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EXHIBIT 2.3
[XXXXX & XXXXXXXX LETTERHEAD]
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DOVE/MICROTRONICS SHARE SALE AND PURCHASE AGREEMENT
AMONG
ASIA ONLINE - AUSTRALIA PTY LTD.
(ACN 089 444 691)
AND
THE PARTIES LISTED IN EXHIBIT D HERETO
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DATED AS OF OCTOBER 5, 1999
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TABLE OF CONTENTS
Clauses and Headings Page
-------------------- ----
1. Agreement to Sell and Purchase the Shares...........................................................1
1.1 Sale and Purchase of Shares from the Vendors...............................................1
1.2 Purchase Price of Sale Shares..............................................................1
1.3 Closing....................................................................................1
1.4 Meeting of directors.......................................................................3
2. Representations and Warranties of the Vendors.......................................................4
2.1 Organization; Good Standing and Qualification..............................................4
2.2 Certificate of Incorporation and Constitution Records......................................5
2.3 Capitalization.............................................................................6
2.4 No Conflict................................................................................7
2.5 Proprietary Rights; Proprietary Information and Inventions Agreement.......................7
2.6 Actions Pending............................................................................8
2.7 Offering Valid.............................................................................8
2.8 Financial Position.........................................................................8
2.9 Absence of Changes Since Last Accounts....................................................10
2.10 Title to Assets...........................................................................12
2.11 Bank Accounts.............................................................................13
2.12 Receivables; Major Customers..............................................................13
2.13 Equipment, Etc............................................................................14
2.14 Real Property.............................................................................15
2.15 Proprietary Assets........................................................................15
2.16 Year 2000.................................................................................15
2.17 Contracts.................................................................................16
2.18 Liabilities; Major Suppliers..............................................................17
2.19 Compliance with Legal Requirements........................................................18
2.20 Governmental Authorizations...............................................................19
2.21 Tax Matters...............................................................................20
2.22 Employee and Labor Matters................................................................22
2.23 Benefit Plans.............................................................................24
2.24 Sale of Products; Performance of Services.................................................25
2.25 Insurance.................................................................................25
2.26 Related Party Transactions................................................................27
2.27 Proceedings...............................................................................27
2.28 Brokers...................................................................................28
2.29 The Vendors...............................................................................28
2.30 Full Disclosure...........................................................................29
2.31 Insolvency Events.........................................................................30
2.32 NAB Charges...............................................................................31
3. Representations and Warranties of Purchaser........................................................31
3.1 Acquisition of Shares.....................................................................31
3.2 Authority; Binding Nature of Agreement....................................................32
4. Pre-Closing Covenants of the Vendors...............................................................32
4.1 Access and Investigation..................................................................32
4.2 Operation of Business.....................................................................32
4.3 Filings and Consents......................................................................34
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4.4 Notification; Updates to Disclosure Schedule..............................................35
4.5 Payment of Indebtedness by Related Parties................................................36
4.6 No Negotiation............................................................................36
4.7 Best Efforts..............................................................................36
4.8 Confidentiality...........................................................................37
5. Conditions Precedent to Purchaser's Obligation to Close............................................37
5.1 Satisfactory Completion of Pre-Acquisition Review.........................................37
5.2 Accuracy of Representations...............................................................37
5.3 Performance of Obligations................................................................38
5.4 Consents..................................................................................38
5.5 No Adverse Change.........................................................................38
5.6 Additional Documents......................................................................38
5.7 No Proceedings............................................................................38
5.8 No Claim Regarding Stock Ownership or Sale Proceeds.......................................39
6. Conditions Precedent to the Vendors' Obligations to Close..........................................39
6.1 Accuracy of Representations...............................................................39
6.2 Purchaser's Performance...................................................................39
6.3 No Injunction.............................................................................39
7. Termination........................................................................................40
7.1 Termination Events........................................................................40
7.2 Termination Procedures....................................................................40
7.3 Effect of Termination.....................................................................41
7.4 Non-exclusivity of Termination Rights.....................................................41
8. Indemnification, Etc...............................................................................41
8.1 Survival of Representation and Covenants..................................................41
8.2 Indemnification by the Vendors............................................................41
8.3 Limitation of the Vendors' liability under the Warranties.................................42
8.4 Specific Limitations......................................................................42
8.5 No Contribution...........................................................................45
9. Restriction of the Vendors.........................................................................45
10. Guarantees of Directors............................................................................47
10.1 Best Endeavours...........................................................................47
10.2 Indemnity.................................................................................47
11. Miscellaneous Provisions...........................................................................48
11.1 Further Assurances........................................................................48
11.2 Fees, Expenses and Stamp Duty.............................................................48
11.3 Notices...................................................................................48
11.4 Time of the Essence.......................................................................48
11.5 Headings..................................................................................49
11.6 Counterparts..............................................................................49
11.7 Governing Law; Venue......................................................................49
11.8 Successors and Assigns....................................................................49
11.9 Remedies Cumulative; Specific Performance.................................................49
11.10 Waiver....................................................................................50
11.11 Amendments................................................................................50
11.12 Severability..............................................................................50
11.13 Parties in Interest.......................................................................50
11.14 Entire Agreement..........................................................................51
11.15 Construction..............................................................................51
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Exhibits
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EXHIBIT A Certain Definitions........................................................................
EXHIBIT B New Constitution for Dove.................................................................. *
EXHIBIT C [Not Used] ......................................................................... *
EXHIBIT D List of Shareholders.......................................................................
EXHIBIT E New Constitution for Microtronics.......................................................... *
EXHIBIT F [Not used] ......................................................................... *
EXHIBIT G List of Consultants and Independent Contractors............................................ *
EXHIBIT H List of Governmental Licenses, Permits, Orders, Etc........................................ *
EXHIBIT I Form of Employment Agreement............................................................... *
EXHIBIT J Designated Senior Officers and Employees................................................... *
EXHIBIT K Proprietary Information and Inventions Deed................................................ *
EXHIBIT L Guarantors and Guarantees.................................................................. *
* Exhibit omitted -- will be provided supplementally to the Commission upon
request.
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SHARE SALE AND PURCHASE AGREEMENT RELATING TO
DOVE AUSTRALIA PTY LTD (ACN 007 800 142)
This Share Sale and Purchase Agreement (the "Agreement") is entered into as of 5
October, 1999, by and among the parties listed in Exhibit D hereto (collectively
referred to as the "Vendors"), and Asia Online - Australia Pty Ltd (ACN 089 444
691)(the "Purchaser").
RECITALS:
WHEREAS, the Vendors own the entire issued share capital of DOVE AUSTRALIA PTY
LTD (ACN 007 800 142) ("Dove") and MICROTRONICS PTY LTD (ACN 008 116 578)
("Microtronics") (each a "Company" and collectively the "Companies").
WHEREAS, the Vendors wish to sell and the Purchaser wishes to purchase all the
issued shares in the capital of each of the Companies (the "Sale Shares") on the
terms hereof.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE THE SHARES
1.1 Sale and Purchase of Shares from the Vendors
At the Closing, each of the Vendors shall sell, assign,
transfer and deliver to the Purchaser, and the Purchaser shall
purchase, the shares in the Companies listed beside each
Vendor's name in Exhibit D, on the terms and subject to the
conditions set forth in this Agreement.
1.2 Purchase Price of Sale Shares
The purchase price for the Sale Shares shall be paid and
satisfied at Closing by TWO MILLION NINE HUNDRED AND SEVENTY
FIVE THOUSAND AUSTRALIAN DOLLARS (A$2,975,000) (allocated as
to A$2,875,000 in respect of the Sale Shares in Dove and
A$100,000 in respect of the Sale Shares in Microtronics) to be
paid to the Vendors at Closing in the proportions set out
beside their respective names in Exhibit D by telegraphic
transfer to the bank accounts nominated in writing by each of
the Vendors to the Purchaser not less than four business days
prior to Closing;
1.3 Closing
(a) The closing of the sale of the Sale Shares to the
Purchaser (the "Closing") shall take place at the
offices of the Purchaser's Australian counsel, Xxxxx
& XxXxxxxx, Level 26 A.M.P. Centre, 00 Xxxxxx Xxxxxx,
Xxxxxx, Xxx Xxxxx Xxxxx, Xxxxxxxxx at 10:00 a.m.
(Sydney
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Time) on the later of 28 September, 1999 or the date
two business days following the satisfaction of the
Closing Conditions set forth in Section 5 and Section
6. For the purposes of this Agreement "Scheduled
Closing Time" shall mean the time and date as of
which the Closing is required to take place pursuant
to this Section 1.3(a); and "Closing Date" shall mean
to the time and date as of which the Closing actually
takes place.
(b) At the Closing the Vendors shall deliver to the
Purchaser:
(i) the certificates representing the Sale
Shares and duly executed instruments of
transfer to transfer title to the Sale
Shares to the Purchaser (or its nominees);
(ii) duly executed powers of attorney (in deed
form) from each Vendor in favour of the
Purchaser (or its nominee(s)) generally in
respect of the Sale Shares sold by that
Vendor under this Agreement enabling the
Purchaser (or its nominee(s)) to attend and
vote at general meetings of the Companies;
(iii) any waiver, consent or other document
necessary to give the Purchaser (or its
nominee(s)) full legal and beneficial
ownership of the Sale Shares;
(iv) the common seals (if any) of the Companies ,
and each register, minute book and other
book required to be kept by the Companies
under any Legal Requirement up to the date
of Closing and each certificate of
incorporation of the Companies (including
certificates issued upon any change of
name);
(v) a consent from National Australia Bank in a
form acceptable to the Purchaser to:
A. the sale of the issued shares in
the capital of Dove;
B. the change in the directors of
Dove; and
C. the adoption by Dove of the
constitution in the form set out in
Exhibit B.
(vi) a release of the National Australia Bank
charge dated 28 March 1989 over the
undertaking, property and assets of
Microtronics;
(vii) a copy of a special resolution of the
shareholders of each of the Companies
adopting the constitutions in the forms set
out in Exhibit B and Exhibit E;
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(viii) employment contracts in the form of the
draft annexed as Exhibit I, entered into
between Dove and the senior officers and
employees designated in Exhibit J;
(ix) copies of the Proprietary Information and
Inventions Deed executed by each of Xxxxx
Xxx Xxxxxxxx, Xxxx Xxxxxx Xxxxxxxx, Xxxx
Xxxxxx Xxxxxxx Xxxxxx and Xxxxx Spice;
(x) a duly executed certificate (the "Closing
Certificate") setting forth the Vendors'
representations and warranties that (A) each
of the representations and warranties made
by the Vendors in this Agreement was
accurate in all respects as of the date of
this Agreement, (B), each of the
representations and warranties made by the
Vendors in this Agreement is accurate in all
respects as of the Closing Date as if made
on the Closing Date, (C) each of the
covenants and obligations that the Vendors
are required to have complied with or
performed pursuant to this Agreement at or
prior to the Closing has been duly complied
with and performed in all respects, and (D),
each of the conditions set forth in Sections
5.3, 5.4, 5.7 and 5.8 has been satisfied in
all respects;
(xi) the Vendors shall procure that each of its
nominees as the Purchaser notifies to the
Vendors resign from their positions as
directors and officers of the Companies , in
each case formally resigning their
respective office (with effect from the end
of the meetings held pursuant to clause 1.4)
and acknowledging in a form reasonably
acceptable to the Purchaser that the writer
has no claim against the Companies for
compensation for loss of office or
otherwise;
(xii) the Vendors shall procure that the bank
signing mandates and authorities and powers
of attorney given by the Companies as the
Purchaser notifies to the Vendors shall be
revoked.
(c) Subject to the Vendors duly complying with the
requirements of clause 1.3(b), at the Closing, the
Purchaser shall pay each Vendor the portion of the
Purchase Price specified beside their respective
names in Exhibit D, in each case through telegraphic
transfer to the bank account nominated by each Vendor
in writing not less than four business days prior to
Closing as contemplated by Section 1.2.
1.4 Meeting of directors
On or before Closing, the Vendors shall cause to be held a
meeting of the directors and/or shareholders of each of the
Companies at which the following resolutions are passed:
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(a) subject to payment of stamp duty (if any), the
approval of the registration of the transfers of the
Sale Shares;
(b) appoint persons nominated by the Purchaser as
directors and secretary and auditor (if any) of the
Company with effect from the end of the meeting;
(c) the cancellation of the existing share certificates
for the Sales Shares;
(d) the issue of new certificates for the Sale Shares in
favour of the Purchaser (or its nominee(s));
(e) the appointment of new signatories to the Company's
bank accounts and the revocation of existing
authorities to operate those bank accounts, as
notified under Section 1.3(b)(xii);
(f) the approval and adoption of the Constitution as a
replacement to the existing constitution of the
Company.
2. REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The Vendors hereby jointly and severally represent and warrant (except
where this Section expressly provides for the representations and
warranties to be given severally, in which case they are given
severally), to and for the benefit of the Purchaser, as follows:
2.1 Organization; Good Standing and Qualification
(a) Each of the Companies is a corporation duly
organized, validly existing and in good standing
under the laws of South Australia, Australia. Each of
the Companies has all requisite corporate power and
authority to own and operate its properties and
assets, to perform its obligations under all material
contracts, and to carry on its business as presently
conducted and as presently proposed to be conducted.
(b) Dove has never conducted any business under or
otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name,
trade name or other name, other than the name "Dove
Australia Pty Ltd" or "Dove Australia".
(c) Microtronics has never conducted any business under
or otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name,
trade name or other name, other than the name
"Microtronics Pty Ltd", "Microtronics" or
"Microtronics Information Systems".
(d) The Companies are not doing business in any
jurisdiction other than Australia.
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(e) Part 2.1 of the Disclosure Schedule accurately sets
forth (i) the names of the members of each Company's
board of directors, (ii) the names of the members of
each committee of each Company's board of directors,
and (iii) the names and titles of each Company's
officers.
(f) Neither of the Companies nor any of their
shareholders has ever approved, or commenced any
proceeding or made any election contemplating, the
dissolution or liquidation of the Company or the
winding up or cessation of the Company's business or
affairs.
(g) Dove has no subsidiaries, and has not since 1 May
1996 owned, beneficially or otherwise, any shares or
other securities of, or any direct or indirect
interest of any nature in, any Entity.
(h) Microtronics has no subsidiaries, and has not since
22 September 1986 owned, beneficially or otherwise,
any shares or other securities of, or any direct or
indirect interest of any nature in, any Entity.
2.2 Certificate of Incorporation and Constitution Records
(a) The Vendors have delivered to the Purchaser accurate
and complete copies of:
(i) each Company's certificate of incorporation
and constitution, including all amendments
thereto;
(ii) the shareholding records of each Company;
and
(iii) all minutes and other records in the
Vendors' possession of the meetings and
other proceedings (including any actions
taken by written consent or otherwise
without a meeting) of the shareholders of
each Company, the board of directors of each
Company and all committees of the board of
directors of each Company.
(b) There has not been any violation of any of the
provisions of either Company's constitution or of any
resolution adopted by the Company's shareholders,
either Company's board of directors or any committee
of either Company's board of directors; and no event
has occurred, and no condition or circumstance
exists, that might (with or without notice or lapse
of time) constitute or result directly or indirectly
in such a violation.
(c) The register of directors, register of directors'
interests, register of members, register of
allotments and register of share transfers are
accurate, up-to-date and complete, and have been
maintained in accordance with sound and prudent
business practices. All such
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records of each Company are in the actual possession
and direct control of each Company.
2.3 Capitalization
(a) The issued share capital of Dove, immediately prior
to the Closing, will consist of 6 fully paid ordinary
shares. All issued and outstanding shares of the
Company's issued capital (a) have been validly issued
to the persons listed on Exhibit D hereto, (b) are
fully paid and nonassessable, and (c) were issued in
compliance with all applicable Legal Requirements
concerning the issuance of securities. The rights,
preferences, privileges and restrictions of the
shares are as stated in the constitution.
(b) The issued share capital of Microtronics, immediately
prior to the Closing, will consist of 4 fully paid
ordinary shares. All issued and outstanding shares of
the Company's issued capital (a) have been validly
issued to the persons listed on Exhibit D hereto, (b)
are fully paid and nonassessable, and (c) were issued
in compliance with all applicable Legal Requirements
concerning the issuance of securities. The rights,
preferences, privileges and restrictions of the
shares are as stated in the constitution.
(c) The Vendors severally warrant that they each have,
and the Purchaser will acquire at the Closing, good
and valid title to the Sale Shares listed beside the
name of each Vendor in Exhibit D free and clear of
any Encumbrances.
(d) The Vendors have each delivered to the Purchaser
accurate and complete copies of the certificates
evidencing their respective title to the Sale Shares.
(e) There is no:
(i) outstanding subscription, option, call,
warrant or right (whether or not currently
exercisable) to acquire any shares or other
securities of either Company;
(ii) outstanding security, instrument or
obligation that is or may become convertible
into or exchangeable for any shares or other
securities of either Company;
(iii) Contract under which either Company is or
may become obligated to sell or otherwise
issue any shares of its capital stock or any
other securities; or
(iv) condition or circumstance that may directly
or indirectly give rise to or provide a
basis for the assertion of a claim by any
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Person to the effect that such Person is
entitled to acquire or receive any shares or
other securities of either Company;
(f) Neither Company has ever repurchased, redeemed or
otherwise reacquired any shares or other securities.
2.4 No Conflict
Neither the execution and delivery of this Agreement by the
Vendors nor the consummation by the Vendors of the
transactions contemplated by this Agreement will (i) result in
a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage,
indenture, or other evidence of indebtedness related to either
Company or any material license agreement, lease or other
material contract, instrument or obligation related to either
Company to which it is a party or by which it may be bound;
(ii) violate any statute, rule, regulation, order, writ,
injunction, decree or arbitration award applicable to either
Company; (iii) result in the loss of, or in a violation or
breach of any Government Authorisation; or (v) result in the
creation of any material (individually or in the aggregate)
lien, including any claims, mortgages, pledges, liens,
security interests, encumbrances or charges of any kind
(collectively, "Lien") on any of the assets owned or used by
either Company.
2.5 Proprietary Rights; Proprietary Information and Inventions
Agreement
(a) Neither Company has received any communications
alleging that it has violated or, by conducting its
business as proposed would violate, any proprietary
rights of any other person, nor are the Vendors aware
of any basis for the foregoing.
(b) The Vendors do not believe it is or will be necessary
for either Company to utilize any inventions, trade
secrets or proprietary information of any of either
Company's employees made prior to their employment by
the Company, except for inventions, trade secrets or
proprietary information that have been assigned to
the Company.
(c) Each Company owns, licenses or has rights to all of
the (i) patents, patent applications, registrations
and applications for registration thereof; (ii)
trademarks, tradenames, service marks and
registrations and applications for registration
thereof; (iii) copyrights and registrations and
applications for registration thereof; (iv) mask
works and registrations and applications for
registration thereof; (v) computer software, data and
documentation; (vi) trade secrets and confidential
business information, know-how, research and
development information, copyrightable works,
financial, marketing and business data, pricing and
cost information, marketing plans and customer lists
and information; and (vii) other proprietary rights
relating to any of the foregoing owned or used by the
Company (collectively, "Intellectual Property").
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(d) To the best of the Vendors' Knowledge each Company
has conducted its business without infringement or
claim of infringement of any license, patent,
copyright, service xxxx, trademark, trade name, trade
secret or other intellectual property right of others
that would have a material adverse effect on the
business or assets of the Company. To the knowledge
of the Vendors, there is no claim of infringement by
others of any license, patent, copyright, service
xxxx, trademark, trade name, trade secret or other
Intellectual Property right of either Company.
2.6 Actions Pending
To the best Knowledge of the Vendors there is no action, suit
or proceeding pending or,, threatened against or affecting
either Company or any of either Company's respective
properties or rights before any court or by or before any
governmental body or arbitration board or tribunal.
2.7 Offering Valid
None of the Vendors, nor any agent on their behalf, have
solicited or will solicit any offers to sell or has offered to
sell or will offer to sell all or any part of the Sale Shares
to any person or persons.
2.8 Financial Position
(a) The Vendors have delivered to the Purchaser the
following financial statements and notes
(collectively, the "the Company Financial
Statements"): for each Company in respect of the
financial year ended June 30, 1999 (the "Unaudited
Accounts Date"), its unaudited profit and loss
statement for the financial year ending on the
Unaudited Accounts Date and its unaudited balance
sheet (the "Unaudited Interim Balance Sheet") as at
the Unaudited Accounts Date, together with all
statements, reports and notes attached to or intended
to be read with any or all of the profit and loss
statement and balance sheet
(b) All of the Company Financial Statements are true,
fair and complete in all respects, and the dollar
amount of each line item included in the Company
Financial Statements is accurate in all respects. The
financial statements and notes referred to in Section
2.8(a) present fairly the financial position of each
Company and the results of operations, changes in
shareholders' equity of each Company for the year
then ended. The Company Financial Statements have
been prepared in accordance with GAAP, applied on a
consistent basis throughout the periods covered.
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(c) At the date of the Unaudited Interim Balance Sheet,
(i) neither Company had any Liabilities required by
GAAP to be provided for in the Unaudited Interim
Balance Sheet or described in the notes thereto which
were not provided for in the Unaudited Interim
Balance Sheet or described in the notes thereto and
(ii) all reserves established by each Company and set
forth in the Unaudited Interim Balance Sheet were
adequate for the purposes for which they were
established.
(d) Except as disclosed in Part 2.8(d) in the Disclosure
Schedule since the date of the Unaudited Interim
Balance Sheet:
(i) neither Company has entered into any
transaction which was not in the Ordinary
Course of its Business;
(ii) there has been no material adverse change in
the condition (financial or otherwise) of
either Company;
(iii) there has been no damage to, or destruction
or loss of, physical property (whether or
not covered by insurance) which may have a
Material Adverse Effect on the business or
operations of either Company;
(iv) neither Company has declared or paid any
dividend or made any distribution on its
securities, redeemed, purchased or otherwise
acquired any of its securities, granted any
options to purchase or subscribe for any
securities, or issued any securities;
(v) neither Company has increased the
compensation of any of its officers, or the
rate of pay of its employees as a group,
except as part of regular compensation
increases in the Ordinary Course of its
Business;
(vi) neither the number of subscribers for the
services offered by either Company nor the
revenues generated therefrom have decreased;
(vii) there has been no resignation or termination
of employment of any officer or key employee
of either Company;
(viii) there has been no labor dispute or
industrial disruption involving either of
the Companies or their employees and none is
pending or, to the best of the Knowledge of
any Vendor, threatened;
(ix) there has been no borrowing or agreement to
borrow by either Company or change in the
contingent obligations of either Company by
way of guarantee, endorsement, indemnity,
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warranty or otherwise or grant of a mortgage
or security interest in any property of
either Company;
(x) there have been no loans made by either
Company to its shareholders, employees,
officers and directors other than travel
advances and office advances made in the
Ordinary Course of Business;
(xi) there has not been any payment of any
obligation or liability of either Company
other than current liabilities paid in the
Ordinary Course of Business;
(xii) there has been no sale, assignment or
transfer of any tangible asset of either
Company except in the Ordinary Course of
Business and no sale, assignment or transfer
of any patent, trademark, trade secret or
other intangible asset of either Company;
and
(xiii) neither Company has incurred any Liabilities
that (i) individually exceed A$10,000 or
(ii) in the aggregate exceed A$50,000.
(e) Each Company has good and marketable title to its
properties and assets. Such properties and assets are
not subject to Encumbrance except liens for current
taxes and assessments not delinquent or those which
are not material in scope or amount and do not
materially interfere with the conduct of the
Company's business. All leases pursuant to which each
Company leases real or personal property are in good
standing and are valid and effective in accordance
with their respective terms and, to the Vendors'
Knowledge, there exists no default thereunder or
occurrence or condition which could result in a
default thereunder or termination thereof. Each
Company's ISP network is in good operating condition,
the Company's buildings, equipment and other tangible
assets are usable in the ordinary course of business,
and the Company owns, or has a valid leasehold
interest in, all assets necessary for the conduct of
its business as presently conducted.
2.9 Absence of Changes Since Last Accounts
Except as set forth in Part 2.9 of the Disclosure Schedule,
since 30 June 1999:
(a) there has not been any adverse change in either
Company's business, condition, assets, liabilities,
operations, financial performance, net income or
prospects (or in any aspect or portion thereof), and
no event has occurred that might have an adverse
effect on either Company's business, condition,
assets, liabilities, operations, financial
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performance, net income or prospects (or on any
aspect or portion thereof);
(b) there has not been any loss, damage or destruction
to, or any interruption in the use of, any of either
Company's assets (whether or not covered by
insurance);
(c) neither Company has (i) declared, accrued, set aside
or paid any dividend or made any other distribution
in respect of any shares or (ii) repurchased,
redeemed or otherwise reacquired any shares or other
securities;
(d) neither Company has sold or otherwise issued any
shares or any other securities;
(e) neither Company has amended its certificate of
incorporation or constitution or has effected or been
a party to any Acquisition Transaction,
recapitalization, reclassification of shares, share
consolidation or division, capital reduction, share
buy back or similar transaction;
(f) neither Company has purchased or otherwise acquired
any asset from any other Person, except for supplies
acquired by the Company in the Ordinary Course of
Business;
(g) neither Company has leased or licensed any asset from
any other Person;
(h) neither Company has made any capital expenditure over
A$50,000;
(i) neither Company has sold or otherwise transferred, or
has leased or licensed, any asset to any other Person
except for products sold by the Company in the
Ordinary Course of Business;
(j) neither Company has written off as uncollectable, or
established any extraordinary reserve with respect
to, any account receivable or other indebtedness;
(k) neither Company has pledged or hypothecated any of
its assets or otherwise permitted any of its assets
to become subject to any Encumbrance;
(l) neither Company has made any loan or advance to any
other Person;
(m) neither Company has (i) established or adopted any
Employee Benefit Plan, or (ii) paid any bonus or made
any profit-sharing or similar payment to, or
increased the amount of the wages, salary,
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16
commissions, fringe benefits or other compensation or
remuneration payable to, any of its directors,
officers or employees;
(n) neither Company has entered into, and neither Company
nor any of the assets owned or used by either Company
has become bound by, any Contract that is not an
Excluded Contract;
(o) the Vendors have received no notice that any Contract
by which either Company or any of the assets owned or
used by either Company is or was bound, or under
which either Company has or had any rights or
interest, has been amended or terminated;
(p) neither Company has incurred, assumed or otherwise
become subject to any Liability, other than accounts
payable (of the type required to be reflected as
current liabilities in the "liabilities" column of a
balance sheet prepared in accordance with GAAP)
incurred by the Company in the Ordinary Course of
Business;
(q) neither Company has discharged any Encumbrance or
discharged or paid any indebtedness or other
Liability, except for accounts payable in the
Ordinary Course of Business;
(r) neither Company has forgiven any debt or otherwise
released or waived any right or claim in excess of
A$10,000;
(s) neither Company has changed any of its methods of
accounting or accounting practices in any respect;
(t) neither Company has entered into any transaction or
taken any other action outside the Ordinary Course of
Business; and
(u) neither Company has agreed, committed or offered (in
writing or otherwise), or has attempted, to take any
of the actions referred to in clauses "(c)" through
"(t)" above.
2.10 Title to Assets
(a) Each Company owns, and has good, valid and marketable
title to, all assets purported to be owned by it,
including:
(i) all assets reflected on the Unaudited
Interim Balance Sheet (except for inventory
sold by the Company since June 30, 1999 in
the Ordinary Course of Business);
(ii) all assets acquired by the Company since
June 30, 1999 (except for inventory sold by
the Company, since June 30, 1999 in the
Ordinary Course of Business);
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17
(iii) all assets referred to in Parts 2.11, 2.12,
2.13 and Part 2.15 of the Disclosure
Schedule and all of the Company's rights
under the Company Contracts; and
(iv) all other assets reflected in the Company's
books and records as being owned by the
Company.
Except as set forth in Part 2.10 of the Disclosure
Schedule, all of said assets are owned by each
Company free and clear of any Encumbrances.
(b) Part 2.10 of the Disclosure Schedule identifies all
assets that are being leased or licensed to each
Company with a value in excess of A$10,000.
2.11 Bank Accounts
Part 2.11 of the Disclosure Schedule accurately sets forth,
with respect to each account maintained by or for the benefit
of each Company at any bank or other financial institution:
(a) the name and location of the institution at which
such account is maintained;
(b) the name in which such account is maintained and the
account number of such account;
(c) a description of such account and the purpose for
which such account is used;
(d) the current balance in such account;
(e) the rate of interest being earned on the funds in
such account; and
(f) the names of all individuals authorized to draw on or
make withdrawals from such account.
There are no safe deposit boxes or similar arrangements
maintained by or for the benefit of either Company.
2.12 Receivables; Major Customers
(a) Part 2.12 of the Disclosure Schedule provides an
accurate and complete breakdown and aging of all
accounts receivable, notes receivable and other
receivables of each Company as of June 30, 1999.
(b) Except as set forth in Part 2.12 of the Disclosure
Schedule, all existing accounts receivable of each
Company as at 30 June 1999 (including
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18
those accounts receivable reflected on the Unaudited
Interim Balance Sheet that have not yet been
collected and those accounts receivable that have
arisen since the Company's inception and have not yet
been collected):
(i) represent valid obligations of customers of
the Company arising from bona fide
transactions entered into in the Ordinary
Course of Business; and
(ii) are current and to the best of the Vendors'
Knowledge will be collected in full (without
any counterclaim or setoff) on or before
September 30, 1999.
(c) Part 2.12 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete
breakdown of the revenues received from, each
customer or other Person that accounted for (i) more
than A$15,000 of the gross revenues of each Company
since 1 July 1997, (ii) more than A$20,000 of each
Company's gross revenues in since 1 July 1998, or
(iii) more than A$10,000 of each Company's gross
revenues since 1 July 1999. Each Company has not
received any notice or other communication (in
writing or otherwise), and has not received any other
information, indicating that any customer or other
Person identified in Part 2.12 of the Disclosure
Schedule may cease dealing with the Company or may
otherwise reduce the volume of business transacted by
such Person with the Company below historical levels.
2.13 Equipment, Etc.
(a) Part 2.13 of the Disclosure Schedule accurately
identifies all equipment, furniture, fixtures,
improvements and other tangible assets (other than
inventory) owned by each Company, and accurately sets
forth the date of acquisition, original cost and book
value of each of said assets. Part 2.13 also
accurately identifies all tangible assets leased to
each Company.
(b) Each asset identified or required to be identified in
Part 2.13 of the Disclosure Schedule:
(i) is structurally sound, free of defects and
deficiencies and in good condition and
repair (ordinary wear and tear excepted);
(ii) complies in all respects with, and is being
operated and otherwise used in full
compliance with, all applicable Legal
Requirements; and
(iii) is adequate for the uses to which it is
being put.
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19
The assets identified in Part 2.13 of the Disclosure
Schedule are adequate for the conduct of each
Company's business in the manner in which such
business is currently being conducted and in the
manner in which such business is proposed to be
conducted.
2.14 Real Property
Neither Company owns any real property or any interest in real
property, except for the leaseholds created under the real
property leases identified in Part 2.14 of the Disclosure
Schedule. Part 2.14 of the Disclosure Schedule provides an
accurate and complete description of the premises covered by
said leases and the facilities located on such premises. Each
Company enjoys peaceful and undisturbed possession of such
premises.
2.15 Proprietary Assets
(a) Except as set forth in Part 2.15 of the Disclosure
Schedule, there is no Proprietary Asset that is owned
by or licensed to either Company or that is otherwise
used or useful in connection with either Company's
business. To the best of the Vendors' Knowledge each
Company has taken all measures and precautions
necessary to protect the confidentiality and value of
each Proprietary Asset identified or required to be
identified in Part 2.15 of the Disclosure Schedule.
(b) To the best of the Vendors' Knowledge neither Company
is infringing, and has not at any time infringed or
received any notice or other communication (in
writing or otherwise) of any actual, alleged,
possible or potential infringement of, any
Proprietary Asset owned or used by any other Person.
To the best of the Knowledge of each of the Vendors,
no other Person is infringing, and no Proprietary
Asset owned or used by any other Person infringes or
conflicts with, any Proprietary Asset owned or used
by either Company.
(c) To the best of the Vendors' Knowledge the Proprietary
Assets identified in Part 2.15 of the Disclosure
Schedule constitute all of the Proprietary Assets
necessary to enable each Company to conduct its
business in the manner in which its business is
currently being conducted and in the manner in which
its business is proposed to be conducted.
2.16 Year 2000
The Vendors have undertaken the investigations and performed
the actions in respect of Year 2000 issues as are set out in
the Disclosure Schedule. To the best of the Knowledge of the
Vendors these investigations and actions should adequately
deal with Year 2000 related issues insofar as they may affect
the Companies.
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20
2.17 Contracts
(a) Part 2.17 of the Disclosure Schedule identifies and
provides an accurate and complete description of all
contracts, agreements, commitments and undertakings
of any nature, written or oral, of each Company, each
of which involves future payments, performance of
services or delivery of goods or materials to or by
either Company of an aggregate amount or value in
excess of A$10,000 per annum or which otherwise is
material to the business or prospects of the Company
(collectively, the "Material Contracts"), except for
any Excluded Contract. Each Company has delivered to
the Purchaser accurate and complete copies of all the
Company Contracts identified in Part 2.17 of the
Disclosure Schedule, including all amendments,
supplements, modifications and waivers thereto.
(b) To the best of the Vendors' Knowledge each Company
Contract is valid and in full force and effect, and
is enforceable by the Company in accordance with its
terms.
(c) Except as set forth in Part 2.17 of the Disclosure
Schedule to the best of the Vendors' Knowledge:
(i) no Person has violated or breached, or
declared or committed any default under, any
Company Contract;
(ii) no event has occurred, and no circumstance
or condition exists, that might (with or
without notice or lapse of time) (A) result
in a violation or breach of any of the
provisions of any Company Contract, (B) give
any Person the right to declare a default or
exercise any remedy under any Company
Contract, (C) give any Person the right to
accelerate the maturity or performance of
any Company Contract, or (D) give any Person
the right to cancel, terminate or modify any
Company Contract;
(iii) neither Company has received any notice or
other communication (in writing or
otherwise) regarding any actual, alleged,
possible or potential violation or breach
of, or default under, any Company Contract;
and
(iv) neither Company has waived any of its rights
under any Company Contract.
(d) To the best of the Knowledge of the Vendors, each
Person against which either Company has or may
acquire any rights under any Company Contract is
solvent and is able to satisfy all of such Person's
current and future monetary obligations and other
obligations and Liabilities to the Company.
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21
(e) Except as set forth in Part 2.17 of the Disclosure
Schedule:
(i) neither Company has ever guaranteed or
otherwise agreed to cause, insure or become
liable for, or has ever pledged any of its
assets to secure, the performance or payment
of any obligation or other Liability of any
other Person; and
(ii) neither Company has ever been a party to or
bound by (A) any joint venture agreement,
partnership agreement, profit-sharing
agreement, cost-sharing agreement,
loss-sharing agreement or similar Contract,
or (B) any Contract that creates or grants
to any Person, or provides for the creation
or grant of, any stock appreciation right,
phantom stock right or similar right or
interest.
(f) To the best of the Vendors' Knowledge the performance
of the Company Contracts will not result in any
violation of or failure to comply with any Legal
Requirement.
(g) No Person is renegotiating any amount paid or payable
to either Company under any Company Contract or any
other term or provision of any Company Contract.
(h) The Contracts identified in Part 2.17 of the
Disclosure Schedule and the Excluded Contracts
collectively constitute all of the Contracts
necessary to enable the Companies to conduct their
businesses as at the Closing Date in all material
respects in the manner in which their businesses are
currently being conducted.
(i) Part 2.17 of the Disclosure Schedule identifies and
provides an accurate and complete description of each
proposed Contract in excess of A$10,000 per annum as
to which any bid, offer, written proposal, term sheet
or similar document has been submitted or received by
either Company.
2.18 Liabilities; Major Suppliers
(a) Neither Company has any Liabilities, except for:
(i) liabilities identified as such in the
"liabilities" column of the Unaudited
Interim Balance Sheet;
(ii) accounts payable (of the type required to be
reflected as current liabilities in the
"liabilities" column of a balance sheet
prepared in accordance with GAAP) incurred
by the Company in the Ordinary Course of
Business since 30 June 1999; and
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22
(iii) the Company's obligations under the
Contracts listed in Part 2.18 of the
Disclosure Schedule and under Excluded
Contracts, to the extent that the existence
of such obligations is ascertainable solely
by reference to such Contracts.
(b) Part 2.18 of the Disclosure Schedule:
(i) provides an accurate and complete breakdown
and aging of each Company's accounts payable
as of June 30, 1999;
(ii) provides an accurate and complete breakdown
of all customer deposits and other deposits
held by each Company as of the date of this
Agreement; and
(iii) provides an accurate and complete breakdown
of each Company's long-term debt as of the
date of this Agreement.
(c) Part 2.18 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete
breakdown of the amounts paid to, each supplier or
other Person that received (i) more than A$15,000
from either Company in 1998, (ii) more than A$20,000
from either Company in 1999, or (iii) more than
A$10,000 from either Company in the first quarter of
2000.
2.19 Compliance with Legal Requirements
(a) Except as set forth in Part 2.19 of the Disclosure
Schedule:
(i) to the best of the Vendors' Knowledge each
Company is in full compliance with each
Legal Requirement that is applicable to it
or to the conduct of its business or the
ownership or use of any of its assets;
(ii) to the best of the Vendors' Knowledge each
Company has at all times been in full
compliance with each Legal Requirement that
is or was applicable to it or to the conduct
of its business or the ownership or use of
any of its assets;
(iii) to the best of the Vendors' Knowledge no
event has occurred, and no condition or
circumstance exists, that might (with or
without notice or lapse of time) constitute
or result directly or indirectly in a
violation by either Company of, or a failure
on the part of either Company to comply
with, any Legal Requirement; and
(iv) Neither Company has received, at any time,
any notice or other communication (in
writing or otherwise) from any Governmental
Body or any other Person regarding (i) any
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23
actual, alleged, possible or potential
violation of, or failure to comply with, any
Legal Requirement, or (ii) any actual,
alleged, possible or potential obligation on
the part of the Company to undertake, or to
bear all or any portion of the cost of, any
cleanup or any remedial, corrective or
response action of any nature.
(b) Each Company has delivered to the Purchaser an
accurate and complete copy of each report, study,
survey or other document prepared since 30 June 1997
to which the Company currently has access that
addresses or otherwise relates to the compliance of
the Company with, or the applicability to the Company
of, any Legal Requirement.
2.20 Governmental Authorizations
(a) Part 2.20 of the Disclosure Schedule identifies:
(i) each Governmental Authorization that is held
by each Company; and
(ii) each other Governmental Authorization that,
to the best of the Knowledge of the Vendors,
is held by any of the Companies' employees
and relates to or is useful in connection
with the Companies' businesses.
The Vendors have delivered to the Purchaser accurate
and complete copies of all of the Governmental
Authorizations identified in Part 2.20 of the
Disclosure Schedule, including all renewals thereof
and all amendments thereto. Each Governmental
Authorization identified or required to be identified
in Part 2.20 of the Disclosure Schedule is valid and
in full force and effect.
(b) Except as set forth in Part 2.20 of the Disclosure
Schedule:
(i) each Company and its employees are, and have
at all times been, in full compliance with
all of the terms and requirements of each
Governmental Authorization identified or
required to be identified in Part 2.20 of
the Disclosure Schedule;
(ii) to the best of the Vendors' Knowledge no
event has occurred, and no condition or
circumstance exists, that might (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 term or requirement of any
Governmental Authorization identified or
required to be identified in Part 2.20 of
the Disclosure Schedule, or (B) result
directly or indirectly in the revocation,
withdrawal, suspension, cancellation,
termination or
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24
modification of any Governmental
Authorization identified or required to be
identified in Part 2.20 of the Disclosure
Schedule;
(iii) neither Company has ever received, and, to
the best of the Knowledge of the Vendors, no
employee of either Company has ever
received, any notice or other communication
(in writing or otherwise) from any
Governmental Body or any other Person
regarding (A) any actual, alleged, possible
or potential violation of or failure to
comply with any term or requirement of any
Governmental Authorization, or (B) any
actual, proposed, possible or potential
revocation, withdrawal, suspension,
cancellation, termination or modification of
any Governmental Authorization; and
(iv) all applications required to have been filed
for the renewal of the Governmental
Authorizations required to be identified in
Part 2.20 of the Disclosure Schedule have
been duly filed on a timely basis with the
appropriate Governmental Bodies, and each
other notice or filing required to have been
given or made with respect to such
Governmental Authorizations has been duly
given or made on a timely basis with the
appropriate Governmental Body.
(c) To the best of the Vendor's Knowledge the
Governmental Authorizations identified in Part 2.20
of the Disclosure Schedule constitute all of the
Governmental Authorizations necessary (i) to enable
each Company to conduct its business in the manner in
which its business is currently being conducted, and
(ii) to permit each Company to own and use its assets
in the manner in which they are currently owned and
used.
(d) Except as set forth in Part 2.20 of the Disclosure
Schedule, neither of the Companies nor the Vendors
was, is or will be required to make any filing with
or give any notice to, or to obtain any Consent from,
any Person in connection with the execution and
delivery of any of the Transactional Agreements or
the consummation or performance of any of the
Transactions.
2.21 Tax Matters
(a) Each Tax required to have been paid, or claimed by
any Governmental Body to be payable, by each Company
(whether pursuant to any Tax Return or otherwise) has
been duly paid in full or on a timely basis. Any Tax
required to have been withheld or collected by each
Company has been duly withheld and collected; and (to
the extent required) each such Tax has been paid to
the appropriate Governmental Body.
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25
(b) Part 2.22 of the Disclosure Schedule accurately
identifies all Tax Returns required to be filed by or
on behalf of each Company in respect of the years
ended 30 June 1997 and 1998 with any Governmental
Body with respect to any taxable period ending on or
before the Closing Date ("the Company Returns"). All
the Company Returns (i) have been or will be filed
when due, and (ii) have been, or will be when filed,
accurately and completely prepared in full compliance
with all applicable Legal Requirements. All amounts
shown on the Company Returns to be due on or before
the Closing Date, and all amounts otherwise payable
in connection with the Company Returns on or before
the Closing Date, have been or will be paid on or
before the Closing Date. Each Company has delivered
to the Purchaser accurate and complete copies of all
the Company Returns filed since its inception.
(c) The Company Financial Statements fully accrue all
actual and contingent liabilities for Taxes with
respect to all periods through the dates thereof in
accordance with Section 2.21.
(d) Except as specifically set out in Part 2.22 of the
Disclosure Schedule, each Company Return relating to
income Taxes that has been filed with respect to any
period ended on or prior to each Company's inception
has either (i) been examined and audited by all
relevant Governmental Bodies, or (ii) by virtue of
the expiration of the limitation period under
applicable Legal Requirements, is no longer subject
to examination or audit by any Governmental Body.
Part 2.22 of the Disclosure Schedule accurately
identifies each examination or audit of the Company
Return that has been conducted since the inception of
each Company. The Vendors have delivered to the
Purchaser accurate and complete copies of all audit
reports and similar documents (to which the Companies
have access) relating to the Company Returns. Except
as set forth in Part 2.22 of the Disclosure Schedule,
no extension or waiver of the limitation period
applicable to any of the Company Returns has been
granted (by either of the Companies or any other
Person), and no such extension or waiver has been
requested from either Company.
(e) Except as set forth in Part 2.22 of the Disclosure
Schedule, no claim or other Proceeding is pending or
has been threatened against or with respect to either
Company in respect of any Tax. There are no
unsatisfied Liabilities for Taxes (including
liabilities for interest, additions to tax and
penalties thereon and related expenses) with respect
to any notice of deficiency or similar document
received by either Company.
(f) Neither Company is or has ever been, a party to or
bound by any tax indemnity agreement, tax sharing
agreement, tax allocation agreement or similar
Contract.
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26
(g) Neither Company: has lodged a private ruling request;
is or has been the subject of any Tax audit; is a
party to any action or proceeding for the assessment
or collection of Tax; has any dispute or disagreement
with any Governmental Body for Tax; or has made any
agreement with or undertaking to any Governmental
Body for Tax and there is no fact or matter known to
the Vendors which might give rise to any of the
above.
(h) Neither Company has entered into any agreement which
now or in the future may extend the period of
assessment or collection of any Tax.
(i) Since the Unaudited Accounts Date no additional
liability for Tax has accrued to either Company other
than as a result of trading activities in the
Ordinary Course of Business.
(j) Each Company has complied with the provisions of Part
IIIAA of the Income Tax Assessment Act, and has
maintained proper records of franking debits and
franking credits for the purposes of that Act.
(k) Neither Company has any permanent establishment (as
that expression is defined in any relevant Double
Taxation Agreement current at the date of this
Agreement) outside Australia.
(l) All documents to which either Company is a party or
may be interested in the enforcement of, and all
transfers of any issued shares (other than as
contemplated by this Agreement), have been properly
stamped under applicable stamp duty legislation.
2.22 Employee and Labor Matters
(a) Part 2.23 of the Disclosure Schedule accurately sets
forth, with respect to each employee of each Company
(including any employee of the Company who is on a
leave of absence or on layoff status):
(i) the name of such employee and the date as of
which such employee was originally hired by
the Company;
(ii) such employee's title, and a description of
such employee's duties and responsibilities;
(iii) the aggregate dollar amount of the
compensation (including wages, salary,
commissions, director's fees, fringe
benefits, bonuses, allowances, share options
and profit-sharing payments received by such
employee from the Company with respect to
services performed in 1998;
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27
(iv) such employee's annualized compensation as
of the date of this Agreement;
(v) particulars of accrued long service leave,
annual leave, sick leave and rostered days
off for each employee;
(vi) particulars of any redundancy or severance
pay owing as at the execution date of this
Agreement;
(vii) each Current Benefit Plan in which such
employee participates or is eligible to
participate; and
(viii) any Governmental Authorization that is held
by such employee and that relates to or is
useful in connection with the Company's
business.
(b) Part 2.23 of the Disclosure Schedule accurately
identifies each former employee of each Company who
is receiving or is scheduled to receive (or whose
spouse or other dependent is receiving or is
scheduled to receive) any benefits (whether from the
Company or otherwise) relating to such former
employee's employment with the Company; and Part 2.23
of the Disclosure Schedule accurately describes such
benefits.
(c) Exhibit G contains a list of individuals who are
currently performing services for each Company
related to its business and are classified as
"consultants" or "independent contractors".
(d) Except as set forth in Part 2.23 of the Disclosure
Schedule, neither Company is a party to or bound by,
or has ever been a party to or bound by, any
employment agreement or any union contract or
determination collective bargaining agreement or
similar Contract.
(e) The Vendors have delivered to the Purchaser accurate
and complete copies of all employee manuals and
handbooks and policy statements relating to the
employment of the current employees of each Company.
(f) To the best of the Knowledge of the Vendors:
(i) no employee of either Company intends to
terminate his employment with the Company;
(ii) no employee of either Company has received
an offer to join a business that may be
competitive with the Company's business; and
(iii) no employee of either Company is a party to
or is bound by any confidentiality
agreement, noncompetition agreement or other
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28
Contract (with any Person) that may have an
adverse effect on (A) the performance by
such employee of any of his duties or
responsibilities as an employee of either
Company, or (B) either Company's business or
operations.
(g) There has never been any slowdown, work stoppage,
labor dispute or union organizing activity, or any
similar activity or dispute, affecting either of the
Companies or any of their employees. There is not now
pending, and no Person has threatened to commence,
any such slowdown, work stoppage, labor dispute or
union organizing activity or any similar activity or
dispute. No event has occurred, and no condition or
circumstance exists, that might directly or
indirectly give rise to or provide a basis for the
commencement of any such slowdown, work stoppage,
labor dispute or union organizing activity or any
similar activity or dispute.
(h) Neither Company has: any existing service or other
agreements with any officers, consultants or
employees of the Company which cannot be fairly
terminated three months' notice or less without
giving rise to a claim for damages or compensation;
liability for compensation to ex-employees or
ex-consultants; obligation to re-instate or re-employ
any ex-officer, ex-consultant or ex-employee of the
Company; policy, practice or obligation regarding
redundancy payments to employees which is more
generous than the applicable award(s) or legislation;
or any industrial agreement or enterprise agreement
(whether registered or not) or plans to introduce any
such agreement, that applies to any employee or
officer of the Company.
2.23 Benefit Plans
(a) Part 2.24 of the Disclosure Schedule sets out
complete and accurate material details of all
Relevant Schemes.
(b) Neither Company has any accrued liability, unfunded
or contingent obligations in relation to any Relevant
Scheme.
(c) Each Company has made all occupational superannuation
contributions required under any award or prescribed
industrial agreement for its employees and has
satisfied all laws. There is no superannuation
guarantee charge or liability accrued or payable for
employees.
(d) Each Relevant Scheme has at all times been
administered under the relevant rules and/or trust
document and (in the case of superannuation schemes)
for the Relevant Scheme to qualify for the maximum
income Tax concessions available to superannuation
funds.
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29
2.24 Sale of Products; Performance of Services
(a) Each product or service that has been sold or
performed by either Company to or for any Person:
(i) conformed and complied in all respects with
the terms and requirements of any applicable
warranty or other Contract and with all
applicable Legal Requirements; and
(ii) was free of any design defects, construction
defects or other defects or deficiencies at
the time of sale.
(b) All repair services and other services that have been
performed by either Company were performed properly
and in full conformity with the terms and
requirements of all applicable warranties and other
Contracts and with all applicable Legal Requirements.
(c) No product developed or sold by either Company has
been the subject of any recall or other similar
action; and the Vendors have received no notice that
any event has occurred, or any condition or
circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for any such recall or
other similar action relating to any such product.
(d) Except as set forth in Part 2.25 of the Disclosure
Schedule, no customer or other Person has ever
asserted or threatened to assert any claim against
either Company (i) under or based upon any warranty
provided by or on behalf of the Company, or (ii)
under or based upon any other warranty relating to
any product sold by the Company or any services
performed by the Company. To the best of the
Knowledge of the Vendors, no event has occurred, and
no condition or circumstance exists, that might (with
or without notice or lapse of time) directly or
indirectly give rise to or serve as a basis for the
assertion of any such claim.
(e) Each Company has in place, and has at all times had
in place, an adequate and appropriate quality control
system.
2.25 Insurance
(a) Part 2.26 of the Disclosure Schedule accurately sets
forth, with respect to each insurance policy
maintained by or at the expense of, or for the direct
or indirect benefit of each Company:
(i) the name of the insurance carrier that
issued such policy and the policy number of
such policy;
(ii) a description of the coverage provided by
such policy;
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30
(iii) the annual premium payable with respect to
such policy, and the cash value (if any) of
such policy; and
(iv) a description of any claims pending, and any
claims that have been asserted in the past,
with respect to such policy.
(b) Part 2.26 of the Disclosure Schedule also identifies
each pending application for insurance that has been
submitted by or on behalf of each Company. Each
Company has delivered to the Purchaser accurate and
complete copies of all of the insurance policies
identified in Part 2.26 of the Disclosure Schedule
(including all renewals thereof and endorsements
thereto) and all of the pending applications
identified in Part 2.26 of the Disclosure Schedule.
(c) Each of the policies identified in Part 2.26 of the
Disclosure Schedule is valid, enforceable and in full
force and effect, and has been issued by an insurance
carrier that, to the best of the Knowledge of the
Vendors, is solvent, financially sound and reputable.
All of the information contained in the applications
submitted in connection with said policies was (at
the times said applications were submitted) accurate
and complete, and all premiums and other amounts
owing with respect to said policies have been paid in
full on a timely basis. The nature, scope and dollar
amounts of the insurance coverage provided by said
policies are sufficient to adequately insure each
Company's business, assets, operations, services and
potential liabilities to the extent that would be
adopted by a prudent businessman in the
circumstances.
(d) To the best of the Vendors' Knowledge except as set
forth in Part 2.26 of the Disclosure Schedule, there
is no pending claim under or based upon any of the
policies identified in Part 2.26 of the Disclosure
Schedule; and no event has occurred, and no condition
or circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for any such claim.
(e) Neither Company has received:
(i) any written notice or other written
communication regarding the actual or
possible cancellation or invalidation of any
of the policies identified in Part 2.26 of
the Disclosure Schedule or regarding any
actual or possible adjustment in the amount
of the premiums payable with respect to any
of said policies;
(ii) any notice or other communication (in
writing or otherwise) regarding any actual
or possible refusal of coverage under, or
any actual or possible rejection of any
claim under, any of the policies identified
in Part 2.26 of the Disclosure Schedule; or
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(iii) any indication that the issuer of any of the
policies identified in Part 2.26 of the
Disclosure Schedule may be unwilling or
unable to perform any of its obligations
thereunder.
2.26 Related Party Transactions
Except as set forth in Part 2.27 of the Disclosure Schedule:
(a) no Related Party has, and no Related Party has at any
time since 1 May 1996 had, any direct or indirect
interest of any nature in any asset used in or
otherwise relating to the business of Dove;
(b) no Related Party has, and no Related Party has at any
time since 22 September 1986 had, any direct or
indirect interest of any nature in any asset used in
or otherwise relating to the business of
Microtronics;
(c) no Related Party is, or has at any time since 1 May
1996 been indebted to Dove;
(d) no Related Party is, or has at any time since 22
September 1986 been indebted to Microtronics;
(e) no Related Party is competing directly or indirectly,
with either Company in any market served by either
Company;
(f) no Related Party has any claim or right against
either Company; and
(g) no event has occurred, and no condition or
circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for any claim or right in
favor of any Related Party against either Company.
2.27 Proceedings
(a) Except as set forth in Part 2.29 of the Disclosure
Schedule, the Vendors have received no written notice
of any pending Proceeding or investigation, and no
Person has threatened to commence any Proceeding:
(i) that involves either Company or that
otherwise relates to or might affect either
Company's business or any of the assets
owned or used by either Company (whether or
not the Company is named as a party
thereto); or
(ii) that challenges, or that may have the effect
of preventing, delaying, making illegal or
otherwise interfering with, any of the
Transactions.
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(b) Except as set forth in Part 2.29 of the Disclosure
Schedule, no event has occurred, and no claim,
dispute or other condition or circumstance exists,
that might directly or indirectly give rise to or
serve as a basis for the commencement of any such
Proceeding.
(c) The Vendors have delivered to the Purchaser accurate
and complete copies of all pleadings, correspondence
and other written materials to which each Company has
access that relate to the Proceedings identified in
Part 2.29.
(d) To the best of the Vendors' Knowledge there is no
Order to which either Company, or any of the assets
owned or used by either Company, is subject that (i)
may have an adverse effect on the Company's business,
condition, assets, liabilities, operations, financial
performance, net income or prospects (or on any
aspect or portion thereof) or on the ability of the
Company or any of the Selling Shareholders to comply
with or perform any covenant or obligation under any
of the Transactional Agreements, or (ii) may have the
effect of preventing, delaying, making illegal or
otherwise interfering with any of the Transactions.
(e) To the best of the Knowledge of the Vendors, no
officer or employee of either Company is subject to
any Order that prohibits such officer or employee
from engaging in or continuing any conduct, activity
or practice relating to the Company's business.
2.28 Brokers
Neither of the Companies nor any of the Vendors have agreed or
become obligated to pay, or has taken any action that might
result in any Person claiming to be entitled to receive, any
brokerage commission, finder's fee or similar commission or
fee in connection with any of the Transactions.
2.29 The Vendors
(a) Each of the Vendors severally warrants that they have
the capacity and financial capability to comply with
and perform all of their covenants and obligations
under each of the Transactional Agreements to which
they are or may become a party.
(b) None of the Vendors:
(i) have at any time, (A) made a general
assignment for the benefit of creditors, (B)
filed, or had filed against it, any
bankruptcy petition or similar filing, (C)
suffered the attachment or other judicial
seizure of all or a substantial portion of
its assets, (D) admitted in writing its
inability to pay its debts as they become
due, (E) been convicted of, or pleaded
guilty to, any felony, or
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(F) taken or been the subject of any action
that may have an adverse effect on such its
ability to comply with or perform any of its
covenants or obligations under any of the
Transactional Agreements; or
(ii) is subject to any Order that may have an
adverse effect on its ability to comply with
or perform any of its covenants or
obligations under any of the Transactional
Agreements.
(c) There is no Proceeding pending, and no Person has
threatened to commence any Proceeding, that may have
an adverse effect on the ability of any of the
Vendors to comply with or perform any of its
covenants or obligations under any of the
Transactional Agreements. No event has occurred, and
no claim, dispute or other condition or circumstance
exists, that might directly or indirectly give rise
to or serve as a basis for the commencement of any
such Proceeding.
(d) Each Vendor severally warrants that this Agreement
constitutes the legal, valid and binding obligation
of each of the Vendors, enforceable against each of
the Vendors in accordance with its terms except to
the extent that enforcement may be limited by
bankruptcy, insolvency, moratorium or similar laws
affecting the rights of creditors generally and
except to the extent that enforcement may be limited
by the application of general equitable principles.
2.30 Full Disclosure
(a) None of the Transactional Agreements contains or will
contain any untrue statement of fact; and none of the
Transactional Agreements omits or will omit to state
any fact necessary to make any of the
representations, warranties or other statements or
information contained therein not misleading.
(b) Except as set forth in Part 2.32 of the Disclosure
Schedule, there is no fact within the Knowledge of
any of the Vendors (other than publicly known facts
relating exclusively to political or economic matters
of general applicability that will adversely affect
all Comparable Entities) that (i) may have an adverse
effect on either Company's business, condition,
assets, liabilities, operations, financial
performance, net income or prospects (or on any
aspect or portion thereof) or on the ability of any
or all of the Vendors to comply with or perform any
covenant or obligation under any of the Transactional
Agreements, or (ii) may have the effect of
preventing, delaying, making illegal or otherwise
interfering with any of the Transactions.
(c) All of the information set forth in the Disclosure
Schedule, and all other information, contained in the
documents contained in Part 2 of the Disclosure
Schedule is accurate and complete in all respects.
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(d) The Vendors provided the Purchaser and the
Purchaser's Representatives with full and complete
access to all of the Companies' records and other
documents and data.
2.31 Insolvency Events
(a) Liquidation/winding up/appointment of administrator
or receiver etc.
Neither Company has had:
(i) a liquidator or provisional liquidator appointed;
(ii) a receiver, receiver and manager, trustee,
controller, official manager or similar officer
appointed;
(iii) an administrator appointed, whether under Part 5.3A
of the Corporations Law or otherwise; or
(iv) an application made for the appointment of an
administrator, liquidator or provisional liquidator;
over all or part of the business, assets or revenues of the
Company and neither of the Companies nor their directors have
passed a resolution for any such appointment; or
(v) an application made for the winding up of the
Company.
(b) Execution
No execution, distress or similar process has been
levied upon or against all or any part of the
business, assets or revenues of the Company.
(c) Schemes of arrangement
Neither Company has:
(i) entered into or resolved to enter into any scheme of
arrangement, composition, assignment for the benefit
of, or other arrangement with its creditors or any
class of creditors; or
(ii) proposed or had proposed on its behalf a
reorganisation, moratorium, deed of company
arrangement or other administration involving one or
more of its creditors, or its winding up or
dissolution.
(d) Statutory demands
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Neither Company has received any demand under section 459E of
the Corporations Law, or been taken to have failed to comply
with a statutory demand as a result of the operation of
section 459F(1) of the Corporations Law.
(e) Solvency
Each Company:
(i) is able to pay its debts as and when they fall due;
(ii) is not insolvent or presumed to be insolvent under
any law; and
(iii) is not insolvent under administration as defined in
section of the Corporations Law or has not taken any
action which could result in that event.
(f) Striking off
Neither Company:
(i) has received a notice under sections 601AA or 601AB
of the Corporations Law; or
(ii) has been struck off the register of Companies or
dissolved and there is no action proposed by the
Australian Securities Commission to do so.
2.32 NAB Charges
No demand has been made by the National Australia Bank, and no event
has occurred, and no circumstance or condition exists that would
entitle the National Australia Bank to make a demand (with or without
notice) under either:
(a) the National Australia Bank charge dated 29 January
1997 over the undertaking, property and assets of
Dove; or
(b) the National Australia Bank charge dated 28 March
1989 over the undertaking, property and assets of
Microtronics.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants, to and for the benefit of the
Vendors, as follows:
3.1 Acquisition of Shares
The Purchaser is not acquiring the Sale Shares with the
current intention of making a public distribution thereof.
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3.2 Authority; Binding Nature of Agreement
(a) The Purchaser has the absolute and unrestricted
right, power and authority to enter into and perform
its obligations under this Agreement;
(b) The execution, delivery and performance of this
Agreement by the Purchaser has been duly authorized
by all necessary action on the part of the Purchaser
and its board of directors; and
(c) This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
4. PRE-CLOSING COVENANTS OF THE VENDORS
4.1 Access and Investigation
The Vendors shall jointly and severally, ensure that, at all
times during the Pre-Closing Period:
(a) the Companies and their Representatives provide the
Purchaser and its Representatives with free and
complete access to the Companies' Representatives,
personnel and assets and to all existing books,
records, Tax Returns, work papers and other documents
and information relating to the Companies to enable
the Purchaser to conduct its due diligence enquiries;
(b) the Companies and their Representatives provide the
Purchaser and its Representatives with such copies of
existing books, records, Tax Returns, work papers and
other documents and information relating to the
Companies as the Purchaser may request in good faith
to enable the Purchaser to conduct its due diligence
enquiries; and
(c) the Companies and their Representatives compile and
provide the Purchaser and its Representations with
such additional financial, operating and other data
and information regarding the Companies as the
Purchaser may request in good faith to enable the
Purchaser to conduct its due diligence enquiries.
4.2 Operation of Business
The Vendors shall jointly and severally ensure that, during
the Pre-Closing Period:
(a) none of the Sale Shares are sold or otherwise
transferred, or offered for sale, and thus no
agreement or commitment is entered into (in writing
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37
or otherwise) to sell or otherwise transfer, any of
the Sale Shares or any interest in or right relating
thereto;
(b) it does not permit offer, agree or commit (in writing
or otherwise) to permit, any of the Sale Shares to
become subject, directly or indirectly, to any
Encumbrance;
(c) each Company conducts its operations exclusively in
the Ordinary Course of Business and in the same
manner as such operations have been conducted prior
to the date of this Agreement;
(d) each Company and its officers use Best Efforts to
preserve intact its current business organization,
keeps available the services of its current officers
and employees and maintains its relations and good
will with all suppliers, customers, landlords,
creditors, licensors, licensees, employees and other
Persons having business relationships with the
Company;
(e) each Company keeps in full force all insurance
policies identified in Part 2.26 of the Disclosure
Schedule;
(f) each Company's officers confer regularly with the
Purchaser concerning operational matters and
otherwise report regularly to the Purchaser
concerning the status of the Company's business,
condition, assets, liabilities, operations, financial
performance and prospects;
(g) each Company immediately notifies the Purchaser of
any inquiry, proposal or offer from any Person
relating to any Acquisition Transaction;
(h) neither Company declares, accrues, sets aside or pays
any dividend or make any other distribution in
respect of any shares, or repurchases, redeems or
otherwise reacquires any shares or other securities;
(i) neither Company sells or otherwise issues any shares
or any other securities;
(j) except as contemplated in this Agreement, neither
Company amends its constitution, or effects or
becomes a party to any Acquisition Transaction,
recapitalization, reclassification of shares, share
consolidation or division, capital reduction or share
buy back or similar transaction;
(k) neither Company forms any subsidiary or acquire any
equity interest or other interest in any other
Entity;
(l) neither Company makes any capital expenditure, except
for capital expenditures that are made in the
Ordinary Course of Business and
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that, when added to all other capital expenditures
made on behalf of the Company during the Pre-Closing
Period, do not exceed A$10,000 in the aggregate;
(m) neither Company creates any Encumbrance over any of
the assets owned or used by the Company;
(n) neither Company incurs, assumes or otherwise becomes
subject to any Liability, except for current
liabilities (of the type required to be reflected in
the "liabilities" column of a balance sheet prepared
in accordance with GAAP) incurred in the Ordinary
Course of Business;
(o) neither Company establishes or adopts any Employee
Benefit Plan, or pays any bonus or make any
profit-sharing or similar payment to, or increases
the amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration
payable to, any of its directors, officers or
employees;
(p) neither Company changes any of its methods of
accounting or accounting practices in any respect;
(q) neither Company makes any Tax election;
(r) neither Company commences any Proceeding;
(s) neither Company enters into any transaction or takes
any other action of the type referred to in Section
2.9;
(t) neither Company enters into any transaction or takes
any other action outside the Ordinary Course of
Business;
(u) neither Company enters into any transaction or takes
any other action that might cause or constitute a
Breach of any representation or warranty made by the
Vendors in this Agreement or in the Closing
Certificate; and
(v) neither Company agrees, commits or offers (in writing
or otherwise), or attempts, to take any of the
actions described in clauses "(a)" through "(u)" of
this Section 4.2.
4.3 Filings and Consents
The Vendors and the Purchaser shall use their respective Best
Efforts to ensure that:
(a) each filing or notice required to be made or given
(pursuant to any applicable Legal Requirement,
Government Authorisation, Order or Contract, or
otherwise) in connection with the execution and
delivery
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of any of the Transactional Agreements or in
connection with the consummation or performance of
any of the Transactions (including each of the
filings and notices identified in Part 2.20 of the
Disclosure Schedule) is made or given as soon as
possible after the date of this Agreement;
(b) each Consent required to be obtained (pursuant to any
applicable Legal Requirement, Order or Contract, or
otherwise) in connection with the execution and
delivery of any of the Transactional Agreements or in
connection with the consummation or performance of
any of the Transactions (including each of the
Consents identified in Part 2.20 of the Disclosure
Schedule) is obtained as soon as possible after the
date of this Agreement and remains in full force and
effect through the Closing Date;
(c) the Companies and the Vendors promptly deliver to the
Purchaser a copy of each filing made, each notice
given and each Consent obtained by them during the
Pre-Closing Period; and
(d) during the Pre-Closing Period, the Vendors, the
Companies and their Representatives cooperate with
the Purchaser and with the Purchaser's
Representatives, and prepare and make available such
documents and take such other actions as the
Purchaser may request in good faith, in connection
with any filing, notice or Consent that the Purchaser
is required or elects to make, give or obtain.
4.4 Notification; Updates to Disclosure Schedule
(a) During the Pre-Closing Period, the Vendors shall
promptly notify the Purchaser in writing of:
(i) the discovery of any event, condition, fact
or circumstance that occurred or existed on
or prior to the date of this Agreement and
that caused or constitutes a Breach of any
representation or warranty made by the
Vendors in this Agreement;
(ii) any event, condition, fact or circumstance
that occurs, arises or exists after the date
of this Agreement and that would cause or
constitute a Breach of any representation or
warranty made by the Vendors in this
Agreement if (A) such representation or
warranty had been made as of the time of the
occurrence, existence or discovery of such
event, condition, fact or circumstance, or
(B) such event, condition, fact or
circumstance had occurred, arisen or existed
on or prior to the date of this Agreement;
(iii) any Breach of any covenant or obligation of
the Vendors; and
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(iv) any event, condition, fact or circumstance
that may make the timely satisfaction of any
of the conditions set forth in Section 5 or
Section 6 impossible or unlikely.
(b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 4.4(a)
requires any change in the Disclosure Schedule, or if
any such event, condition, fact or circumstance would
require such a change assuming the Disclosure
Schedule were dated as of the date of the occurrence,
existence or discovery of such event, condition, fact
or circumstance, then the Vendors shall promptly
deliver to the Purchaser an update to the Disclosure
Schedule specifying such change. No such update shall
be deemed to supplement or amend the Disclosure
Schedule for the purpose of (i) determining the
accuracy of any of the representations and warranties
made by the Vendors in this Agreement or in the
Closing Certificate, or (ii) determining whether any
of the conditions set forth in Section 5 has been
satisfied.
4.5 Payment of Indebtedness by Related Parties
The Vendors shall cause all indebtedness and other Liabilities
of each Related Party to each Company (including any such
indebtedness or other Liability identified in Part 2.27 of the
Disclosure Schedule) other than A$129,195.57 to be discharged
and paid in full prior to the Closing.
4.6 No Negotiation
The Vendors shall ensure that, during the Pre-Closing Period,
neither of the Companies nor any of the Companies'
Representatives directly or indirectly:
(a) solicits or encourages the initiation of any inquiry,
proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction;
(b) participates in any discussions or negotiations with,
or provides any non-public information to, any Person
(other than the Purchaser) relating to any
Acquisition Proposal; or
(c) considers the merits of any unsolicited inquiry,
proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction.
4.7 Best Efforts
During the Pre-Closing Period, each of the Vendors shall use
its Best Efforts to cause the conditions set forth in Sections
5 and 6.3 to be satisfied on a timely basis.
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4.8 Confidentiality
The Vendors shall ensure that, during the Pre-Closing Period,
and, in so far as the obligations relate to the Vendors alone,
at all times after Closing:
(a) the Vendors, the Companies and their Representatives
keep strictly confidential the existence and terms of
this Agreement;
(b) neither the Vendors, the Companies nor any of their
Representatives issues or disseminates any press
release or other publicity or otherwise makes any
disclosure of any nature (to any of the Companies'
suppliers, customers, landlords, creditors or
employees or to any other Person) regarding any of
the Transactions, except to the extent that the
Companies or the Vendors are required by law to make
any such disclosure regarding the Transactions; and
(c) if either of the Companies or the Vendors are
required by law to make any disclosure regarding the
Transactions, the Vendors advises the Purchaser, at
least five business days before making such
disclosure, of the nature and content of the intended
disclosure and take into account the Purchaser's
reasonable requirements relating to the preservation
of confidentiality.
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
The Purchaser's obligation to purchase the Sale Shares and to take the
other actions required to be taken by the Purchaser at the Closing is
subject to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by the Purchaser, in
whole or in part, in accordance with Section 11.10):
5.1 Satisfactory Completion of Pre-Acquisition Review
The Purchaser shall have satisfactorily completed its
pre-acquisition investigation and review of the Companies'
businesses, condition, assets, liabilities, operations,
financial performance, net income, prospects and regulatory
matters and shall be satisfied with the results of that
investigation and review.
5.2 Accuracy of Representations
All of the representations and warranties made by the Vendors
in this Agreement (considered collectively), and each of said
representations and warranties (considered individually),
shall have been accurate in all material respects as of the
date of this Agreement, and shall be accurate in all material
respects as of the Scheduled Closing Time as if made at the
Scheduled Closing Time, without giving effect to any update to
the Disclosure Schedule.
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5.3 Performance of Obligations
(a) The Vendors shall have delivered to the Purchaser the
certificates representing all (and not less than all)
of the Sale Shares as required by Section 1.3(b)(i),
and shall have executed and/or delivered each of the
other documents required to be executed and/or
delivered by it pursuant to Section 1.3(b) such that
subject only to payment of stamp duty and the
registration of the transfers of the Sale Shares by
the Companies, the Purchaser shall upon Closing
become the registered holder of the entire issued
share capital of the Companies.
(b) All of the other covenants and obligations that the
Vendors is required to comply with or to perform at
or prior to the Closing (considered collectively),
and each of said covenants and obligations
(considered individually), shall have been duly
complied with and performed in all material respects.
5.4 Consents
Each of the Consents identified in Part 2.20 of the Disclosure
Schedule shall have been obtained and shall be in full force
and effect.
5.5 No Adverse Change
There shall have been no material adverse change in the
Companies' businesses, condition, assets, liabilities,
operations, financial performance, net income or prospects (or
in any aspect or portion thereof) since the date of this
Agreement.
5.6 Additional Documents
The Purchaser may request in good faith such materials or
evidence as it may reasonably require for the purpose of (i)
evidencing the accuracy of any representation or warranty made
by the Vendors, (ii) evidencing the compliance by the Vendors
with, or the performance by the Vendors of, any covenant or
obligation set forth in this Agreement, (iii) evidencing the
satisfaction of any condition set forth in this Section 5, or
(iv) otherwise facilitating the consummation or performance of
any of the Transactions.
5.7 No Proceedings
Since the date of this Agreement, there shall not have been
commenced or threatened against the Purchaser, or against any
Person affiliated with the Purchaser, any Proceeding (a)
involving any challenge to, or seeking damages or other relief
in connection with, any of the Transactions, or (b) that may
have the effect of preventing, delaying, making illegal or
otherwise interfering with any of the Transactions.
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5.8 No Claim Regarding Stock Ownership or Sale Proceeds
No Person shall have made or threatened any claim asserting
that such Person (a) may be the holder or the beneficial owner
of, or may have the right to acquire or to obtain beneficial
ownership of, any capital stock or other securities of either
Company, or (b) may be entitled to all or any portion of the
Purchase Price.
5.9 Board Approval
The board of directors (or any duly authorised committee
appointed by the board) of the Purchaser's ultimate parent
company, Asia Online, Ltd. has approved the terms of the
transactions contemplated or referred to in this Agreement and
the other Transactional Agreements.
6. CONDITIONS PRECEDENT TO THE VENDORS' OBLIGATIONS TO CLOSE
The Vendors' obligations to sell the Sale Shares and to take the other
actions required to be taken by each of them at the Closing is subject
to the satisfaction, at or prior to the Closing, of each of the
following conditions (any of which may be waived by the Vendors, in
whole or in part, in accordance with Section 11.10):
6.1 Accuracy of Representations
All of the representations and warranties made by the
Purchaser in this Agreement (considered collectively), and
each of said representations and warranties (considered
individually), shall have been accurate in all material
respects as of the date of this Agreement and shall be
accurate in all material respects as of the Scheduled Closing
Time as if made at the Scheduled Closing Time.
6.2 Purchaser's Performance
All of the other covenants and obligations that the Purchaser
is required to comply with or to perform pursuant to this
Agreement at or prior to the Closing (considered
collectively), and each of said covenants and obligations
(considered individually), shall have been complied with and
performed in all material respects.
6.3 No Injunction
There shall not be in effect any injunction that shall have
been entered by a court of competent jurisdiction since the
date of this Agreement and that prohibits the sale of the Sale
Shares by the Vendors to the Xxxxxxxxx.
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0. XXXXXXXXXXX
7.1 Termination Events
This Agreement may be terminated prior to the Closing:
(a) by the Purchaser if (i) there is a material Breach of
any covenant or obligation of any of the Vendors or
(ii) the Purchaser reasonably determines that the
timely satisfaction of any condition set forth in
Section 5 has become impossible or impractical (other
than as a result of any failure on the part of the
Purchaser to comply with or perform its covenants and
obligations under this Agreement);
(b) by the Vendors if (i) there is a material Breach of
any covenant or obligation of the Purchaser, or (ii)
the Vendors reasonably determine that the timely
satisfaction of any condition set forth in Section 6
has become impossible or impractical (other than as a
result of any failure on the part of any of the
Vendors to comply with or perform any covenant or
obligation set forth in this Agreement);
(c) by the Purchaser at or after the Scheduled Closing
Time if any condition set forth in Section 5 has not
been satisfied by the Scheduled Closing Time;
(d) by the Vendors at or after the Scheduled Closing Time
if any condition set forth in Section 6 has not been
satisfied by the Scheduled Closing Time;
(e) by the Purchaser if the Closing has not taken place
on or before 30 September, 1999 (other than as a
result of any failure on the part of the Purchaser to
comply with or perform its covenants and obligations
under this Agreement);
(f) by the Vendors if the Closing has not taken place on
or before 30 September, 1999 (other than as a result
of the failure on the part of the Vendors to comply
with or perform any covenant or obligation set forth
in this Agreement); or
(g) by the mutual consent of the Purchaser and the
Vendors.
7.2 Termination Procedures
If the Purchaser wishes to terminate this Agreement pursuant
to Section 7.1(a), Section 7.1(c) or Section 7.1(e), the
Purchaser shall deliver to any Vendor a written notice stating
that the Purchaser is terminating this Agreement and setting
forth a brief description of the basis on which the Purchaser
is terminating this Agreement. If the Vendors wish to
terminate this Agreement pursuant to Section 7.1(b), Section
7.1(d) or Section 7.1(f), the Vendors shall
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deliver to the Purchaser a written notice stating that the
Vendors are terminating this Agreement and setting forth a
brief description of the basis on which the Vendors are
terminating this Agreement.
7.3 Effect of Termination
If this Agreement is terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement shall
terminate; provided, however, that:
(a) no party shall be relieved of any obligation or other
Liability arising from any Breach by such party of
any provision of this Agreement;
(b) the Vendors shall, in all events, remain bound by and
continue to be subject to Section 4.8.
7.4 Non-exclusivity of Termination Rights
The termination rights provided in Section 7.1 shall not be
deemed to be exclusive. Accordingly, the exercise by any party
of its right to terminate this Agreement pursuant to Section
7.1 shall not be deemed to be an election of remedies and
shall not be deemed to prejudice, or to constitute or operate
as a waiver of, any other right or remedy that such party may
be entitled to exercise (whether under this Agreement, under
any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
8. INDEMNIFICATION, ETC.
8.1 Survival of Representation and Covenants
(a) The representations, warranties, covenants and
obligations of each party shall survive (without
limitation):
(i) the Closing and the sale of the Shares to
the Purchaser;
(ii) any sale or other disposition of any or all
of the Shares by the Purchaser; and
(iii) any Acquisition Transaction effected by or
otherwise involving the Purchaser, the
Vendors or either of the Companies.
(b) For purposes of this Agreement, each statement or
other item of information set forth in the Disclosure
Schedule or in any update to the Disclosure Schedule
shall be deemed to be a representation and warranty
made by the Vendors in this Agreement.
8.2 Indemnification by the Vendors
(a) The Vendors indemnify the Indemnitees against all
Proceedings, actions, claims, demands, losses
(including any decrease in the value of
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the assets of either Company or the value of the Sale
Shares, whether or not realised), Liabilities,
damages, costs and expenses which may be made,
brought against, suffered or incurred by the
Indemnitees, and arising directly or indirectly out
of or in connection with any representation or
warranty made by the Vendors in this Agreement or in
the Closing Certificate being untrue, inaccurate or
misleading in any respect or any breach of this
Agreement by the Vendors.
(b) The Vendors indemnify the Indemnitees against all
costs and expenses in relation to:
(i) all amounts currently due to the
Festival of Television for
Australian Children from either
Company or any of the Vendors; and
(ii) all amounts agreed to be paid to
the Festival of Television for
Australian by either Company or any
of the Vendors pursuant to any
settlement.
8.3 Limitations of the Vendors' liability under the Warranties
(a) Clause 8.4 shall have effect to limit the liability of the
Vendors in respect of the representations and warranties
("Representations and Warranties") made by the Vendors
pursuant to the terms of this Agreement.
(b) Any payment made by the Vendor pursuant to clause 8.2 shall be
treated by the Purchaser and the Vendors as a reduction pro
tanto of the Purchase Price to the extent thereof.
(c) The Purchaser acknowledges that it has not relied on any
warranty, representation or undertaking of the Vendors or
either of them save for the Representations and Warranties.
8.4 Specific Limitations
Save in respect of any claims under the Representations and Warranties
which arise because of fraud, dishonesty or deliberate non-disclosure
by the Vendors or in respect of the Representations and Warranties at
clause and 2.3(c) and 2.29(d), the following limitations shall apply:
(a) No liability shall in any event arise in respect of any claim
for breach of the Representations and Warranties unless the
loss thereby sustained (together with the aggregate amount of
losses sustained from any previous claims if any) exceeds a
total sum of A$29,750 and, in addition, the loss sustained
under each individual claim to be counted towards the total
sum referred to above must exceed A$4,760.
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(b) The aggregate liability of the Vendors in respect of all
claims for breach of the Representations and Warranties shall
not exceed A$2,975,000.
(c) Subject to Section 8.4(b), a liability that arises in respect
of any claim for breach of the Representations and Warranties
shall be for the whole of the loss sustained.
(d) No claim shall be brought by the Purchaser or either Company
against the Vendors in respect of any breach of the
Representations and Warranties unless notice in writing of
such claim specifying in reasonably sufficient detail the
nature of the breach has been given to the Vendors on or prior
to:
(i) the 6th anniversary of the date hereof in respect of
claims relating to Tax; and
(ii) the third anniversary of the date hereof in respect of
all other claims, each date being the relevant "Claim
Date".
(e) Any claim which has been made before the relevant Claim Date
shall if it has not been previously satisfied or settled or
withdrawn be deemed to have been withdrawn and shall become
fully barred and unenforceable on the expiry of 7 months
commencing on the relevant Claim Date unless proceedings in
respect thereof have been instituted, issued and served upon
the Vendors.
(f) Dove, Microtronics or the Purchaser as the case may be shall
reimburse the Vendors an amount equal to any sum paid by the
Vendors to the Purchaser, Dove or Microtronics arising out of
any specific breach of the Representations and Warranties to
the extent to which it is subsequently recovered by or paid in
full to Dove, Microtronics or the Purchaser by any third
party. Such reimbursement will be net of all expenses
(including tax costs) incurred by the Purchaser in recovering
such amount.
(g) No liability shall arise to the Purchaser or to either Company
and neither the Purchaser nor either Company shall have any
claim whatsoever against the Vendors or either of them in
respect of breach of the Representations and Warranties:
(i) if and to the extent that such breach or claim occurs
as a result of any legislation not in force at the
date hereof or which takes effect retrospectively or
occurs as a result of any increase in the rates of
taxation in force at the date hereof; or
(ii) to the extent:
(A) that the Company actually claims and
receives indemnity against any loss or
damage suffered by the Company arising out
of such specific breach or claim under the
terms of any insurance policy;
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(B) that any allowance or provision has been
made in the accounts of the Company in
respect of the matter to which such
liability relates;
(h) Neither the Purchaser nor either Company shall be entitled to
claim that any fact or circumstance constitutes a breach of
any of the Representations or Warranties if such fact or
circumstance has been fully, fairly and specifically disclosed
in this Agreement or in any of the Schedules hereto or in the
Disclosure Schedule.
(i) Neither the Purchaser nor either Company shall be entitled to
recover damages in respect of any claim for breach of any of
the Representations or Warranties or otherwise obtain
reimbursement or restitution more than once in respect of any
one misrepresentation or specific breach of the
Representations or Warranties.
(j) If any claim comes to the notice of the Purchaser or either
Company by reason or in consequence of which the Vendors may
be liable under the Representations or Warranties the
Purchaser shall or shall procure that the Company shall:
(i) as soon as reasonably practicable give written notice
thereof to the Vendors;
(ii) not make any admission of liability, agreement or
compromise in relation thereto without the prior
agreement of the Vendors;
(iii) provide the Vendors and their professional advisers
with reasonable access to the premises and personnel
of the Purchaser and the Company and all associated
documents and records whether in electronic format or
otherwise;
(iv) in any event, if the Purchaser considers that it or
the Company will or may make a claim against the
Vendors the Purchaser shall promptly notify the
Vendors in writing giving reasonable particulars
thereof and for a period of 30 days after such
notification shall afford the Vendors the opportunity
to take steps to remedy or avert such breach or
potential breach.
(k) None of the Indemnitees shall have any claim whatsoever
against the Vendors or any of them to the extent:
(i) of the amount by which any Liability of the Companies
has actually been overstated in the Unaudited Interim
Balance Sheets less the amount by which any other
Liability has actually been understated in the
Unaudited Interim Balance Sheets
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(ii) of the amount by which any asset of the Companies has
actually been understated in the Unaudited Interim
Balance Sheets less the amount by which any other
asset has actually been overstated in the Unaudited
Interim Balance Sheets
(iii) that any allowance or provision has been made in the
Unaudited Interim Balance Sheets in respect to the
matter to which such Liability relates or such matter
was taken into account in computing the amount of any
such allowance, provision or reserve
(iv) that the breach would not have arisen or would have
been reduced or eliminated but for any winding up or
cessation after Closing of any trade or business
carried on by either of the companies.
(l) All amounts available for setoff or otherwise liable to be
deducted pursuant to this Agreement shall first be taken into
account for the purposes of determining the amount of loss
sustained in connection with the de minimis limits referred to
herein.
(m) For the purposes of Section 8.4(k)(i), no amount may be
subtracted in respect of a Liability which has been subject to
a claim under this Agreement and no amount which has been
subtracted in respect of a Liability may thereafter be the
subject of a claim under this Agreement.
(n) For the purposes of Section 8.4(k), no amount may be
subtracted in respect of an asset which has been subject to a
claim under this Agreement and no amount which has been
subtracted in respect of an asset may thereafter be the
subject of a claim under this Agreement.
8.5 No Contribution
Each of the Vendors waives, and acknowledges and agrees that
it shall not have and shall not exercise or assert or attempt
to exercise or assert, any right of contribution or right of
indemnity or any other right or remedy against either Company
or any of their employees, officers or agents in connection
with any indemnification obligation or any other Liability to
which any of the Vendors may become subject under any of the
Transactional Agreements or otherwise in connection with any
of the Transactions.
9. RESTRICTION OF THE VENDORS
9.1 Each of the Vendors undertakes with the Purchaser (for itself
and as trustee for the Companies) that, except with the
consent in writing of the Purchaser:
(a) for the period of two years after Completion it will
not within any country or place in which the
Companies have carried on business during the year
preceding the date of this Agreement either on its
own account or in conjunction with or on behalf of
any person, firm or
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company carry on or be engaged, concerned or
interested, directly or indirectly, whether as
shareholder, director, employee, partner, agent or
otherwise in carrying on any business carried on by
the Companies within such preceding year (other than
as a holder of not more than 5 per cent (5%) of the
issued shares or debentures of any company listed on
a recognised stock exchange);
(b) for the period of two years after Completion it will
not either on its own account or in conjunction with
or on behalf of any other person, firm or company
solicit or entice away or attempt to solicit or
entice away from either Company the custom of any
person, firm, company or organisation who shall at
any time within the year preceding the date hereof
have been a customer, identified prospective
customer, representative, agent, or correspondent of
either Company or in the habit of dealing with either
Company or enter into any contract for sale and
purchase or accept business from any such person,
firm, company or organisation in a business area in
which either Company competes;
(c) for the period of two years after Completion it will
not either on its own account or in conjunction with
or on behalf of any other person, firm or company
employ, solicit, entice away or attempt to employ,
solicit or entice away from either Company any person
who at the date hereof is or at the date of or within
the year preceding such employment, solicitation,
enticement or attempt shall have been an officer,
manager, consultant or employee of the Company
whether or not such person would commit a breach of
contract by reason of leaving such employment;
(d) it will not at any time hereafter make use of or
disclose or divulge to any person (other than to
officers or employees of the Company whose province
it is to know the same) any information (other than
any information properly available to the public or
disclosed or divulged pursuant to an order of a court
of competent jurisdiction) relating to either
Company, the identity of its customers and suppliers,
its products, finance, contractual arrangements,
business or methods of business;
(e) if, in connection with the business or affairs of
either Company, it shall have obtained trade secrets
or other confidential information belonging to any
third party under an agreement purporting to bind
either Company which contained restrictions on
disclosure it will not without the previous written
consent of the board of directors of the Purchaser at
any time infringe or take any action which would or
might result in an infringement of such restrictions;
(f) it will not at any time hereafter in relation to any
trade, business or company use a name or trade xxxx
including the word "Dove", "Dove Australia",
Mictronics or "Microtronics Information Systems" or
any
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word or symbol confusingly similar thereto in such a
way as to be capable of or likely to be confused with
the name or any trade xxxx of either Company and
shall use its best endeavours to procure that no such
name or trade xxxx shall be used by any person, firm
or company with which he is connected.
9.2 The Vendors acknowledge that:
(a) the covenants given in clause 9.1 are material to the
Purchaser's decision to enter into this Agreement;
and
(b) the restraints contained in clause 9.1 are:
(i) fair and reasonable regarding the subject
matter, area and duration; and
(ii) reasonably required by the Purchaser to
protect the business, financial and
proprietary interests of the Companies.
9.3 While the restrictions contained in this Clause are considered
by the parties to be reasonable in all the circumstances, it
is recognised that restrictions of the nature in question may
fail for technical reasons and accordingly it is hereby agreed
and declared that if any of such restrictions shall be
adjudged to be void as going beyond what is reasonable in all
the circumstances for the protection of the interests of the
Purchaser but would be valid if part of the wording thereof
were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope the
said restriction shall apply with such modifications as may be
necessary to make it valid and effective.
10. GUARANTEES OF DIRECTORS
10.1 Best Endeavours
The Company shall use its best endeavours and shall act in
good faith to procure a reasonably timely release, discharge
or replacement of the persons listed in Part I of Exhibit L
from the guarantees and indemnities described in Part II of
Exhibit L (the "Guarantees").
10.2 Indemnity
Pending the release, discharge or replacement of the persons
listed in Part I of Exhibit L from the Guarantees, the Company
shall indemnify each person listed in Part I of Exhibit L
against all costs, claims and demands (collectively, "Losses")
suffered or incurred by each such person by reason of being a
guarantor under any Guarantee but excluding Losses suffered or
incurred in relation to acts or omissions occurring on or
before Closing.
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11. MISCELLANEOUS PROVISIONS
11.1 Further Assurances
Each party hereto shall execute and/or cause to be delivered
to each other party hereto such instruments and other
documents, and shall take such other lawful actions within its
power, as such other party may reasonably request (prior to,
at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
11.2 Fees, Expenses and Stamp Duty
Each party shall bear its own expenses of and incidental to
the negotiation leading to the entering into of this Agreement
all the Transaction Agreement, and the preparation, execution
and performance of such agreement. All stamp duties assessed
or assessable on the transfer of the Sale Shares to the
Purchaser shall be borne by the Purchaser.
11.3 Notices
Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and
received when delivered (by hand, by registered mail, by
courier or express delivery service or by facsimile) to the
address or facsimile number set forth beneath the name of such
party below (or to such other address or facsimile number as
such party shall have specified in a written notice given to
the other parties hereto):
If to the Purchaser : Asia Online - Australia Pty Ltd
23rd Floor, Citicorp Centre
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxx Xxxx
Attention : MR. ED. XXXXXXX
Facsimile : (000) 0000 0000
If to the Vendors : 00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxx
Xxxxx Xxxxxxxxx 0000
Attention : MR XXXX XXXXXXX
Facsimile : (000) 0000 0000
11.4 Time of the Essence
Time is of the essence of this Agreement.
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11.5 Headings
The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this
Agreement.
11.6 Counterparts
This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
11.7 Governing Law; Venue
(a) This Agreement and all definitive Agreements
contained herein shall be construed in accordance
with, and governed in all respects by, the laws of
New South Wales.
(b) Any legal action or other legal proceeding relating
to this Agreement or the enforcement of any provision
of this Agreement may be brought or otherwise
commenced in any court having jurisdiction in New
South Wales. Each party to this Agreement:
(i) expressly and irrevocably consents and
submits to the non-exclusive jurisdiction of
the courts of New South Wales; and
(ii) waives any claim or objection based on
absence of jurisdiction or inconvenient
forum;
11.8 Successors and Assigns
This Agreement shall be binding upon: the Vendors and the
Purchaser and their respective successors and assigns (if
any). This Agreement shall inure to the benefit of the
Purchaser; the other Indemnitees; and the respective
successors and assigns (if any) of the foregoing. The
Purchaser may freely assign any or all of its rights under
this Agreement (including its indemnification rights under
Section 8), in whole or in part, to any other Person without
obtaining the consent or approval of any other party hereto or
of any other Person.
11.9 Remedies Cumulative; Specific Performance
The rights and remedies of the parties hereto shall be
cumulative (and not alternative). The Vendors and the
Purchaser agree that:
(a) in the event of any Breach or threatened Breach by
the other party of any covenant, obligation or other
provision set forth in this Agreement, the
non-breaching party shall be entitled (in addition to
any other
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remedy that may be available to it) to (i) a decree
or order of specific performance or mandamus to
enforce the observance and performance of such
covenant, obligation or other provision, and (ii) an
injunction restraining such Breach or threatened
Breach; and
(b) the Vendors and the Purchaser shall not be required
to provide any bond or other security in connection
with any such decree, order or injunction or in
connection with any related action or Proceeding.
11.10 Waiver
(a) No failure on the part of any Person to exercise any
power, right, privilege or remedy under this
Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy
under this Agreement, shall operate as a waiver of
such power, right, privilege or remedy; and no single
or partial exercise of any such power, right,
privilege or remedy shall preclude any other or
further exercise thereof or of any other power,
right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim
arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the
waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such Person;
and any such waiver shall not be applicable or have
any effect except in the specific instance in which
it is given.
11.11 Amendments
This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly
executed and delivered on behalf of the Purchaser and the
Vendors.
11.12 Severability
In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful,
void or unenforceable to any extent, the remainder of this
Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to
be invalid, unlawful, void or unenforceable, shall not be
impaired or otherwise affected and shall continue to be valid
and enforceable to the fullest extent permitted by law.
11.13 Parties in Interest
Except for the provisions of Section 8 hereof, none of the
provisions of this Agreement is intended to provide any rights
or remedies to any Person other than the parties hereto and
their respective successors and assigns (if any).
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11.14 Entire Agreement
The Transactional Agreements set forth the entire
understanding of the parties relating to the subject matter
thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject
matter thereof.
11.15 Construction
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the
plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter
genders; and the neuter gender shall include the
masculine and feminine genders.
(b) The parties hereto agree that any rule of
construction to the effect that ambiguities are to be
resolved against the drafting party shall not be
applied in the construction or interpretation of this
Agreement.
(c) As used in this Agreement, the words "include" and
"including", and variations thereof, shall not be
deemed to be terms of limitation, but rather shall be
deemed to be followed by the words "without
limitation".
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended
to refer to Sections of this Agreement and Exhibits
to this Agreement.
The parties hereto have caused this Agreement to be executed and delivered as of
the date stated at the commencement hereof.
SIGNED for and on behalf of )
ASIA ONLINE - AUSTRALIA PTY LTD )
by its duly authorised representative )
in the presence of: )
/s/ XXXXX XXXXXXX XXXXXXXXX /s/ XXXXX X. XXXXXXXX
--------------------------- ---------------------
Signature of witness Signature of authorised representative
Xxxxx Xxxxxxx Xxxxxxxxx Xxxxx X. Xxxxxxxx
--------------------------- ---------------------
Name of witness (please print) Name of authorised representative
(please print)
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SIGNED by )
XXXXXXXX AIRDRIE XXXXX )
in the presence of: )
/s/ X.X. XXXX /s/ XXXXXXXX AIRDRIE XXXXX
------------------------------ --------------------------
Signature of witness Signature of XXXXXXXX AIRDRIE XXXXX
X.X. Xxxx
------------------------------
Name of witness (please print)
SIGNED by )
XXXXXX XXXXX XXXXX )
in the presence of: )
/s/ X.X. XXXX /s/ XXXXXX XXXXX XXXXX
------------------------------ --------------------------
Signature of witness Signature of XXXXXX XXXXX XXXXX
X.X. Xxxx
------------------------------
Name of witness (please print)
SIGNED by )
XXXXXXXX XXXXXXX )
in the presence of: )
/s/ X.X. XXXX /s/ XXXXXXXX XXXXXXX
------------------------------ --------------------------
Signature of witness Signature of XXXXXXXX XXXXXXX
X.X. Xxxx
------------------------------
Name of witness (please print)
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SIGNED by )
XXXXXXX XXXX XXXXXXX )
in the presence of: )
/s/ X.X. XXXX /s/ XXXXXXX XXXX XXXXXXX
------------------------------ ------------------------
Signature of witness Signature of XXXXXXX XXXX XXXXXXX
X.X. Xxxx
------------------------------
Name of witness (please print)
SIGNED by )
XXXXXX XXXXX XXXXX AND XXXXXXXX AIRDRIE XXXXX )
)
in the presence of: )
/s/ X.X. XXXX /s/ XXXXXX XXXXX XXXXX
------------------------------ -------------------------
Signature of witness Signature of XXXXXX XXXXX XXXXX
X.X. Xxxx /s/ XXXXXXXX AIRDRIE XXXXX
------------------------------ --------------------------
Name of witness (please print) Signature of XXXXXXXX AIRDRIE XXXXX
SIGNED by )
XXXXXXXX XXXXXXX AND XXXXXXX )
XXXX XXXXXXX )
in the presence of: )
/s/ X.X. XXXX /s/ XXXXXXXX XXXXXXX
------------------------------ ------------------------
Signature of witness Signature of XXXXXXXX XXXXXXX
X.X. Xxxx /s/ XXXXXXX XXXX XXXXXXX
------------------------------ --------------------------
Name of witness (please print) Signature of XXXXXXX XXXX XXXXXXX
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACQUISITION TRANSACTION "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale or other disposition of
all or any portion of either
Company's business or assets (other
than in the Ordinary Course of
Business);
(b) the issuance, sale or other
disposition of (i) any capital
stock of either Company, (ii) any
option, call, warrant or right
(whether or not immediately
exercisable) to acquire any capital
stock of either Company, or (iii)
any security, instrument or
obligation that is or may become
convertible into or exchangeable
for any capital stock of either
Company; or
(c) any merger, consolidation, business
combination, share exchange,
reorganization or similar
transaction involving either
Company.
AGREEMENT "Agreement" shall mean the Share Sale and
Purchase Agreement to which this Exhibit A
is attached (including the Disclosure
Schedule), as it may be amended from time to
time.
BEST EFFORTS "Best Efforts" shall mean the reasonable
efforts that a prudent Person desiring to
achieve a particular result would use in
order to ensure that such result is achieved
as expeditiously as possible.
BREACH There shall be deemed to be a "Breach" of a
representation, warranty, covenant,
obligation or other provision if there is or
has been (a) any inaccuracy in or breach of,
or any failure to comply with or perform,
such representation, warranty, covenant,
obligation or other provision, or (b) any
claim (by any Person) or other circumstance
that is inconsistent with such
representation, warranty, covenant,
obligation or other provision; and the term
"Breach" shall be deemed to refer to any
such inaccuracy, breach, failure, claim or
circumstance.
59
BUSINESS DAY "Business day" means a day (excluding
Saturday) when banks are open for business
in New South Wales.
CLOSING "Closing" shall have the meaning specified
in Section 1.3(a) of the Agreement.
CLOSING CERTIFICATE "Closing Certificate" shall have the meaning
specified in Section 1.3(b)(x) of the
Agreement.
CLOSING DATE "Closing Date" shall have the meaning
specified in Section 1.3(a) of the
Agreement.
COMPANY CONTRACT "Company Contract" shall mean any Contract:
(a) to which either Company is a party;
(b) by which either Company or any of
its assets is or may become bound
or under which the Company has, or
may become subject to, any
obligation; or
(c) under which either Company has or
may acquire any right or interest.
COMPANY FINANCIAL STATEMENTS "Company Financial Statements" shall have
the meaning specified in Section 2.8(a) of
the Agreement.
COMPANY RETURNS "Company Returns" shall have the meaning
specified in Section 2.21(b) of the
Agreement.
COMPARABLE ENTITIES "Comparable Entities" shall mean Entities
(other than the Company) that are engaged in
businesses similar to the Company's
business.
CONSENT "Consent" shall mean any approval, consent,
ratification, permission, waiver or
authorization (including any Governmental
Authorization).
CONSTITUTION "Constitution" means for Dove the
constitution in the form attached as Exhibit
B and for Microtronics the constitution in
the form attached as Exhibit E.
CONTRACT "Contract" shall mean any written, oral,
implied or other agreement, contract,
understanding, arrangement, instrument,
note, guaranty, indemnity, representation,
warranty, deed, assignment, power of
attorney, certificate, purchase order, work
order, insurance policy,
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benefit plan, commitment, covenant,
assurance or undertaking of any nature.
CURRENT BENEFIT PLAN "Current Benefit Plan" shall mean any
Employee Benefit Plan that is currently in
effect and:
(a) that was established or adopted by
either Company or is maintained or
sponsored by either Company;
(b) in which either Company
participates;
(c) with respect to which either
Company is or may be required or
permitted to make any contribution;
or
(d) with respect to which either
Company is or may become subject to
any Liability.
DAMAGES "Damages" shall include any loss, damage,
injury, decline in value, lost opportunity,
Liability, claim, demand, settlement,
judgment, award, fine, penalty, Tax, fee
(including any legal fee, expert fee,
accounting fee or advisory fee), charge,
cost (including any cost of investigation)
or expense of any nature.
DISCLOSURE SCHEDULE "Disclosure Schedule" shall mean the
schedule (dated as of the date of the
Agreement) delivered to the Purchaser on
behalf of the Vendors, a copy of which is
attached to the Agreement and incorporated
in the Agreement by reference.
ENCUMBRANCE "Encumbrance" shall mean any lien, pledge, ,
charge, mortgage, security interest, trust,
equitable interest, right of possession,
lease, tenancy, license, covenant, option,
right of first refusal, preemptive right, or
retention of title.
ENTITY "Entity" shall mean any corporation
(including any non-profit corporation),
general partnership, limited partnership,
limited liability partnership, joint
venture, estate, trust, cooperative,
foundation, society, political party, union,
company (including any limited liability
company or joint stock company), firm or
other enterprise, association, organization
or entity.
EXCLUDED CONTRACT "Excluded Contract" shall mean any Company
Contract that:
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(a) the Company has entered into in the
Ordinary Course of Business;
(b) does not contemplate or involve the
payment of cash or other
consideration in an amount or
having a value in excess of
A$10,000.
GAAP "GAAP" shall mean the accounting standards
applicable for the purposes of the
Corporations Law; the requirements of the
Corporations Law for the preparation and
content of financial statements, directors'
reports and auditor's reports; and generally
accepted and consistently applied accounting
principles and practices in Australia;
except those inconsistent with any of the
foregoing; and for any company incorporated
outside Australia, the equivalent accounting
standards in that company's jurisdiction of
incorporation.
GOVERNMENTAL AUTHORIZATION "Governmental Authorization" shall mean any:
(a) permit, license, certificate,
franchise, concession, approval,
consent, ratification, permission,
clearance, confirmation,
endorsement, waiver, certification,
designation, rating, registration,
qualification or authorization that
is, has been or may in the future
be issued, granted, given or
otherwise made available by or
under the authority of any
Governmental Body or pursuant to
any Legal Requirement; or
(b) right under any Contract with any
Governmental Body.
GOVERNMENTAL BODY "Governmental Body" shall mean any:
(a) commonwealth, state, or territory,
jurisdiction;
(b) federal, state, local or municipal,
government;
(c)
(e) individual, Entity or body
exercising, or entitled to
exercise, any executive,
legislative, judicial,
administrative, regulatory, police,
military or taxing authority or
power of any nature.
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INDEMNITEES The Purchaser, its shareholders and
subsidiaries and after Closing, the
Companies.
KNOWLEDGE An individual shall be deemed to have
"Knowledge" of a particular fact or other
matter if:
(a) such individual is actually aware
of such fact or other matter; or
(b) a prudent individual could be
expected to discover or otherwise
become aware of such fact or other
matter in the course of conducting
a reasonable investigation
concerning the truth or existence
of such fact or other matter.
LEGAL REQUIREMENT "Legal Requirement" shall mean any federal,
state, local, municipal, foreign or other
law, statute, legislation, constitution,
principle of common law, resolution,
ordinance, code, edict, decree,
proclamation, treaty, convention, rule,
regulation, ruling, directive,
pronouncement, requirement, specification,
determination, decision, opinion or
interpretation that is, has been or may in
the future be issued, enacted, adopted,
passed, approved, promulgated, made,
implemented or otherwise put into effect by
or under the authority of any Governmental
Body.
LIABILITY "Liability" shall mean any debt, obligation,
duty or liability of any nature (including
any contingent liability) regardless of
whether such debt, obligation, duty or
liability is immediately due and payable.
MATERIAL ADVERSE EFFECT For the purposes of the Agreement, "Material
Adverse Effect" as it applies to the
Companies or Purchaser means an adverse
effect on the business, operations,
condition (financial or otherwise), assets
or prospects of either Company or Purchaser,
taken as a whole, which is material. For
purposes of this Agreement, documents,
objects, effects, conditions, events or
occurrences shall be deemed "material" if
they involve amounts, or result in Purchaser
Damages (as hereinafter defined), in excess
of A$29,000 (or equivalent in any other
currency) individually or when aggregated
with other Purchaser Damages incurred due to
a breach of a representation or warranty by
the Vendors or if they in any way materially
and adversely affect the value of, or either
Company's rights, title or interest in, any
of its assets. For purposes of this
Agreement, "Purchaser
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Damages" means any material loss, expense,
liability, or other damages, including the
reasonable costs of investigation, interest,
penalties and attorney's and accountant's
fees.
ORDER "Order" shall mean any:
(a) order, judgment, injunction,
decree, decision, opinion, verdict,
sentence, subpoena, writ or award
that is, has been or may in the
future be issued, made, entered,
rendered or otherwise put into
effect by or under the authority of
any court, or other Governmental
Body or any arbitrator or
arbitration panel; or
(b) Contract with any Governmental Body
that is, has been or may in the
future be entered into in
connection with any Proceeding.
ORDINARY COURSE OF BUSINESS An action taken by or on behalf of either
Company shall not be deemed to have been
taken in the "Ordinary Course of Business"
unless:
(a) such action is consistent with the
Company's past practices and is
taken in the ordinary course of the
Company's normal day-to-day
operations;
(b) such action is taken in accordance
with generally accepted and prudent
business practices;
(c) such action is not required to be
authorized by the Company's
shareholders, the Company's board
of directors or any committee of
the Company's board of directors
and does not require any other
separate or special authorization
of any nature;
PERSON "Person" shall mean any individual, Entity
or Governmental Body.
PRE-CLOSING PERIOD "Pre-Closing Period" shall mean the period
commencing as of the date of the Agreement
and ending on the Closing Date.
PROCEEDING "Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding
(including any civil, criminal,
administrative, investigative or appellate
proceeding and any informal proceeding),
prosecution, hearing,
64
inquiry, inquest, audit, examination or
investigation that is, has been or may in
the future be commenced, brought, conducted
or heard by or before, or that otherwise has
involved or may involve, any Governmental
Body or any arbitrator or arbitration panel.
PROPRIETARY ASSET "Proprietary Asset" shall mean any patent,
patent application, trademark (whether
registered or unregistered and whether or
not relating to a published work), trademark
application, trade name, fictitious business
name, service xxxx (whether registered or
unregistered), service xxxx application,
copyright (whether registered or
unregistered), copyright application,
maskwork, maskwork application, trade
secret, know-how, franchise, system, domain
name or internet address, computer software,
invention, design, blueprint, proprietary
product, technology, proprietary right or
other intellectual property right or
intangible asset.
PROPRIETARY INFORMATION
AND INVENTIONS DEED "Proprietary Information and Inventions
Deed" means the proprietary information and
inventions deed in the form attached at
Exhibit K.
PURCHASE PRICE "Purchase Price" shall have the meaning
specified in Section 1.2 of the Agreement.
RELATED PARTY Each of the following shall be deemed to be
a "Related Party":
(a) the Vendors;
(b) each individual who is, or who has
at any time been, an officer of the
Vendors;
(c) each member of the family of each
of the parties who are individuals
referred to in clauses "(a)" and
"(b)" above; and
(d) any Entity in which any one of the
parties referred to in clauses
"(a)", "(b)" and "(c)" above holds
(or in which more than one of such
parties collectively hold),
beneficially or otherwise, a
material voting, proprietary or
equity interest.
65
RELEVANT SCHEME shall mean: all superannuation schemes,
retirement benefit schemes or other pension
schemes or arrangements; and all employment
benefit plans, programs or arrangements
including medical, dental or life insurance
to which either Company or any of its
subsidiaries is a party or which either
Company or any of its subsidiaries makes
available or obtains for its officers or
employees or former officers or employees;
REPRESENTATIVES "Representatives" shall mean officers,
directors, employees, agents, attorneys,
accountants and advisers.
SALE SHARES "Sale Shares" shall have the meaning as
specified in the Recitals to the Agreement.
SCHEDULED CLOSING TIME "Scheduled Closing Time" shall have the
meaning specified in Section 1.3(a) of the
Agreement.
"SUBSIDIARY" "subsidiary" has the meaning given to that
term in Division 6 of part 1.2 of the
Corporations Law.
TAX "Tax" shall mean any tax (including any
income tax, franchise tax, capital gains
tax, estimated tax, gross receipts tax,
value-added or goods and services tax,
surtax, excise tax, ad valorem tax, transfer
tax, stamp tax, sales tax, use tax, land or
property tax, business tax, occupation tax,
inventory tax, occupancy tax, withholding
tax or payroll tax), levy, assessment,
tariff, impost, imposition, toll, duty
(including any customs duty), deficiency or
fee, and any related charge or amount
(including any fine, penalty or interest),
that is, has been or may in the future be
(a) imposed, assessed or collected by or
under the authority of any Governmental
Body, or (b) payable pursuant to any
tax-sharing agreement or similar Contract.
TAX RETURN "Tax Return" shall mean any return
(including any information return), report,
statement, declaration, estimate, schedule,
notice, notification, form, election,
certificate or other document or information
that is, has been or may in the future be
filed with or submitted to, or required to
be filed with or submitted to, any
Governmental Body in connection with the
determination, assessment, collection or
payment of any Tax or in connection with the
administration, implementation or
enforcement of or compliance with any Legal
Requirement relating to any Tax.
66
TRANSACTIONAL AGREEMENTS "Transactional Agreements" shall mean:
(a) the Agreement;
(b) the Employment Agreements referred
to in Section 1.3(b)(viii) of the
Agreement;
(c) the Proprietary Information and
Inventions Deeds referred to in
Section 1.3(b)(ix) of the
Agreement;
(d) the Closing Certificate.
TRANSACTIONS "Transactions" shall mean (a) the execution
and delivery of the respective Transactional
Agreements, and (b) all of the transactions
contemplated by the respective Transactional
Agreements, including:
(i) the sale of the Sale Shares by the
Vendors to the Purchaser in
accordance with the Agreement; and
(ii) the performance by the Vendors and
the Purchaser of their respective
obligations under the Transactional
Agreements and the exercise by the
Vendors and the Purchaser of their
respective rights under the
Transactional Agreements.
UNAUDITED INTERIM BALANCE SHEET "Unaudited Interim Balance Sheet" shall have
the meaning specified in Section 2.8(a) of
the Agreement.
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EXHIBIT D
LIST OF SHAREHOLDERS
DOVE MICROTRONICS
SHAREHOLDER PROPORTIONS (%) SHARES SHARES
Xxxxxxxx Airdrie Xxxxx 16.95% 1 1
Xxx 0
Xxxxx Xxxx
Xxxxx XX 0000
Xxxxxx Xxxxx Xxxxx 16.95% 1 1
Xxx 0
Xxxxx Xxxx
Xxxxx XX 0000
Xxxxxxxx XxXxxxx 16.95% 1 1
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxx XX 0000
Xxxxxxx Xxxx XxXxxxx 16.95% 1 1
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxx XX 0000
Xxxxxx Xxxxx Xxxxx and 16.1% 1
Xxxxxxxx Airdrie Xxxxx
Xxx 0
Xxxxx Xxxx
Xxxxx XX 0000
Xxxxxxxx XxXxxxx and 16.1% 1
Xxxxxxx Xxxx XxXxxxx
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx Xxxx XX 0000
