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EXHIBIT 2.14
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SHARE PURCHASE AGREEMENT
AMONG
ASIA ONLINE - AUSTRALIA PTY LTD
(ACN 089 444 691)
AND
THE PARTIES LISTED IN EXHIBIT B HERETO
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DATED AS 21 JUNE 2000
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TABLE OF CONTENTS
Clauses and Headings Page
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1. Agreement to Purchase the Sale Shares...............................................................1
1.1 Sale and Purchase of Shares from the Vendors...............................................1
1.2 Price of Sale Shares.......................................................................1
1.3 Closing....................................................................................1
2. Representations and Warranties of the Vendors.......................................................4
2.1 Organisation; Good Standing and Qualification..............................................5
2.2 Certificate of Incorporation and Constitution Records......................................5
2.3 Capitalisation.............................................................................6
2.4 No Conflict................................................................................7
2.5 Proprietary Rights; Proprietary Information and Inventions Agreement.......................8
2.6 Actions Pending............................................................................9
2.7 Offering Valid.............................................................................9
2.8 Financial Position.........................................................................9
2.9 Absence of Changes Since 31 May 2000......................................................11
2.10 Title to Assets...........................................................................13
2.11 Bank Accounts.............................................................................14
2.12 Receivables; Major Customers..............................................................15
2.13 Equipment, Etc............................................................................15
2.14 Real Property.............................................................................16
2.15 Proprietary Assets........................................................................16
2.16 Year 2000.................................................................................16
2.17 Contracts.................................................................................17
2.18 Liabilities; Major Suppliers..............................................................19
2.19 Compliance with Legal Requirements........................................................20
2.20 Governmental Authorisations...............................................................21
2.21 Governmental Action.......................................................................21
2.22 Tax Matters...............................................................................21
2.23 Employee and Labor Matters................................................................24
2.24 Benefit Plans.............................................................................26
2.25 Sale of Products; Performance of Services.................................................26
2.26 Insurance.................................................................................27
2.27 Related Party Transactions................................................................29
2.28 Certain Payments, Etc.....................................................................29
2.29 Proceedings...............................................................................30
2.30 Brokers...................................................................................31
2.31 The Vendors...............................................................................31
2.32 Full Disclosure...........................................................................33
2.33 Insolvency Events.........................................................................33
2.34 Effect of Sale............................................................................35
3. Representations and Warranties of Purchaser........................................................35
3.1 Acquisition of Shares.....................................................................35
3.2 Authority; Binding Nature of Agreement....................................................35
4. Pre-Closing Covenants of the Vendors...............................................................36
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4.1 Access and Investigation..................................................................36
4.2 Operation of Business.....................................................................36
4.3 Filings and Consents......................................................................38
4.4 Notification; Updates to Disclosure Schedule..............................................39
4.5 No Negotiation............................................................................40
4.6 Best Efforts..............................................................................40
4.7 Confidentiality...........................................................................40
5. Conditions Precedent to Purchaser's Obligation to Close............................................41
5.1 Accuracy of Representations...............................................................41
5.2 Performance of Obligations................................................................41
5.3 Consents..................................................................................42
5.4 No Adverse Change.........................................................................42
5.5 Additional Documents......................................................................42
5.6 No Proceedings............................................................................42
5.7 No Claim Regarding Sale Shares Ownership or Sale Proceeds.................................42
6. Conditions Precedent to the Vendors' and Company's Obligations to Close............................43
6.1 Accuracy of Representations...............................................................43
6.2 Purchaser's Performance...................................................................43
6.3 No Injunction.............................................................................43
7. Termination........................................................................................44
7.1 Termination Events........................................................................44
7.2 Termination Procedures....................................................................45
7.3 Effect of Termination.....................................................................45
7.4 Non-exclusivity of Termination Rights.....................................................45
8. Indemnification, Etc...............................................................................45
8.1 Survival of Representation and Covenants..................................................45
8.2 Indemnification by the Vendors............................................................46
8.3 Right to Require Cure of Breach...........................................................47
8.4 No Contribution...........................................................................47
8.5 Interest..................................................................................47
8.6 Setoff....................................................................................48
8.7 Non-exclusivity of Indemnification Remedies...............................................48
8.8 Defence of Third Party Claims.............................................................48
8.9 Exercise of Remedies by Indemnitees other than Purchaser..................................49
9. Restriction of the Vendors.........................................................................50
9.1 General obligations.......................................................................50
9.2 Restraints fair and reasonable............................................................52
9.3 Severability..............................................................................52
9.4 Vendors to Procure........................................................................52
9.5 Exceptions................................................................................52
10. Guarantees of Directors............................................................................52
10.1 Best Endeavours...........................................................................52
10.2 Indemnity.................................................................................53
11. Miscellaneous Provisions...........................................................................53
11.1 Further Assurances........................................................................53
11.2 Fees, Expenses and Stamp Duty.............................................................53
11.3 Attorneys' Fees...........................................................................53
11.4 Notices...................................................................................53
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11.5 Headings..................................................................................54
11.6 Counterparts..............................................................................54
11.7 Governing Law; Venue......................................................................54
11.9 Remedies Cumulative; Specific Performance.................................................55
11.10 Waiver....................................................................................56
11.11 Amendments................................................................................56
11.12 Severability..............................................................................56
11.13 Parties in Interest.......................................................................56
11.14 Entire Agreement..........................................................................56
11.15 Construction..............................................................................57
11.16 Diezel Interactive Pty Ltd Trust Representations and Warranties...........................57
11.17 Diezel Visual Communications Pty Ltd Trust Representations and Warranties.................58
Exhibits
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EXHIBIT A Certain Definitions......................................................................63
EXHIBIT B List of Shareholders.....................................................................75
EXHIBIT C List of Consultants and Independent Contractors...........................................*
EXHIBIT D List of Governmental Licenses, Permits, Orders, Etc.......................................*
EXHIBIT E Form of Employment Agreement..............................................................*
EXHIBIT F Designated Senior Officers and Employees..................................................*
EXHIBIT G Guarantors and Guarantees.................................................................*
EXHIBIT H Proprietary Information and Inventions Deed...............................................*
* Schedule omitted - will be provided supplementally to the Commission upon
request.
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SHARE PURCHASE AGREEMENT RELATING TO
AVONSLEIGH PTY LTD
(ACN 092 585 763 )
This Share Purchase Agreement (the "Agreement") is entered into as of 21 June
2000, by and among the parties listed in Exhibit B 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 AVONSLEIGH PTY LTD
ACN (092 585 763 ) (the "Company").
WHEREAS, the Vendors wish to sell and the Purchaser wishes to purchase the
entire issued share capital of the Company (the "Sale Shares").
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO PURCHASE THE SALE 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 Company listed beside each
Vendor's name in Exhibit B, on the terms and subject to the
conditions set forth in this Agreement.
1.2 Price of Sale Shares
The purchase price for the Sale Shares shall be paid and
satisfied at Closing, being THREE MILLION THREE HUNDRED AND
THIRTY THOUSAND EIGHT HUNDRED AND NINETY TWO AUSTRALIAN
DOLLARS (A$3,330,892) to be paid to the Vendors for 100% of
the Sale Shares at Closing in the proportions set out beside
their respective names in Exhibit B by bank cheque or by
telegraphic transfer to the bank accounts nominated in writing
by each of the Vendors to the Purchaser not less than two
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 39, Rialto Xxxxx Xxxxx, 000 Xxxxxxx
Xxxxxx, Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx at 2:00 p.m.
(Sydney Time) on the later of 21 June, 2000 or the
date two business days
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following the satisfaction or waiver 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 the
time and date as of which the Closing actually takes
place.
(b) At the Closing the Vendors shall:
(i) deliver to the Purchaser (or its nominee(s))
the certificates representing the Sale
Shares, duly executed instruments of
transfer to transfer title to the Sale
Shares to the Purchaser (or its nominee(s))
and certified copies of the resolutions of
the Boards of Directors of those Vendors
which are corporations authorising the
transfer of the Sale Shares registered in
their names and giving authority to execute
the relevant instrument(s) of transfer on
behalf of the relevant Vendor to the party
who executed them;
(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 Company
pending registration of the transfer of the
Sale Shares in the Company's register of
members;
(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) deliver to the Purchaser: a letter from the
lessor of Xxxxx 0, 000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxx (the "Premises")
("Lessor") confirming the Lessor's consent
to the transfer of the existing lease of the
Premises to the Company;
(v) deliver to the Purchaser the common seal (if
any) of the Company, and each register,
minute book and other book required to be
kept by the Company under any Legal
Requirement up to the date of Closing and
each certificate of incorporation of the
Company (including certificates issued upon
any change of name);
(vi) deliver to the Purchaser:
(A) employment contracts in the form of
the drafts annexed as Exhibit E,
duly executed by the senior officers
and employees designated in Exhibit
F; and
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(B) copies of the Proprietary
Information and Inventions Deed
duly executed by the senior
officers and employees designated
in Exhibit F;
(vii) execute and deliver to the Purchaser a
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 is
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 5.1, 5.2, 5.3, 5.4, 5.6
and 5.7 has been satisfied in all
respects;
(viii) procure that each of its nominees as the
Purchaser notifies to the Vendors resign
from their positions as directors and
officers of the Company, and 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 Company for
compensation for loss of office or
otherwise; and
(ix) if so required by the Purchaser, procure the
revocation or amendment of the bank signing
mandates and authorities and any power of
attorney given by the Company as the
Purchaser notifies to the Vendors shall be
revoked.
(c) Subject to the Vendors duly complying with the
requirements of Section 1.3(b), at the Closing, the
Purchaser shall pay each Vendor the proportion
(expressed as a percentage) of the Purchase Price
specified beside their respective names in Exhibit B,
in each case by bank cheque or through telegraphic
transfer to the bank account nominated by each Vendor
in writing not less than two business days prior to
Closing.
1.4 Meetings
On or before Closing, the Vendors shall cause to be held a meeting of
the directors and/or shareholders of the Company at which the following
resolutions are passed:
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(a) subject to payment of stamp duty (if any) by the
Purchaser, the approval of the registration of the
transfers of the Sale Shares;
(b) if so required by the Purchaser, appoint new
signatories to the Company's bank accounts and the
revocation of existing authorities to operate those
bank accounts, as notified under clause 1.3(b)(ix);
(c) appoint persons nominated by the Purchaser as
directors, secretary and public officer of the
Company with effect from the end of the meeting;
(d) accept the resignations of directors, secretaries
received under clause 1.3(b)(viii) with effect from
the end of the meeting;
(e) the cancellation of the existing share certificates
for the Sales Shares; and
(f) the issue of new certificates for the Sale Shares in
favour of the Purchaser (or its nominee(s)).
2. REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The representations and warranties in this Section 2 shall be read
subject to the following:
(a) immediately prior to Closing, the Vendors carried on the
Business as trustees for the their respective trusts;
(b) immediately prior to Closing, the Vendors, as trustees for
their respective trusts, transferred the assets of the
Business into the Company; and
(c) subject to paragraphs (d), (e) and (f), the representations
and warranties in this Section 2 are to be treated as having
been made as if the Business was owned and carried on by the
Company in its own right at all times immediately before and
after Closing.
(d) the following representations and warranties in this Section 2
are given as at Closing, and should be read to apply from,
Closing: 2.1(a), 2.1(c), 2.2(a), 2.2(d), 2.3, 2.7, 2.8, 2.9,
2.12, 2.13, 2.14, 2.21, 2.22;
(e) the following representations and warranties in this Section 2
are given as at Closing, but should be read to apply from, 14
July 1999: 2.2(b), 2.4, 2.11, 2.16, 2.17, 2.18, 2.19, 2.23,
2.24, 2.25(b) to (e), 2.26, 2.29, 2.32; and
(f) the following representations and warranties in this Section 2
are given as at Closing, but should be read to operate from, 1
July 1997: 2.1(b), 2.1(d), 2.1(e), 2.2(c), 2.5, 2.6, 2.10,
2.15, 2.25(a), 2.27, 2.28, 2.30, 2.31, 2.33, 2.34.
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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 Organisation; Good Standing and Qualification
(a) The Company is a corporation duly organised, validly
existing and in good standing under the laws of
Victoria, Australia. The Company 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) Except as disclosed in Part 2.1 of the Disclosure
Schedule, the Company 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 names
"Avonsleigh", "Diezel Interactive", "Dzign Visual
Communications" and "Dzign Advertising".
(c) Part 2.1 of the Disclosure Schedule accurately sets
forth:
(i) the names of the members of the Company's
board of directors;
(ii) the names of the members of each committee
of the Company's board of directors; and
(iii) the names and titles of the Company's
officers.
(d) Neither the Company nor any of its 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.
(e) Except as disclosed in Part 2.1 of the Disclosure
Schedule the Company has no subsidiaries, and has
never 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) the Company's Certificate of Incorporation
and Constitution, including all amendments
thereto;
(ii) the shareholding records of the Company; and
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(iii) the minutes and other records of the
meetings and other proceedings (including
any actions taken by written consent or
otherwise without a meeting) of the
shareholders of the Company, the board of
directors of the Company and all committees
of the board of directors of the Company.
(b) There have been no meetings or other proceedings of
the shareholders of the Company, the board of
directors of the Company or any committee of the
board of directors of the Company that are not fully
reflected in such minutes or other records.
(c) To the best of the Vendor's Knowledge, there has not
been any violation of any of the provisions of the
Company's or of any resolution adopted by the
Company's shareholders, the Company's board of
directors or any committee of the 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.
(d) The books of account, shareholder records, minute
books and other records of the Company are accurate,
up-to-date and complete, and have been maintained in
accordance with sound and prudent business practices.
All of the records of the Company are in the actual
possession and direct control of the Company.
2.3 Capitalisation
(a) The entire issued share capital of the Company,
immediately prior to the Closing, will consist of
3,330,892 fully paid ordinary shares. All issued and
outstanding shares of the Company's issued capital:
(i) have been validly issued to the persons
listed in Exhibit B hereto;
(ii) are fully paid and non-assessable; and
(iii) 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 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 (representing not less than 100%
of the total outstanding voting equity of the
Company) in Exhibit B free and clear of any
Encumbrances.
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(c) The Vendors have each delivered to the Purchaser
accurate and complete copies of the certificates
evidencing their respective title to the Sale Shares.
(d) There is no:
(i) outstanding subscription, option, call,
warrant or right (whether or not currently
exercisable) to acquire any shares or other
securities of the Company (except as
contemplated under this Agreement);
(ii) outstanding security, instrument or
obligation that is or may become convertible
into or exchangeable for any shares or other
securities of the Company;
(iii) Contract under which the 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
Person to the effect that such Person is
entitled to acquire or receive any shares or
other securities of the Company;
(e) Except as set out in Part 2.3 of the Disclosure
Schedule, the Company has never repurchased, redeemed
or otherwise reacquired any shares or other
securities.
2.4 No Conflict
Except as set out in Part 2.4 of the Disclosure Schedule,
neither the execution and delivery of this Agreement by the
Vendors or the Company nor the consummation by the Vendors or
the Company of the transactions contemplated by this Agreement
will:
(a) 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 the Company or any material
license agreement, lease or other material contract,
instrument or obligation related to the Company to
which it is a party or by which it may be bound;
(b) violate any statute, rule, regulation, order, writ,
injunction, decree or arbitration award applicable to
the Company;
(c) result in the loss of, or in a violation or breach of
any Government Authorisation; or
(d) result in the creation of any material (individually
or in the aggregate) lien, including any claims,
mortgages, pledges, liens, security interests,
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encumbrances or charges of any kind (collectively,
"Lien") on any of the assets owned or used by the
Company.
2.5 Proprietary Rights; Proprietary Information and Inventions
Agreement
(a) The Company has not 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 the Company to utilise any inventions, trade
secrets or proprietary information of any of the
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) To the best of the Vendors' Knowledge, the Company
owns, licences or has rights to all computer software
and data and documentation. used in the Company's
business. The Company owns, licenses or has rights to
all of the:
(i) patents, patent applications, registrations
and applications for registration thereof;
(ii) trademarks, trade names, service marks and
registrations and applications for
registration thereof;
(iii) domain names and registrations and
applications for registration thereof;
(iv) copyrights and registrations and
applications for registration thereof;
(v) mask works and registrations and
applications for registration thereof;
(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").
(d) The 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
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claim of infringement by others of any license,
patent, copyright, service xxxx, trademark, trade
name, trade secret or other Intellectual Property
right of the Company.
2.6 Actions Pending
There is no action, suit or proceeding pending or, to the best
Knowledge of the Vendors, threatened against or affecting the
Company or any of its respective properties or rights before
any court or by or before any governmental body or arbitration
board or tribunal.
2.7 Offering Valid
The Vendors have not offered to sell the Sale Shares to any
other person or persons so as to invalidate the transfer of
the legal and beneficial ownership of the Sale Shares to the
Purchaser on Closing.
2.8 Financial Position
(a) The Vendors have delivered to the Purchaser the
following financial statements and notes
(collectively, "the Vendors Financial Statements"):
(i) for the Company in respect of the financial
year ended 30 June 1998 (the " 1998 Accounts
Date"), its unaudited profit and loss
statement for the financial year ending on
the 1998 Accounts Date and its unaudited
balance sheet as at the 1998 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 or balance sheet;
(ii) for the Company in respect of the financial
year ended 30 June 1999 (the "1999 Accounts
Date"), its unaudited profit and loss
statement for the financial year ending on
the 1999 Accounts Date and its unaudited
balance sheet (the "Unaudited Balance
Sheet") as at the 1999 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 or balance sheet; and
(iii) for the Company, its unaudited proforma
balance sheet as at 31 May 2000 (assuming
the Reorganisation Transactions are
effective as at that date), together with
all statements, reports and notes attached
to or intended to be read with that balance
sheet.
(b) All of the Vendors Financial Statements are true,
fair and complete in all material respects, and the
dollar amount of each line item included in the
Vendors Financial Statements is accurate. The
financial statements and notes referred to in Section
2.8(a)(i) present fairly the
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financial position of the Vendors for the period to
which they relate and the results of operations,
changes in shareholders' equity and cash flows of the
Vendors for the year then ended. The financial
statements and notes referred to in Section
2.8(a)(ii) present fairly the financial position of
the Vendors as of the respective dates thereof and
the results of operations, changes in shareholders'
equity and cash flows of the Vendors for the periods
covered thereby. The Vendors Financial Statements
have been prepared in accordance with GAAP, applied
on a consistent basis throughout the periods covered.
(c) As at the 1999 Accounts Date:
(i) the Company had no Liabilities required by
GAAP to be provided for in the Unaudited
Balance Sheet or described in the notes
thereto which were not provided for in the
Unaudited Balance Sheet or described in the
notes thereto; and
(ii) all reserves established by the Company and
set forth in the Unaudited 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 1999 Accounts Date:
(i) the Company has not 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;
(ii) neither the number of subscribers for the
services offered by the Company nor the
revenues generated therefrom have decreased;
(iii) there has been no resignation or termination
of employment of any officer or key employee
of the Company;
(iv) there has been no labor dispute or
industrial disruption involving the Company
or its employees and none is pending or, to
the Knowledge of any Vendor, threatened;
(v) there has been no borrowing or agreement to
borrow by the Company or change in the
contingent obligations of the Company by way
of guarantee, endorsement, indemnity,
warranty or otherwise or grant of a mortgage
or security interest in any property of the
Company;
(vi) there has not been any payment of any
obligation or liability of the Company other
than current liabilities paid in the
Ordinary Course of Business;
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(vii) there has been no sale, assignment or
transfer of any tangible asset of the
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 the Company; and
(e) The 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 the
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. The
Company's buildings, equipment and other tangible
assets are in good operating condition and are
useable in the ordinary course of business having
regard to their age and ordinary wear and tear, 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 31 May 2000
Except as set forth in Part 2.9 of the Disclosure Schedule,
since 31 May 2000:
(a) there has not been any adverse change in the
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 the Company's business, condition, assets,
liabilities, operations, financial 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 the
Company's assets (whether or not covered by
insurance);
(c) the Company has not:
(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) the Company has not sold or otherwise issued any
shares or any other securities;
-11-
16
(e) the Company has not amended its Certificate of
Incorporation or Constitution and has not effected or
been a party to any Acquisition Transaction,
recapitalisation, reclassification of shares, share
consolidation or division, capital reduction, share
buy back or similar transaction;
(f) the Company has not purchased or otherwise acquired
any asset from any other Person, except for supplies
acquired by the Company in the Ordinary Course of
Business;
(g) the Company has not leased or licensed any asset from
any other Person;
(h) the Company has not made any capital expenditure over
A$30,000;
(i) the Company has not sold or otherwise transferred,
and has not leased or licensed, any asset to any
other Person except for products sold by the Company
from its inventory in the Ordinary Course of
Business;
(j) the Company has not written off as uncollectable, or
established any extraordinary reserve with respect
to, any account receivable or other indebtedness;
(k) the Company has not pledged or hypothecated any of
its assets or otherwise permitted any of its assets
to become subject to any Encumbrance;
(l) the Company has not made any loan or advance to any
other Person;
(m) the Company has not:
(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, commissions, fringe
benefits or other compensation or
remuneration payable to, any of its
directors, officers or employees;
(n) the Company has not entered into, and neither the
Company nor any of the assets owned or used by the
Company has become bound by, any Contract;
(o) no Contract by which the Company or any of the assets
owned or used by the Company is or was bound, or
under which the Company has or had any rights or
interest, has been amended or terminated;
(p) the Company has not 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
-12-
17
sheet prepared in accordance with GAAP) incurred by
the Company in the Ordinary Course of Business;
(q) the Company has not discharged any Encumbrance or
discharged or paid any indebtedness or other
Liability, except for accounts payable that:
(i) are reflected as current liabilities in the
"liabilities" column of the Unaudited Balance
Sheet or have been incurred by the Company
since 31 May 1999 in the Ordinary Course of
Business; and
(ii) have been discharged or paid in the Ordinary
Course of Business;
(r) the Company has not forgiven any debt or otherwise
released or waived any right or claim;
(s) the Company has not changed any of its methods of
accounting or accounting practices in any respect;
(t) the Company has not entered into any transaction or
taken any other action outside the Ordinary Course of
Business; and
(u) the Company has not agreed, committed or offered (in
writing or otherwise), and has not attempted, to take
any of the actions referred to in clauses "(c)"
through "(t)" above.
2.10 Title to Assets
(a) The 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
Balance Sheet (except for inventory sold by
the Company since 31 May 2000 in the
Ordinary Course of Business);
(ii) all assets acquired by the Company since 31
May 2000 (except for inventory sold by the
Company, since 31 May 2000 in the Ordinary
Course of Business);
(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.
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18
Except as set forth in Part 2.10 of the Disclosure
Schedule, all of said assets are owned by the 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 the
Company.
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 the 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 authorised 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 the 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 the Company as of 31 May 2000.
(b) Except as set forth in Part 2.12 of the Disclosure
Schedule, all existing accounts receivable of the
Company (including those accounts receivable
reflected on the 6 Unaudited Balance Sheet that have
not yet been collected and those accounts receivable
that have arisen since incorporation 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 will be collected in full
(without any counterclaim or set-off) on or
before 31 May 2000, and the
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19
Vendor has no reason to believe that they
will not be collected in full.
(c) Part 2.12 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete
breakdown of the revenues received from the Company's
top ten customers, plus revenue from each such
customer for the financial year ending 31 May 1999.
The 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 each item of equipment, furniture,
fixtures, improvements and other tangible assets
(other than inventory) owned by the Company having a
value in excess of $5,000. Part 2.13 also accurately
identifies each tangible asset leased to the Company
that has a value in excess of $5,000.
(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.
(c) The assets identified in Part 2.13 of the Disclosure
Schedule are adequate for the conduct of the
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
The Company does not own 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. The
Company enjoys peaceful and undisturbed possession of such
premises.
-15-
20
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 the Company or that is otherwise
used or useful in connection with the Company's
business. The 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) The Company is not 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 the Company.
(c) The Proprietary Assets identified in Part 2.15 of the
Disclosure Schedule constitute all of the Proprietary
Assets necessary to enable the 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
To the best of the Vendors' Knowledge, the Company's products
and services are "Year 2000 Compliant", meaning that:
(a) date data from at least 1 January 2000 through to 31
December 2001 have and will process without error or
interruption (other than an error or interruption not
expected to have a material adverse effect on the
Company) in any level of computer hardware, software
or services the Company provides, including but not
limited to, microcode, firmware, system or
application programs, files, databases and computer
services;
(b) there has been, will be no, loss of functionality of
the Company's products and services (other than any
loss not expected to have a material adverse effect
on the Company) with respect to the introduction,
processing or output of records containing dates on
or after 1 January 2000; and
(c) the Company's products and services are interoperable
with other software/hardware which may deliver
records to, receive records from or interact with the
Company's products and services in the course of
processing data,
Provided, however, that the foregoing shall not apply to any
adverse effects caused by any products and services (including
any third party software or
-16-
21
hardware) not developed by the Company or by any modification
to the Company's products and services which are made by a
party other than the Company. Further, the Company has tested
all of its products and services and determined that they are
Year 2000 Compliant. Third party software used by the Company
in its products and services and the Company's internal
hardware and software is also Year 2000 Compliant.
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 the Company, each
of which involves future payments, performance of
services or delivery of goods or materials to or by
the Company of an aggregate amount or value in excess
of $10,000 or which otherwise is material to the
business or prospects of the Company (collectively,
the "Material Contracts"), except for any Excluded
Contract. The 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) Each Company Contract is valid and in full force and
effect, and is enforceable by the Company in
accordance with its terms. No Company Contract
contains any term or provision that is extraordinary
or that is otherwise not customarily found in
Contracts entered into by Comparable Entities.
(c) Except as set forth in Part 2.17 of the Disclosure
Schedule, and subject to the disclosure in sub-clause
2.12(b)(ii):
(i) to the best of the Vendors' Knowledge, no
Person has materially violated or breached,
or declared or committed any default under,
any Company Contract;
(ii) to the best of the Vendors' Knowledge, no
material event has occurred, and no material
circumstance or material 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;
-17-
22
(iii) the Company has not 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) the Company has not waived any of its rights
under any Company Contract.
(d) To the best of the Knowledge of the Vendors, each
Person against which the 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.
(e) Except as set forth in Part 2.17 of the Disclosure
Schedule:
(i) the Company has never guaranteed or
otherwise agreed to cause, insure or become
liable for, and has never pledged any of its
assets to secure, the performance or payment
of any obligation or other Liability of any
other Person; and
(ii) the Company has never 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) 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, or has the right to
renegotiate, any amount paid or payable to the
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 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.
(i) Part 2.17 of the Disclosure Schedule identifies and
provides an accurate and complete description of each
proposed Contract as to
-18-
23
which any bid, offer, written proposal, term sheet or
similar document has been submitted or received by
the Company.
2.18 Liabilities; Major Suppliers
(a) The Company has no Liabilities, except for:
(i) liabilities identified as such in the
"liabilities" column of the Unaudited
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 31 May 2000; and
(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 the Company's accounts payable
as of 31 May 2000;
(ii) provides an accurate and complete breakdown
of all customer deposits and other deposits
held by the Company as of the date of this
Agreement; and
(iii) provides an accurate and complete breakdown
of the 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$25,000 from the Company in the
1999 financial year; or
(ii) more than A$25,000 from the Company in the
first two quarters of the 2000 financial
year.
2.19 Compliance with Legal Requirements
(a) Except as set forth in Part 2.19 of the Disclosure
Schedule:
(i) the 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;
-19-
24
(ii) the 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) 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 the Company of, or a failure on
the part of the Company to comply with, any
Legal Requirement; and
(iv) the Company has not received, at any time,
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 Legal
Requirement; or
(B) 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) There are no reports, studies, surveys or other
documents to which the Company has access that
address or otherwise relate to the compliance of the
Company with, or the applicability to the Company of,
any Legal Requirement.
(c) To the best of the Knowledge of the Vendors, no
Governmental Body has proposed or is considering any
Legal Requirement that, if adopted or otherwise put
into effect:
(i) may have an adverse effect on the Company's
business, condition, assets, liabilities,
operations, financial performance, net income
or prospects or on the ability of the Vendors
to comply with or perform any covenant or
obligation under this Agreement; or
(ii) may have the effect of preventing, delaying,
making illegal or otherwise interfering with
any of the Transactions.
2.20 Governmental Authorisations
(a) The Company does not hold, and is not required to
hold, any Governmental Authorisations.
(b) To the best of the Knowledge of the Vendors, the
Company's employees do not hold, and not required to
hold, any Governmental Authorisations that relate to,
or are useful in connection with, the Company's
business.
-20-
25
2.21 Governmental Action
To the best of the Knowledge of the Vendors no authorisation,
consent or approval of, or filing with, any court or any
federal, state or local governmental authority or agency is
required in connection with the execution and delivery of this
Agreement and the issuance and sale of the Sale Shares other
than those that have been or will be made or obtained prior to
the Closing.
2.22 Tax Matters
(a) Each Tax required to have been paid, or claimed by
any Governmental Body to be due and payable, by the
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 the Company has been duly withheld and
collected; and (to the extent required) each such Tax
has been paid to the appropriate Governmental Body;
and the Company is entitled to recover any goods and
services tax payable by the Company from all clients
of the Company under the Company Contracts.
(b) Part 2.22 of the Disclosure Schedule accurately
identifies all Tax Returns required to be filed by or
on behalf of the Company 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. The Company has delivered
to the Purchaser accurate and complete copies of all
the Company Returns filed since incorporation.
(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 2.22. To the extent required
by any Legal Requirement, the Company will establish,
in the Ordinary Course of Business, reserves adequate
for the payment of all Taxes for the period from
incorporation through to the Closing Date, and the
Company will disclose the dollar amount of such
reserves to the Purchaser on or prior to the Closing
Date.
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26
(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 since incorporation. Neither the Company nor
its advisers have received a Notice of Amendment to
the Company's income tax assessments by virtue of
section 170 of the Income Tax Assessment Act
("ITAA"), or any Notices issued by the Commissioner
under section 264 of the ITAA. Part 2.22 of the
Disclosure Schedule accurately identifies each
examination or audit of the Company Return that has
been conducted since incorporation. The Vendors have
delivered to the Purchaser accurate and complete
copies of all audit reports and similar documents (to
which the Company has access) relating to the Company
Returns. Except as set forth in Part 2.22 of the
Disclosure Schedule, the Company has not engaged in
any fraudulent conduct or acts of evasion in relation
to Taxes and no allegation to that effect has been
made by any relevant taxing authority.
(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 the
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 the Company.
(f) There is no agreement, plan, arrangement or other
Contract covering any employee or independent
contractor or former employee or independent
contractor of the Company that, individually or
collectively, could give rise directly or indirectly
to the payment of any amount that would not be
deductible pursuant to Australian tax legislation.
The Company is not, and has never been, a party to or
bound by any tax indemnity agreement, tax sharing
agreement, tax allocation agreement or similar
Contract.
(g) The Company:
(i) has not lodged a private ruling request;
(ii) is not and has not been the subject of any
Tax audit;
(iii) is not a party to any action or proceeding
for the assessment or collection of Tax;
(iv) does not have any dispute or disagreement
with any Governmental Body for Tax; and
(v) has not 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.
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27
(h) The Company has not entered into any agreement which
now or in the future may extend the period of
assessment or collection of any Tax.
(i) Since the 31 May 2000 no additional liability for Tax
has accrued to the Company other than as a result of
trading activities in the Ordinary Course of Business
and no payment or expenditure has been made or
incurred or committed which will not be wholly
deductible in computing the Company's Taxable income.
(j) The 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) The Company does not have 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 the 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.
2.23 Employee and Labor Matters
(a) Part 2.23 of the Disclosure Schedule accurately sets
forth, with respect to each employee of the 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, profit-sharing payments and other
payments or benefits of any type) received
by such employee from the Company with
respect to services performed for the year
to 31 May 2000;
(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;
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28
(vii) each Current Benefit Plan in which such
employee participates or is eligible to
participate; and
(viii) any Governmental Authorisation that is held
by such employee and that relates to or is
useful in connection with the Company's
business.
(b) No former employee of the Company 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.
(c) Exhibit C contains a list of individuals who are
currently performing services for the 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, the Company is not a party to or bound by,
and has never been a party to or bound by, any
employment agreement or any union contract,
industrial award or determination collective
bargaining agreement or similar Contract.
(e) The Vendors has delivered to the Purchaser accurate
and complete copies of all employee manuals and
handbooks, disclosure materials, policy statements
and other materials relating to the employment of the
current and former employees of the Company.
(f) To the best of the Knowledge of the Vendors:
(i) no employee of the Company intends to
terminate his employment with the Company;
(ii) no employee of the Company has received an
offer to join a business that may be
competitive with the Company's business; and
(iii) no employee of the Company is a party to or
is bound by any confidentiality agreement,
noncompetition agreement or other 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
the Company; or
(B) the Company's business or
operations.
(g) the Company is not engaged, and has never been
engaged, in any unfair labour practice of any nature.
There has never been any slowdown,
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29
work stoppage, labour dispute or union organising
activity, or any similar activity or dispute,
affecting the Company or any of its employees. There
is not now pending, and no Person has threatened to
commence, any such slowdown, work stoppage, labour
dispute or union organising 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,
labour dispute or union organising activity or any
similar activity or dispute.
(h) Excluding the application of general law in any of
the following circumstances, the Company does not
have:
(i) any existing service or other agreements with
any officers, consultants or employees of the
Company which cannot be fairly terminated by
three months' notice or less without giving
rise to a claim for damages or compensation;
liability for compensation to ex-employees or
ex-consultants;
(ii) obligation to re-instate or re-employ any
ex-officer, ex-consultant or ex-employee of
the Company;
(iii) policy, practice or obligation regarding
redundancy payments to employees which is
more generous than the applicable award(s) or
legislation; or
(iv) 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.
2.24 Benefit Plans
(a) Part 2.24 of the Disclosure Schedule sets out
complete and accurate material details of all
Relevant Schemes.
(b) Subject to the disclosures in sub-clause 2.24(b) and
(c), the Company does not have any accrued liability,
unfunded or contingent obligations in relation to any
Relevant Scheme.
(c) Subject to the disclosures in sub-clause 2.24(b) and
(c), the 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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30
2.25 Sale of Products; Performance of Services
(a) Each product or service that has been sold or
performed by the 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.
All repair services and other services that have been
performed by the 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.
(b) To the best of the Knowledge of the Vendors, the
Company will not incur or otherwise become subject to
any Liability arising directly or indirectly from any
product sold, or any services performed by, the
Company on or at any time prior to the Closing Date.
(c) No product developed or sold by the Company has been
the subject of any recall or other similar action;
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 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
the 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) The Company has in place, and has at all times had in
place, an adequate and appropriate quality control
system.
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2.26 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 the Company:
(i) the name of the insurance carrier that
issued such policy and the policy number of
such policy;
(ii) whether such policy is a "claims made" or an
"occurrences" policy;
(iii) a description of the coverage provided by
such policy and the material terms and
provisions of such policy (including all
applicable coverage limits, deductible
amounts and co-insurance arrangements and
any non-customary exclusions from coverage);
(iv) the annual premium payable with respect to
such policy, and the cash value (if any) of
such policy; and
(v) 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:
(i) each pending application for insurance that
has been submitted by or on behalf of the
Company; and
(ii) each self-insurance or risk-sharing
arrangement affecting the Company or any of
its assets.
(c) The 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.
(d) 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 the
Company's business, assets, operations, key
employees, services and potential liabilities; and
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said insurance coverage is at least as comprehensive
as the insurance coverage customarily maintained by
Comparable Entities.
(e) 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.
(f) The Company has not received:
(i) any notice or other communication (in
writing or otherwise) 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
(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.
2.27 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 incorporation of the Company had, any
direct or indirect interest of any nature in any
asset used in or otherwise relating to the business
of the Company;
(b) no Related Party is, or has at any time since
incorporation of the Company been, indebted to the
Company;
(c) since incorporation of the Company, no Related Party
has entered into, or has had any direct or indirect
financial interest in, any Contract, transaction or
business dealing of any nature involving the Company;
(d) no Related Party is competing, or has at any time
incorporation of the Company competed, directly or
indirectly, with the Company in any market served by
the Company;
(e) no Related Party has any claim or right against the
Company; and
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(f) 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
favour of any Related Party against the Company.
2.28 Certain Payments, Etc.
Neither the Company, nor any officer, employee, agent or other
Person associated with or acting for or on behalf of the
Company, has at any time, directly or indirectly:
(a) used any corporate funds:
(i) to make any unlawful political contribution
or gift or for any other unlawful purpose
relating to any political activity;
(ii) to make any unlawful payment to any
governmental official or employee; or
(iii) to establish or maintain any unlawful or
unrecorded fund or account of any nature;
(b) made any false or fictitious entry, or failed to make
any entry that should have been made, in any of the
books of account or other records of the Company;
(c) made any payoff, influence payment, bribe, rebate,
kickback or unlawful payment to any Person;
(d) performed any favour or given any gift which was not
deductible for federal income tax purposes;
(e) made any payment (whether or not lawful) to any
Person, or provided (whether lawfully or unlawfully)
any favour or anything of value (whether in the form
of property or services, or in any other form) to any
Person, for the purpose of obtaining or paying for:
(i) favourable treatment in securing business;
or
(ii) any other special concession; or
(f) agreed, committed, offered or attempted to take any
of the actions described in clauses "(a)" through
"(e)" above.
2.29 Proceedings
(a) Except as set forth in Part 2.29 of the Disclosure
Schedule, there is no pending Proceeding or
investigation, and no Person has threatened to
commence any Proceeding:
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34
(i) that involves the Company or that otherwise
relates to or might affect the Company's
business or any of the assets owned or used
by the 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.
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.
(b) There is no Order to which the Company, or any of the
assets owned or used by the 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.
(c) To the best of the Knowledge of the Vendors, no
officer or employee of the 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.
2.30 Brokers
Except for the disclosure noted in the Disclosure Schedule,
neither the Company 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.
2.31 The Vendors
(a) In respect of each of the Vendors who are
incorporated, they severally warrant that they are a
corporation duly organised, validly existing and in
good standing under the laws of the jurisdiction they
are incorporated in and have all requisite corporate
powers and authority to execute and deliver this
Agreement and to carry out and perform their
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35
obligations under the Agreement and the Certificate.
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
(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) Those of the Vendors that are corporations severally
warrant that all corporate action on the part of the
relevant Vendor, its officers, directors and
shareholders necessary for the authorisation of this
Agreement, the performance of all its obligations
hereunder at the Closing and the sale and delivery of
the Sale Shares it is selling has been taken or will
be taken prior to the Closing. 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
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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.
2.32 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 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 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 historical information set forth in the
Disclosure Schedule, and all other information
regarding the Company and its business, condition,
assets, liabilities, operations, financial
performance, net income and, to the best Knowledge of
the Vendors, prospects that has been furnished to the
Purchaser or any of its Representatives by or on
behalf of the Vendors or any of the Vendors'
Representatives, is accurate and complete in all
respects.
(d) The Vendors provided the Purchaser and the
Purchaser's Representatives with full and complete
access to all of the Company's records and other
documents and data.
2.33 Insolvency Events
(a) Liquidation/winding up/appointment of administrator
or receiver etc.
The Company has not had:
(i) a liquidator or provisional liquidator
appointed;
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37
(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 the Company nor its
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
The Company has not:
(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
The Company has not 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
The 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
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38
(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
The Company:
(i) has not received a notice under sections
601AA or 601AB of the Corporations Law; and
(ii) has not been struck off the register of
Companies or dissolved and there is no
action proposed by the Australian Securities
and Investments Commission to do so.
2.34 Effect of Sale
Except as disclosed in part 2.34 of the Disclosure Schedule,
neither the execution nor performance of this Agreement or a
document to be executed at or before Closing will:
(a) result in the Company losing the benefit of any
Governmental Authorisation or an asset, licence,
grant, subsidy, right or privilege which it enjoys at
the date of this Agreement in any jurisdiction; or
(b) conflict with, or result in a breach of, or give rise
to an event of default under, or require the consent
of a person under, or enable a person to terminate or
relieve a person from an obligation under, an
agreement, arrangement or obligation to which the
Company is a party or a legal or administrative
requirement in any jurisdiction.
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.
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.
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39
(b) The execution, delivery and performance of this
Agreement by the Purchaser has been duly authorised
by all necessary action on the part of the Purchaser
and its board of directors.
(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 as and when reasonably
requested:
(a) the Company and its Representatives provide the
Purchaser and its Representatives with free and
complete access to the Company's Representatives,
personnel and assets and to all existing books,
records, Tax Returns, work papers and other documents
and information relating to the Company to enable the
Purchaser to conduct its due diligence enquiries;
(b) the Company and its 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
Company as the Purchaser may request in good faith to
enable the Purchaser to conduct its due diligence
enquiries; and
(c) the Company and its Representatives compile and
provide the Purchaser and its Representations with
such additional financial, operating and other data
and information regarding the Company 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
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;
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40
(c) the 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) the Company preserves intact its current business
organisation, 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) the Company keeps in full force all insurance
policies identified in Part 2.26 of the Disclosure
Schedule;
(f) the 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) the Company immediately notifies the Purchaser of any
inquiry, proposal or offer from any Person relating
to any Acquisition Transaction;
(h) the Company and its officers use their Best Efforts
to cause the Company to operate profitably and to
maximise its net income;
(i) the Company does not declare, accrue, set aside or
pay any dividend or make any other distribution in
respect of any shares, and does not repurchase,
redeem or otherwise reacquire any shares or other
securities;
(j) the Company does not sell or otherwise issue any
shares or any other securities;
(k) the Company does not amend its Constitution, and does
not effect or become a party to any Acquisition
Transaction, recapitalisation, reclassification of
shares, share consolidation or division, capital
reduction or share buy back or similar transaction;
(l) the Company does not form any subsidiary or acquire
any equity interest or other interest in any other
Entity;
(m) the Company does not make any capital expenditure,
except for capital expenditures that are made in the
Ordinary Course of Business and 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;
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41
(n) the Company does not enter into or permit any of the
assets owned or used by the Company to become bound
by any Contract, except for any Excluded Contract;
(o) the Company does not incur, assume or otherwise
become 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;
(p) the Company does not establish or adopt any Employee
Benefit Plan, and does not pay any bonus or make any
profit-sharing or similar payment to, or increase the
amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration
payable to, any of its directors, officers or
employees;
(q) the Company does not change any of its methods of
accounting or accounting practices in any respect;
(r) the Company does not commence any Proceeding;
(s) the Company does not enter into any transaction or
take any other action of the type referred to in
Section 2.9;
(t) the Company does not enter into any transaction or
take any other action outside the Ordinary Course of
Business;
(u) the Company does not enter into any transaction or
take 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) the Company does not agree, commit or offer (in
writing or otherwise), and does not attempt, to take
any of the actions described in clauses "(a)" through
"(v)" of this Section 4.2.
4.3 Filings and Consents
To the extent applicable, the Vendors shall 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) by the Company or the Vendors 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 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;
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42
(b) each Consent required to be obtained (pursuant to any
applicable Legal Requirement, Order or Contract, or
otherwise) by the Company or the Vendors 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 Company and the Vendors promptly delivers 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
Company 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
(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.
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43
(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 No Negotiation
The Vendors shall ensure that, during the Pre-Closing Period,
neither the Company nor any of the Company's 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.
4.6 Best Efforts
During the Pre-Closing Period, each of the Vendors and the
Company shall use its Best Efforts to cause the conditions set
forth in Sections 5 and 6.3 to be satisfied on a timely basis.
4.7 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 Company and their Representatives
keep strictly confidential the existence and terms of
this Agreement;
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44
(b) neither the Vendors, the Company 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 Company's
suppliers, customers, landlords, creditors or
employees or to any other Person) regarding any of
the Transactions, except to the extent that the
Company or the Vendors are required by law to make
any such disclosure regarding the Transactions; and
(c) if the Company 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 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.
5.2 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 the Vendors shall have executed and/or delivered
each of the other documents required to be executed
and/or delivered by them pursuant to Section 1.3(b)
and (d) such that subject only to payment of stamp
duty and the registration of the transfers of the
Sale Shares by the Company, the Purchaser shall upon
Closing become the registered holder of the entire
issued share capital of the Company.
(b) All of the other covenants and obligations that the
Vendors are 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.
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5.3 Consents
To the extent applicable, 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.
5.4 No Adverse Change
There shall have been no adverse change in the Company's
business, condition, assets, liabilities, operations,
financial performance, net income or prospects (or in any
aspect or portion thereof) since the date of this Agreement.
5.5 Additional Documents
Purchaser shall have received such other materials or evidence
as the Purchaser, in good faith, may reasonably require for
the purpose of:
(a) evidencing the accuracy of any representation or
warranty made by the Vendors;
(b) evidencing the compliance by the Vendors with, or the
performance by the Vendors of, any covenant or
obligation set forth in this Agreement;
(c) evidencing the satisfaction of any condition set
forth in this Section 5; or
(d) otherwise facilitating the consummation or
performance of any of the Transactions.
5.6 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.
5.7 No Claim Regarding Sale Shares 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 the Company; or
(b) may be entitled to all or any portion of the Purchase
Price.
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5.8 Novation of Lease Financings
With effect from Closing, the obligations of the Company under the
lease financings, listed in Part III of Exhibit G, shall be novated by
deed of novation, on terms acceptable to the Purchaser.
5.9 Trust Names and Vendors Names to be Changed
With effect from Closing, the Vendors, the Diezel Interactive Class
Income Unit Trust, the Dzign Visual Communications Class Income Unit
Trust and Dzign Advertising Pty Ltd must change their respective names
so that all or part of the name , "DZIGN" or "DIEZEL", or any
confusingly similar word or words, are removed.
6. CONDITIONS PRECEDENT TO THE VENDORS' AND COMPANY'S 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 Purchaser (or its nominee(s)).
7. TERMINATION
7.1 Termination Events
This Agreement may be terminated prior to the Closing:
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(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 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 or waived 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 or waived by the Scheduled Closing Time;
(e) by the Purchaser if the Closing has not taken place
on or before 28 June, 2000 (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 28 June, 2000 (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 wishes to
terminate this Agreement pursuant to Section 7.1(b), Section
7.1(d) or Section 7.1(f), the
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Vendors shall deliver to the Purchaser a written notice signed
by each of the Vendors and 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; and
(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) Subject to paragraph (d), the representations,
warranties, covenants and obligations of each party
shall survive (without limitation):
(i) the Closing, the sale of the Sale Shares to
the Purchaser (or its nominee(s));
(ii) any sale or other disposition of any or all
of the Sale Shares; and
(iii) any Acquisition Transaction effected by or
otherwise involving the Purchaser, the
Vendors or the Company.
All of said representations, warranties, covenants
and obligations shall remain in full force and effect
and shall survive for two years from the Closing
Date.
(b) The representations, warranties, covenants and
obligations of the Vendors, and the rights and
remedies that may be exercised by the Indemnitees,
shall not be limited or otherwise affected by or as a
result
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of any information furnished to, or any investigation
made by or Knowledge of, any of the Indemnitees or
any of their Representatives.
(c) 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.
(d) The representations, warranties, covenants and
obligations of the Vendors under this Agreement are
limited to the extent that Vendors shall not be
liable to the Purchaser:
(i) for any claim which is less than $10,000;
and
(ii) until all claims exceeding $10,000 in
aggregate exceed $70,000 in which event the
parties will be liable for the whole amount
of the claims and not just the excess over
$70,000.
8.2 Indemnification by the Vendors
The Vendors shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and
reimburse each of the Indemnitees for, any Damages which are
directly or indirectly suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise
become subject at any time (regardless of whether or not such
Damages relate to any third-party claim) and which arise
directly or indirectly from or as a direct or indirect result
of, or are directly or indirectly connected with:
(a) any Breach of any representation or warranty made by
the Vendors in this Agreement (without giving effect
to any update to the Disclosure Schedule) or in the
Closing Certificate;
(b) any Breach of any representation, warranty,
statement, information or provision contained in the
Disclosure Schedule or in any other document
delivered or otherwise made available to the
Purchaser or any of its Representatives by or on
behalf of the Vendors or any of its Representatives;
(c) any Breach of any covenant or obligation of the
Vendors;
(d) any Liability to which the Company or any of the
other Indemnitees may become subject and that arises
directly or indirectly from or relates directly or
indirectly to any product manufactured or sold, or
any service performed, by or on behalf of the Company
on or at any time prior to the Closing Date;
(e) any Liability to which the Company or any of the
other Indemnitees may become subject and that arises
directly or indirectly from any amendment to the
Company Returns.
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(f) any matter identified or referred to in Part 2.21 or
Part 2.29 of the Disclosure Schedule; or
(g) any Proceeding relating directly or indirectly to any
Breach, alleged Breach, Liability or matter of the
type referred to in clause "(a)", "(b)", "(c)",
"(d)", or "(e)" above (including any Proceeding
commenced by any Indemnitee for the purpose of
enforcing any of its rights under this Section 8),
providing the Proceeding is successful.
The indemnity contained in this clause 8.2 shall remain in
full force and effect and shall survive for two years from the
Closing Date. For the avoidance of doubt, this indemnity may
be relied on by the Purchaser if an action or Proceeding is
commenced within two of the Closing Date, but continues after
the indemnity expires.
8.3 Right to Require Cure of Breach
Without limiting the generality of anything contained in
Section 8.2, if there is any Breach of any representation or
warranty made by the Vendors, then the Vendors shall be
obligated to pay such amounts to the Company and take such
other actions as the Purchaser may in good faith request for
the purpose of causing such Breach to be corrected, cured and
eliminated in all respects (at no cost to the Company or the
Purchaser).
8.4 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 the Company or
any of its 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.
8.5 Interest
Any party that is required to indemnify any other Person
pursuant to this Section 8 with respect to any Damages shall
also be required to pay such other Person interest on the
amount of such Damages (for the period commencing as of the
date on which such other Person first incurred or otherwise
became subject to such Damages and ending on the date on which
the applicable indemnification payment is made by such party)
at the applicable rate of interest as applied by the Supreme
Court of New South Wales from time to time.
8.6 Setoff
In addition to any rights of setoff or other rights that the
Purchaser or any of the other Indemnitees may have at common
law or otherwise, the Purchaser
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shall have the right to set off any amount that may be owed to
any Indemnitee under this Section 8 against any amount
otherwise payable by any Indemnitee to the Agent or any of the
Selling Shareholders.
8.7 Non-exclusivity of Indemnification Remedies
The indemnification remedies and other remedies provided in
this Section 8 shall not be deemed to be exclusive.
Accordingly, the exercise by any Person of any of its rights
under this Section 8 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 Person 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).
8.8 Defence of Third Party Claims
In the event of the assertion or commencement by any Person of
any claim or Proceeding (whether against the Company, against
any other Indemnitee or against any other Person) with respect
to which the Vendors may become obligated to indemnify, hold
harmless, compensate or reimburse any Indemnitee pursuant to
this Section 8, the Purchaser may proceed with the defence of
such claim or Proceeding on its own, or if the Vendors so
elect, with the participation of the Vendors, on the following
basis:
(i) all reasonable expenses relating to the defence of
such claim or Proceeding (whether or not incurred by
the Purchaser) shall be borne and paid exclusively by
the Vendors;
(ii) the Vendors shall make available to the Purchaser any
documents and materials in the possession or control
of any of the Vendors that may be necessary to the
defence of such claim or Proceeding;
(iii) the Purchaser shall keep the Vendors informed of all
material developments and events relating to such
claim or Proceeding; and
(iv) the Purchaser shall have the right to settle, adjust
or compromise such claim or Proceeding with the
consent of the Vendors; provided, however, that the
Vendors shall not unreasonably withhold such consent.
(v) For the avoidance of doubt, in the event that the
Purchaser elects to proceed with the defence of a
claim or Proceeding, the Purchaser shall have an
unfettered discretion to run the defence as it sees
fit, but shall consider any matters raised by the
Vendors in the event that the Vendors elect to
participate in the defence of the claim or
Proceeding.
8.9 Exercise of Remedies by Indemnitees other than Purchaser
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No Indemnitee (other than the Purchaser or any successor
thereto or assign thereof) shall be permitted to assert any
indemnification claim or exercise any other remedy under this
Agreement unless the Purchaser (or any successor thereto or
assign thereof) shall have consented to the assertion of such
indemnification claim or the exercise of such other remedy.
8.11 Lease Financings
The Vendors shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and
reimburse any of the Indemnitees for, any damages which are
directly or indirectly suffered or incurred by any of the
Indemnitees or to which any of the Indemnitees may otherwise
become subject at any time (regardless of whether or not such
damages relate to any third party claim) and which arise
directly or indirectly from a direct or as an indirect result
of, or are directly or indirectly connected with, the Company
having breached any of the Lease Financing Agreements, listed
in Part III of Exhibit G, prior to the date of this Agreement.
8.12 Directors' or Shareholders' Loans
The Vendors shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and
reimburse any of the Indemnitees for, any damages or payments
which are directly or indirectly suffered or incurred by any
of the Indemnitees or to which any of the Indemnitees may
otherwise become subject at any time (regardless of whether or
not such damages relate to any third party claim) and which
arise directly or indirectly from a direct or as an indirect
result of, or are directly or indirectly connected with, any
loan by or to the Company in respect of a director or past
director, or shareholder or past shareholder of the Company,
not having been discharged, in full and final settlement, with
no further recourse against the Company or any of its
employees or officers, at the Completion Date.
8.13 Legal Ownership of Assets
The Vendors shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and
reimburse any of the Indemnitees for, any damages or payments
which are directly or indirectly suffered or incurred by any
of the indemnities or to which any of the indemnities may
otherwise become subject at any time (regardless of whether or
not damages relate to any third party claim) and which arise
directly or indirectly from a direct or as an indirect result
of, or are directly or indirectly connected with, any assets
used in the Business of the Company being transferred from:
(a) Diezel Interactive Pty Ltd, as trustee for the Diezel
Interactive Class Income Unit Trust, settled 14 July
1999;
(b) Dzign Visual Communications Pty Ltd, as trustee for
the Design Visual Communication Class Income Unit
Trust, settled 14 July 1999; or
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(c) Dzign Advertising Pty Ltd as trustee for the Dzign
Trust, settled 24 June 1997,
to the Company at the Completion Date.
8.14 Software Licences
The Vendors shall hold harmless and indemnify each of the
Indemnitees from and against, and shall compensate and
reimburse any of the Indemnitees for, any damages or payments
which are directly or indirectly suffered or incurred by any
of the indemnities or to which any of the indemnities may
otherwise become subject at any time (regardless of whether or
not damages relate to any third party claim) and which arise
directly or indirectly from a direct or as an indirect result
of, or are directly or indirectly connected with:
(a) the costs, fees penalties or fines associated with
obtaining any software licences required to operate
the Business of the Company that were not obtained by
the Vendors immediately prior to Closing; and
(b) any liability of, or claim or proceeding brought
against, the Purchaser by reason of the Vendors
failing to obtain any software licence that is
required to operate the Business of the Company
immediately prior to Closing.
9. RESTRICTION OF THE VENDORS
9.1 General obligations
Each of the Vendors, must not directly or indirectly, whether
solely or jointly with any other person:
(a) for a period of two years after the Closing Date shall
not carry on or be engaged or involved in any trade,
business or undertaking which is in direct competition
with the Company either on its own account or in
conjunction with or on behalf of any person, firm or
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 Company within such preceding year other than:
(i) 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; or
(ii) where a Vendor is employed or otherwise
engaged in the provision of services to the
Government following cessation of employment
with the Company and the provision of those
services does not compete with the business
of the Company;
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(b) use or disclose, or permit any other person to use or
disclose any Confidential Information (not being
information which is or becomes available to the
public other than by reason of a breach of this
clause);
(c) for a period of two years after the Closing Date,
canvass, solicit, or entice away from the Company the
custom of any person, firm, company or organisation
who as at Completion was a client, customer,
identified prospective customer, representative or
agent or correspondent of the Company, or in the
habit of dealing with the 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 the Company competes;
(d) use or register a name or trade xxxx, which includes
all or part of the name "AVONSLEIGH", "DZIGN" or
"DIEZEL" or any confusingly similar word or words in
such a way as to be capable of or likely to be
confused with the above name, 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;
(e) 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 the Company,
the identity of its customers and suppliers, its
products, finance, contractual arrangements, business
or methods of business and shall use its best
endeavours to prevent the publication or disclosure
of any such information;
(f) if, in connection with the business or affairs the
Company, it shall have obtained trade secrets or
other confidential information belonging to any third
party under an agreement purporting to bind the
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;
9.2 Restraints fair and reasonable
The Vendors acknowledge that:
(a) the covenants given in Section 9.1 are material to
the Purchaser's decision to enter into this
Agreement; and
(b) the restraints contained in Section 9.1 are:
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(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 Company.
9.3 Severability
Each of the obligations set out in Section 9.1 is severable
and independent so that if Section 9.1 or any part or
provision of it is unenforceable then that Section or that
part will be deemed eliminated or modified to the minimum
extent necessary to make this Agreement or that clause or part
enforceable.
9.4 Vendors to Procure
The Vendors shall procure that each of their subsidiaries,
holding companies and any other affiliated companies will
observe the restrictions contained in the foregoing provisions
of this Section 9 and that their respective employees,
officers and agents, excluding ex-employees, ex-officers and
ex-agents, will observe the restrictions contained in this
Clause.
9.5 Exceptions
Nothing in this Section 9 will restrict, effect or prevent the
Vendors holding interests in not more than 5% of the issued
shares or debentures of any company listed on a recognised
stock exchange.
10. GUARANTEES OF DIRECTORS
10.1 Best Endeavours
The Company shall use its best endeavours to procure the
release, discharge or replacement of the persons listed in
Part I of Exhibit G from the guarantees and indemnities
described in Part II of Exhibit G (the "Guarantees").
10.2 Indemnity
Pending the release, discharge or replacement of the persons
listed in Part I of Exhibit G from the Guarantees, the Company
shall indemnify each person listed in Part I of Exhibit H
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.
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,
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at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
11.2 Fees, Expenses and Stamp Duty
(a) 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.
(b) The Purchaser shall bear up to A$7,000 of stamp duty
assessed or assessable on the transfer of the assets
from Diezel Interactive Pty Ltd, as trustee for the
Diezel Interactive Class Income Trust, settled 14
July 1999 for the Dzign Visual Communications Pty
Ltd, as trustee for the Dzign Visual Communication
Class Income Unit Trust to the Company. The Vendors
are jointly and severally liable for all stamp duties
assessed or assessable above A$7,000.
11.3 Attorneys' Fees
If any legal action or other legal proceeding relating to any
of the Transactional Agreements or the enforcement of any
provision of any of the Transactional Agreements is brought
against any party hereto, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and
disbursements on a party/party basis (in addition to any other
relief to which the prevailing party may be entitled).
11.4 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 Vendors: c/- Xxxxxx Partners, Lawyers
Xxxxx 0
000 Xxxxx Xxxxxx
Xxxxxxxxx XXX 0000
Attention: Xxxxx Xxxxxxxxx
Facsimile: (00-0) 0000-0000
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If to the Purchaser: Asia Online - Australia Pty Ltd
16/F, One International Finance
Centre, Xx. 0
Xxxxxxx Xxxx Xxxxxx, Xxxxxxx,
Xxxx Xxxx
Attention: Mr. Ed. Xxxxxxx/Xxxxxx Xxx
Facsimile: (000) 0000 0000
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) Each party irrevocably and unconditionally submits to
the non-exclusive jurisdiction of the courts of New
South Wales.
(c) The Vendors agree that, if any Proceeding is
commenced against any Indemnitee by any Person in or
before any court or other tribunal anywhere in the
world, then such Indemnitee may proceed against the
Vendors in such court or other tribunal with respect
to any indemnification claim or other claim arising
directly or indirectly from or relating directly or
indirectly to such Proceeding or any of the matters
alleged therein or any of the circumstances giving
rise thereto.
(d) Nothing contained in Section 11.7(b) or 11.7(c) shall
be deemed to limit or otherwise affect the right of
any Indemnitee to commence any legal proceeding or
otherwise proceed against the Vendors in any other
forum or jurisdiction.
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 (subject to Section 8.9), 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
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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 agree that:
(a) in the event of any Breach or threatened Breach by
any one or more of the Vendors of any covenant,
obligation or other provision set forth in this
Agreement, the Purchaser shall be entitled (in
addition to any other 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) neither the Purchaser nor any other Indemnitee shall
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.
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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).
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.
11.16 Diezel Interactive Pty Ltd Trust Representations and
Warranties
Diezel Interactive Pty Ltd represents and warrants to each
other party that:
(a) it is the only trustee of the Trust;
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(b) it has the power under the Trust Deed to:
(i) execute and deliver this Agreement; and
(ii) perform its obligations under this
Agreement;
(c) all action required by the Trust Deed to authorise:
(i) its execution and delivery of this
Agreement to which it is a party; and
(ii) the performance of its obligations under
this Agreement, has been taken;
(d) the execution by it of this Agreement to which it is
a party and the performance by it of its obligations
or the exercise of its rights under this Agreement
does not contravene the Trust Deed;
(e) no action is currently taking place or pending to
remove it as trustee of the Trust or appoint a new or
additional trustee of the Trust;
(f) it has entered into this Agreement in its capacity as
trustee of the Trust and for the benefit of the
Beneficiary;
(g) it has a right to be fully indemnified out of the
Trust Fund in respect of the obligations incurred by
it under the Transactional Agreements and it has not
released, disposed of or restricted its equitable
lien over the Trust Fund which secures that
indemnity;
(h) it is not and has never been in breach of the Trust
Deed;
(i) it and its directors, officers, employees and agents
have complied with their obligations in connection
with the Trust;
(j) the Trust has not been terminated and no action is
pending to terminate the Trust;
(k) the Beneficiary is not presently entitled to any of
the assets of the Trust.
In this Section 11.16:
"BENEFICIARY" means any beneficiary or beneficiaries of the
Trust;
"TRUST" means the deed of trust dated 14 July 1999 as
constituted under the Trust Deed;
"TRUST DEED" means the Diezel Interactive Class Income Unit
Trust; and
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"TRUST FUND" means the property which is at any time subject
to the Trust.
11.17 Diezel Visual Communications Pty Ltd Trust Representations and
Warranties
Dzign Visual Communications Pty Ltd represents and warrants to
each other party that:
(a) it is the only trustee of the Trust;
(b) it has the power under the Trust Deed to:
(i) execute and deliver this Agreement; and
(ii) perform its obligations under this
Agreement;
(c) all action required by the Trust Deed to authorise:
(i) its execution and delivery of this
Agreement to which it is a party; and
(ii) the performance of its obligations under
this Agreement, has been taken;
(d) the execution by it of this Agreement to which it is
a party and the performance by it of its obligations
or the exercise of its rights under this Agreement
does not contravene the Trust Deed;
(e) no action is currently taking place or pending to
remove it as trustee of the Trust or appoint a new or
additional trustee of the Trust;
(f) it has entered into this Agreement in its capacity as
trustee of the Trust and for the benefit of the
Beneficiary;
(g) it has a right to be fully indemnified out of the
Trust Fund in respect of the obligations incurred by
it under the Transactional Agreements and it has not
released, disposed of or restricted its equitable
lien over the Trust Fund which secures that
indemnity;
(h) it is not and has never been in breach of the Trust
Deed;
(i) it and its directors, officers, employees and agents
have complied with their obligations in connection
with the Trust;
(j) the Trust has not been terminated and no action is
pending to terminate the Trust;
(k) the Beneficiary is not presently entitled to any of
the assets of the Trust.
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In this Section 11.17:
"BENEFICIARY" means any beneficiary or beneficiaries of the
Trust;
"TRUST" means the deed of trust dated 14 July 1999 as
constituted under the Trust Deed;
"TRUST DEED" means the Dzign Visual Communications Class
Income Unit Trust; and
"TRUST FUND" means the property which is at any time subject
to the Trust.
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The parties hereto have caused this Agreement to be executed and delivered as of
the date stated at the commencement hereof.
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SIGNED for and on behalf of )
ASIA ONLINE - AUSTRALIA PTY LTD )
by its duly authorised representative )
in the presence of: )
/s/ JO XX XX /s/ XXXXX X. XXXXXXXX
------------ ---------------------
Signature of witness Signature of authorised representative
Jo Xx Xx Xxxxx X. Xxxxxxxx
-------- -----------------
Name of witness (please print) Name of authorised representative
(please print)
SIGNED for and on behalf of )
DIEZEL INTERACTIVE PTY LTD AS TRUSTEE )
FOR THE DIEZEL INTERACTIVE CLASS )
INCOME UNIT TRUST )
by its duly authorised representative )
in the presence of: )
/s/ XXXXX XXXXXXXXX /s/ X.X. XXXXXXX
------------------- ----------------
Signature of witness Signature of authorised representative
Xxxxx Xxxxxxxxx X.X. Xxxxxxx
--------------- ------------
Name of witness (please print) Name of authorised representative
(please print)
SIGNED for and on behalf of )
DZIGN VISUAL COMMUNICATIONS )
PTY LTD AS TRUSTEE FOR THE DZIGN )
VISUAL COMMUNICATIONS CLASS )
INCOME UNIT TRUST )
by it duly authorised representative )
in the presence of: )
/s/ XXXXX XXXXXXXXX /s/ X.X. XXXXXXX
------------------- ----------------
Signature of witness Signature of authorised representative
Xxxxx Xxxxxxxxx X.X. Xxxxxxx
--------------- ------------
Name of witness (please print) Name of authorised representative
(please print)
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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 the 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 the Company;
(ii) any option, call, warrant or right
(whether or not immediately
exercisable) to acquire any capital
stock of the Company; or
(iii) any security, instrument or obligation
that is or may become convertible into
or exchangeable for any capital stock
of the Company; or
(c) any merger, consolidation, business
combination, share exchange, reorganisation
or similar transaction involving the Company.
AGREEMENT "Agreement" shall mean the Share 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 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
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(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.
BUSINESS "Business" means the activities carried on by:
(a) Diezel Interactive Pty Ltd, as trustee for
the Diezel Interactive Class Income Unit
Trust;
(b) Dzign Visual Communications Pty Ltd, as
trustee for the Dzign Visual Communications
Class Income Unit Trust; and
(c) Dzign Advertising Pty Ltd, as trustee for
the Dzign Trust,
immediately prior to Closing and involving the
provision of advertising services, graphic
design services and internet services.
BUSINESS DAY "Business day" means a day (excluding Saturday)
when banks are open for business in both Hong
Kong and 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)(ix) 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 the Company is a party;
(b) by which the 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 the Company has or may acquire
any right or interest.
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COMPANY FINANCIAL STATEMENTS "Company Financial Statements" shall have the
meaning specified in Section 2.8(a) of the
Agreement.
COMPANY PLAN "Company Plan" shall mean any Current Benefit
Plan or Past Benefit Plan.
COMPANY RETURNS "Company Returns" shall have the meaning
specified in Section 2.22(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
authorisation (including any Governmental
Authorisation).
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, 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 the
Company or is maintained or sponsored by
the Company;
(b) in which the Company participates;
(c) with respect to which the Company is or may
be required or permitted to make any
contribution; or
(d) with respect to which the 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
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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,
hypothecation, charge, mortgage, security
interest, encumbrance, equity, trust, equitable
interest, claim, preference, right of
possession, lease, tenancy, license,
encroachment, covenant, infringement,
interference, Order, proxy, option, right of
first refusal, pre-emptive right, community
property interest, legend, defect, impediment,
exception, reservation, limitation, impairment,
imperfection or retention of title, condition
or restriction of any nature (including any
restriction on the voting of any security, any
restriction on the transfer of any security or
other asset, any restriction on the receipt of
any income derived from any asset, any
restriction on the use of any asset and any
restriction on the possession, exercise or
transfer of any other attribute of ownership of
any asset).
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, organisation or entity.
EXCLUDED CONTRACT "Excluded Contract" shall mean any Company
Contract that:
(a) the Company has entered into in the
Ordinary Course of Business;
(b) has a term of less than 90 days or may be
terminated by the Company (without penalty)
within 90 days after the delivery of a
termination notice by the Company; and
(c) 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
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accepted and consistently applied accounting
principles and practices in Australia, except
those inconsistent with any of the foregoing.
GOVERNMENTAL AUTHORISATION "Governmental Authorisation" shall mean any:
(a) permit, license, certificate, franchise,
concession, approval, consent,
ratification, permission, clearance,
confirmation, endorsement, waiver,
certification, designation, rating,
registration, qualification or
authorisation 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, province, nation,
principality, territory, county,
municipality, district or other
jurisdiction of any nature;
(b) federal, state, local, municipal, foreign
or other government;
(c) governmental or quasi-governmental
authority of any nature (including any
governmental division, subdivision,
department, agency, bureau, branch, office,
commission, council, board,
instrumentality, officer, official,
representative, organisation, unit, body or
Entity and any court or other tribunal);
(d) multi-national organisation or body; or
(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.
INDEMNITEES The Purchaser, its shareholders and
subsidiaries and after Closing, the Company,
and their respective directors officers and
agents.
KNOWLEDGE An individual shall be deemed to have
"Knowledge" of a particular fact or other
matter if:
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(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 diligent and comprehensive
investigation concerning the truth or
existence of such fact or other matter.
The Vendors shall be deemed to have "Knowledge"
of a particular fact or other matter if any
officer, employee or other Representative of the
Vendors has Knowledge 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
unknown, undisclosed, unmatured, unaccrued,
unasserted, contingent, indirect, conditional,
implied, vicarious, derivative, joint, several or
secondary liability), regardless of whether such
debt, obligation, duty or liability would be
required to be disclosed on a balance sheet
prepared in accordance with generally accepted
accounting principles and 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 Company or
Purchaser means an adverse effect on the
business, operations, revenue (on an annualized
basis) condition (financial or otherwise), assets
or prospects of the 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
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Purchaser Damages (as hereinafter defined),
in excess of A$25,000 (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 the Company's rights,
title or interest in, any of its assets. For
purposes of this Agreement, "Purchaser 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, edict,
decree, ruling, pronouncement,
determination, 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, administrative agency 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 the Company
shall not be deemed to have been taken in the
"Ordinary Course of Business" unless:
(a) such action is recurring in nature, 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
sound and prudent business practices;
(c) such action is not required to be
authorised 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 authorisation of any
nature; and
(d) such action is similar in nature and
magnitude to actions customarily taken,
without any separate or special
authorisation, in the ordinary course of
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the normal day-to-day operations of other
Entities that are engaged in businesses
similar to the Company's business.
PAST BENEFIT PLAN "Past Benefit Plan" shall mean any employee
benefit plan (other than a Current Benefit
Plan):
(a) which the Company has at any time
established, adopted, maintained or
sponsored;
(b) in which the Company has ever participated;
(c) with respect to which the Company has ever
made, or has ever been required or
permitted to make, any contribution; or
(d) with respect to which the Company has ever
been subject to any Liability.
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, contest,
hearing, 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
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right or other intellectual property right or
intangible asset.
PROPRIETARY INFORMATION AND "Proprietary Information and Inventions Deed"
INVENTIONS DEED shall mean the proprietary information and
inventions deed in the form attached as Exhibit H;
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.
RELEVANT SCHEME "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 the Company or any of its
subsidiaries is a party or which the Company or
any of its subsidiaries makes available or
obtains for its officers or employees or former
officers or employees;
REORGANISATION TRANSACTIONS "Reorganisation Transactions" means the disposal
by the Vendors of their respective businesses and
assets to the Company pursuant to various
business acquisition agreements between the
Vendors and the Company executed and completed on
or about the date hereof;
REPRESENTATIVES "Representatives" shall mean officers, directors,
employees, agents, attorneys, accountants,
advisors and representatives.
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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,
fringe benefits 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.
TRANSACTIONAL AGREEMENTS "Transactional Agreements" shall mean:
(a) the Agreement;
(b) the Employment Agreements referred to in
Section 1.3(b)(vii) of the Agreement;
(d) the Proprietary Information and Inventions
Deed; and
(e) the Closing Certificate.
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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, the
Company and the Purchaser of their
respective obligations under the
Transactional Agreements and the exercise
by the Vendors, the Company and the
Purchaser of their respective rights under
the Transactional Agreements.
UNAUDITED BALANCE SHEET "Unaudited Balance Sheet" shall have the meaning
specified in Section 2.8(a)(ii) of the Agreement.
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EXHIBIT B
LIST OF SHAREHOLDERS
SHAREHOLDER PROPORTION % SALE SHARES
----------- ------------ -----------
Diezel Interactive 50% 1,665,446 Ordinary Shares
Pty Ltd as trustee
for the Diezel
Interactive Class
Income Unit Trust
Dzign Visual 50% 1,665,446 Ordinary Shares
Communications
Pty Ltd as trustee
for the Dzign
Visual
Communications
Class Income Unit
Trust
75
