COMPANY AT CLOSING DATE. By the Closing Date
the current directors of the Acquiror Company shall appoint Jacov (Xxxx)
Xxxxxxx, Xxxx Xxxx, Xxxxxxx Fanshil, Xxxx Shabshay and Spiro Baramilis, as
additional members of the Acquiror Company Board. Immediately thereafter, all
current directors of the Acquiror Company shall resign as directors of the
Acquiror Board.
SECTION III
CLOSING DATE
3.1 CLOSING DATE. The closing of the Exchange will occur upon execution
of this Agreement on January 28, 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.
7
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
Organization 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.
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.
8
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.
4.2.3 ADDITIONAL REPRESENTATIONS AND WARRANTIES OF ACCREDITED
INVESTORS. Each 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 E.
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 F.
4.2.5 STOCK LEGENDS. Each 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
9
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.
(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.
10
(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 E and F. 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.
5.2 SUBSIDIARIES. Except as set forth on Schedule 5.2, 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,
11
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 and with
the exception that the Acquiror Company must have the share transfers stamped
with the NSW revenue authorities, with the stamp duty payable on such transfers
is estimated to be AU$14,000.
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 Acquiror
Company Shareholders 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.
5.7 CAPITALIZATION AND RELATED MATTERS.
5.7.1 CAPITALIZATION. The issued capital stock of the Company
consists of 1,360 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 B 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
12
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 (with the exception that the
Shareholders have disclosed to the Acquiror Company the litigation between the
Company and the ACCC in relation to certain advertisements issued by the Company
in relation to Xx. Xxx Xxxxxx). 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 (with the exception that the Company is currently
engaged in proceedings against Mr. Xxxx Xxxx and others in respect of their
alleged unauthorized use of the Company's customer database and other
intellectual property). 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 (with the exception that the Company has granted
a license to use its intellectual property in Korea for a period of 3 years to
an entity associated with Mr. Song).
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.
13
5.13 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 AND
THE ACQUIROR COMPANY SHAREHOLDERS
The Acquiror Company and the Acquiror Company Shareholders, jointly and
severally, represent and warrant to the Shareholders and the Company as follows:
6.1 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 a true, correct and complete list of 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.
6.2 SUBSIDIARIES. 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.
6.3 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.
6.4 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
14
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 (a) the Schedule 14(f) Filing, and (b) such other customary filings with
the Commission for transactions of the type contemplated by this Agreement.
6.5 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.
6.6 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.
6.7 SECURITIES LAWS. Assuming the accuracy of the representations and
warranties of the Shareholders contained in Section 4 and Exhibits E and F, 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.
6.8 CAPITALIZATION AND RELATED MATTERS.
15
6.8.1 CAPITALIZATION. The authorized capital stock of the
Acquiror Company consists of 25,000,000 shares of the Acquiror Company's Common
Stock, of which 10,400,000 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.
6.8.2 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.
6.8.3 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.
6.9 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 such 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.
16
6.10 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.
6.11 NO BROKERS OR FINDERS. 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.
6.12 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 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, 2004. The Acquiror Company Balance Sheet provides a
true and fair view of the assets and liabilities (whether accrued, absolute,
contingent, liquidated or otherwise, whether due or to become due, whether or
not known to Acquiror Company) as at December 31, 2003.
6.13 CHANGES. Except as set forth in the SEC Documents, the Acquiror
Company has, since January 1, 2004:
6.13.1 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.
6.13.2 ADVERSE CHANGES. 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;
6.13.3 LOANS. Made any loans or advances to any Person;
6.13.4 LIENS. Created or permitted to exist any Lien on any
material property or asset of the Acquiror Company, other than Permitted Liens;
6.13.5 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;
17
6.13.6 DIVIDENDS. Declared, set aside, made or paid any
dividend or other distribution to any of its stockholders;
6.13.7 MATERIAL ACQUIROR COMPANY CONTRACTS. Terminated or
modified any Material Acquiror Company Contract, except for termination upon
expiration in accordance with the terms thereof;
6.13.8 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;
6.13.9 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;
6.13.10 INDEBTEDNESS. Created, incurred, assumed or otherwise
become liable for any Indebtedness in excess of US $10,000 in the aggregate,
other than professional fees;
6.13.11 GUARANTEES. Guaranteed or endorsed in a material
amount any obligation or net worth of any Person;
6.13.12 ACQUISITIONS. Acquired the capital stock or other
securities or any ownership interest in, or substantially all of the assets of,
any other Person;
6.13.13 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;
6.13.14 AGREEMENTS. Except as set forth in the SEC Documents,
entered into any agreement, or otherwise obligated itself, to do any of the
foregoing.
6.14 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.
6.14.1 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
18
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.
6.15 EMPLOYEES.
6.15.1 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.
6.15.2 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.
6.16 TAX RETURNS AND AUDITS.
6.16.1 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.
6.16.2 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.
6.16.3 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
19
assessed or asserted against or agreed to by the Acquiror Company since their
inception and any and all correspondence with respect to the foregoing.
6.16.4 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.
6.16.5 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.
6.16.6 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.
6.17 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.
6.18 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
20
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.
6.19 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.
6.20 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.
6.21 INTERESTED PARTY TRANSACTIONS. 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
21
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.
6.22 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.
6.23 BANK ACCOUNTS AND SAFE DEPOSIT BOXES. The Acquiror Company does
not use a deposit or financial account, a lock box, or a safety deposit box, in
its business as presently conducted.
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.
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
22
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-Q 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. The Acquiror Company's Common Stock
is listed on the OTC Bulletin Board, and the Acquiror Company is not aware of
any facts which would make the Acquiror Company's Common Stock ineligible for
quotation on the OTC Bulletin Board.
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.
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
22
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 RULE 144 REPORTING. Subject to the Acquiror Company Shareholders
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:
7.1.1 Make and keep public information available, as those
terms are understood and defined in Rule 144; and
7.1.2 File with the Commission, in a timely manner, all
reports and other documents required of the Acquiror Company under the Exchange
Act.
7.2 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 Shareholders and the Acquiror Company Shareholders shall fully
cooperate with the Acquiror Company.
7.3 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.
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):
24
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 Shareholders 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 Shareholders 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 CERTIFICATE OF SHAREHOLDERS. Each Shareholder will have delivered
to the Acquiror Company a certificate executed by such Shareholder, if a natural
person, or an authorized officer of the Shareholder, if an entity, certifying
the satisfaction of the conditions specified in Sections 8.1 and 8.2.
8.6 CONSENTS.
8.6.1 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.
8.6.2 Without limiting the foregoing, the Schedule 14(f)
Filing shall have been mailed to the stockholders of the Acquiror Company not
less than ten (10) days prior to the Closing Date. No Proceeding occasioned by
25
the Section 14(f) Filing shall have been initiated or threatened by the
Commission (which Proceeding remains unresolved as of the Closing Date).
8.7 DOCUMENTS. The Company and the Shareholders must deliver to the
Acquiror Company at the Closing (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), (ii) each of the Transaction Documents to
which the Company and/or the Shareholders is a party, duly executed, (iii) 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.
8.8 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. 8.9 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.
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 PROVISION OF FUNDING.
9.1.1 BRIDGE FINANCE. Dragon providing the Company with
AU$300,000 unsecured bridge finance prior to the Closing Date, together with the
AU$31,000 owed by Dragon to the Company.
26
9.2 ACCURACY OF REPRESENTATIONS. The representations and warranties of
the Acquiror Company and Acquiror Company 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
Acquiror Company and Acquiror Company 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.
9.3 PERFORMANCE BY THE ACQUIROR COMPANY.
9.3.1 All of the covenants and obligations that the Acquiror
Company and Acquiror Company Shareholders 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.
9.3.2 Each document required to be delivered by the Acquiror
Company and Acquiror Company Shareholders pursuant to this Agreement must have
been delivered.
9.4 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.
9.5 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 9.2, 9.3, and 9.4.
9.6 CERTIFICATE OF ACQUIROR COMPANY SHAREHOLDERS. The Acquiror Company
Shareholders will have delivered to the Company a certificate, dated the Closing
Date, executed by such Acquiror Company Shareholder, if a natural person or an
authorized officer of the Acquiror Company Shareholder, if an entity, certifying
the satisfaction of the conditions
specified in Sections 9.2 and 9.3.
9.7 CONSENTS.
9.7.1 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.
27
9.7.2 Without limiting the foregoing, the Schedule 14(f)
Filing shall have been mailed to the stockholders of the Acquiror Company not
less than ten (10) days prior to the Closing Date. No Proceeding occasioned by
the Section 14(f) Filing shall have been initiated or threatened by the
Commission (which Proceeding remains unresolved as of the Closing Date).
9.8 DOCUMENTS. The Acquiror Company must have caused the following
documents to be delivered to the Company and/or the Shareholders:
9.8.1 share certificates evidencing each Shareholder's pro
rata share of the Closing Acquiror Company Shares (as set forth in Exhibit B);
9.8.2 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; and (C) 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;
9.8.3 a Certificate of Good Standing of the Acquiror Company;
9.8.4 each of the Transaction Documents to which the Acquiror
Company is a party, duly executed;
and
9.8.5 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.
9.9 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.
9.10 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.
9.11 BANK ACCOUNTS. The Company shall transfer the authorization
signatories for its bank accounts to Jacov (Xxxx) Xxxxxxx as authorized
signatory of such accounts.
28
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.
10.2 INDEMNIFICATION BY THE ACQUIROR COMPANY SHAREHOLDERS. From and
after the execution of this Agreement until the expiration of the Survival
Period, each of Xxxxxxxxx Xxxxxxxx, Xxxxxx Xxxxxxx Xxxxxxx and Xxxxxx X. Xxxxxx
(together, the "Principal Acquiror Company Shareholders") shall indemnify and
hold harmless the Acquiror Company, Company and the Shareholders (collectively,
the "Company Indemnified Parties"), from and against any Damages arising,
directly or indirectly, from or in connection with:
(a) any breach of any representation or warranty made
by the Acquiror Company or the Acquiror Company Shareholders in this
Agreement or in any certificate delivered by the Acquiror Company
pursuant to this Agreement;
(b) any breach by the Acquiror Company or the
Acquiror Company Shareholders of any covenant or obligation of the
Acquiror Company in this Agreement required to be performed by the
Acquiror Company or the Acquiror Company Shareholders on or prior to
the Closing Date; or
(c) any and all losses, claims, damages, or
liabilities against the Acquiror Company or the Acquiror Company
Shareholders, occurring on or prior to the Closing Date.
10.3 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.
10.4 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.
30
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 three (3) 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.
11.3.1 Subsequent to the date of this Agreement, the Acquiror
Company, the Acquiror Company Shareholders 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
30
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):
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
Xxxxxxxxx
Attention: Jacov Vaismaq, President Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Telephone No.: 00 0 0000 0000 Telephone No.: 000-000-0000
Facsimile No.: 61 2 9640 5264 Facsimile No.: 000-000-0000
with an additional copy during the
Survival Period only to:
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
If to Xxxxx Xxxxxxx:
with a copy to
Xxxx 000 Xxxxx & XxXxxxxx
00-00 Xxxxxxxx Xxxxxx Xxxxx 00, 00 Xxxxxx Xxxxxx
Bondi Junction NSW 2022 Xxxxxx XXX 0000
Xxxxxxxxx Xxxxxxxxx
31
Attention: Xxxxxxx Xxxxx, Esq.
Attention: : Xxxx Xxxxxxx Telephone No.: 00 0 0000 0000
Telephone No.: 00 0 0000 0000 Facsimile No.: 61 2 9225 1595
Facsimile No.: 61 2 9640 5264
with a copy to
If to Dragon Enterprises, Ltd.:
00 Xxxxxx Xxxxxx Loeb & Loeb LLP
Castries, St. Lucia 000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: : Xx. Xxxx Xxxxxx Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
Telephone No.: (000) 0000 0000 Telephone No.: 000-000-0000
Facsimile No.: (000) 0000 0000 Facsimile No.: 000-000-0000
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.
32
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 Dragon
Enterprises, Ltd. is responsible for all costs, expenses, fees and charges of
Acquiror Company in relation to this Agreement.
33
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: ACQUIROR COMPANY SHAREHOLDER:
ADVANCED MEDICAL INSTITUTE INC. Signed:_____________________________
Signed:________________________ Printed name: Xxxxxxxxx Xxxxxxxx
Printed name:__________________
Title:_________________________
SHAREHOLDER: ACQUIROR COMPANY SHAREHOLDER:
XXXXX XXXXXXX Signed:______________________________
Signed:________________________ Printed name: Xxxxxx Xxxxxxx Xxxxxxx
SHAREHOLDER: ACQUIROR COMPANY SHAREHOLDER:
DRAGON ENTERPRISES, LTD. Signed:______________________________
Signed:________________________ Printed name: Xxxxxx X. Xxxxxx
Printed 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 C:
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
ACQUIROR COMPANY SHAREHOLDERS
________________________________________________________________________
NAME AND ADDRESS OF ACQUIROR NUMBER OF SHARES HELD BY
COMPANY SHAREHOLDER ACQUIROR COMPANY SHAREHOLDER
________________________________________________________________________
Xxxxxxxxx Xxxxxxxx
0000 Xxxxxxxx Xxxxxx
Xxxxx Xxxxx, XX 00000
________________________________________________________________________
Xxxxxx Xxxxxxx Xxxxxxx
0000 Xxxxx Xxxxx
Xxxxxxxxx, XX 00000
________________________________________________________________________
Xxxxxx X. Xxxxxx
0000 X. Xxxxxxxx Xxxxxx #0000
Xxxx Xxxx, XX 00000
________________________________________________________________________
EXHIBIT B
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
______________________________________________________________________________________________________________________
Dragon Enterprises, Ltd. 204 1,850,000
00 Xxxxxx Xxxxxx
Xxxxxxxx, Xx. Xxxxx
______________________________________________________________________________________________________________________
Xxxxx Xxxxxxx 1,130 10,250,000
Xxxx 000
00-00 Xxxxxxxx Xxxxxx
Xxxxx Xxxxxxxx XXX 0000
Xxxxxxxxx
______________________________________________________________________________________________________________________
Xxxx Xxxx 28 250,000
______________________________________________________________________________________________________________________
Xxxx Xxxxxxx 83 750,000
______________________________________________________________________________________________________________________
Xxxxx Investments Limited 165 1,500,000
______________________________________________________________________________________________________________________
EXHIBIT C
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 D
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 E
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 F
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 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.
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.
