EXHIBIT 2.1
FAI HOME SECURITY HOLDINGS PTY LIMITED (ACN 003 125 264)
('VENDOR')
HOME SECURITY INTERNATIONAL INC.
('PURCHASER')
FAI INSURANCES LIMITED (ACN 004 304 545)
('FAI')
CERVALE PTY LIMITED (ACN 056 258 201)
('CERVALE')
SHARE PURCHASE AGREEMENT
RELATING TO THE PURCHASE OF SHARES IN FAI HOME SECURITY PTY LIMITED
AND FAI HOME SECURITY (ENZED) LIMITED
XXXXXX XXXXXXX
Lawyers
Xxxxxx Xxxxxxx Building
00 Xxxxxx Xxxxx
XXXXXX XXX 0000
DX 000 XXXXXX
Telephone (00) 0000 0000
Facsimile (00) 0000 0000
Ref: MAP
SHARE PURCHASE AGREEMENT
AGREEMENT dated 1997
BETWEEN FAI HOME SECURITY HOLDINGS PTY LIMITED (ACN 003 125 264) a
company incorporated in New South Wales and having its registered
office at 000 Xxxxxxxxx Xxxxxx, Xxxxxx XXX 0000 ('VENDOR')
AND HOME SECURITY INTERNATIONAL INC. a company incorporated in
Delaware, United States of America and having its registered
office at St Moritz Hotel, 00 Xxxxxxx Xxxx Xxxxx, Xxx Xxxx, XX
00000 ('PURCHASER')
AND FAI INSURANCES LIMITED (ACN 004 304 545) a company incorporated
in New South Wales and having its registered office at 000
Xxxxxxxxx Xxxxxx, Xxxxxx XXX 0000 ('FAI')
AND CERVALE PTY LIMITED (ACN 056 258 201) in its own capacity and as
trustee of the Xxxxxx Investment Trust of 00 Xxxxxxxxxx Xxxxxx,
Xxxxxx, Xxx Xxxxx Xxxxx ('CERVALE')
RECITALS
A. The Australian Company has an authorised share capital of
A$1,000,000 divided into 1,000,000 ordinary shares of $1.00 each, of
which 2 fully paid ordinary shares are on issue.
B. The NZ Company at Completion will have 1,000,000 ordinary shares on
issue.
C. The Vendor has agreed to sell and the Purchaser has agreed to
purchase the Shares subject to and on the terms and conditions
contained in this agreement.
D. FAI has agreed to guarantee certain obligations of the Vendor under
this agreement.
E. Cervale has agreed to provide certain warranties under this
agreement.
AGREEMENT
1. DEFINITIONS AND INTERPRETATION
1.1 In this agreement except where the context otherwise requires the
following words and expressions have the meanings indicated.
'ACCOUNTING STANDARDS' means the Australian Accounting Standards from time
to time and if and to the extent that any matter is not covered by
Australian Accounting Standards means generally accepted accounting
principles applied from time to time in Australia for a company similar to
the Company.
'ACCOUNTS' means the audited balance sheet of each of the Group Companies
as at the First Accounts Date and the unaudited balance sheet of each of
the Group Companies as at the Second Accounts Date and the audited profit
and loss statement of each of the Group Companies for the financial year
ended on the First Accounts Date and the unaudited profit and loss
statement of each of the Group Companies for the six months ending on the
Second Accounts Date, together with the reports of the directors in respect
of those accounts.
'ARTICLES' means the articles of association of the Australian Company.
'ASSETS' has the meaning given in the Asset Purchase Agreement, except that
in relation to the Canada Tangible Assets, the SA Tangible Assets, the UK
Tangible Assets and the USA Tangible Assets (together, the 'Tangible
Assets'), means the Tangible Assets held by the Vendor and in existence on
the Completion Date.
'ASSET WARRANTIES' means those Warranties set out in SCHEDULE 7.
'ASSET PURCHASE AGREEMENT' means the agreement between the Vendor, Cervale
Pty Limited and various entities associated with Cervale Pty Limited, a
copy of which forms Annexure A to this agreement.
'AUSTRALIAN COMPANY' means FAI Home Security Pty Limited (ACN 000 000 000),
full details of which are set out in part 1 of SCHEDULE 1.
'AUSTRALIAN SHARES' means all of the issued shares in the capital of the
Australian Company as at the Completion Date.
'BUSINESS' means the business of selling, installing and servicing
residential security alarm systems through a distributorship network
conducted by the Group.
'BUSINESS CONTRACTS' has the meaning given in the Asset Purchase Agreement.
'BUSINESS LIABILITIES' has the meaning given in the Asset Purchase
Agreement.
'CLAIM' includes a claim, notice, demand, action, proceeding, litigation,
investigation, judgment, damage, loss, cost, expense or liability however
arising, whether present, unascertained, immediate, future or contingent,
whether based in contract, tort or statute and whether involving a third
party or party to this agreement.
'COMPANIES' means the Australian Company and the NZ Company, and in
SCHEDULE 6, 'Company' has the meaning given in CLAUSE 7.3.
'COMPANY WARRANTIES' means those Warranties set out in SCHEDULE 6.
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'COMPLETION' means completion of the sale and purchase of the Shares in
accordance with CLAUSE 6.
'COMPLETION DATE' means the day upon which Completion occurs under CLAUSE
6.
'CONDITIONS PRECEDENT' means the conditions precedent to Completion of this
agreement set out in CLAUSE 3.1.
'CONDITIONS SUBSEQUENT' means the conditions subsequent to this agreement
set out in CLAUSE 3.4.
'CONFIDENTIAL INFORMATION' means:
(a) all data bases, source codes, methodologies, manuals, artwork,
advertising manuals, trade secrets and all financial, accounting,
marketing and technical information, customer and supplier lists,
know-how, technology, operating procedures and other information, used
by or relating to any Group Company and its transactions and affairs
which is not in the public domain;
(b) all notes and reports incorporating or derived from information
referred to in paragraph (a); and
(c) all copies of the information, notes and reports referred to in
paragraphs (a) and (b).
'CONSIDERATION' means the consideration referred to in CLAUSE 4.
'CONSTITUTION' means the constitution of the NZ Company.
'CONTINGENT LIABILITIES' has the meaning given in the Accounting
Standards.
'DELIVER' includes procure the delivery of.
'EQUIPMENT LEASES' has the meaning given in the Asset Purchase Agreement.
'FIRST ACCOUNTS DATE' means 30 June 1996.
'FLOAT' means the initial public offer registered under the Securities
Xxx 0000 (US) by the Purchaser of 500,000 ordinary shares in the
Purchaser and concurrent sale of 5,500,000 ordinary shares in the
Purchaser by the Vendor.
'GROUP' means the Australian Company, the NZ Company, the NZ Trust and
FAI Home Security (NZ) Limited in its capacity as trustee of the NZ
Trust.
'GROUP COMPANY' means any entity forming part of the Group.
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'INTELLECTUAL PROPERTY RIGHTS' means all intellectual property and
proprietary rights (whether registered or unregistered) including:
(a) business names;
(b) trade or service marks (whether registered or unregistered);
(c) any right to have information kept confidential; and
(d) patents, patent applications, drawings, discoveries, inventions,
improvements, trade secrets, technical data, formulae, computer
programs, data bases, know-how, logos, registered and unregistered
designs, design rights, copyright and similar industrial or
intellectual property rights.
'INTERNATIONAL PROPERTY LEASES' has the same meaning as is given to
'Property Leases' in the Asset Purchase Agreement.
'LIABILITIES' means all liabilities, losses, damages, outgoings, costs and
expenses of whatever description.
'NESS CONTRACT' means a contract to be entered into between the Australian
Company and Ness Security Products Pty Limited granting to the Australian
Company and its nominees, the exclusive right to sell the SecurityGuard
product throughout the world (except the United States of America) and the
non-exclusive right to sell the SecurityGuard product in the United States
of America.
'NZ ASSET SALE AGREEMENT' means the agreement entered into in respect of
the sale of the assets and other items of the FAI Home Security (NZ) Trust
to FAI Home Security (ENZED) Limited dated on or about the date of this
agreement.
'NZ COMPANY' means FAI Home Security (ENZED) Limited, full details of which
are set out in part 2 of SCHEDULE 1.
'NZ COMPLETION' means the completion of all transactions contemplated by
the following agreements:
(a) the NZ Asset Sale Agreement;
(b) the NZ Share Sale Agreement.
'NZ DEBT' has the meaning given in the NZ Asset Sale Agreement.
'NZ SHARE SALE AGREEMENT' means the agreement entered into in respect of the
sale of the NZ Shares by FAI Home Security (NZ) Trust to the Vendor dated on
or about the date of this agreement.
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'NZ SHARES' means all of the issued shares in the capital of the NZ
Company as at the Completion Date.
'NZ TRUST' means the trust known as the FAI Home Security (NZ) Trust, as
established by a deed of trust dated 30 June 1995.
'PARTIES' means the parties to this agreement.
'PLANT AND EQUIPMENT' means all computer equipment, scanners, printers,
plant, equipment, motor vehicles, machinery, furniture, fixtures and
fittings used by any Group Company, including without limitation, the
plant and equipment described in SCHEDULE 3.
'PROPERTY LEASES' means the property leases referred to in SCHEDULE 5.
'RECORDS' means all original and copy records, documents, books, files,
reports, accounts, plans, correspondence, letters and papers of every
description and other material belonging or relating to or used by any
Group Company, including certificates of incorporation, minute books,
statutory books and registers, books of account, taxation returns, title
deeds, customer lists, price lists, computer programs and software, trading
and financial records.
'RELATED BODY CORPORATE' has the meaning given to that term by sections 9
and 50 of the Corporations Law.
'SEC' means the Securities Exchange Commission.
'SECOND ACCOUNTS DATE' means 31 December 1996.
'SECURITYGUARD' means the home security alarm devices which at the date of
this Agreement are manufactured by Ness Security Products Pty Limited and
known as 'SecurityGuard' and SecurityGuard II'.
'SELL' includes procure the sale of.
'SHARES' means all of the NZ Shares and the Australian Shares.
'TAX', 'TAXES' or 'TAXATION' means all forms of taxes, duties (including
without limitation, state stamp duties), imposts, charges, withholdings,
rates, levies or other governmental impositions of whatever nature whenever
and by whatever authority imposed, assessed or charged together with all
costs, charges, interest, penalties, fines, expenses and other additional
statutory charges incidental or related to the imposition.
'UNDERWRITING AGREEMENT' means an agreement in the form set out in SCHEDULE
9 pursuant to which the Underwriter underwrites the Float.
'UNDERWRITER' means National Securities Corporation, Inc.
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'Warranties' means each of the covenants, representations and warranties
referred to in clause 7 and set out in Schedule 6 and Schedule 7.
1.2 In this agreement unless the contrary intention appears:
(a) the singular includes the plural and vice versa and words importing a
gender include other genders;
(b) reference to any legislation or any provision of any legislation
includes any amendment, modification, consolidation or re-enactment of
the legislation or any legislative provision substituted for, and all
legislation and statutory instruments of, and regulations issued
under, the legislation;
(c) other grammatical forms of defined words and expressions have
corresponding meanings;
(d) a reference to a clause, paragraph, schedule or annexure is a
reference to a clause or paragraph of, or schedule or annexure to,
this agreement and a reference to this agreement includes its
schedules and annexures;
(e) words importing persons include firms, bodies corporate,
unincorporated associations or authorities;
(f) a reference to a person includes a reference to the person's
executors, administrators, successors, substitutes and assigns;
(g) an agreement, representation, warranty or indemnity given or
undertaken by 2 or more persons binds them and is given jointly and
severally;
(h) headings are for ease of reference only and do not affect the
construction of this agreement;
(i) a reference to an amount of money is a reference to the amount in the
lawful currency of the Commonwealth of Australia;
(j) a reference to writing includes typewriting, printing, lithography,
photography and any other mode of representing or reproducing words,
figures or symbols in a permanent and visible form;
(k) a document expressed to be an annexure means a document a copy of
which has been initialled for the purposes of identification by or on
behalf of the parties.
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2. SALE AND PURCHASE
2.1 Subject to the terms and conditions of this agreement, the Vendor as
beneficial owner agrees to sell the Shares to the Purchaser and the
Purchaser agrees to purchase the Shares from the Vendor for the
Consideration.
2.2 The Shares must be transferred at Completion free from all liens, mortgages
charges and encumbrances whatsoever and together with all rights, including
dividend rights, attached or accruing to them after the Completion Date.
2.3 FAI guarantees the obligations of the Vendor under this agreement including
without limitation clause 2.1 but not including the obligations in relation
to the Assets or the Asset Warranties.
2.4 Subject to the terms and conditions of this agreement, the Vendor agrees to
assign the benefit of the NZ Debt to the Purchaser on Completion.
2.5 Subject to the terms and conditions of this agreement, the Vendor agrees
to assign the Assets to the Purchaser on Completion.
3. CONDITIONS PRECEDENT AND SUBSEQUENT
3.1 Completion of the sale of the Shares is conditional upon the satisfaction
of each of the following conditions precedent:
(a) NZ Completion has occurred;
(b) the Ness Contract has been entered into by the Australian Company; and
(c) the Purchaser has obtained approval on terms satisfactory to it to
Completion of the sale to the Purchaser of the NZ Shares from the
Overseas Investment Commission of New Zealand pursuant to the Overseas
Investment Regulations 1985.
3.2 If the Conditions are not satisfied on or before 30 June 1997 or a later
date agreed by the parties in writing then either the Purchaser or the
Vendor may at any time before Completion terminate this agreement by giving
notice in writing to the other.
3.3 On service of a notice under clause 3.2 this agreement has no further
effect and all parties are released from their obligations to further
perform this agreement.
3.4 The Purchaser or the Vendor may terminate this agreement by giving notice
to the other if:
(a) the Underwriting Agreement is terminated before completion of the
Underwriting Agreement; or
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(b) either or both of the following conditions subsequent are not
fulfilled within 24 hours after Completion:
(i) the Float has gone effective;
(ii) the Underwriting Agreement has been executed.
3.5 If this agreement terminates in accordance with clause 3.4, the rights and
obligations of the Parties under this agreement, except for this clause
3.5, will terminate and,unless the Vendor waives its rights under this
clause 3.5, the Parties must take all necessary steps to:
(a) vest title and possession of the Shares in the Vendor;
(b) divest the Vendor of the shares in the Purchaser referred to in
clause 4; and
(c) otherwise restore the rights and obligations of the Parties to those
rights and obligations that they would have had if this agreement had
not been entered into without loss or gain to any of the Parties,
including without limitation taking all steps necessary to obtain a
refund of any stamp duty paid in accordance with section 41(7) of the
Stamp Duties Xxx 0000.
4. CONSIDERATION
4.1 In consideration for the sale of the Shares and the Assets, the Purchaser
agrees to issue and allot to the Vendor on Completion 8,999,999 ordinary
shares in the capital of the Purchaser and to pay the Vendor within 14 days
after the Completion Date an amount in Australian currency equal to the sum
of A$339,973 and the book value of the Assets (denominated in Australian
Currency) at the Completion Date.
4.2 In consideration for the assignment of the benefit of the NZ Debt, the
Purchaser agrees to pay to the Vendor within 14 days after the Completion
Date an amount equal to the value of the NZ Debt, as set out in an Audit
Certificate to be provided by Xxxxxx Xxxxxxxx at Completion.
5. POSITION PENDING COMPLETION
5.1 Subject to clause 5.2, Pending Completion the Vendor must procure that the
Business is carried on in all respects in the ordinary and usual course and
in the same manner as prior to the date of this agreement including,
without limitation, maintaining all insurance policies current at the time
of this agreement and, in particular, procure that no Group Company, except
with the prior written consent of the Purchaser:
(a) transfers or otherwise disposes or agrees to transfer or dispose of
the whole or any part of the Business;
(b) makes a material change in the nature of, or ceases carrying on, the
Business;
(c) sells or otherwise disposes of any material asset of the Group; or
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(d) enters into any material, unusual or abnormal contract or commitment.
5.2 The Purchaser acknowledges that:
(a) the Purchaser is not entitled to the retained profits of the
Australian Company up to and including the Completion Date and that
there will be a dividend declared and paid out prior to Completion. If
the Australian Company has insufficient cash to pay the dividend, the
Purchaser agrees to procure payment of the amount outstanding at the
earliest opportunity but within six months of the Completion Date;
(b) the NZ Company has not traded and will not trade prior to the
Completion Date;
(c) notwithstanding paragraphs 5.1(b), (c) and (d), NZ Completion must
occur prior to Completion;
(d) any loans outstanding to the Vendor or its Related Bodies Corporate
from either of the Companies or to either of the Companies from the
Vendor or its Related Bodies Corporate will be repaid with 30 days
after Completion.
6. COMPLETION
6.1 Completion will occur immediately prior to the verification by the SEC to
the Underwriter and the Purchaser that the Float become effective.
6.2 At Completion the Vendor must:
(a) deliver to the Purchaser duly executed and completed transfers in
favour of the Purchaser, or as it directs in writing, of the Shares in
registrable form (except for the impression of stamp duty) together
with the relevant share certificates;
(b) deliver to the Purchaser any power of attorney or other authority
under which the transfers of the Shares are executed;
(c) cause a meeting of the board of directors of each Company to be held
and procure the board of directors of each Company to resolve that the
transfers of the Shares (subject to the payment of stamp duty on the
transfers) be approved and registered;
(d) cause the persons named in part 1 of Schedule 2 (or such other persons
as the Purchaser notifies to the Vendor prior to Completion) to be
validly appointed respectively as directors and the secretary of the
Australian Company and immediately on such appointment, cause each of
the persons named in part 2 of Schedule 2 against whose name it is
indicated that the person is to resign, to:
(i) resign from office as director or secretary of the Australian
Company; and
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(ii) deliver to the Purchaser a letter executed under seal (in the
form required by the Purchaser) acknowledging that he or she has
no claim against any Group Company for breach of contract, loss
of office, redundancy, unfair dismissal, compensation, loans or
otherwise except payments properly payable to him or her as an
employee for accrued and unpaid salary, holiday pay and long
service leave up to the Completion Date;
(e) deliver to the Purchaser all Records complete and up-to-date and
complying with all statutory requirements;
(f) deliver to the Purchaser the common seal of each Company; and
(g) deliver to the Purchaser any ASC Forms 312 and any analogous forms
under NZ legislation necessary to convey to the Purchaser clear title
to the Shares;
(h) stamped original counterparts of the International Property Leases
and, to the extent available to the Vendor, of the Business Contracts
and Equipment Leases;
(i) any documents required to transfer the Statutory Licences to the
Purchaser or its nominees; and
(j) do all other things necessary or desirable to place the Purchaser in
effective control of each of the Companies and the Business.
6.3 At Completion the Purchaser must allot to the Vendor 8,999,999 ordinary
shares in the capital of the Purchaser.
6.4 Immediately after Completion:
(a) the Vendor will enter into the Underwriting Agreement; and
(b) the Vendor will sell 5,500,000 ordinary shares in the Purchaser to the
Underwriter in accordance with the terms of the Underwriting
Agreement.
6.5 After Completion and until the Shares are registered in the name of the
Purchaser, the Vendor must convene and attend general meetings of the
Company, vote at those meetings and take all other action in the capacity
of the registered holder of the Shares as the Purchaser may lawfully
require from time to time by notice in writing to the Vendor.
6.6 For the purposes of clause 6.5 only, the Vendor appoints the Purchaser as
its attorney to convene and attend general meetings of the Company, vote at
those meetings and take all other action in the capacity of the registered
holder of the Shares.
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6.7 The Vendor assigns, and the Purchaser accepts the assignment of the benefit
of the NZ Debt with effect from the Completion Date.
7. WARRANTIES
7.1 The Vendor and FAI jointly and severally represent and warrant to the
Purchaser that each of the Company Warranties is true and accurate at the
date of this agreement and will be true and accurate on each day up to and
including the Completion Date.
7.2 The Vendor and Cervale jointly and severally represent and warrant to the
Purchaser that each of the Asset Warranties is true and accurate at the
date of this agreement and will be true and accurate on each day up to and
including the Completion Date.
7.3 Each of the Warranties is separate and independent and is not limited by
reference to any other Warranty or any other provision in this agreement.
7.4 Each of the Company Warranties:
(a) applies in relation to each Group Company and, except where expressly
otherwise provided, separately in relation to each Group Company as if
each reference in SCHEDULE 6 to the 'Company' is a reference to that
Group Company; and
(b) remains in full force and effect on and after the Completion Date
despite Completion.
7.5 Each of the Asset Warranties remains in full force and effect on and after
the Completion Date despite Completion.
7.6 Provided that all matters disclosed in SCHEDULE 8 have been disclosed
separately to the Purchaser at least three days prior to the date of
execution of this agreement, the Purchaser acknowledges that none of the
matters disclosed in SCHEDULE 8 or any other matter referred to or
contemplated by this agreement, including, without limitation, NZ
Completion, can give rise to a breach of Warranty. No other information
relating to any Group Company of which the Purchaser has knowledge, actual
or constructive, prejudices any Claim of the Purchaser under the Warranties
nor operates to reduce any amount recoverable.
7.7 Subject to CLAUSE 7.8, if there is a breach of or inaccuracy in any of the
Warranties on or before Completion the Purchaser may immediately terminate
this agreement by notice in writing to the Vendor but is not entitled to
any other remedy.
7.8 The Vendor must immediately notify the Purchaser in writing of any facts or
circumstances of which it becomes aware which constitute or may constitute
a breach of any Warranty ('NOTIFIED BREACH'). The Purchaser must notify the
Vendor within 7 days of receipt of such notice whether or not it has
elected to terminate this agreement as a result of a Notified Breach in
accordance with CLAUSE 7.7. The Purchaser acknowledges that if it
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makes no election within seven days of receipt of such notice, then the
Purchaser waives any rights it may have to terminate this Agreement in
respect of the Notified Breach.
7.9 The rights and remedies of the Purchaser in respect of any breach of the
Warranties or of the terms of this agreement are not affected by
Completion.
7.10 The Vendor and FAI jointly and severally indemnify the Purchaser from all
Claims:
(a) made by any third party in relation to a matter which constitutes, or
in circumstances that constitute, a breach of any of the Company
Warranties or any other covenant or representation in this agreement;
or
(b) which the Purchaser or any Company suffers or incurs by reason of any
of the Company Warranties or any other covenant or representation made
in this agreement being untrue or inaccurate in any respect or by
reason of any failure by the Vendor or FAI to fulfil its obligations
under this agreement.
7.11 The Vendor and Cervale jointly and severally indemnify the Purchaser from
all Claims:
(a) made by any third party in relation to a matter which constitutes, or
in circumstances that constitute, a breach of any of the Asset
Warranties or any other covenant or representation in this agreement;
or
(b) which the Purchaser or any Company suffers or incurs by reason of any
of the Asset Warranties or any other covenant or representation made
in this agreement being untrue or inaccurate in any respect or by
reason of any failure by the Vendor or Cervale to fulfil its
obligations under this agreement.
7.12 Notwithstanding any other provision of this agreement:
(a) the maximum aggregate liability of the Vendor under the Company
Warranties shall be limited to an amount equal to A$2,500,000 and
under the Asset Warranties shall be limited to an amount equal to
A$500,000;
(b) the Vendor shall not have any liability in respect of any Claim under
the Warranties unless reasonable particulars of the Claim are given to
the Vendor before the first anniversary of Completion;
(c) the liability of the Vendor in respect of any Claim under the
Warranties shall be reduced to the extent that the Claim has arisen as
a result of any act or omission after Completion by the Purchaser;
(d) the Vendor shall not be liable in respect of any Claim under the
Warranties unless the aggregate of all Claims made against the Vendor
under the Warranties exceeds the sum of A$100,000, but thereafter the
Vendor will be liable for the whole amount payable in respect of all
claims, and not just the excess over A$100,000.
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7.13 The Purchaser acknowledges and agrees that, except for the Warranties, the
Vendor has not given, nor has the Purchaser relied upon, any
representation, warranty, statement or document or other conduct by the
Vendor or its representatives in connection with the Companies or the
Business.
7.14 The Purchaser must (at the cost of the Vendor) take such action as the
Vendor may request in relation to a Notified Breach, including without
limitation:
(a) prosecute any action or proceedings, including the making of any
counter-claim or cross-claim against any person;
(b) conduct any negotiations and participate in any investigation in
respect of such notified breach;
(c) not accept, pay or compromise such notified breach without the
Vendor's prior written consent; and
(d) co-operate and procure its solicitors, accountants and other
representatives to co-operate with the Vendor and its counsel,
accountants or other representatives in respect of such notified
breach.
8. BUSINESS CONTRACTS AND EQUIPMENT LEASES
8.1 Subject to Completion and the Vendor at its cost obtaining all necessary
consents, the Vendor assigns and the Purchaser accepts an assignment of the
benefit of the Business Contracts and the Equipment Leases with effect from
the Completion Date.
8.2 HSI must assume, perform and observe the covenants and obligations of the
Vendor under the Business Contracts and Equipment Leases after Completion
and indemnifies the Vendor against any Liabilities arising as a result of
any breach or non-performance or non-observance of any terms and conditions
of any Business Contract or of any Equipment Lease after the Completion
Date.
8.3 The Vendors indemnify the Purchaser against all Liabilities incurred by the
Purchaser as a result of any breach or default under any of the Business
Contracts or Equipment Leases occurring on or prior to the Completion Date.
8.4 The Vendor must use its reasonable endeavours to obtain all required
transfers to the Purchaser of all Statutory Licences, International
Property Leases, Equipment Leases and Business Contracts but if, despite
their reasonable endeavours, the Vendor is unable to procure any such
transfers the Vendor must:
(a) hold the benefit of the relevant Statutory Licence, International
Property Lease, Equipment Lease or Business Contract on trust for the
benefit of the Purchaser; and
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(b) fully co-operate with the Purchaser in any reasonable arrangements
designed to provide for the Purchaser the benefit of the relevant
Statutory Licence, International Property Lease, Equipment Lease or
Business Contract.
8.5 On Completion, the Purchaser must assume the obligations of the Vendor
under CLAUSES 9 AND 10 of the Asset Purchase Agreement as if references to
'HSI' are references to 'the Purchaser' and references to the 'Vendor' or
'Vendors' are references to the Vendor (as defined in this agreement).
9. COSTS
The Purchaser must pay all costs in relation to the preparation and
execution of this agreement, including, without limitation, all stamp duty
on this agreement and any other instrument or other document executed to
give effect to any provisions of this agreement.
10. DURATION OF PROVISIONS
The covenants, conditions, provisions and Warranties contained in this
agreement do not merge or terminate at Completion and to the extent that
they have not been fulfilled and satisfied remain in full force and effect.
11. ASSIGNMENT
None of the rights of the parties under this agreement may be assigned or
transferred.
12. ENTIRE AGREEMENT
This agreement contains the entire understanding of the parties as to its
subject matter and any and all previous understandings or agreements on
that subject matter cease to have any effect from the date of this
agreement.
13. NO WAIVER
13.1 The failure of a party to exercise or delay in exercising a right, power or
remedy under this agreement does not prevent its exercise.
13.2 A provision of or right under this agreement may not be waived except by a
waiver in writing signed by the party granting the waiver, and will be
effective only to the extent specifically set out in that waiver.
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14. GOVERNING LAW AND JURISDICTION
14.1 This agreement is governed by the law of New South Wales.
14.2 Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of New South Wales.
15. FURTHER ACTION
Each party must, both before and after the Completion Date, do everything
reasonably necessary or desirable to give full effect to this agreement.
16. COUNTERPARTS
This agreement may be executed in any number of counterparts and all those
counterparts taken together are regarded as one instrument.
17. NOTICES
17.1 A notice required or authorised to be given or served on a party under this
agreement must be in writing and may be given or served by facsimile, post
or hand to that party at its facsimile number or address appearing in this
clause or such other facsimile number or address as the party may have
notified the other party or parties in writing:
Vendor
Attention: Xx Xxxxx Xxxxxxxx
Address: Xxxxx 0, 00 Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx, XXX, 0000
Facsimile No: 612 9936 2425
Purchaser
Attention: Xx Xxxxx Xxxxxxxxxx
Address: St Moritz
00 Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, XX 00000
FAI
Attention: Xx Xxxxx XxxXxxxxxx
Address: 000 Xxxxxxxxx Xxxxxx, Xxxxxx, XXX, 0000
Facsimile No: 9373 0012
17.2 A notice is deemed to have been given or served on the party to whom it was
sent:
(a) in the case of hand delivery, on delivery;
15
(b) in the case of pre-paid post, four days after the date of despatch;
(c) in the case of facsimile transmission, at the time of despatch if,
following transmission, the sender receives a transmission
confirmation report or, if the sender's facsimile machine is not
equipped to issue a transmission confirmation report, the recipient
confirms in writing that the notice has been received.
17.3 A notice given or served under this agreement is sufficient if:
(a) in the case of a company, it is signed by a director, officer or
secretary of that company; or
(b) in the case of an individual, it is signed by that party.
17.4 The provisions of this clause are in addition to any other mode of service
permitted by law.
17.5 In this clause 'NOTICE' includes a demand, request, consent, approval,
offer and any other instrument or communication made, required or
authorised to be given under this agreement.
16
SCHEDULE 1
DETAILS OF THE COMPANIES
PART 1 - AUSTRALIAN COMPANY
NAME: FAI Home Security Pty Limited
ACN: 000 000 000
REGISTERED OFFICE: 00xx Xxxxx, XXX Xxxxxxxxx Xxxxxxxx, 000
Xxxxxxxxx Xxxxxx, Xxxxxx
DATE OF INCORPORATION: 13 August 1990
AUTHORISED SHARE CAPITAL: $1,000,000 divided into 1,000,000 shares of
$1.00 each of which 2 fully paid ordinary
shares are on issue.
ISSUED CAPITAL: 2 fully paid ordinary shares of $1.00 each
PART 2 - NZ COMPANY
NAME: FAI Home Security (ENZED) Limited
COMPANY NO: XX 000000
REGISTERED OFFICE: Xxxxx 00, Xxxxxxx & Xxxxxxx Xxxxx, 00-00
Xxxxxx Xxxxxx, Xxxxxxxx
DATE OF INCORPORATION: [23 April 1997]
ISSUED CAPITAL AS AT COMPLETION: 1,000,000 ordinary shares
17
SCHEDULE 2
PART 1
DIRECTORS AND SECRETARIES TO BE APPOINTED - AUSTRALIAN COMPANY
DIRECTORS Xxxxxxx Xxxxx Xxxxxxxx
PART 2
CURRENT DIRECTORS AND SECRETARIES - AUSTRALIAN COMPANY
DIRECTORS Current: Xxxxxxx Xxxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx Xxxxxx
To Resign:
SECRETARY Current: Xxxxxx Xxxxxxxxx Baulderstone
To Resign
18
SCHEDULE 3
PLANT AND EQUIPMENT
(Clause 1.1)
PART 1 - AUSTRALIAN COMPANY
19
PART 2 - NZ COMPANY
SHARE PURCHASE AGREEMENT - SCHEDULE 3 PART 2 - NZ COMPANY
FAI Home Security (NZ) Trust Depreciation Schedule Y/E 30/6/96
Fixed Assets retained at warehouse after sales to Distributors Sep 95 and move from ASB Bldg. Nov 95.
Date Open Cost of Sale Sale Profit/Loss Deprec
---- ---- ------- ---- ---- ----------- ------
Details Cost Purchased Wdv 1/7/95 additions Date Proceeds on disposal Rate red. Val
------- ------ --------- ---------- --------- ---- -------- ----------- -------------
Furniture $ $ $ $
---------
Hydestar shelving 890 01/07/95 890 9.50%
Canteen chairs 6, desk/chair 1,451 01/07/95 1,451 15.00%
Bookcase 253 01/07/95 253 9.50%
Appleton Sign 704 01/09/95 704 9.50%
Hydestar shelving 1,233 01/03/96 1,233 9.50%
Computer Software
Attache Modules 1,531 01/07/95 1,531 40.00%
Purchase Order Module 2,973 01/07/95 2,973 40.00%
Wordperfect 663 01/07/95 663 40.00%
Datagroup 991 01/07/95 991 40.00%
Windows for Workgroups 175 01/09/95 175 40.00%
Office Equipment
----------------
DX2-66 and Lotus 4,037 01/07/95 4,037 40.00%
Nokia Road Fitting 332 01/07/95 332 50.00%
Fax 516 01/07/95 516 33.00%
PCXB Computer, software 10,176 01/07/95 10,178 40.00%
Modem 0 01/07/95 1,271 30 Nov 95 1,271 40.00%
Ansutek weighing scale 340 01/07/95 340 33.00%
Photo-copier 2,100 01/07/95 2,100 33.00%
Shelving 699 31/08/96 699
Depreciation charge to March 97
29,064 0 30,335 1,271 0
Accum. Clos
------ ----
Details Months Deprec Deprec. Wdv 30/6/96
------- ------ ------ ------- -----------
Furniture $ $ $
---------
Hydestar shelving 12 85 805
Canteen chairs 6, desk/chair 12 218 1,233
Bookcase 12 24 229
Appleton Sign 10 56 648
Hydestar shelving 4 39 1,194
Computer Software
Attache Modules 12 612 919
Purchase Order Module 12 1,189 1,784
Wordperfect 12 265 398
Datagroup 12 396 595
Windows for Workgroups 12 70 105
Office Equipment
----------------
DX2-66 and Lotus 12 1,615 2,422
Nokia Road Fitting 00 000 000
Fax 12 170 346
PCXB Computer, software 12 4,070 6,106
Modem 0 0 0
Ansutek weighing scale 12 112 228
Photo-copier 12 693 1,407
Shelving
Depreciation charge to March 97 4,800 (4,800)
14,580 0 14,484
155180/1
20
SCHEDULE 4
INTELLECTUAL PROPERTY RIGHTS
(Company Warranty 12)
1. Copyright and Confidential Information in all databases, source codes,
software, methodologies, training material, promotional material, system
manuals, compilations, artwork and advertising materials used in the
Business, including without limitation the following:
3. Business Names
FAI Home Security
21
SCHEDULE 5
PROPERTY LEASES
PART 1 - AUSTRALIAN COMPANY
PROPERTY: Xxxxx 0, 00 Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx, XXX, 0000
LEASE DATED:
LESSOR: FAI General Insurance Company Limited
RENT:
TERM: currently being negotiated
PROPERTY: Xxxxx 0, 00 Xxxxxxx Xxxxxxx, Xxxxx Xxxxxx, XXX, 0000
LEASE DATED:
LESSOR: FAI General Insurance Company Limited
RENT:
TERM: currently being negotiated
PART 2 - NZ COMPANY
PROPERTY: Xxxx 0, 00 Xxxxxx Xxxxxx, Xxxxxxx Xxxx, Xxxxxxxx
LEASE DATED: 10 February 1995
LESSOR: GA & XX Xxx and AD & XX Xxxxx, Xxxxxxx Xxxx, 0XX Xxxxxx,
Xxx Xxxxxxx
RENT: $1,312.00 [per month]
TERM: 2 years plus two further options to renew each of two years.
22
SCHEDULE 6
COMPANY WARRANTIES
Note: Pursuant to clause 7.3, each of the Warranties applies in relation to each
Group Company and, except where expressly otherwise provided, separately in
relation to each Group Company as if each reference in this SCHEDULE 6 to the
'Company' is a reference to that Group Company;
WARRANTY 1
(Vendor authority to sell)
1.1 The Vendor is the registered and beneficial owner of the Australian Shares
and will at Completion be the registered and beneficial owner of the NZ
Shares and there will be at Completion no mortgages, liens, claims, charges
or other encumbrances, or interests of any person, over or affecting the
Shares.
1.2 The Vendor has the power to enter into and perform this agreement and the
agreement constitutes a legal, valid and binding obligation on the Vendor
enforceable in accordance with its terms.
WARRANTY 2
(The Company)
2.1 The Australian Company and the NZ Company:
(a) are accurately described in SCHEDULE 1;
(b) have full corporate power to own their properties, assets and business
and to carry on their businesses as now conducted; and
(c) have or will at Completion have good and marketable title to all of
the assets included in the Accounts.
2.2 No meeting has been convened, resolution proposed, petition presented or
order made for the winding up of the Company and no receiver,
administrator, receiver and manager, provisional liquidator, liquidator or
other officer of the court has been appointed or threatened to be appointed
in relation to the Company or any part of its undertaking or assets.
WARRANTY 3
(Share capital)
3.1 The Australian Shares comprise the whole of the issued share capital of the
Australian Company, are fully paid and were properly issued.
3.2 At Completion, the NZ Shares will comprise the whole of the issued share
capital of the NZ Company, and will be fully paid and properly issued.
23
3.3 There are no options or other entitlements over the Shares or any unissued
shares of the Company or securities convertible into shares of the Company.
WARRANTY 4
(Financial statements)
4. The Accounts:
(a) disclose a true and fair view of the affairs, financial position and
assets and liabilities of the Group as at the First Accounts Date and
the Second Accounts Date and of the income, expenses and results of
operations of the Group for the financial year ended on the First
Accounts Date and the Second Accounts Date;
(b) were prepared in accordance with the Accounting Standards, the
requirements of the Corporations Law, analogous New Zealand
requirements and standards, and all other applicable laws and on a
basis that is materially consistent with the audited accounts of the
Group for the financial year preceding the financial year ended on the
First Accounts Date.
WARRANTY 5
(Liabilities including, without limitation, Tax liabilities)
5.1 Otherwise than as set out in the Articles, the Company has not given any
guarantees, indemnities or letters of comfort in respect of the
obligations of any person.
5.2 The Company has not granted or created any mortgage, charge, debenture,
lien, finance lease or other encumbrance.
5.3 The Company does not have any material commitments and is not aware of any
unusual or actual or Contingent Liabilities except as disclosed in the
Accounts.
WARRANTY 6
(No changes since accounts date)
6. Since the Second Accounts Date:
(a) there has been no material adverse change in the assets, liabilities,
turnover, earnings, financial condition, trading position or prospects
of the Company;
(b) the Australian Company and the NZ Trust have carried on the Business
in the ordinary and usual course and have not entered into any
contracts or arrangements other than in the ordinary course of
carrying on the Business;
(c) the Company has not incurred or undertaken any actual or contingent
liabilities or obligations, including Taxation, that have not been
paid or satisfied except in the ordinary course of business. For the
purposes of this warranty and warranty 8.2,
24
the Vendor and FAI acknowledge that any corporate restructuring
occurring within or involving the Group prior to the sale of Shares
contemplated by this agreement does not form part of the ordinary
course of business of the Company and therefore any liabilities,
including without limitation, in respect of Taxation arising in
connection with any such corporate restructuring shall be to the
account of the Vendor and/or FAI, and not to the account of the
Companies;
(d) the Company has not acquired or disposed of or dealt with any assets
nor has it entered into any agreement or option to acquire or dispose
of any assets other than in the normal course of business for full
market value;
(e) except in the ordinary course of business, the Company has not
borrowed money;
(f) the Company has not paid or agreed to pay any retiring allowance,
superannuation or benefit to any of its officers or employees except
where the law requires it or in accordance with a superannuation or
retirement scheme in force at the Accounts Date;
(g) the Company has not entered into any contract of service with any of
its officers or employees or increased, or agreed to increase, the
rate of compensation payable to any of its officers, employees or
agents [disclosure for Xxxx Xxxxxx?];
(h) the rights attaching to the Shares have not altered and no alteration
has been made to the capital structure of the Company;
(i) the Company has not implemented any new accounting or valuation method
for its business, assets, property or rights;
(j) no major supplier of the Company has:
(i) materially reduced the level of its supplies to the Company;
(ii) indicated an intention to cease or materially reduce the volume
of its trading with the Company after Completion; or
(iii) materially altered the terms on which it trades with the
Company;
(k) no major customer of the Company has:
(i) materially reduced the level of its custom from the Company;
(ii) indicated an intention to cease or materially reduce the volume
of its trading with the Company after Completion;
(iii) materially altered the terms on which it trades with the
Company;
25
(l) no loans have been made nor bonuses paid by the Company to employees,
nor have any advances or loan money been accepted from any employees;
[disclosure re Xxxx Xxxxxx?]
(m) no resolutions have been passed by the members or directors of the
company except in the ordinary course of business of the Company and
those necessary to give effect to this agreement.
WARRANTY 7
(Records)
7. The Records:
(a) are in the possession of the Australian Company and the NZ Company;
(b) have been fully, properly and accurately kept and maintained and are up
to date;
(c) accurately record the details of all of the transactions, finances,
assets and liabilities of the Company; and
(d) as far as necessary, have been prepared in accordance with the
requirements of the Corporations Law and the Accounting Standards and
where applicable, analogous New Zealand requirements and standards.
WARRANTY 8
(Taxation)
8.1 The Company has paid, or the Accounts fully provide for, all Taxes which
the Company is or may become liable to pay for the period up to and
including the Second Accounts Date.
8.2 The only liabilities for Tax of the Company arising in respect of the
period after the Second Accounts Date and ending on the Completion Date
will be liabilities arising out of the ordinary course of carrying on the
Business.
8.3 All Tax information required by law (including but not limited to records,
returns, elections and notices) to be lodged or kept by the Company has
been lodged with the appropriate authorities or kept as required.
8.4 The Company is not involved in any audit of any of its tax returns or any
dispute with any Taxation authority responsible for the assessment and
collection of Tax and neither FAI nor the Vendor is aware of any
circumstances which may give rise to such an audit or dispute.
8.5 The Company has maintained sufficient and accurate records and all other
information required to support all Tax information which has been or may
be lodged with any Taxation authority
26
8.6 All documents and transactions to which the Company is a party that are
required to be stamped, or that the Company has an interest in enforcing,
have been duly stamped.
8.7 The Company has lodged or supplied all information regarding Taxes as and
when requested by a Taxation authority.
WARRANTY 9
(Ownership of assets)
9. Except for those assets the subject of the equipment leases listed in
SCHEDULE 3, all of the property and assets included in the Accounts or
which the Company uses in the conduct of the Business are legally and
beneficially owned by the Company.[need to disclose Ness Romalpa clause]
WARRANTY 10
(Properties and property leases)
10.1 The Property described in SCHEDULE 5 comprises all the land and buildings
used by the Company. The Company does not own any real property.
10.2 The Company beneficially owns the benefit of a valid and enforceable
leasehold interest under the Property Lease in accordance with its terms.
The Property Lease has not been amended or modified and is not liable to
forfeiture or termination. [disclose status of lease]
10.3 The Company has duly and punctually performed and is not in breach of any
covenants or conditions of any lease, licence or other occupational
arrangement granted to it and there are no circumstances which exist which
may cause any such lease or other occupational arrangement to be
terminated.
WARRANTY 11
(Plant, machinery and equipment)
11.1 Other than the equipment or vehicles the subject of the equipment leases
described in SCHEDULE 3 ('EQUIPMENT LEASES'), the Company owns all Plant
and Equipment.
11.2 Each item of Plant and Equipment is in a good and safe state of repair and
condition and satisfactory working order for its age and has been regularly
and properly maintained;
11.3 The Company has duly and punctually observed and performed the terms and
conditions of each Equipment Lease. No Equipment Lease is liable to
forfeiture or termination.
11.4 Except for the Equipment Leases the Company has not entered into any hire
purchase, leasing or credit sale agreement.
WARRANTY 12
(Intellectual property rights)
27
12.1 SCHEDULE 4 contains a complete and accurate list of all Intellectual
Property Rights used by the Group.
12.2 Except under the licences disclosed in SCHEDULE 7, the Company owns all the
Intellectual Property Rights used by it including the Intellectual Property
Rights listed in SCHEDULE 4 ('OWNED INTELLECTUAL PROPERTY RIGHTS').
12.3 Except for licences of its data bases and owned software granted by the
Company in the ordinary course of business, the Company has not dealt with
or granted to any person any rights in respect of the Owned Intellectual
Property Rights by way of licence or in any other way. [Need to make
disclosure].
12.4 Neither FAI nor the Vendor is aware of any infringements by the Company of
the Intellectual Property Rights of any other person, nor are they aware of
any infringements of the Owned Intellectual Property Rights.
12.5 Neither FAI nor the Vendor is aware of any allegation or basis on which an
allegation could be made that the Company has infringed the Intellectual
Property Rights of any person or on which the validity or effectiveness of
the Owned Intellectual Property Rights may be challenged.
12.6 Other than in the ordinary course of business, there are no outstanding
royalties, licence fees or other similar fees payable by the Company in
connection with the use of any Intellectual Property Rights.
12.7 Each of the licences under which the Company uses the Intellectual Property
Rights is valid, binding and enforceable. The Company has complied at all
times with the terms of each licence and no licensor has any right to
terminate any licence.
WARRANTY 13
(Compliance with applicable laws)
13.1 The Business is and has been conducted in accordance with all applicable
laws, does not contravene any laws and no allegation of any contravention
of any applicable laws is known to the Company, FAI or the Vendor.
13.2 The Company holds all statutory licences, consents, registrations,
approvals, permits and authorisations necessary for the carrying on of the
Business. So far as the Vendor and FAI are aware, there is no fact or
matter which might prejudice the continuance or renewal, or result in the
revocation or variation in any material respect, of any such licences,
consents, registrations, approvals, permits and other authorisations.
WARRANTY 14
(Litigation)
14.1 Neither the Company nor any person for whose acts or defaults the Company
may be vicariously liable is involved in, or threatened with, any claim,
litigation, prosecution or arbitration in any court, tribunal or otherwise
with an individual value in excess of
28
$100,000 which have been brought other than in the ordinary course of
business and there are no facts or circumstances of which either the Vendor
or FAI is aware which are likely to give rise to any such litigation or
arbitration [disclose PI claims?].
14.2 There are no unsatisfied judgments, awards, claims or demands against the
Company, with an individual value in excess of $100,000 which have been
brought other than in the ordinary course of business.
14.3 To the knowledge of the Vendor and FAI, the Company is not being
investigated for any breach or alleged breach of the law.
WARRANTY 15
(Superannuation and employee benefits)
15.1 Except for its commitments to contribute to the FAI Staff Productivity
Superannuation ('FUND'), the Company has no obligation, liability or duty
to make any payment to any person in respect of any superannuation,
retirement benefits, pensions, annuities, life assurance schemes or
arrangements for the benefit of any present or former directors or
employees of the Company or their respective dependants.
15.2 The Fund is established under a trust deed dated 17 November 1988, as
amended from time to time ('TRUST DEED').
15.3 The Company has complied with all of its obligations under the Trust Deed
including making all contributions to the Fund required to be made under
the Trust Deed. There is no outstanding liability of the Company and the
Fund is fully funded to meet all potential claims for benefits by the
members of the Fund.
15.4 The assets of the Fund are sufficient, having regard to appropriate
actuarial valuation methods and assumptions, to provide prospective
benefits to the extent to which they will relate to periods of service or
membership prior to Completion.
15.5 Full and proper records and accounts of the Fund have been kept, are up-to-
date, and disclose a true and fair view of the affairs of the Fund.
15.6 Neither the Company nor the trustees of the Fund have received notice of
any claim or dispute in relation to the Fund.
15.7 The transfer of the Shares to the Purchaser will not cause an increase in
the obligations of the Company to make contributions to the Fund.
WARRANTY 16
(Employees)
16.1 Except as disclosed in SCHEDULE 7, all contracts of employment to which the
Company is a party can be terminated by the Company by notice of 30 days or
less.
29
16.2 The Company has complied in all material respects with all contractual,
statutory, legal and fiscal obligations of and in relation to its
employment of its employees, including without limitation all withholding
obligations, all codes of practice, collective agreements and awards.
16.3 The Company does not operate any bonus, profit share or employee incentive
plans or schemes for its employees. [To be checked. May need to make
disclosure.]
16.4 All employee entitlements have been provided for in the Accounts.
WARRANTY 17
(Conduct of business)
17.1 To the knowledge of the Vendor and FAI, no practice carried on by the
Company or contract, arrangement or understanding to which the Company is a
party:
(a) is or should be notified or authorised under the Trade Practices Xxx
0000 or has been the subject of an inquiry under either of that Act;
or
(b) infringes any other competition, anti-restrictive trade practice,
anti-trust or other consumer protection laws applicable to the Company
in Australia or overseas.
17.2 Neither FAI nor the Vendor is aware that any of the Company's officers,
agents or employees have paid or been paid any bribe or used any of the
Company's assets unlawfully to obtain any advantage for any person.
WARRANTY 18
(No Subsidiaries)
18. The Company:
(a) neither holds nor beneficially owns shares or other securities in the
capital of another company;
(b) has not agreed to buy any securities in any other Australian, NZ or
overseas company; or
(c) is not and has not agreed to become a member of any partnership,
unincorporated association, joint venture or consortium.
WARRANTY 19
(Effect of sale of shares)
19.1 To the knowledge of the Vendor and FAI the transfer of the Shares to the
Purchaser will not result in any supplier or customer of the Company
ceasing or being entitled to substantially reduce its level of business
with the Company.
19.2 The entry into and performance of this agreement does not and will not:
30
(a) result in the breach of any of the terms, conditions or provisions of
any agreement or arrangement to which the Company is a party;
(b) relieve any person from any obligation to the Company;
(c) result in the creation, imposition, crystallisation or enforcement of
any encumbrance on any of the assets of the Company;
(d) result in any indebtedness of the Company becoming due and payable;
(e) contravene the Articles or the Constitution.
WARRANTY 20
(Accuracy and completeness of disclosed information)
20.1 All information which is known to the Vendor and FAI relating to the
Shares, the Company, the Business or otherwise the subject matter of this
agreement and which is material to a purchaser of the Shares has been
disclosed in writing to the Purchaser.
20.2 Neither FAI nor the Vendor is aware of any fact or circumstance which might
reasonably be expected to effect in any material adverse way the financial
position, operations, profitability or prospects of the Company or the
Business.
WARRANTY 21
(Effect of entering into this agreement)
21. Neither the carrying out of the Float nor the entry into or performance of
this agreement or any other agreement or document contemplated by this
agreement will result or has resulted in:
(a) any breach of section 205(1) of the Corporations Law; or
(b) any breach of the Foreign Acquisitions and Takeovers Act (1975)
(Commonwealth).
31
SCHEDULE 7
ASSET WARRANTIES
(clause 7)
WARRANTY 1
(Vendor)
1.1 The execution, delivery and performance of this agreement by the Vendor
will constitute legally valid and binding obligations on the Vendor,
enforceable in accordance with its terms.
1.2 The sale of the Assets pursuant to this agreement does not result in a
breach of any obligation or constitute a default under or result in the
imposition of any Encumbrance under any agreement or undertaking, by which
the Vendor is bound.
1.3 Neither the Vendor nor any of its members has any interest directly or
indirectly in any company or business which is or is likely to be
competitive with the Business.
1.4 No meeting has been convened, resolution proposed, petition presented or
order made for the winding up of the Vendor and no receiver, receiver and
manager, provisional liquidator, liquidator or other officer of the Court
has been appointed in relation to the Assets or any of them and no
mortgagee has taken or attempted or indicated in any manner an intention to
take possession of any of the Assets.
WARRANTY 2
(Accounts and Records)
2.1 The Accounts:
(a) disclose a true and fair view of the affairs, financial position and
assets and liabilities of the Vendors as at the Accounts Date and of
the income, expenses and results of the operations of the Vendors for
the six month period (or the financial year in the case of FAI Canada)
ended on the Accounts Date; and
(b) were prepared in accordance with applicable accounting standards and
legal requirements on a basis that is materially consistent with the
audited accounts of the Vendors for the twelve month period preceding
the six month period (or the financial year ended in the case of FAI
Canada) ended on the Accounts Date.
2.2 Since the Accounts Date:
(a) the Business has been carried on in the ordinary and usual course and
no contracts or commitments differing from those ordinarily made in
the conduct of the Business have been entered into or incurred;
32
(b) there has been no material adverse change in the Assets, the financial
condition or the profitability of the Business.
2.3 The Records:
(a) have been fully, properly and accurately kept and completed; and
(b) do not contain material inaccuracies or discrepancies of any kind.
WARRANTY 3
(Title to Assets)
3.1 The Vendor is the absolute legal and beneficial owner of all the Assets and
at Completion all the Assets will vest in HSI free from all Encumbrances.
3.2 SCHEDULE 3 contains an accurate list of all of the Plant and Equipment
owned by the Business and used in the conduct of the Business.
WARRANTY 4
(Plant and Equipment)
4.1 The Plant and Equipment:
(a) is in a good and safe state of repair and condition;
(b) is in good working order;
(c) is capable and will be capable, over the period of time during which
it will be written down to a nil value in the accounts of the
Business, of doing the work for which it was designed or purchased;
(d) is used in and not surplus to the requirements of the Business.
4.2 The Assets are:
(a) all located at the Site;
(b) the only assets used by the Vendor in the Business; and
(c) the only assets required for the conduct of the Business.
WARRANTY 5
(Compliance with statutory requirements)
5.1 The Vendor holds all statutory licences, consents, approvals and
authorisations necessary for the carrying on of the Business and the use of
the Site and has complied with the terms of those licences, consents,
approvals and authorisations.
33
5.2 The present conduct of the Business and use of the Assets does not, to the
knowledge of the Vendor, breach or contravene any law, statute, ordinance,
rule, regulation, by-law, scheme or permit.
WARRANTY 6
(Property Lease)
6.1 With respect to the Property Lease:
(a) there are no subsisting breaches;
(b) the Vendor has observed the obligations and covenants of the lessee
and has not received a notice which has not been complied with;
(c) it is valid and subsisting;
(d) the Vendor has exclusive occupation and quiet enjoyment of the Site
and holds all necessary licenses, permits and approvals for the
conduct of the Business from the Site.
6.2 The use of the Site for the carrying on of the Business:
(a) does not, to the knowledge of the Vendor, breach any applicable law,
statute, ordinance, rule, regulation, by-law, planning scheme,
development consent, order, permit or determination of any
governmental authority;
(b) is permitted under the terms of the Property Lease; and
(c) is in conformity with all local government building, health, fire and
public utility laws and regulations.
6.3 No development, alterations or works have been carried out in relation to
the Site which would require any permission or consent under any statute or
regulation which has not been obtained and all conditions attaching to any
such permission or consent have been fully complied with.
WARRANTY 7
(Equipment Leases)
7.1 The agreements described in SCHEDULE 5 constitute all the plant and
equipment leases or hire purchase agreements used in the Business.
7.2 With respect to each Equipment Lease:
(a) there are no subsisting breaches and the Vendor has received no notice
of any breach of the Equipment Lease;
34
(b) it is valid and subsisting; and
(c) it has not been amended or modified.
WARRANTY 8
(Employees)
8.1 In respect of each Employee:
(a) the details of that Employee's salary, bonus and other benefits and
other material terms of employment listed in SCHEDULE 7 are true and
correct in all respects;
(b) the Vendor has complied in all respects with all obligations imposed
on it by statutes, orders, regulations, collective agreements and
awards;
(c) the Vendor has made all payments in respect of occupational
superannuation required under any statute or award;
(d) except as required by law, that Employee's employment with the
Business may be terminated by the employer by notice of 30 days or
less.
WARRANTY 10
(Superannuation)
9. Except for the Vendor's Fund:
(a) there are no superannuation, retirement or provident schemes or other
arrangements providing for any payment to Employees on their
retirement, resignation or death or on the occurrence of any permanent
or temporary disability in operation in relation to the Business;
(b) the Vendor does not contribute to any other schemes which will provide
the Employees or their respective dependants with pensions, annuities
or lump sum payments upon retirement or death or otherwise; and
(c) the Vendor is not under any legal liability or ex-gratia arrangement
or promise to pay pensions, gratuities, superannuation allowances or
the like to any Employees.
WARRANTY 11
(Business Contracts)
11.1 There are no agreements, arrangements or understandings (whether written or
unwritten) affecting the Assets or the carrying on of the Business that:
(a) HSI will be unable to terminate after the Completion Date on giving 30
days' notice or less without penalty;
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(b) are material to the operation of the Business and have not been
disclosed in writing to HSI;
(c) are outside the ordinary and proper course of business of the Business
or otherwise contain any unusual, abnormal or onerous provision;
(d) are incapable of being fulfilled or performed on time without undue or
unusual expenditure of money or effort;
(e) entitle the other party to terminate the agreement, or impose terms
less favourable to the Business, by reason of the change in ownership
of the Business.
11.2 To the best of the knowledge, information and belief of the Vendor, no
customer or supplier of the Business will cease to purchase from or sell to
the Business by reason of the change in ownership of the Business.
WARRANTY 12
(Litigation)
12.1 To the knowledge of the Vendor, there is no Claim threatened or pending
against the Vendor in respect of the Business or the Assets nor does there
exist or has there occurred any fact, matter or circumstance likely to give
rise to any Claim or Liability which could affect the ability of the
Business to continue operating or which may materially adversely affect the
Goodwill.
12.2 There are no unsatisfied or outstanding judgments, orders or awards
affecting the Vendor, the Business or any of the Assets or to which it is
or may become a party.
WARRANTY 13
(Intellectual Property Rights)
13.1 The Vendor's use of the Intellectual Property Rights does not infringe,
breach an obligation of confidence or wrongfully use any confidential
information, trade secrets, copyright, letters patent, trade marks, service
marks, trade names, designs, business names or other similar industrial,
commercial or intellectual property rights of any corporation or person and
no Claims have been asserted challenging the Vendor's use of the
Intellectual Property Rights.
13.2 The Vendor has not licensed, assigned, authorized or permitted any person
or corporation to use the Intellectual Property Rights or the Business
Name.
WARRANTY 14
(Material disclosure)
14. All information concerning the Business and the Assets which might
reasonably be expected to be material for disclosure to a prudent intending
purchaser of the Business in
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determining whether or not to purchase the Business or the price at which a
purchaser would be prepared to purchase the Business has been disclosed in
writing to HSI.
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SCHEDULE 8
DISCLOSURES AGAINST WARRANTIES
(Clause 7.5)
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SCHEDULE 9
UNDERWRITING AGREEMENT
(Clause 7.3(a))
#43#
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EXECUTED as an agreement
THE COMMON SEAL of HOME )
SECURITY INTERNATIONAL INC. )
is affixed in accordance with its articles )
of association in the presence of )
--------------------------------- ---------------------------------
Secretary Director
--------------------------------- ---------------------------------
Name of secretary (print) Name of director (print)
THE COMMON SEAL of FAI HOME )
SECURITY HOLDINGS PTY LIMITED )
is affixed in accordance with its articles )
of association in the presence of )
--------------------------------- ----------------------------------
Secretary Director
--------------------------------- ----------------------------------
Name of secretary (print) Name of director (print)
THE COMMON SEAL of FAI )
INSURANCES LIMITED )
is affixed in accordance with its articles )
of association in the presence of )
--------------------------------- ---------------------------------
Secretary Director
--------------------------------- ---------------------------------
Name of secretary (print) Name of director (print)
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THE COMMON SEAL of )
CERVALE PTY LIMITED )
is affixed in accordance with its articles )
of association in the presence of )
--------------------------------- -------------------------------
Secretary Director
--------------------------------- -------------------------------
Name of secretary (print) Name of director (print)
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