EXHIBIT 10(21)
_____________________________
Dated: As of June 30, 1995
AGREEMENT FOR PURCHASE OF SHARES
(Ultrabridge Darwin Limited;
Havewin Trading Limited;
Diamond Darwin Pty Limited)
EXECUTION COPY
i
_____________________________________________________________________________
TABLE OF CONTENTS
_____________________________________________________________________________
RECITALS.................................................................. 1
OPERATIVE PROVISIONS...................................................... 3
1 INTERPRETATION.................................................. 3
2 SALE AND PURCHASE OF SHARES..................................... 9
3 PURCHASE PRICE.................................................. 10
4 CONDITIONS PRECEDENT............................................ 11
5 COMPLETION AND COMPLETION ACCOUNTS.............................. 14
6 PAYMENT OF THE PURCHASE PRICE................................... 19
7 CONDUCT OF BUSINESS PENDING COMPLETION.......................... 19
8 RISK AND INSURANCE.............................................. 23
9 ACCESS TO RECORDS............................................... 24
10 SUPERANNUATION.................................................. 25
11 WARRANTIES REPRESENTATIONS AND INDEMNITIES...................... 25
12 ADJUSTMENT FOR TAX LIABILITY.................................... 33
13 DEFAULT BY VENDORS.............................................. 44
14 RESTRAINT....................................................... 44
15 COSTS AND STAMP DUTY............................................ 46
16 POWER OF ATTORNEY............................................... 47
17 NOTICES......................................................... 47
18 ASSIGNMENT...................................................... 48
19 MISCELLANEOUS................................................... 48
20 GOVERNING LAW JURISDICTION AND SERVICE OF PROCESS............... 49
APPENDIX A WARRANTIES AND REPRESENTATIONS WITH RESPECT
TO THE COMPANY AND SUBSIDIARIES............................ 51
VENDORS' QUALIFICATIONS.............................................. 51
THE COMPANY AND THE SUBSIDIARIES..................................... 52
SHARES............................................................... 52
FINANCIAL STATEMENTS................................................. 53
BUSINESS............................................................. 54
BUSINESS PREMISES.................................................... 57
PLANT AND EQUIPMENT.................................................. 59
INVENTORY............................................................ 60
INTELLECTUAL PROPERTY RIGHTS......................................... 60
CONTRACTS............................................................ 62
INSURANCE............................................................ 63
TAXATION............................................................. 63
RECORDS.............................................................. 64
LITIGATION........................................................... 65
ENVIRONMENT.......................................................... 66
ii
_________________________________________________________________________
EMPLOYEES........................................................ 67
SUPERANNUATION................................................... 67
CHANGES SINCE THE LAST BALANCE DATE.............................. 68
BROKERAGE........................................................ 69
INFORMATION...................................................... 00
XXXXXXXX X WARRANTIES AND REPRESENTATIONS WITH RESPECT TO
ULTRABRIDGE DARWIN LIMITED............................. 71
VENDORS' QUALIFICATIONS.......................................... 71
ULTRABRIDGE...................................................... 71
THE SHARES....................................................... 71
FINANCIAL STATEMENTS............................................. 72
BUSINESS......................................................... 73
INSURANCE........................................................ 75
TAXATION......................................................... 75
RECORDS.......................................................... 76
LITIGATION....................................................... 76
CHANGES SINCE THE DATE OF THE LAST ULTRABRIDGE ACCOUNTS.......... 76
INFORMATION...................................................... 77
APPENDIX C WARRANTIES AND REPRESENTATIONS WITH RESPECT TO
HAVEWIN TRADING LIMITED................................ 79
VENDORS' QUALIFICATIONS.......................................... 79
HAVEWIN.......................................................... 79
THE SHARES....................................................... 79
FINANCIAL STATEMENTS............................................. 80
BUSINESS......................................................... 81
INSURANCE........................................................ 83
TAXATION......................................................... 83
RECORDS.......................................................... 84
LITIGATION....................................................... 84
CHANGES SINCE THE DATE OF THE LAST HAVEWIN ACCOUNTS.............. 84
INFORMATION...................................................... 85
SCHEDULES
SCHEDULE 1A ULTRABRIDGE VENDORS AND SHAREHOLDING
(ULTRABRIDGE DARWIN LIMITED SHARES)............... 87
SCHEDULE 1B HAVEWIN VENDORS AND SHAREHOLDING
(HAVEWIN TRADING LIMITED SHARES).................. 89
SCHEDULE 1B(b) HAVEWIN VENDORS AND SHAREHOLDER LOANS............. 90
SCHEDULE 1C VENDORS AND SHAREHOLDING TRUST SHARES
(DIAMOND DARWIN PTY LIMITED SHARES)............... 91
iii
________________________________________________________________________
SCHEDULE 2 SUBSIDIARIES.................................... 92
SCHEDULE 3 MORTGAGES AND OTHER ENCUMBRANCES
OVER THE COMPANY AND EACH SUBSIDIARY............ 93
SCHEDULE 4 BANK ACCOUNTS AND SIGNATORIES................... 94
SCHEDULE 5 CONTRACTS WITH THE VENDORS...................... 95
SCHEDULE 6 BUSINESS PREMISES............................... 96
SCHEDULE 7 PARTICULARS OF PROPERTY LEASES.................. 97
SCHEDULE 8 LIST OF PLANT AND EQUIPMENT..................... 98
SCHEDULE 9 PARTICULARS OF EQUIPMENT LEASES................. 99
SCHEDULE 10 PARTICULARS OF REGISTERED AND UNREGISTERED...... 100
SCHEDULE 11 MATERIAL CONTRACTS.............................. 101
SCHEDULE 12 BANKING FACILITIES.............................. 102
SCHEDULE 13 CONTRACTS OF INSURANCE.......................... 103
SCHEDULE 14 LITIGATION...................................... 106
SCHEDULE 15 EMPLOYEE BENEFIT PLANS.......................... 107
SCHEDULE 16 NOTICE PROVISIONS............................... 108
SCHEDULE B1 BANK ACCOUNTS AND SIGNATORIES................... 111
SCHEDULE B2 CONTRACTS OF INSURANCE.......................... 112
SCHEDULE C1 BANK ACCOUNTS AND SIGNATORIES................... 113
SCHEDULE C2 CONTRACTS OF INSURANCE.......................... 114
SIGNATURES..................................................... 115
ANNEXURES
ANNEXURE A LAST ACCOUNTS................................... 120
ANNEXURE B INTERIM ACCOUNTS................................ 121
iv
____________________________________________________________________
ANNEXURE C DISCLOSURE LETTER ......................... 122
ANNEXURE A-1 LAST HAVEWIN ACCOUNTS ..................... 123
ANNEXURE A-2 LAST ULTRABRIDGE ACCOUNTS ................. 124
EXHIBITS
EXHIBIT 1 ULTRABRIDGE LIQUIDATION PROCEDURES
EXHIBIT 2 HAVEWIN LIQUIDATION PROCEDURES
1
________________________________________________________________________________
AGREEMENT FOR PURCHASE OF SHARES
This Agreement for Purchase of Shares (this "Agreement") is made
as of June 30, 1995
Between:
THE PERSONS whose names and addresses are set out in column 1 of
Schedule 1 (collectively "Vendors" and individually "Vendor")
And:
MGM GRAND AUSTRALIA PTY LTD (A.C.N. 069 214 473), which is a
company incorporated in the Northern Territory, Australia and has
its registered office at 3rd Floor, Diamond Beach Casino, Gilruth
Avenue, Darwin City, NT 0800 ("Purchaser").
And:
MGM GRAND, INC., which is a company incorporated in the State of
Delaware, United States, with its principal office in Las Vegas,
Nevada ("MGM Grand").
RECITALS:
A. Diamond Darwin Pty Limited (A.C.N. 009 641 089) is a company
incorporated in the Northern Territory, Australia and has its
registered office at 3rd Floor, Diamond Beach Casino, Gilruth
Avenue, Darwin City, Northern Territory, Australia ("Company").
B. Ultrabridge Darwin Limited is a company incorporated in the
Cayman Islands and has its registered office at X.X. Xxx 000,
Xxxxxx Xxxxx, Xxxxx Church Street, Grand Cayman, Cayman Islands,
British West Indies ("Ultrabridge").
C. Havewin Trading Limited is a company incorporated in Hong Kong
and has its registered office at Rooms 705-8, Asia Pacific
Finance Tower, Xxxxxxxx Xxxxx, 0 Xxxxxx Xxxx, Xxxx Xxxx
("Havewin").
D. The Company has an authorised share capital of Aus$20,000,000
divided into 4,250,000 A Class shares, 4,250,000,000 B Class
shares, 10,000,000 C Class shares and 1,500,000 D Class shares of
AUS$1.00 par value each, of which 4,250,000 A Class shares,
4,250,000 B Class shares and 1,500,000 D Class shares have
been issued, credited as fully paid.
E. Ultrabridge has an authorized ordinary share capital of US
$900,000 divided into 1,000 ordinary voting shares and 899,000
ordinary non-voting shares, with a nominal value of US $1.00
each, of which 1,000 voting shares and 100,000 non-voting shares
have been issued, credited as fully paid, and an authorised
preference share capital of
2
________________________________________________________________________________
US $4,500,000, of which 4,356,138 7% preference shares, with a
nominal value of US $1.00 each, have been issued, credited as
fully paid.
F. Havewin has an authorized share capital of HK $10,000 consisting
of 10,000 ordinary shares with a nominal value of shares of
HK$1.00 each, of which two shares have been issued, credited as
fully paid, provided, however, that at Completion Havewin will
have an authorized share capital of HK$37,163,212, consisting of
37,163,212 ordinary shares with a nominal value of shares of
HK$1.00 each, of which 37,163,212 shares will have been issued,
credited as fully paid.
G. The persons whose names and addresses are set out in column 1 of
Schedule 1A (collectively "Ultrabridge Vendors" and individually
"Ultrabridge Vendor") registered and beneficial owners of all
issued shares in the capital of Ultrabridge ("Ultrabridge
Shares") as set out in columns 2,3, and 4 of Schedule 1A opposite
the name of each Ultrabridge Vendor. Ultrabridge is the
registered and beneficial owner of 4,250,000 A Class shares of
the Company (the "Class A Shares").
H. The persons whose names and addresses are set out in column 1 of
Schedule 1B (collectively "Havewin Vendors" and individually
"Havewin Vendor") are registered and beneficial owners of all
issued shares in the capital of Havewin ("Havewin Shares") as set
out in columns 2, 3, and 4 of Schedule 1B opposite the name of
each Havewin Vendor. Havewin is the registered and beneficial
owner of 4,250,000 B Class shares of the Company (the "Class B
Shares").
I. As reflected on Schedule 1C, Cortust Aktiengesellschaft fur
Treuhandsschaften and Xx. Xxxxxxx Grasern are the trustees of the
Xxxxxxx Family Trust (the "Trust") which is the registered and
beneficial owner of 1,500,000 D Class Shares of the Company (the
"Class D Shares").
J. The Class A Shares, Class B Shares and Class D Shares
(collectively, the "Shares"), owned by Ultrabridge, Havewin and
the Trust, respectively, constitute all of the issued shares in
the capital of the Company.
K. The Ultrabridge Vendors have agreed to sell and the Purchaser has
agreed to purchase the Ultrabridge Shares, the Havewin Vendors
have agreed to sell and the Purchaser has agreed to purchase the
Havewin Shares and the Trust has agreed to sell and the Purchaser
has agreed to purchase the Class D Shares, all on the following
terms, as a result of which the Purchaser would beneficially own
(either directly or indirectly through its ownership of
Ultrabridge and Havewin) all of the Shares.
3
________________________________________________________________________________
L. It is specifically acknowledged that the Purchase Price has been
negotiated on an aggregate basis amongst the parties and
reflects the aggregate amount which the Purchaser is prepared to
pay in order to acquire the direct or indirect beneficial
ownership of all of the Shares, which amount has been allocated
amongst the various Vendors through arms length negotiations.
OPERATIVE PROVISIONS:
1 INTERPRETATION
________________________________________________________________________________
1.1 The following words have these meanings in this Agreement unless
the contrary intention appears.
ACCOUNTING STANDARDS means the Australian Accounting Standards
from time to time and if and to the extent that any matter is
not covered by Australian Accounting Standards means generally
accepted accounting principles applied from time to time in
Australia for a company similar to the Company; provided that in
the case of Ultrabridge, Accounting Standards means
International Accounting Standards and in the case of Havewin,
Accounting Standards means Hong Kong Accounting Standards, in
each case subject to the same qualifications mutatis mutandis.
BUSINESS DAY means a day on which trading banks are open for
general business in Northern Territory.
BUSINESS PREMISES means all the land and buildings owned or
leased or occupied by the Company or any Subsidiary.
COMPANY COMPLETION ACCOUNTS means the audited balance sheet of
the Company and the Subsidiaries reflecting the assets and
liabilities of the Company and the Subsidiaries as at 4:00 a.m.
Darwin Time on the Completion Date and the audited profit and
loss account of the Company and the Subsidiaries for the period
from the Last Accounts ending on that date and time to be
prepared in accordance with Clause 5.
COMPLETION means settlement of the sale and purchase of the
Ultrabridge Shares, the Havewin Shares and the Class D Shares in
accordance with Clause 5 and Complete has a corresponding
meaning.
COMPLETION ACCOUNTS means the Company Completion Accounts, the
Ultrabridge Completion Accounts and the Havewin Completion
Accounts.
4
________________________________________________________________________________
COMPLETION DATE means that date which is the fifth (5th)
Business Day following satisfaction or waiver of the conditions
to Purchaser's obligations set forth in Clause 4, but not later
than December 31, 1995, or any other date agreed by the Vendors
and the Purchaser; provided that in the event conditions to the
Purchaser's obligations set forth in Clause 4 have not been
satisfied by such date, then such date shall automatically be
extended to five (5) Business Days after the final condition is
satisfied or waived, so long as the Purchaser is diligently
seeking the approvals and consents set forth in Clause 4.
CONFIDENTIAL INFORMATION means all trade secrets and all
financial, marketing and technical information, concepts, know-
how, technology, processes and knowledge which is confidential or
of a sensitive nature, but excludes that which is in the public
domain.
CONTAMINANT means a solid, liquid, gas, odour, heat, sound,
vibration, radiation or substance which makes or may make the
Business Premises or the surrounding Environment:
(a) unsafe or unfit for habitation or occupation by persons or
animals;
(b) degraded in its capacity to support plant life; or
(c) otherwise environmentally degraded.
CORPORATIONS LAW means the Corporations Law of the Commonwealth
of Australia.
DIAMOND DARWIN CONSOLIDATED means the Company and its
Subsidiaries, including Diamond Leisure Pty Limited (A.C.N. 009
624 417), a company incorporated in the Northern Territory,
Australia ("Diamond Leisure"), Fernbank Pty ltd. (A.C.N. 009 622
262), a company incorporated in the Northern Territory, Australia
("Fernbank"), and the Territory Property Trust established under
the trust deed made on 28 September 1984 (the "Territory Trust").
DISCLOSURE LETTER means the letter of even date herewith from the
Vendors to the Purchaser disclosing exceptions to the Warranties
(a true and correct copy of which is attached hereto as Annexure
C).
ENVIRONMENT means the physical factors of the surroundings of
persons including the land, waters, atmosphere, climate, sound,
odours, taste, the biological factors of animals and plants and
the social factor of aesthetics.
5
________________________________________________________________________________
ENVIRONMENTAL LAW means a law regulating or otherwise relating to
the Environment, including but not limited to any law relating to
land use planning, pollution of air or water, soil or ground
water contamination, chemicals, waste, use of dangerous goods or
to any other aspect of protection of the environment.
EQUIPMENT LEASES means leases of, and agreements to hire,
equipment and other personal property (including motor vehicles)
to the Company or any Subsidiary.
FUTURE INCOME TAX BENEFIT means the estimated amount of future
saving in income tax likely to arise as a result of:
(a) the reversal of Timing Differences; and
(b) the recoupment of carried forward tax losses (which for the
purposes of Australian Accounting Standard ASAB 1020 are
dealt with separately from other timing differences).
HAVEWIN COMPLETION ACCOUNTS means the audited balance sheet of
Havewin reflecting the assets and liabilities of Havewin as at
the close of business Hong Kong time on the day immediately
preceding the Completion Date and the audited profit and loss
account of Havewin for the period from the Last Havewin Accounts
ending on that date and time, to be prepared in accordance with
Clause 5.
HIT SHAREHOLDERS means Rizona (Hong Kong) Limited and Xxxxx
Singapore Pte. Limited.
INDEPENDENT AUDITOR means Price Waterhouse, Adelaide, the
Company's auditor.
INTELLECTUAL PROPERTY LICENCES means all agreements under which
the Company or any Subsidiary obtains the right to use, but not
ownership of, any of the Intellectual Property Rights referred to
in paragraphs (a) to (d) of the definition of that term.
INTELLECTUAL PROPERTY RIGHTS means:
(a) the business names owned or used at any time prior to
Completion by the Company or any Subsidiary;
(b) all trade marks owned or used at any time by the Company or
any Subsidiary prior to completion;
(c) all Confidential Information owned or used at any time prior
to Completion by the Company or any Subsidiary;
6
_______________________________________________________________________________
(d) all patents, patent applications, discoveries, inventions,
registered and unregistered designs, copyright and similar
rights owned or used at any time prior to Completion by the
Company or any Subsidiary; and
(e) the Intellectual Property Licences.
INTERIM ACCOUNTS means the balance sheet of the Company and the
Subsidiaries as at 24 March 1995 and the profit and loss account
of the Company and the Subsidiaries for the period of 83 days
ending on 24 March 1995, which are unaudited but which have been
reviewed by the Independent Auditor and copies of which are
attached hereto as Annexure B.
INVENTORY means all stock-in-trade in use or intended for use in
connection with the business of the Company or any Subsidiary as
at the Completion Date, including items owned by the Company or
any Subsidiary which are in transit to the Company or any
Subsidiary.
LAST ACCOUNTS means the audited balance sheet of the Company and
the Subsidiaries as at the Last Balance Date and the audited
profit and loss account of the Company and the Subsidiaries for
the period of twelve (12) months ending on the Last Balance Date,
copies of which are attached as Annexure A.
LAST BALANCE DATE means 30 September, 1994.
LAST HAVEWIN ACCOUNTS means the audited balance sheet of Havewin
as at 31 March, 1995 and the audited profit and loss account of
Havewin for the period of twelve (12) months ending on said date,
copies of which are attached as Annexure A-1.
LAST ULTRABRIDGE ACCOUNT means the audited balance sheet of
Ultrabridge as at 31 December 1994 and the audited profit and
loss account of Ultrabridge for the period of fifteen (15) months
ending on said date, copies of which are attached as Annexure X-
0.
LEASED PLANT AND EQUIPMENT means the subject matter of the
Equipment Leases.
PLANT AND EQUIPMENT means all plant, equipment, motor vehicles,
machinery, furniture, fixtures and fittings and other personal
property owned and used by the Company or any Subsidiary.
PROPERTY LEASES means the leases to the Company or any Subsidiary
of real property.
7
________________________________________________________________________________
PURCHASE PRICE means the aggregate consideration payable for the
Ultrabridge Shares, the Havewin Shares and the Class D Shares
calculated in accordance with Clause 3 and adjusted, where
applicable, in accordance with Clause 11.8 and Clause 12.4.
RECORDS means originals and copies, in machine readable or
printed form, of all books, files, reports, records,
correspondence, documents and other material of or relating to or
used in connection with the Company or any Subsidiary including:
(a) minute books, statutory books and registers, books of
account and copies of taxation returns;
(b) sales literature, market research reports, brochures and
other promotional material (including printing blocks,
negatives, sound tracks and associated material);
(c) all sales and purchasing records;
(d) all trading and financial records; and
(e) lists of all regular suppliers and customers.
RELATED BODY CORPORATE of a body corporate means another body
corporate which is related to the first within the meaning of
section 50 of the Corporations Law.
SUBSIDIARIES means all of the bodies corporate and trust
described in Schedule 2, and Subsidiary means any one of those
bodies corporate or trusts.
TAX where used in this Agreement has the same meaning as that
ascribed to it in Clause 12.
TIMING DIFFERENCES means differences between pre-tax accounting
profit or loss and taxable income or tax loss for a given
financial period which arise because the financial period in
which some items of revenue and expense are included in the
determination of the pre-tax accounting profit or loss does not
coincide with the financial period in which they are included in
the determination of taxable income or tax loss.
UD INDEMNITORS means Ultrabridge Securities Limited (Cayman
Islands), Xxxx Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxx Xxxxxxx (all
more particularly described in Schedule 1A).
8
________________________________________________________________________________
UD SHAREHOLDERS means Ultrabridge Securities Limited, Xxxx Xxxxxx
Xxxxxxxx, HPLF Investments (II) Limited, Xxxxx Xxxxxxx Xxxxxxx,
the Trustees of the Howletts and Port Lympne Foundation (the
"Foundation") and Enderbury Limited.
ULTRABRIDGE COMPLETION ACCOUNTS means the audited balance sheet
of Ultrabridge reflecting the assets and liabilities of
Ultrabridge as at the close of business Cayman Islands time on
the day immediately preceding the Completion Date and the audited
profit and loss account of Ultrabridge for the period from the
Last Utrabridge Accounts ending on that date and time, to be
prepared in accordance with Clause 5.
WARRANTIES means the warranties, representations and indemnities
in this Agreement, including Clause 11.
1.2 In this Agreement unless the contrary intention appears:
(a) a reference to a Clause, schedule, annexure or appendix is a
reference to a Clause of or schedule, annexure or appendix
to this Agreement and references to this Agreement include
any recital, schedule, annexure or appendix;
(b) a reference to this Agreement or another instrument includes
any variation or replacement of either of them;
(c) a reference to a statute, ordinance, code or other law
includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of
any of them;
(d) the singular includes the plural and vice versa;
(e) the word person includes a firm, a body corporate, an
unincorporated association or an authority;
(f) a reference to a person includes a reference to the person's
executors, administrators, successors, substitutes
(including, but not limited to, person taking by novation)
and assigns;
(g) an agreement, representation or warranty in favour of two or
more persons is for the benefit of them jointly and
severally;
(h) an agreement, representation or warranty on the part of two
or more persons binds them jointly and severally;
9
________________________________________________________________________________
(i) if a period of time is specified and dates from a given day
or the day of an act or event, it is to be calculated
exclusive of that day; and
(j) a reference to a day is to be interpreted as the period of
time commencing at midnight and ending 24 hours later.
1.3 Headings are inserted for convenience and do not affect the
interpretation of this Agreement.
2 SALE AND PURCHASE OF SHARES
________________________________________________________________________________
2.1 Each Ultrabridge Vendor agrees to sell and transfer to the
Purchaser and the Purchaser agrees to purchase from that
Ultrabridge Vendor, on the terms and conditions of this
Agreement, the number of Ultrabridge Shares held by that
Ultrabridge Vendor set out in column 2 of Schedule 1A. Each
Havewin Vendor agrees to sell and transfer to the Purchaser and
Purchaser agrees to purchase from that Havewin Vendor, on the
terms and conditions of this Agreement, the number of Havewin
Shares held by that Havewin Vendor set out in column 2 of
Schedule 1B. The Trust agrees to sell and transfer to the
Purchaser and Purchaser agrees to purchase from the Trust, on the
terms and conditions of this Agreement, the number of Class D
Shares held by the Trust set out in column 2 of Schedule 1C.
2.2 The Ultrabridge Shares, the Havewin Shares and the Class D Shares
must be transferred free from any mortgage, charge, lien, pledge
or other encumbrance and, except as otherwise specifically
provided for in this Agreement, with all rights, including
dividend rights, attached or accruing to them on and from
February 23, 1995. The Purchase Price is inclusive of all
shareholder loans from Ultrabridge and Havewin, and all such
loans to the extent outstanding shall be satisfied on Completion
from the Purchase Price.
2.3 The Purchaser is not obliged to Complete unless each Vendor is
ready, willing and able to Complete simultaneously.
2.4 Each Ultrabridge Vendor and Havewin Vendor waives in favour of
the Purchaser any pre-emptive or other rights which that Vendor
has now or might otherwise have in respect of any of the
Ultrabridge Shares or Havewin Shares held by each other
Ultrabridge Vendor and/or Havewin Vendor, as the case may be.
Subject to Completion, the Trust waives, and each Ultrabridge
Vendor and each Havewin Vendor shall procure that Ultrabridge and
Havewin, respectively, waive any pre-emptive or other rights
which the Trust, Ultrabridge or Havewin, respectively, has now or
might otherwise have in respect of shares of the Company. Without
limiting the foregoing, effective at Completion,
10
________________________________________________________________________________
the shareholders agreement dated 19 April 1988 among Ultrabridge,
Havewin, Xxx Xxxxx Xxxxxxxxx and Messrs. Ong and Ong (referred to
in the Articles of Association of the Company) and the
Shareholders Deed between Ultrabridge, Havewin, State Bank of
South Australia, the Company, Diamond Leisure and Fernbank dated
9 September 1993 will have been terminated.
3. PURCHASE PRICE
_______________________________________________________________________________
3.1 The Purchase Price is Aus$75,806,250 less the amount of
Aus$4,000,000 representing indebtedness owing by the Company to
Ultrabridge or Havewin as at 23 February 1995 and less any
indebtedness in excess of Aus$4,000,000 owing by Diamond Darwin
Consolidated to Ultrabridge, Havewin, any Vendor or any party
related or affiliated thereto immediately prior to Completion,
which the Purchaser shall procure is repaid on Completion, which
Purchase Price shall be further adjusted as provided below.
Ultrabridge and Havewin will each be owed immediately prior to
Completion Aus$2,000,000 by the Company which, as provided above,
on Completion the Purchaser shall procure is repaid by the
Company, and on Completion Ultrabridge and Havewin will then have
the right to pay the proceeds of such indebtedness to the
Ultrabridge Vendors and the Havewin Vendors on Completion as they
each shall direct. The Purchase Price shall be adjusted upwards
or downwards by an amount equal to 100% of the consolidated net
profits/losses after tax earned/incurred after utilization of
available tax losses and after charging minority interest by
Diamond Darwin Consolidated (the "Net Profits") for the period
between January 1, 1995 and March 24, 1995 (both dates inclusive)
(the "Interim Period") and 50% of the Net Profits for the period
between March 24, 1995 and the date of Completion (both dates
exclusive), and shall be adjusted downwards to the extent (a)
that on Completion the aggregate of external bank term loans
(excluding shareholders loans which are to be repaid as provided
above) and other Non-Current liabilities of Diamond Darwin
Consolidated shall exceed Aus$19 million principal and (b) of any
distributions or dividends made by the Company since September
30, 1994 (collectively, the "Adjustments"). The Interim Accounts
state that the Net Profits for the Interim Period were
Aus$1,715,050. In reliance on the accuracy of the Interim
Accounts, on Completion the Purchaser will pay an amount of
Aus$77,521,300 on account of the Purchase Price and repayment of
the aforesaid shareholders' loans, and the final purchase price
shall be determined by the Independent Auditor by reference to
the Company Completion Accounts. The balance of the Purchase
Price shall be paid by the Purchaser or repaid by the Vendors, as
applicable, together with an amount equal to interest thereon at
2% over State Bank of South Australia's Bank Xxxx Rate for the
applicable period from Completion to the actual date of payment
within seven
11
________________________________________________________________________________
days of the Independent Auditor's certificate of the final
Purchase Price. All payments made with respect to the Purchase
Price shall be made to a single bank account in the name of
Xxxxxxx Suddards, in trust for Vendors, as their respective
interests may appear, which will distribute the payments in
accordance with written instructions from the Vendors. The
amounts to be paid to the Ultrabridge Vendors, the Havewin
Vendors and the Trust are set forth on Schedules 1A, 1B and 1C,
respectively; provided, however, the benefit or burden as the
-------- -------
case may be, of the Adjustments, shall be borne 42.5% for the
account of the Ultrabridge Vendors, 15% for the account of the
Trust, and 42.5% for the account of the Havewin Vendors.
3.2 For the purpose of Clause 3.1:
(a) a reference to "consolidated net profits/losses" shall
exclude any reduction in profits or the incurring of a loss
as a result of the exclusion as an asset of any Future
Income Tax Benefit in the Last Accounts which adjustment is
made in accordance with the principles for preparation of
the Company Completion Accounts in Clause 5.4; and
(b) a reference to Non-Current Liabilities shall include a
provision for long-service leave and leasing of plant and
equipment, the installments for which are not payable within
twelve (12) months of the balance sheet date.
3.3 On Completion, Havewin and Ultrabridge shall have no liabilities
of any kind except for liabilities which are satisfied from the
Purchase Price or are otherwise cancelled or discharged at no
cost to Ultrabridge or Havewin, as applicable, or to Purchaser.
4 CONDITIONS PRECEDENT
________________________________________________________________________________
4.1 Completion is conditional on:
(a) the Treasurer of the Commonwealth of Australia consenting,
under the Foreign Acquisitions and Takeovers Xxx 0000, to
the proposed acquisition by the Purchaser of Diamond Darwin
Consolidated through its acquisition of the Ultrabridge
Shares, the Havewin Shares (and subsequent liquidation of
Ultrabridge and Havewin) and the Class D Shares, and the
Treasurer is to be deemed to have so consented:
(i) if the Purchaser receives written advice from the
Treasurer or on his behalf, without any term or
condition which the Purchaser considers unacceptable,
to
12
________________________________________________________________________________
the effect that the acquisition of the Ultrabridge
Shares, the Havewin Shares and the Trust Shares is not
objected to under the Foreign Acquisitions and
Takeovers Xxx 0000; or
(ii) if 10 days have elapsed from the day the Treasurer
ceased to be empowered to make any order under Part II
of the Foreign Acquisitions and Takeovers Act in
relation to the proposed acquisition because of lapse
of time, notice of the proposed acquisition of the
Ultrabridge Shares, the Havewin Shares and the Trust
Shares having been given to the Treasurer under the
Foreign Acquisitions and Takeovers Xxx 0000;
(b) the Purchaser and the Vendors receiving all relevant
consents and approvals required from the Government or
relevant Minister of the Northern Territory of Australia in
relation to the change of control of Diamond Darwin
Consolidated, in connection with the gaming and liquor
licenses on terms no less favorable than the following:
(i) the gaming license of Diamond Leisure shall be granted
on an "evergreen" basis, subject to the continued good
behavior of the licensee and its controllers;
(ii) table game exclusivity enjoyed by Diamond Leisure
shall be extended through no earlier than June 30,
2005 at the current 8% gaming tax on gross gaming
profit;
(iii) in the event community poker machines are introduced
in the Northern Division of the Northern Territory and
as a consequence the Company and the Subsidiaries
cease to enjoy exclusivity in poker machines:
x. through at least June 30, 2003, the Northern
Territory Government shall collect and remit to
Diamond Leisure an amount equal to not less than
22% of the gross gaming profit of the community
machines located in the Northern Division; and
y. commencing with the community machines becoming
operational, the gaming tax on Diamond Leisure's
poker machines may be increased in stages from the
present 8% of gross gaming profit to a rate not in
excess of 12.5% of gross gaming profit in the
first year, 15% of
13
________________________________________________________________________________
gross gaming profit in the second year, 17.5% of
gross gaming profit in the third and fourth years,
20% in the fifth year, 22.5% in the sixth year,
and 25% in the seventh and subsequent years, in
each case measured from the date of introduction
of the community poker machines in the Northern
Division of the Northern Territory; and
(iv) confirmation satisfactory to the Purchaser that
Diamond Leisure's gaming and liquor licenses would
extend to operations at additional sites in the
Northern Division of the Northern Territory;
(c) as elected by Purchaser:
(i) the agreement of the State Bank of South Australia
having been received to the change of control of the
Company (and any other events or transactions
contemplated by this Agreement) under that certain
Facility Agreement dated as of 2 August 1993 and
related agreements (the "State Bank Loan Agreements")
without imposing any adverse changes in such State
Bank Loan Agreements, or
(ii) provision satisfactory to Purchaser having been made
with respect to the refinancing and discharge of the
State Bank Loan Agreements;
(b) the approval by all appropriate Nevada regulatory
authorities to the extent required of the transactions
contemplated by this Agreement.
4.2 (a) MGM Grand and the Purchaser shall use their best endeavours
(other than by incurring substantial liabilities,
substantial obligations (including any divestment and
restrictions on business operations) or monetary obligations
and other than by consenting to any substantial alteration
to the terms of this Agreement) to satisfy any request for
information or condition or conditions specified by or on
behalf of the Treasurer of the Commonwealth of Australia
under the Foreign Acquisitions and Takeovers Xxx 0000 as
referred to in Clause 4.1(a).
(b) Each of the parties shall use all reasonable endeavours to
obtain the fulfillment of the conditions in Clause 4.1(b) to
(d) inclusive in an expeditious manner.
14
________________________________________________________________________________
(c) The Vendors and Purchaser, as applicable, shall give the
other prompt notice in writing upon it becoming aware
whether or not any of the conditions precedent referred to
in Clause 4.1 has been satisfied.
4.3 If:
(a) any of the conditions in Clause 4.1 are not fulfilled by the
Completion Date; or
(b) any consent, approval or agreement required under any of
those conditions is not granted on terms acceptable to the
Purchaser, acting reasonably,
then the Purchaser may at any time before Completion,
subject to the Purchaser having complied with Clause 4.2,
terminate this Agreement by notice given to the Vendors.
4.4 If this Agreement is terminated under Clause 4.3 then, in
addition to any other rights, powers or remedies provided by law:
(a) each party is released from its obligations to further
perform the Agreement except those imposing on it
obligations of confidentiality;
(b) each party retains the rights it has against any other party
in respect of any past breach;
(c) the Purchaser must return to the Vendors any Records given
to it under Clause 9 except in the event of breach by any of
the Vendors (in which event such Records may be retained
only to the extent relevant to the exercise of Purchaser's
rights, powers and remedies provided by law).
5. COMPLETION AND COMPLETION ACCOUNTS
________________________________________________________________________________
5.1 Completion of the sale and purchase of the Ultrabridge Shares,
the Havewin Shares and the Class D Shares will take place at 9:00
a.m. on the Completion Date at the offices of MGM Grand, 0000 Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx 00000, XXX, or such
other time and place as the Vendors and the Purchaser may agree.
5.2 The Vendors agree to do the following on Completion:
(a) deliver to the Purchaser or its solicitors:
15
________________________________________________________________________________
(i) executed transfers in favour of the Purchaser of all the
Ultrabridge Shares, the Havewin Shares and the Class D
Shares, except one share in each case to be delivered and
transferred to such nominees as Purchaser shall designate
prior to the Completion Date, together with the share
certificates for the aforesaid shares and consents that the
Purchaser reasonably requires;
(ii) share certificates representing the Class A Shares and Class
B Shares, to be held by Purchaser or its solicitors in
connection with the liquidation following Completion of
Ultrabridge and Havewin; and
(iii) share certificates and unit certificates for the
Subsidiaries (including the Territory Property Trust)
representing all such shares or units owned by the Company
or any Subsidiaries and true and correct copies of the title
deeds for the land owned by the Company, the Subsidiaries
and/or the Territory Property Trust (the originals of which
are held by or on behalf of the State Bank of South
Australia pursuant to the State Bank Loan Agreements); and
(b) cause:
(i) the board of directors of Ultrabridge, Havewin and the
Company to direct that, subject to the payment of stamp
duty, if any, the transfers of the respective shares are
registered;
(ii) the delivery to the Purchaser or its nominee of the Records
within the possession or control of the Vendors, Havewin,
Ultrabridge, Diamond Darwin Consolidated or any of their
respective affiliates and the common seal and any other
company seals of Ultrabridge, Havewin, the Company and the
Subsidiaries;
(iii) the delivery to the Purchaser or its nominee of duly
completed bank authorities authorised by the board of
directors of Ultrabridge, Havewin and the Company and each
of the Subsidiaries directed to that company's bankers
authorising the operation of each of its bank accounts by
nominees of the Purchaser; and
(iv) the appointment to the board of directors of Ultrabridge,
Havewin, the Company and each of the Subsidiaries of the
Purchaser's nominees and the resignation from those
16
________________________________________________________________________________
boards, on terms approved by the Purchaser, of all
the existing directors but so that a properly
constituted board of directors is in existence at
all times.
5.3 The Purchaser agrees to make payment on Completion in
accordance with Clause 6.1 if the Vendors comply with Clause
5.2.
5.4 The Vendors and the Purchaser agree to cause the Company,
promptly after the Completion Date, to prepare the Company
Completion Accounts in accordance with the Accounting
Standards save for compliance with the Australian Approved
Accounting Standard AASB 1020 in respect of Future Income
Tax Benefit, and have those accounts audited (with an
unqualified audit report) by the Independent Auditor. The
Ultrabridge Vendors agree to cause Ultrabridge (with the
cooperation of the Purchaser), promptly after the Completion
Date, to prepare the Ultrabridge Completion Accounts in
accordance with the Accounting Standards applicable to
Ultrabridge and have those accounts audited (with an
unqualified audit report) by Price Waterhouse, Cayman
Islands. The Havewin Vendors agree to cause Havewin (with
the cooperation of the Purchaser), promptly after the
Completion Date, to prepare the Havewin Completion Accounts,
in accordance with the Accounting Standards applicable to
Havewin and have those accounts audited (with an unqualified
audit report) by Xxxxxxx Mar Fan & Co., Hong Kong. The
Company Completion Accounts, Ultrabridge Completion
Accounts, and Havewin Completion Accounts shall each be
prepared in consultation with Purchaser's auditor who shall
be consulted in connection with the respective audit plan
(including approach and audit scope), and who shall have the
opportunity to review and comment upon such respective
auditors' working paper files and results, and to meet and
confer with such auditors to resolve any differences prior
to the respective Completion Accounts being certified and
presented to the parties. The respective Completion Accounts
must:
(a) subject to paragraph (c) below, disclose a true and
fair view of the state of the affairs, financial
position and assets and liabilities of the Company and
the Subsidiaries in the case of the Company Completion
Accounts, Ultrabridge in the case of the Ultrabridge
Completion Accounts (except that Ultrabridge will not
comply with the equity accounting provisions of
International Accounting Standards 28 in respect of its
investment in the Company) and Havewin in the case of
the Havewin Completion Accounts as at Havewin
Completion Accounts as at the Completion Date and the
income, expenses and results of operations of the
Company and the Subsidiaries in the case of the Company
Completion Accounts, Ultrabridge in the case of the
Ultrabridge Completion
17
________________________________________________________________________________
Accounts and Havewin in the case of the Havewin Completion
Accounts for the financial period ending on that date;
(b) subject to paragraph (c) below, include in the balance sheet
all such reserves and provisions for taxation as are
materially necessary to cover all tax liabilities, whether
or not assessed, of the Company and the Subsidiaries in the
case of the Company Completion Accounts, Ultrabridge in the
case of the Ultrabridge Completion Accounts and Havewin in
the case of the Havewin Completion Accounts up to the
Completion Date;
(c) in the case of the Company Completion Accounts: (i) include
no opening balance, no closing balance and no item of profit
or loss, each in respect of Future Income Tax Benefit and
(ii) in order to facilitate the determination of the
Purchase Price, separately state the Net Profits for the
period between January 1, 1995 and March 24, 1995 (both
dates inclusive) and the period between March 24, 1995 and
the date of Completion (both dates exclusive); and
(d) not include in the balance sheet provision for auditors fees
for auditing the Completion Accounts, it being agreed that:
in the case of the Company Completion Accounts, Purchaser
will be responsible for 50% of such fees and Vendors will be
responsible for 50% of such fees; in the case of
Ultrabridge, the Ultrabridge Vendors will be responsible for
100% of such fees; and in the case of Havewin, the Havewin
Vendors will be responsible for 100% of such fees;
(e) be prepared:
(i) subject to paragraph 5.4(c) above, in accordance with
the requirements of the Corporations Law and in the
case of Ultrabridge and Havewin, the corresponding
applicable laws;
(ii) subject to paragraph 5.4(c) above, in accordance with
the relevant Accounting Standards;
(iii) in the manner described in the notes to them and the
accompanying auditor's opinion;
(iv) on a consistent basis with the Last Accounts for the
prior financial period except that they shall not
include in the case of the Company Completion Accounts
as an asset any Future Income Tax Benefit, and it
being understood that no warranty shall be given as
to the Company's
18
________________________________________________________________________________
ability to utilize any Future Income Tax Benefit which,
had the Company Completion Accounts been prepared on a
consistent basis with the Last Accounts, would have been
included in the Company Completion Accounts;
(v) without revaluing upwards any assets in the period which is
the subject of the Completion Accounts;
The Company Completion Accounts must immediately be delivered upon
availability by the Company to the Vendors and the Purchaser. The
Ultrabridge Completion Accounts must immediately be delivered upon
availability by Ultrabridge to the Ultrabridge Vendors and the
Purchaser. The Havewin Completion Accounts must immediately be
delivered upon availability by Havewin to the Havewin Vendors and the
Purchaser. Purchaser and Vendors each agree to cooperate fully in
order that the respective Completion Accounts be prepared and
delivered as promptly as practicable.
5.5 If the Purchaser and the Vendors in the case of the Company Completion
Accounts, the Ultrabridge Vendors in the case of the Ultrabridge
Accounts and the Havewin Vendors in the case of the Havewin Accounts
cannot agree on any item in connection with the preparation of the
respective Completion Accounts, then either such Vendors or the
Purchaser may refer the disagreement to the Independent Auditor, in
the case of the Company, to Price, Waterhouse, Cayman Islands in the
case of Ultrabridge and Xxxxxxx Mar Fan & Co. in the case of Havewin,
with the request that such auditor make a decision on the disagreement
as soon as practicable after receiving any submissions from the
respective Vendors and the Purchaser and after meeting and conferring
with Purchaser's auditor in an effort to resolve such differences. The
decision of the Independent Auditor, Price Waterhouse, Cayman Islands,
and Xxxxxxx Mar Fan & Co., as applicable is, in the absence of
manifest error, to be conclusive and binding on the parties for the
purpose of determining the Purchase Price under this Agreement. The
auditor will be appointed as an expert and not as an arbitrator. In
the event Purchaser's auditor expresses the written opinion that
manifest error exists, the disputed matter shall be referred to one of
the 4 largest internationally recognized accounting firms (not
including Price Waterhouse or Xxxxxx Xxxxxxxx), as the Purchaser and
Vendors may agree, to resolve such matter as it shall decide in its
absolute discretion. Purchaser and Vendors shall each be responsible
for half of the fees and costs of such accounting firm in resolving
the matter.
19
________________________________________________________________________________
6 PAYMENT OF THE PURCHASE PRICE
________________________________________________________________________________
6.1 The Purchaser agrees to pay to the Vendors at Completion and
thereafter the amounts set forth in Clause 3.
6.2 Each payment referred to in Clause 6 must be made by bank
cheque or bank telegraphic transfer to the account of
Xxxxxxx Suddards as provided in Clause 3 pursuant to written
instructions given by the Vendors prior to Completion (which
instructions shall remain operative until changed in
compliance with the procedures set forth in Clause 17).
6.3 MGM Grand guarantees the due and punctual performance by
Purchaser of all of Purchaser's obligations under or arising
from this Agreement and shall indemnify and keep indemnified
the Vendors and each of them for any loss, damage, cost or
expenses which may be suffered or incurred by them as a
result of the non-performance of the obligations of the
Purchaser hereunder. Without limiting the generality of the
foregoing, MGM Grand shall pay on demand any amounts due
for payment by the Purchaser hereunder if the Purchaser has
not made such payment to the person entitled thereto within
five (5) Business Days of the date such payment was due for
payment.
7 CONDUCT OF BUSINESS PENDING COMPLETION
________________________________________________________________________________
7.1 From the date hereof until Completion the Vendors must (and
since February 23, 1995 through the date hereof the Vendors
have), unless the Purchaser otherwise agrees in writing or
as otherwise specifically provided in this Agreement,
procure or procured, as applicable, that the Company and
each of the Subsidiaries:
(a) carries on its business in a normal, proper and
efficient manner and only in the ordinary course of
business and regularly consults with the Purchaser on
material aspects in the manner of conduct of its
business;
(b) submits to the Purchaser for its approval (such
approval not to be unreasonably withheld) any changes
in its business, including without limitation (x) any
contracts which may not be cancelled by the Company or
the Subsidiary in question without penalty on 60 or
fewer days' notice, and (y) any capital expenditures
in excess of Aus$100,000 for any single capital
expenditure or Aus$500,000 in the aggregate, provided
however that the foregoing shall not apply to
recurring capital expenditures consistent with prior
practice for replacements and refurbishment;
20
________________________________________________________________________________
(c) uses all reasonable endeavours to preserve the
goodwill of its business;
(d) maintains its assets at normal levels; and
(e) carries out repairs and maintenance to the Plant and
Equipment, the Leased Plant and Equipment and the
Business Premises in accordance with good commercial
practice and standards of maintenance so as to
maintain said property in the same condition as it was
on February 23, 1995 and as required under the
Equipment Leases and the Property Leases, fair wear
and tear excepted.
7.2 From the date hereof until Completion the Vendors must (and
since February 23, 1995 through the date hereof the Vendors
have), unless the Purchaser otherwise agrees in writing,
procure or procured, as applicable, that the Company and
each of the Subsidiaries do not:
(a) increase, reduce or otherwise alter its share capital
or grant any options for the issue of shares or other
securities;
(b) declare or pay a dividend or make any distribution of
any kind to any Vendor or any relative, associate or
affiliate of a Vendor or body corporate associated (as
that term is defined in the Corporations Law) with a
Vendor;
(c) make a distribution or revaluation of assets;
(d) buy back its shares;
(e) enter into any abnormal or unusual transaction which
relates to or adversely affects its business;
(f) enter into any contract involving total expenditure in
excess of Aus$100,000 for the Company and the
Subsidiaries taken as a whole, respectively;
(g) purchase any asset (other than Inventory) for more
than Aus$100,00 or total assets (other than Inventory)
costing more than Aus$100,000 in the case of the
Company and the Subsidiaries taken as a whole;
(h) allow the total amount owing to trade creditors to
exceed the monthly average for the previous six
months;
(i) mortgage, pledge or encumber any asset;
21
________________________________________________________________________________
(j) sell or transfer any asset except in the ordinary
course of business consistent with prior practice;
(k) cancel, terminate or modify any contractual right
except in the ordinary course of business consistent
with prior practice;
(l) waive any right of substantial value;
(m) enter into advancement booking arrangements for hotel
rooms or other facilities except in the ordinary
course of business consistent with prior practice;
(n) renew or extend any leases other than as required by
leases in effect prior to February 23, 1995;
(o) adopt or amend any bonus, profit sharing,
compensation, stock option, pension, retirement,
deferred compensation, employment or other employee
benefit plan, agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any
employee or increase in any manner the compensation or
fringe benefits of any employee or pay an benefit not
required by an existing plan, current practice or
arrangement; or
7.3 The Vendors agree that they will not enter any discussions
with any potential purchaser of the Company, any of its
Subsidiaries, Ultrabridge or Havewin, or any significant
asset of any of the foregoing and will not furnish any
information regarding any of the foregoing to any such
potential purchaser.
7.4 The Ultrabridge Vendors, on the one hand, and Havewin
Vendors, on the other hand, shall take all steps necessary
within their respective powers to enable the Purchaser to
implement the liquidation of Ultrabridge and Havewin
respectively by the distribution in specie of the underlying
shares in Diamond Darwin owned by each company. It shall be
the responsibility of Purchaser to place such companies into
liquidation by passing the relevant shareholder resolutions
and complete the implementation of such liquidations as soon
as practicable following Completion, including the timely
making of all tax filings, provided that the indemnity given
by the UD Indemnitors and the Havewin Vendors in respect of
Australian Tax as provided in Clause 12.12 shall not relate
to any value attributed to the Ultrabridge Shares and the
Havewin Shares or the underlying 'A' Shares and 'B' Shares
in the Company owned by each of Ultrabridge and Havewin in
excess of the Purchase Price attributable to the Ultrabridge
Shares and Havewin Shares hereunder, and shall only be
operative if the Purchaser implements such liquidations in
accordance with the applicable requirements of the
respective company's constituent documents and in
22
________________________________________________________________________________
accordance with the description of the material steps for
each of Ultrabridge and Havewin referred to in Clause 7.6
within the timescale after Completion where specified in
such detailed description of material steps.
7.5 In furtherance of the transactions provided for in this
Agreement, including without limitation Clause 7.4, the
Ultrabridge Vendors and the Havewin Vendors, respectively,
shall take all steps necessary to procure that Ultrabridge
and Havewin:
(a) On Completion and, subject to Clause 7.6(b), at any
time thereafter, have no liabilities of any kind
(including tax liabilities), except for liabilities
approved in writing by Purchaser and for which there
is corresponding cash equivalent asset equal to or in
excess of such liability and shall have no issued
capital or any obligations to issue share capital
other than the share capital relating exclusively to
the Ultrabridge Shares and Havewin Shares to be
acquired by Purchaser on Completion and which
represent the entirety of the outstanding share
capital of Ultrabridge and Havewin, as the case may
be;
(b) on Completion, own, free and clear of all liens,
charges and claims (other than the rights of
Purchaser) the Shares of Diamond Darwin set out in
Schedule 1A (in the case of Ultrabridge) and Schedule
1B (in the case of Havewin);
(c) do not enter into any transactions or make any
commitments for which Ultrabridge or Havewin will have
any liability or responsibility from and after
Completion, except as specifically provided for in
this Agreement; and
(d) maintain their respective corporate existence and good
standing and conduct their respective affairs in
conformity with all applicable laws and regulations.
7.6 (a) Exhibited to this Agreement and marker Exhibit 1 and
2 respectively are the detailed descriptions of the
material steps and timetable to be taken and pro forma
completed copies of the documents to be executed in
order to implement the respective liquidations of
Ultrabridge and Havewin, including details of
appropriate forms to be filed and resolutions and
other documents to be executed. The UD Indemnitors
warrant that the steps and timetable outlined in
Exhibit 1 comply with all applicable requirements of
applicable law and the Havewin Vendors warrant
likewise in respect of Exhibit 2.
23
________________________________________________________________________________
(b) The Purchaser will complete and lodge, where
appropriate, the forms and associated documents
referred to in Exhibits 1 and 2 in the form of those
contained in the said Exhibits and in an expeditious
manner consistent with the timetable contained in
those Exhibits.
8 RISK AND INSURANCE
________________________________________________________________________________
8.1 The Vendors must procure that the Company and each of the
Subsidiaries, and to the extent relevant, Ultrabridge and
Havewin maintains at least until Completion insurance of
such company's assets covering such risks and for such
amounts as is currently maintained by such company. Upon
reasonable request by Purchaser, the Ultrabridge Vendors
must procure that Ultrabridge, and the Havewin Vendors must
procure that Havewin, take out and maintain until Completion
insurance of the company's assets covering such risks and
for such amounts as would be maintained in accordance with
prudent business practice.
8.2 If any of the assets of the Company or any Subsidiary are
damaged, destroyed or otherwise affected before Completion
to a degree that in the Purchaser's reasonable judgment may
materially and adversely affect the conduct or profitability
of the business of the Company or any of the Subsidiaries,
the Purchaser may terminate this Agreement by notice to the
Vendors. If the Purchaser does not elect to terminate this
Agreement and the Company or such Subsidiary is not, in the
reasonable opinion of the Purchaser, adequately insured
under the contracts of insurance referred to in Clause 8.1,
including loss of profits, then an appropriate adjustment
will be made to the Purchase Price as agreed between the
Vendors and the Purchaser. If the Vendors and the Purchaser
are unable to agree on the adjustment within 21 days of the
Completion Date, then either the Vendors or the Purchaser
may refer the disagreement to an independent valuer with the
request that the independent valuer make a decision in
respect of the disagreement as soon as practicable after
receiving the reference and any submissions from the Vendors
and the Purchaser. If the Vendors or Purchaser cannot agree
on the independent valuer within seven days of one
requesting appointment then the independent valuer is to be
the person nominated by the President of the Australian
Institute of Chartered Accountants (New South Wales Branch)
at the request of the Vendors or the Purchaser. The decision
of the independent valuer is to be conclusive and binding on
the parties in the absence of manifest error. The Vendors
(collectively) and the Purchaser agree to each pay one half
of the independent valuer's costs and expenses in connection
with the reference. The independent valuer will be appointed
as an expert and not as an arbitrator. The
24
________________________________________________________________________________
procedures for determination are to be decided by the
independent valuer in its absolute discretion.
8.3 If this Agreement is terminated under Clause 8.2 then Clause
4.4 applies with the necessary changes.
9 ACCESS TO RECORDS
________________________________________________________________________________
The Vendors agree to ensure that the Purchaser and its
representatives are allowed full and free access to the
premises and Records of the Company and the Subsidiaries and
Ultrabridge and Havewin at all reasonable times before the
Completion Date to enable the Purchaser to become familiar
with the affairs of the Company and the Subsidiaries and
Ultrabridge and Havewin and investigate the accuracy of the
Warranties. The Vendors must also provide the information,
assistance and facilities that the Purchaser reasonably
requires for those purposes. If for any reason the Purchaser
does not proceed with the purchase of the Ultrabridge
Shares, the Havewin Shares and the Class D Shares, it may
not, at any time after termination of this Agreement,
disclosure or use, or permit the disclosure or use of, any
Confidential Information of the Company or any Subsidiary or
Ultrabridge or Havewin except:
(a) if required to make such disclosure by any court of
competent jurisdiction or in order to enforce any
rights under this Agreement;
(b) pursuant to any court order;
(c) pursuant to any law or regulation having the force of
law or the requirements of any governmental authority
such as the Commonwealth of Australia, the Northern
Territory, the United States of America, or State of
Nevada, or any agency or instrumentality thereof;
(d) pursuant to the requirements of any recognised stock
exchange or securities regulatory agency such as the
United States Securities and Exchange Commission;
(e) in circumstances where the information has come
within the public domain otherwise than by reason of a
breach by one of the parties of the provisions of this
Clause;
(f) to professional advisers; and.
(g) in connection with legal proceedings arising from or
in connection with such termination.
25
________________________________________________________________________________
10 SUPERANNUATION
________________________________________________________________________________
10.1 In this Clause 10 and Warranties 105 to 108 inclusive in Appendix
A to this Agreement the following words have these meanings:
Fund means:
(a) Host-Plus Superannuation Fund established by a Declaration
of Trust dated 8 February 1988; and
(b) Diamond Leisure Special No. 2 Superannuation Master Plan,
the trustee of which is AMP Superannuation Limited (ACN 008
414 104).
Trust Deed means the trust deed that established the applicable
Fund, as amended.
10.1 The Vendors agree to ensure that both before and after the
Completion Date the Purchaser and any actuary appointed by it are
provided with all records and information which they may require
(including detailed information about each of the members and
their participation in the Fund) in order to verify the
correctness of any calculations or values to be ascertained for
the purposes of this Agreement (including the Warranties). This
obligation extends to any records, information or systems which
are recorded, maintained or otherwise dependent on any
computerised or similar system or service.
11 WARRANTIES REPRESENTATIONS AND INDEMNITIES
________________________________________________________________________________
11.1 Except as set forth in the Disclosure Letter, each of the Vendors
represents and warrants to the Purchaser that each of the
statements set out in Appendix A to this Agreement is accurate as
at the date hereof and will be accurate on Completion. Each of
the statements is to be treated as a separate representation and
warranty and the interpretation of any statement made may not be
restricted by reference to or inference from any other statement.
11.2 Except as set forth in the Disclosure Letter, each of the
Ultrabridge Vendors represents and warrants to the Purchaser that
each of the statements set out in Appendix B to this Agreement is
accurate as at the date hereof and will be accurate on
Completion. Each of the statements is to be treated as a separate
representation and warranty and the interpretation of any
statement made may not be restricted by reference to or inference
from any other statement.
26
________________________________________________________________________________
11.3 Except as set forth in the Disclosure Letter, each of the Havewin
Vendors represents and warrants to the Purchaser that each of the
statements set out in Appendix C to this Agreement is accurate as
at the date hereof and will be accurate on Completion. Each of
the statements is to be treated as a separate representation and
warranty and the interpretation of any statement made may not be
restricted by reference to or inference from any other statement.
11.4 Subject to the following provisions of this Clause 11.4, the
Warranties are not extinguished or affected by any investigation
made by or on behalf of the Purchaser into the affairs of the
Company or any Subsidiary or Ultrabridge or Havewin or by any
other event or matter unless:
(a) the Purchaser has given a specific written waiver or
release; or
(b) the claim relates to a thing done or not done after the date
of this Agreement at the written request or with the written
approval of the Purchaser.
11.5 (a) Each of the Vendors acknowledges that it has made and given
its respective Warranties with the intention of inducing the
Purchaser and MGM Grand to enter into this Agreement and
that the Purchaser and MGM Grand have entered into this
Agreement in full reliance on such Warranties.
(b) The Purchaser hereby warrants that no reliance has been
placed nor will at any time hereafter be placed by the
Purchaser on any representation or warranty (whether express
or implied and whether written or oral) relating to the
Company or any Subsidiary or Ultrabridge or Havewin other
than the Warranties and accordingly all representations and
warranties (whether express or implied, statutory or
otherwise) on the part of the Vendors other than the
Warranties are hereby excluded to the full extent
permissible by law.
(c) The Purchaser acknowledges that it has made and given the
warranty in Clause 11.5(b) above with the intention of
inducing the Vendors to enter into this Agreement and the
Vendors have entered into this Agreement in full reliance of
that warranty.
11.6 Each of the Vendors represents, warrants and undertakes to the
Purchaser that each of the Warranties made by it is true and
correct on the date of this Agreement and will be at the
Completion Date as if made on and as at each of those dates.
27
________________________________________________________________________________
11.7 Subject to Clause 11.11 through 11.21, each of the Vendors
indemnifies the Purchaser against all liability or loss arising
directly or indirectly from, and any costs, charges and expenses
incurred in connection with ("Losses"), any inaccuracy in or
breach of any of the Warranties made by it.
(a) With respect to any inaccuracy in or breach of any of the
Warranties (other than those in Appendix B and Appendix C),
the UD Indemnitors shall be jointly and severally liable for
57 1/2% of the Losses and the Havewin Vendors shall be
jointly and severally liable for 42 1/2% of the Losses,
provided however that the Purchaser may recover 100% of such
Losses from the UD Indemnitors under Clause 11.21, in which
event the UD Indemnitors will have a claim for contribution
against the Havewin Vendors for any amounts paid by the UD
Indemnitors in excess of their 57 1/2% share.
(b) With respect to any inaccuracy in or breach of any of the
Warranties made in Appendix B, the UD Indemnitors shall be
jointly and severally liable for 100% of the Losses.
(c) With respect to any inaccuracy in or breach of any of the
Warranties made in Appendix C, the Havewin Vendors shall be
jointly and severally liable for 100% of the Losses.
11.8 If a payment is made for a breach of any of the Warranties, the
payment is to be treated as a reduction in the Purchase Price and
if the payment is made pursuant to Clause 11.7(a) it shall be
borne as to 57 1/2% by the UD Indemnitors in respect of their
Ultrabridge Shares only and as to 42 1/2% by the Havewin Vendors
in respect of their Havewin Shares only, provided always that to
the extent the UD Indemnitors pay 100% of the relevant Losses
pursuant to Clause 11.21 or if the breach of Warranty relates to
Clause 11.7(b) the payment shall be treated as a reduction in the
Purchase Price in relation to the Ultrabridge Shares of the UD
Indemnitors only and if the breach of Warranty related to Clause
11.7(c) the payment shall be treated as a reduction in the
Purchase Price in relation to the Havewin Shares of the Havewin
Vendors only.
11.9 Subject to Clause 8.2, the sole remedy of the Purchaser for
breach or non-compliance of any Warranty is damages in accordance
with this Clause 11 and in no event shall Purchaser be entitled
to rescind this Agreement, provided, however, that if such breach
or non-compliance becomes apparent before Completion, Purchaser
shall be entitled to withhold from the Purchase Price such amount
as Purchaser reasonably deems appropriate with respect to such
breach or non-compliance.
28
________________________________________________________________________________
11.10 The Purchaser may not claim for any breach of the Warranties
unless notice in writing of the claim, setting forth with
reasonable particularity the basis thereof, is made to the
Vendors within two years from the Completion Date except
with respect to Warranties 74 to 82 inclusive in Appendix A
to this Agreement, Warranties 28 to 35 inclusive in Appendix
B to this Agreement, Warranties 28 to 35 inclusive in
Appendix C to this Agreement, and Clause 12, in which event
the period for the Company, any Subsidiary, Ultrabridge or
Havewin shall be four years from the earliest due date of
filing by such entity of the first income tax return
following Completion in which such entity is required to pay
any income tax.
11.11 Except for claims for breach of Warranties 74 to 82
inclusive in Appendix A and Clause 12, which shall be
recoverable in full regardless of amount, the Purchaser may
not claim for breach of the Warranties if the total of all
claims for breach of the Warranties is less than
Aus$375,000; provided if such sustainable claims exceed
Aus$375,000 in the aggregate they shall be recoverable in
full. The maximum aggregate claims which can be recovered
shall be equal to the Purchase Price.
11.12 The Purchaser shall not be entitled to make any claim under
or pursuant to the Warranties or in relation to:
(a) any matter to the extent it is properly reserved,
provided for, noted or otherwise properly taken into
account, in the Last Accounts and such Last Accounts
with respect to such item were prepared in accordance
with the relevant Warranties relating to such Last
Accounts;
(b) any matter where the claim arises as a result of, or
would not have arisen but for, legislation not in
force at the date of this Agreement, or any change in
legislation with retrospective effect after the date
of this Agreement (including without limitation any
increase in rates of Tax or changes in legislation
relating to Tax with retrospective effect) or any
change in the interpretation of the law after the date
of this Agreement;
(c) any matter where the facts or circumstances giving
rise to such claim have been fully and fairly
disclosed to the Purchaser in the Disclosure Letter or
the documents annexed or referred to in the
Disclosure Letter;
(d) any claim to the extent it has been made good or is
compensated for otherwise than by the Company any of
its Subsidiaries, Ultrabridge, Havewin or the
Purchaser;
29
________________________________________________________________________________
(e) any claim which would not have arisen but for a
voluntary act or omission performed or allowed to
occur by the Purchaser or the Company or any of its
Subsidiaries, Ultrabridge or Havewin after Completion
otherwise than in the ordinary and proper course of
business; and
(f) any matter or thing done or omitted to be done after
the date of this Agreement at the request or
instigation of the Purchaser.
11.13 Following Completion the remedies of the Purchaser in
respect of any breach of any of the Warranties shall be
limited to a claim for damages and shall not extend to
rescission of this Agreement or the right to claim that any
such breach constitutes repudiation of this Agreement.
11.14 Following Completion the Purchaser shall not be entitled to
make any claim under or pursuant to the Warranties for
indemnification against liability or potential liability to
a third party (an "Indemnification Claim") unless:
(a) within thirty (30) days after the circumstances have
come to the notice of the Purchaser or the Company or
any of its Subsidiaries, which will, or are likely to,
or may give rise to an Indemnification Claim the
Purchaser gives to the UD Indemnitors (or in the case
of a Warranty relating to Appendix C, to the Havewin
Vendors) written notice of such Indemnification Claim,
provided that the failure or delay to give such notice
shall not vitiate Purchaser's right to make a claim
under the warranties with respect to the
Indemnification Claim in the absence of demonstrable
material prejudice to the UD Indemnitors or Havewin
Vendors, as applicable. No such Indemnification Claim
shall be settled or compromised without the prior
written consent of the UD Indemnitors or the Havewin
Vendors except where the breach of Warranty relates
solely to Clause 11.7(b) or 11.7(c), in which event
the consent must be given by the UD Indemnitors in
relation to Clause 11.7(b) and the Havewin Vendors in
relation to Clause 11.7(c) (as applicable, the
"Relevant Party") such consent not to be unreasonably
withheld or delayed;
(b) if requested by the Relevant Party, the Purchaser has
taken or procured that the Company or the relevant
Subsidiary has taken all reasonable steps to avoid,
resist, or compromise any Indemnification Claim and
any proceedings in respect thereof and has taken or
procured that the Company or the relevant Subsidiary
has taken all necessary proceedings or other action in
connection therewith, subject in each case to the
Relevant Party indemnifying and securing the Purchaser
and/or the
30
________________________________________________________________________________
Company or the relevant Subsidiary to the reasonable
satisfaction of the Purchaser against all reasonable
costs, liabilities, charges and expenses which it may
reasonably incur thereby;
(c) the Purchaser has at all times allowed the Relevant
Party and their professional advisers and other agents
access to and to inspect and take copies of, all
necessary books and files and records of the Company
and any Subsidiary for the purpose of assessing and
dealing with any such Indemnification Claim; and
(d) nothing herein shall apply to any claim by Purchaser
under the Warranties which is not an Indemnification
Claim.
11.15 Without prejudice to the generality of Clause 11.14(b), the
Purchaser shall permit the Relevant Party upon its or their
providing an indemnity reasonably satisfactory to the
Purchaser for all losses, claims, demands and reasonable
expenses which may be thereby reasonably incurred, to
control (subject to good faith consultation with Purchaser)
the conduct of all proceedings against third parties
relating to the claim (including the appointment of
solicitors or other professional advisers) and making any
settlement or compromise thereof provided that:
(a) if the Purchaser shall in writing so require, the
Relevant Party shall procure that the Purchaser is
promptly sent copies of all communications and other
documents, written or otherwise, pertaining thereto
transmitted to the other party thereto or their agents
or professional advisers (including pleadings and any
opinion of Counsel relating to the proceedings against
third parties); and
(b) the Relevant Party shall make no settlement or
compromise of such claim without the prior approval of
the Purchaser (such approval not to be unreasonably
withheld or delayed, it being understood it shall be
reasonable for Purchaser to disapprove any settlement
which adversely impacts the ongoing business or
reputation of Purchaser, the Company or any Subsidiary
for reasons to be stated in writing by the Purchaser).
11.16 In calculating the loss to the Purchaser and/or the Company
or any Subsidiary arising or alleged to arise out of any
liability of the Vendors in respect of any breach of the
Warranties there shall be (i) deducted:
(a) the net amount by which any Tax for which the Company
or any Subsidiary is or may at any time be liable to
be assessed or
31
________________________________________________________________________________
accountable is reduced or extinguished as a result of
any such liability after giving effect to payment
under the Warranty;
(b) the amount of any realized tax benefit attributable to
losses or other allowable sums available for offset
against Tax and created as a result of any such
liability after giving effect to payment under the
Warranty or (where appropriate) the amount by which
any such losses or other allowable sum are increased
as a result of such liability after giving effect to
payment under the Warranty; and
(ii) added:-
(a) the amount by which any Tax for the Purchaser, Company
or any Subsidiary is or may at any time be liable to
be assessed or for which it may be accountable is
increased as a result of such liability after giving
effect to payment under the Warranty; and
(b) the amount by which any tax benefit attributable to
such losses or other allowable sums may be decreased
as result of such liability after giving effect to
payment under the Warranty.
11.17 If the Purchaser or the Company or any Subsidiary is
entitled to recover (whether by payment, discount, credit,
set-off or otherwise) from any person other than the Vendors
any sum in respect of any matters giving rise to a liability
of the Vendors, the UD Indemnitors or the Havewin Vendors
under the Warranties, and provided the Relevant Party has
paid or made adequate provision to pay the Purchaser in full
under the Warranty, the Purchaser shall and shall procure
that the Company and the relevant Subsidiary shall, give all
reasonable assistance (including access to documents)if
required by the Relevant Party and at the expense of the UD
Indemnitors (or the Havewin Vendors, as the case may be)
shall take, or procure the taking of, all appropriate steps
to enforce such recovery (keeping the Relevant Party fully
informed of the progress of any action taken) and, in the
case of the Purchaser shall forthwith account to the Company
or the relevant Subsidiary for any amount so recovered less
all reasonable expenses of recovery thereof of, if less, any
amount paid or payable by the Vendors, the UD Indemnitors or
the Havewin Vendors in respect of the claim.
11.18 If any payment is made by any of the Vendors, the UD
Indemnitors or the Havewin Vendors in full settlement of any
claim under the Warranties and the Purchaser or the Company
or any of its Subsidiaries subsequently recovers or procures
the recovery from a third party of an amount which is
referable to that claim the Purchaser shall, or shall
procure that the Company or the relevant Subsidiary
32
_______________________________________________________________________________
shall, forthwith repay or procure repayment to the relevant
Vendors, UD Indemnitors or Havewin Vendors of any amount
equal to
33
________________________________________________________________________________
(ii) acquiescence, delay, acts, omissions or mistakes on
the part of the purchaser;
(iii) any novation of a right of the Purchaser;
(iv) any variation of this Agreement or any Agreement
entered into in performance of this Agreement; and
(v) the invalidity or unenforceability of an obligation or
liability of a person other than the UD Indemnitors;
(c) none of the UD Indemnitors may, without the consent of the
purchaser, raise a set-off or counterclaim available to it
or any of the UD Indemnitors against the Purchaser in
reduction of its liability under this guarantee and
indemnity or make a claim or enforce a right against the
Havewin Vendors or their property or prove in competition
with the Purchaser if a liquidator, receiver, or trustee in
bankruptcy is appointed in respect of the Havewin Vendors
until all money payable to the Purchaser in connection with
this Clause is paid;
(d) if a claim that a payment in connection with Clause 11.7(a)
is void or voidable is upheld, conceded or compromised, then
the Purchaser is entitled immediately as against each UD
Idemnitor to the rights to which it would have been entitled
under this guarantee and indemnity if a payment had not
occurred; and
(e) each UD Indemnitor agrees to pay or reimburse the Purchaser
on demand for:
(i) its costs, charges and expenses in making, enforcing
and doing anything in connection with this guarantee
and indemnity including, but not limited to, legal
costs and expenses on a full indemnity basis; and
(ii) all fees, taxes and charges which are payable in
connection with this guarantee and indemnity or a
payment, receipt or other transaction contemplated by
it.
12 ADJUSTMENT FOR TAX LIABILITY
________________________________________________________________________________
12.1 In this Clause 12 the following words have these meanings:
Authority means any governmental authority or instrumentality
responsible for Tax, wherever situated.
34
________________________________________________________________________________
CLAIM AMOUNT MEANS:
(a) the amount the Company, any Subsidiary, Ultrabridge or
Havewin is required to pay in Tax to an Authority as a
result of a Tax Claim; or
(b) the amount of any credit, rebate or refund of Tax lost
by the Company, any Subsidiary, Ultrabridge or Havewin
as a result of a Tax Claim.
DEFERRED PROVISION means the sum of the provision for
deferred Tax liability in the Last Accounts, the Last
Ultrabridge Accounts or the Last Havewin Accounts, as the
case may be, and any Future Income Tax Benefit which has
been offset in the calculation of that provision.
TAX means taxes (including fringe benefits taxes), levies,
imposts, deductions, charges, withholdings and duties
(excluding stamp duties), together with any related
interest, penalties, fines and other statutory charges
whether accruing before or after Completion.
TAX CLAIM means a deemed assessment, an assessment notice
(including a notice of adjustment of loss claimed by a
company in a manner adversely affecting the company), demand
or other document issued or action taken by or on behalf of
an Authority, whether before or after the date of this deed,
as a result of which the Company, any Subsidiary,
Ultrabridge or Havewin is liable to make a payment for Tax
or is deprived of any credit, rebate, refund, or relief,
allowance, deduction, or loss carried forward.
TAX PROVISION means, in respect of the Company, the
Subsidiaries, Ultrabridge or Havewin, at any time,
respectively, the sum of:
(a) the provision for current Tax in the Last Accounts, the
Last Ultrabridge Accounts or the Last Havewin Accounts,
as the case may be;
(b) the relevant Deferred Provision; and
(c) all amounts already paid or agreed to be paid by the
Vendors, the Ultrabridge Vendors, or the Havewin
Vendors as the case may be, under this Clause 12 at
that time, less all Tax paid or payable in respect of
those payments to a maximum of the amount of those
payments.
12.2 Each of the UD Indemnitors and Havewin Vendors agree that if
at any time the Company or any Subsidiary receives or
suffers a Tax Claim that relates to an act or omission of,
or occurrence affecting,
35
________________________________________________________________________________
that company before the close of business on the Completion
Date, then the UD Indemnitors and Havewin Vendors must pay
to the Purchaser the amount by which the sum of:
(a) the Claim Amount for that Tax Claim; and
(b) all other Claim Amounts for Tax Claims that relate to
an act or omission of, or occurrence affecting the
Company or any Subsidiary before the close of business
on the Completion Date, other than Tax Claims referred
to in Clause 12.6,
exceeds the Tax Provision.
Without limiting the scope or effectiveness of Clause 3.3,
which shall govern, each of the UD Indemnitors agree that if
at any time Ultrabridge receives or suffers a Tax Claim that
relates to an act or omission of, or occurrence affecting,
that company before the close of business on the Completion
Date, then the UD Indemnitors must pay to the Purchaser the
amount by which the sum of:
(a) the Claim Amount for that Tax Claim; and
(b) all other Claim Amounts for Tax Claims that relate to
an act or omission of, or occurrence affecting
Ultrabridge before the close of business on the
Completion Date, other than Tax Claims referred to in
Clause 12.6,
exceeds the Tax Provision.
Without limiting the scope or effectiveness of Clause 3.3,
which shall govern, each of the Havewin Vendors agree that
if at any time Havewin receives or suffers a Tax Claim that
relates to an act or omission of, or occurrence affecting,
that company before the close of business on the Completion
Date, then the Havewin Vendors must pay to the Purchaser the
amount by which the sum of:
(a) the Claim Amount for that Tax Claim; and
(b) all other Claim Amounts for Tax Claims that relate to
an act or omission of, or occurrence affecting Havewin
before the close of business on the Completion Date,
other than Tax Claims referred to in Clause 12.6,
exceeds the Tax Provision.
12.3 Each of the UD Indemnitors and Havewin Vendors agrees that
if at any time it becomes apparent that the Deferred
Provision for the
36
________________________________________________________________________________
Company and the Subsidiaries is understated, calculating the
proper Deferred Provision:
(a) in accordance with the requirements of other applicable
laws at the time of preparation of the Last Accounts;
(b) in accordance with the Accounting Standards at the time
of preparation of the Last Accounts; and
(c) on a consistent basis with the Last Accounts,
then the UD Indemnitors and Havewin Vendors must pay to the
Purchaser the amount of the understatement.
Each of the Ultrabridge Vendors agrees that if at any time
it becomes apparent that the Deferred Provision for
Ultrabridge is understated, calculating the proper Deferred
Provision:
(a) in accordance with the requirements of applicable laws
at the time of preparation of the Last Ultrabridge
Accounts;
(b) in accordance with the Accounting Standards at the time
of preparation of the Last Ultrabridge Accounts; and
(c) on a consistent basis with the Last Ultrabridge
Accounts,
then the Ultrabridge Vendors must pay to the Purchaser the
amount of the understatement.
Each of the Havewin Vendors agrees that if at any time it
becomes apparent that the Deferred Provision for Havewin is
understated, calculating the proper Deferred Provision:
(a) in accordance with the requirements of applicable laws
at the time of preparation of the Last Havewin
Accounts;
(b) in accordance with the Accounting Standards at the time
of preparation of the Last Havewin Accounts; and
(c) on a consistent basis with the Last Havewin Accounts,
then the Havewin Vendors must pay to the Purchaser the
amount of the understatement.
37
________________________________________________________________________________
For the purpose of this Clause the Deferred Provision in the Last
Accounts, the Last Ultrabridge Accounts or the Last Havewin
Accounts, as the case may be, but not the proper Deferred
Provision, is to be reduced by the Claim Amount of a Tax Claim
which would, but for the inclusion of the Deferred Provision in
the Tax Provision, have resulted in a payment under Clause 12.2.
12.4 Any payment under Clause 12.2 or 12.3 shall be borne and paid as
to 57 1/2% by the UD Indemnitors (jointly and severally) in
respect of their Ultrabridge Shares only and as to 42 1/2% by the
Havewin Vendors (jointly and severally) as a reduction in the
Purchase Price in respect of their Havewin Shares only, provided
--------
that to the extent, pursuant to Clause 11.21, the UD Indemnitors
pay 100% of the relevant payment under clause 12.2 or 12.3, the
payment shall be treated as a reduction in the Purchase Price in
relation to the Ultrabridge Shares of the UD Indemnitors only,
and further provided always that if the payment relates solely to
----------------
Ultrabridge, such payment shall be treated as a reduction in the
Purchase Price in relation to the Ultrabridge Shares of the UD
Indemnitors only and if the payment relates solely to Havewin,
such payment shall be treated as a reduction in the Purchase
Price in relation to the Havewin Shares of the Havewin Vendors
only.
12.5 The obligations of the Vendors under Clauses 12.2 or 12.3 do not
apply in respect of a Tax Claim or understatement of the Deferred
Provision:
(a) to the extent that the Tax Claim or understatement of the
Deferred Provision represents the disallowance of any
deduction for carried forward losses, and the disallowance
results from:
(i) the Company or any Subsidiary not carrying on at all
times after Completion the same business as it carried
on immediately before Completion; or
(ii) the Company or Subsidiary, after Completion, deriving
income from a business of a kind that it did not carry
on or from a transaction of a kind that it had not
entered into in the course of its business operations
before Completion;
(b) to the extent that the Tax Claim or understatement of the
Deferred Provision arises from the failure by Ultrabridge,
Havewin, the Company or any Subsidiary after Completion, in
a timely manner, to:
38
________________________________________________________________________________
Havewin, the Company or any Subsidiary after Completion, in
a timely manner, to:
(i) lodge any return; notice, objection or other document
in relation to the Tax Claim;
(ii) claim all or any portion of any relief, allowance,
deduction, credit, rebate or right to repayment;
(iii) disclose or correctly describe in any return, notice,
objection or other document relating to the Tax Claim
any fact, matter or thing to the extent that it was or
might reasonably be expected to have been within the
knowledge of either the Purchaser or the company; or
(iv) take any other action which the company in question is
required to take under this Clause or any laws
relating to Tax.
(c) to the extent that the Tax Claim or understatement of the
Deferred Provision relates to any income, profit or gain
earned, accrued or received by reason of an act or omission
of, or occurrence affecting, Ultrabridge, Havewin or the
Company or any Subsidiary in the ordinary course of its
business and which for Tax purposes is taken to be derived
between the Accounts date of the Last Accounts or Last
Havewin Accounts, as applicable and the date of Completion;
(d) to the extent that the Tax Claim or understatement of the
Deferred Provisions results from or is increased by a change
to or introduction of any legislation, regulation, order or
rule (whether having the force of law or not and whether the
change or introduction is retrospective or not) relating to
Tax (including without limitation increases in rates of Tax)
after Completion;
(e) to the extent that any Tax Claim or understatement of the
Deferred Provisions relates to any act or omission by MGM
Grand or the Purchaser before or after Completion, or by the
Company or any Subsidiary after Completion, other than in
the ordinary and proper course of business;
(f) as a direct or indirect result of the assignment of any
rights conferred on MGM Grand or the Purchaser by this
Agreement on or after the date of this Agreement or the
issue or transfer of any shares in the Purchaser, Company or
any new Subsidiary (excluding any transfer of shares in
relation to the liquidation of Ultrabridge and Havewin)
after Completion;
39
________________________________________________________________________________
(g) to the extent MGM Grand or any Subsidiary becomes entitled
to any foreign tax credit in any jurisdiction as a result of
paying the Tax claim;
(h) in the case only of the Company and the subsidiaries, to the
extent that any payments otherwise arising under Clause 12.2
or 12.3 are not, in aggregate, greater than the amount of
Available Future Income Tax Benefit (as defined). The
Available Future Income Tax Benefit represents the Future
Income Tax Benefit which would be included in the Company
Completion Accounts, if the Company Completion Accounts were
to be drawn up in the light of all information at the date
of calculation of the amount which, subject to this
paragraph, is payable under Clause 12.2 or 12.3 and in
accordance with the Accounting Standards, rather than as set
out in Clause 5.4, after application and utilization of such
Future Income Tax Benefit against the income of the Company
and the Subsidiaries for the period from 4:00 a.m Darwin
time on the Completion Date to 30 September 1995, the income
of this period and utilization of Future Income Tax Benefit
against it being determined in accordance with the
Accounting Standards. For avoidance of doubt, it is
acknowledged that Available Future Income Tax Benefits are
to be determined after application and utilization of Future
Income Tax Benefits against the income of the Company and
Subsidiaries for the fiscal year ending 30 September, 1995;
(i) where the Tax Claim or understatement of the Deferred
Provision will give rise also to a future saving in Tax as a
result of any relief, allowance, deduction, credit, rebate
or right to repayment, then only to the extent of (i) the
present value of such saving in Tax, and (ii) in the event
such saving in Tax is subsequently disallowed or not
realized, the obligations of the Vendors shall be reinstated
to the extent of such disallowance or non-realization. To
the extent that sub-paragraph (h) and (i) are applicable to
the same item then sub-paragraph (h) shall be applied in
priority to sub-paragraph (i). Additionally, if there is a
dispute between the parties as to the present value of a
saving in Tax then the dispute shall be referred to the
auditor of the Company for resolution.
12.6 Payments under Clause 12.2 or 12.3 must be made to the Purchaser
as follows:
(a) if Ultrabridge, Havewin, any Subsidiary or the Company must
make a payment of Tax in respect of a Tax Claim to which
Clause 12.2 applies - seven days before the latest date on
which
40
________________________________________________________________________________
that payment may lawfully be made without incurring any
penalty or additional tax for late payment;
(b) if Ultrabridge, Havewin, any Subsidiary or the Company is
deprived of any credit, rebate, refund, relief, allowance,
deduction, loss carried forward - seven days before the
latest date on which Tax becomes payable by the company
without incurring any penalty or additional tax for late
payment, being Tax which would not have been payable were it
not for the Tax Claim; and
(c) if an amount is payable under Clause 12.3 - seven days after
the Purchaser advises the Vendors of the understatement.
12.7 The UD Indemnitors and Havewin Vendors (collectively) must pay
interest to the Purchaser on any moneys due under this Clause 12
but unpaid, from the date payment is due until paid in full, at a
rate equal to 2% over State Bank of South Australia's Bank Xxxx
Rate.
12.8 If for any reason an amount received by the Purchaser under
Clause 12.2 or 12.3 is treated as assessable income of the
Purchaser under any law relating to Tax, the UD Indemnitors and
Havewin Vendors (collectively) agree to pay to the Purchaser an
increased amount so that, after deducting from that amount all
Tax paid or payable in respect of the receipt, and reducing that
amount further by an amount equal to the Australian Dollar
equivalent of any foreign tax credit received by MGM Grand or any
of MGM Grand's subsidiaries under the applicable tax treaty, the
balance remaining is equal to the amount due under the relevant
Clause.
12.9 If the Purchaser or the Company any Subsidiary, Ultrabridge or
Havewin becomes aware of a Tax Claim or any request or demand by
an Authority to conduct an audit or other investigation or obtain
any information ("Audit") that might, in the opinion of
Purchaser, lead to a Tax Claim, the Purchaser must give written
notice of it to all of the Vendors who are potentially liable in
respect of that Tax Claim ("Relevant Vendors") within thirty (30)
business days of becoming so aware provided that a delay in such
notice shall not vitiate Relevant Vendors' responsibility in the
absence of a demonstration of material prejudice resulting from
such delay.
The Purchaser must ensure the Relevant Vendors and their
professional advisers have reasonable access to the personnel of
the Purchaser and the Subsidiaries and the Company and to any
relevant premises, assets and Records within the custody, power,
possession or control of those companies to enable the Relevant
Vendors and their professional advisers to consider the Tax Claim
or participate in the Audit (as the
41
________________________________________________________________________________
case may be) and to take copies or photographs of any documents
relating to the Tax Claim or Audit or of the Records at the
expense of the Relevant Vendors, provided the Relevant Vendors
and their professional advisers give to the Purchaser or the
Subsidiaries and the Company such undertakings as to
confidentiality as the Purchaser may reasonably require.
Provided always that the Relevant Vendors act in a timely manner,
the Purchaser must ensure that neither the Company, nor any
Subsidiary, nor Ultrabridge nor Havewin enters into any
communication or correspondence with the Authority until the
Relevant Vendors have been given a reasonable opportunity to
advise the Purchaser what action they request be taken in
accordance with this Clause 12.9 or have advised the Purchaser
that they have no such request.
The Purchaser must ensure that the Company or any Subsidiary or
Ultrabridge or Havewin takes any proper and reasonable action
that the Relevant Vendors (collectively) request in compliance
with this Clause 12.9:
(a) in response to any request for documents, information or
explanations made by an Authority in connection with an
Audit;
(b) in response to any interpretation of facts or law put
forward by an Authority in connection with an Audit;
(c) in response to any preliminary conclusions or proposed Tax
Claim put forward by an Authority in connection with an
Audit;
(d) To avoid, resist, compromise or defend a demand or notice
issued by an Authority which gives rise to the Tax Claim.
The Relevant Vendors may only request an action under this Clause
12.9 if, concurrently with the mailing of such request, they
provide Purchaser with written indemnification in form and
substance satisfactory to Purchaser in the exercise of
reasonable judgment fully indemnifying Purchaser and the
Subsidiaries against any liability or loss which may be suffered
or costs, damages or expenses which may be incurred as a result
of compliance with their request, and;
(a) in respect of an Audit, if, should the Purchaser so require,
they provide the Purchaser with an opinion that the
requested action does not contravene the requirements of law
and taking account of:
42
________________________________________________________________________________
. the magnitude of any Tax Claim that might possibly
result from the matter that the requested action is in
response to,
. the nature, extent and content of the action
requested,
it is a proper and reasonable action for the Relevant
Vendors to request;
(b) in respect of a Tax Claim, if they provide the Purchaser
with an opinion that there is a real prospect that the
requested action will result in the demand or notice issued
by the Authority being avoided, resisted, compromised or
defended.
In either instance, the opinion provided to the Purchaser must be
that of a partner specializing in tax of a major law firm or
accounting firm in the jurisdiction competent to properly advise
upon the matter which gives rise to the Relevant Vendors' request
for action.
The action that the Relevant Vendors may request be taken by the
Purchaser or the Company or any Subsidiary or Ultrabridge or
Havewin includes:
(a) In respect of an Audit, the provision to the Authority of
only the particular documents, information, explanations,
comments, responses, submissions or proposals which the
Relevant Vendors nominate or agree to be provided, unless
otherwise required by law,
(b) in respect of an Audit, the lodging of any request or notice
that any preliminary conclusions or proposed Tax Claim
notified by the Authority in connection with the Audit be
subject to such review procedures as might be available
prior to the raising of a Tax Claim,
(c) in respect of a Tax Claim, the making of appeals and
objections, provided that all other avenues of review have
been exhausted.
Where the Relevant Vendors have made a request for action that is
valid under this Clause 12.9, the Purchaser must ensure that,
except as may be required by applicable law, neither the Company
nor any Subsidiary nor Ultrabridge nor Havewin undertakes any
action, or omits taking any action, which act or omission is
inconsistent with the request of the Relevant Vendors.
43
________________________________________________________________________________
Any action required under this Clause 12.9 must be taken in
a timely manner.
Notwithstanding anything to the contrary contained herein,
Purchaser shall not be obliged to comply with any request
which it reasonably believes would be in contravention of
applicable law.
12.10 If, following the making of a payment under Clause 12.2 for
a Tax Claim, all or part of the Claim Amount is refunded
either in cash or by credit to Ultrabridge, Havewin, any of
the Subsidiaries or the Company (including, but not limited
to, any amount or credit received following a successful
objection or appeal), the Purchaser must immediately pay to
the Relevant Vendors the lesser of the refund and the amount
of the payment paid under Clause 12.2. Any payment under
Clause 12.10 is to be treated in a manner consistent with
Clause 12.4.
12.11 If the Relevant Vendors and the Purchaser cannot agree on
any amount to be paid under this Clause 12 within 21 days of
a dispute arising, then either the Relevant Vendors or the
Purchaser may refer the disagreement to an expert with the
request that the expert make a decision on the disagreement
as soon as practicable after receiving any submissions from
the Relevant Vendors and the Purchaser. The expert is to be
a person with over ten years experience in Tax agreed by the
Relevant Vendors and the Purchaser, or if they do not agree
on the person to be appointed within seven days of one party
requesting appointment, a person with the same expertise
appointed by the President of the Australian Institute of
Chartered Accountants at the request of either the Relevant
Vendors or the Purchaser. The decision of the expert is to
be conclusive and binding on the parties in the absence of
manifest error. The Relevant Vendors and the Purchaser agree
to each pay one half of the expert's costs and expenses in
connection with the reference. The expert is appointed as an
expert and not as an arbitrator. The procedures for
determination are to be decided by the expert in its
absolute discretion.
12.12 Without limiting the scope of the indemnity given under
Clause 12, the Ultrabridge Vendors will indemnify the
Purchaser for the full amount of any Cayman Islands
taxation, and the Havewin Vendors will indemnify Purchaser
for the full amount of any Hong Kong taxation, or pay direct
to the relevant authority the amount of that taxation (other
than Hong Kong transfer stamp duty on the transfer of the
Havewin shares), that may become payable by the Purchaser,
Ultrabridge, Havewin, the Company or any Subsidiary except
in respect of an amount of taxation arising from an event or
matter described in such Clauses 12.5(b) to (f) inclusive,
provided, however, in the case of Subclause 12.5(c), to the
extent the claim under this
44
________________________________________________________________________________
Clause 12.12 arises from the liquidation of Ultrabridge or
Havewin in accordance with Exhibits 1 and 2, as applicable,
in which event the indemnification shall be applicable.
12.13 In the event the Purchaser elects to assign its rights of
purchase under this Agreement to any subsidiary as provided
in Clause 18, then for all purposes of this Clause 12 the
term the "Purchaser" shall also be deemed to refer to such
subsidiary.
13 DEFAULT BY VENDORS
________________________________________________________________________________
If the Vendors or any of them do not Complete, other than as
a result of default by the Purchaser, the Purchaser may give
the Vendors notice requiring them to Complete within 7 days
of receipt of the notice. If the Vendors do not Complete
within that period, the Purchaser may elect to proceed for
specific performance or terminate this Agreement. In either
case the Purchaser may seek damages for the default. If this
Agreement is so terminated then Clause 4.4 will apply with
the necessary changes. This termination does not affect any
other rights the Purchaser has against the Vendors at law or
in equity.
14 RESTRAINT
________________________________________________________________________________
14.1 Subject to any other agreement entered into concurrently
herewith or hereafter between any of the Vendors and their
affiliates, on the one hand, and MGM Grand and any of its
Subsidiaries, on the other hand, each of the Ultrabridge
Vendors (in the case of Clause 14.1(a)) and each of the
Vendors (in the case of Clauses 14.1(b) and 14.1(c))
undertakes to the Purchaser that it and its affiliates will
not without the prior consent of Purchaser:
(a) for five years from the Completion Date, be engaged or
involved in any capacity in any business or activity
which is the same as or similar to the business of the
Company or any Subsidiary or any material part of it.
For the purposes of this Clause "engaged or involved
in" includes direct or indirect involvement as a
principal, agent, partner, employee, shareholder,
unitholder, director, trustee, beneficiary, manager,
consultant, adviser or financier. This restriction
applies throughout the Northern Territory of
Australia;
(b) for five years from the Completion Date:
(i) solicit the custom of anyone who was a customer
of the Company or any Subsidiary at any time
within two years before the Completion Date,
except in relation to any
45
________________________________________________________________________________
business outside Australia and without limitation
including the existing casinos in London, Le Touquet
and New Zealand in which the Ultrabridge Vendors have
an interest; or
(ii) entice away or endeavour to entice away from the
Company or any Subsidiary any employee or anyone who
was at any time during the two years before the
Completion Date, a director, agent, representative,
associate or adviser of or to the Company or any
Subsidiary; or
(c) at any time after the Completion Date:
(i) use or disclose any Confidential Information of
Ultrabridge, Havewin, the Company or any Subsidiary to
anyone other than the Purchaser, except:
(a) if required to make such disclosure by any court
of competent jurisdiction or in order to enforce
any rights under this Agreement;
(b) pursuant to any court order;
(c) pursuant to any law or regulation having the force
of law or the requirements of any governmental
authority such as the Commonwealth of Australia,
the Northern Territory, the United States of
America, or State of Nevada, or agency or
instrumentality thereof;
(d) pursuant to the requirements of any recognised
stock exchange or securities regulatory agency
such as the United States Securities and Exchange
Commission;
(e) in circumstances where the information has come
within the public domain otherwise than by reason
of a breach by one of the parties of the
provisions of this Clause; and
(f) to professional advisers.
(ii) use a logo, symbol, trade xxxx or business name
substantially identical or deceptively similar to a
trade
46
________________________________________________________________________________
xxxx or business name owned or used by the Company or
any Subsidiary.
14.2 If any of the prohibitions or restrictions contained in Clause
14.1 is judged to go beyond what is reasonable in the
circumstances and necessary to protect the goodwill of the
Company or any Subsidiary, but would be judged reasonable and
necessary if any activity were deleted or a period or area were
reduced, then the prohibitions or restrictions apply with that
activity deleted or period or area reduced by the minimum amount
necessary.
14.3 Each of the prohibitions and restrictions in Clause 14.1 has
effect as a separate and severable prohibition or restriction and
is to be enforced accordingly.
14.4 Notwithstanding Clause 14.1(a) the Ultrabridge Vendors
(collectively) may hold in aggregate up to 5% of the shares in
any public company the shares of which are quoted on Australian
Stock Exchange Limited, even though that company carries on any
of the activities referred to in Clause 14.1(a) or such higher
aggregate interest with the prior written consent of the
Purchaser.
14.5 Each of the Vendors acknowledges that all the prohibitions and
restrictions contained in Clause 14 are reasonable in the
circumstances and necessary to protect the goodwill of the
Company and the Subsidiaries.
15 COSTS AND STAMP DUTY
________________________________________________________________________________
15.1 The Vendors and the Purchaser agree to bear their own legal and
other costs and expenses in connection with the preparation,
execution and completion of this Agreement and of other related
documentation, except for stamp duty.
15.2 The Purchaser agrees to bear all stamp duty payable or assessed
in connection with this Agreement, any permitted assignment of
its rights or the rights of MGM Grand hereunder, the transfer of
the Ultrabridge Shares, the Havewin Shares and the Class D Shares
to the Purchaser.
15.3 The Ultrabridge Vendors and the Havewin Vendors, as the case may
be, agree to bear all stamp duty payable or assessed in
connection with the liquidation of Ultrabridge and Havewin,
respectively.
47
________________________________________________________________________________
16 POWER OF ATTORNEY
________________________________________________________________________________
16.1 Each Vendor appoints the Purchaser to be its attorney from the
Completion Date until the Ultrabridge Shares, the Havewin Shares
and the Class D Shares, as the case may be, are registered in the
name of the Purchaser.
16.2 The Purchaser may do in the name of each Vendor and on its behalf
everything necessary or expedient, in the Purchaser's sole
discretion, to:
(a) transfer the Ultrabridge Shares, the Havewin Shares and the
Class D Shares;
(b) exercise any rights, including rights to appoint a proxy or
representative and voting rights, attaching to the
Ultrabridge Shares, the Havewin Shares and the Class D
Shares;
(c) receive any dividend or other entitlement paid or credited
to the Vendors in respect of the Ultrabridge Shares, the
Havewin Shares and the Class D Shares; and
(d) do any other act or thing in respect of the Ultrabridge
Shares, the Havewin Shares and the Class D Shares or
Ultrabridge, Havewin, the Company or any Subsidiary.
16.3 Each Vendor declares that all acts and things done by the
Purchaser in exercising powers under this power of attorney will
be as good and valid as if they had been done by the Vendor and
agrees to ratify and confirm whatever the Purchaser does in
exercising powers under this power of attorney.
16.4 Each Vendor declares that this power of attorney of the Purchaser
is given for valuable consideration and is irrevocable from the
date of this Agreement until the Ultrabridge Shares, the Havewin
Shares and the Class D Shares are registered in the name of the
Purchaser.
16.5 The Purchaser is expressly authorised to do any act as a result
of which a benefit is conferred on it.
17 NOTICES
________________________________________________________________________________
17.1 A notice, approval, consent or other communication in connection
with this Agreement:
(a) must be in writing;
48
________________________________________________________________________________
(b) must be left at the address of the addressee, or sent
by prepaid ordinary post (airmail if posted to or from
a place outside Australia) to the address of the
addressee or sent by facsimile to the facsimile number
of the addressee which is specified in this Clause or
if the addressee notifies another address or facsimile
number then to that address or facsimile number.
The address, facsimile number and reference party of
each party is set forth on Schedule 16:
17.2 A notice, approval, consent or other communication takes
effect from the time it is received unless a later time is
specified in it.
17.3 A letter or facsimile is taken to be received:
(a) in the case of a posted letter, on the third (seventh,
if posted to or from a place outside Australia) day
after posting; and
(b) in the case of facsimile, on production of a
transmission report by the machine from which the
facsimile was sent which indicates that the facsimile
was sent in its entirety to the facsimile number of
the recipient.
18 ASSIGNMENT
________________________________________________________________________________
Except as hereinafter provided, a party may not assign its
rights under this Agreement without the consent of the other
party.
Notwithstanding the foregoing, the Purchaser may assign its
rights under this Agreement to any of MGM Grand's direct or
indirect United States, Australian or offshore
subsidiaries, provided that the Purchaser and MGM Grand
remain fully liable thereunder.
19 MISCELLANEOUS
_______________________________________________________________________________
19.1 A party may exercise a right, power, or remedy at its
discretion, and separately or concurrently with another
right, power or remedy. A single or partial exercise of a
right, power or remedy by a party does not prevent a further
exercise of that or of any other right, power or remedy.
Failure by a party to exercise or delay in exercising a
right, power or remedy does not prevent its exercise.
19.1 A provision of or a right created under this Agreement may
not be:
(a) waived except in writing signed by the party granting
the waiver; or
49
_______________________________________________________________________________
(b) varied except in writing signed by the parties.
19.3 A party may give conditionally or unconditionally or
withhold its approval or consent in its absolute discretion
unless this Agreement expressly provides otherwise.
19.4 The rights, powers and remedies provided in this Agreement
are cumulative with and not exclusive of the rights, powers
or remedies provided by law independently of this Agreement.
19.5 The Warranties in this Agreement do not merge on Completion.
19.6 Each indemnity in this Agreement is a continuing obligation,
separate and independent from the other obligations of the
parties and survives termination of this Agreement.
19.7 It is not necessary for a party to incur expense or make
payment before enforcing a right of indemnity conferred by
this Agreement.
19.8 Each party agrees, at its own expense, on the request of any
other party, to do everything reasonably necessary to give
effect to this Agreement and the transactions contemplated
by it (including the execution of documents) and to use all
reasonable endeavours to cause relevant third parties to do
likewise.
19.9 A party may not make press or other announcements or
releases relating to this Agreement and the transactions the
subject of this Agreement without the approval of the other
parties to the form and manner of the announcement or
release unless that announcement or release is required to
be made law or by a stock exchange.
19.10 This Agreement constitutes the entire Agreement of the
parties about its subject matter and any previous
Agreements, understandings and negotiations on that subject
matter case to have any effect.
19.11 This Agreement may be executed in counterparts, and all such
counterparts shall collectively constitute one Agreement.
19.12 This Agreement shall be deemed effective and delivered as at
30 June 1995 notwithstanding that it was signed after 30
June 1995 provided all parties hereto sign a counterpart of
this Agreement.
20 GOVERNING LAW JURISDICTION AND SERVICE OF PROCESS
_______________________________________________________________________________
20.1 This Agreement and the transactions contemplated by this
Agreement are governed by the law in force in the Northern
Territory.
50
________________________________________________________________________________
20.2 Each party irrevocably and unconditionally submits to the
non-exclusive jurisdiction of the courts of the Northern
Territory and courts of appeal from them for determining any
dispute concerning this Agreement or the transactions
contemplated by this Agreement. Each party waives any right
it has to object to any action being brought in those
courts, to claim that the action has been brought in an
inconvenient forum, or to claim that those courts do not
have jurisdiction.
20.3 Without preventing any other mode of service, any document
in an action (including, but not limited to, any writ of
summons or other originating process or any third or other
party notice) may be served on any party by being delivered
to or left for that party at its address for service of
notices under Clauses 17.
EXECUTED as an Agreement.
APPENDIX A
51
--------------------------------------------------------------------------------
APPENDIX A WARRANTIES AND REPRESENTATIONS WITH RESPECT
TO THE COMPANY AND SUBSIDIARIES
--------------------------------------------------------------------------------
VENDORS' QUALIFICATIONS
--------------------------------------------------------------------------------
1 The vendors are the registered holders and beneficial owners of
the Ultrabridge Shares, the Havewin Shares and the Class D Shares
as set out in Schedules 1A, 1B and 1C, respectively. Ultrabridge
and Havewin are the registered holders and beneficial owners of
the Class A Shares and Class B Shares of Company as set out in
Schedules 1A and 1B, respectively.
2 There are no mortgages, charges, pledges, liens, encumbrances or
other security interests over or affecting the Ultrabridge Shares,
the Havewin Shares, the Shares, or, except pursuant to the State
Bank Loan Agreements, the shares of Diamond Leisure, Fernbank, or
the 24,000,000 units of the Territory Trust owned by the Company.
3 Each of the Vendors has the power to enter into and perform this
Agreement and has obtained all necessary consents to enable it to
do so.
4 The entry into and performance of this Agreement by the Vendors
does not constitute a breach of any obligation (including any
statutory, contractual or fiduciary obligation), or default under
any Agreement or undertaking, by which any of the Vendors,
Ultrabridge, Havewin, the Company or any Subsidiary is bound.
5 No meeting has been convened or resolution proposed, or petition
presented, and no order has been made, for the winding-up of any
corporate Vendor. No petition has been presented and no order has
been made for the bankruptcy of any personal Vendor. No voluntary
arrangement has been proposed or reached with any creditors of any
Vendor. Each Vendor is able to pay its debts as and when they fall
due.
6 No consent or approval (other than those listed in Clause 4) of
any governmental authority or private party (other than United
States governmental authorities) is required in connection with
the transactions contemplated by this Agreement.
7 This Agreement is valid, binding and enforceable against the
Vendors.
52
-------------------------------------------------------------------------------
THE COMPANY AND THE SUBSIDIARIES
-------------------------------------------------------------------------------
8 The Company and each of the Subsidiaries:
(a) is accurately described in Recitals A and D and Schedule 2
(as appropriate);
(b) has full corporate power to own its properties, assets and
business and to carry on its business as now conducted; and
(c) has done everything necessary to do business lawfully in all
jurisdictions in which its business is carried on.
9 No meeting has been convened or resolution proposed, or petition
presented, and no order has been made, for the winding-up of the
Company or any Subsidiary. No distress, execution or other similar
order or process has been levied on any of the property or assets
of the Company or any Subsidiary. No voluntary arrangement has
been proposed or reached with any creditors of the Company or any
Subsidiary. No receiver, receiver and manager, provisional
liquidator, liquidator or other officer of the court has been
appointed in relation to the Company or any Subsidiary. The
Company and each of the Subsidiaries is able to pay its debts as
and when they fall due.
SHARES
-------------------------------------------------------------------------------
10 The Shares of the Company held by Ultrabridge, Havewin and the
Trust comprise the whole of the issued ordinary share capital of
the Company, and are fully paid. All of the shares of Diamond
Leisure and Fernbank are owned by the Company. The Territory Trust
consists of 28,000,000 units, of which the company owns 24,000,000
units and Kumagai Gumi Co. Ltd. owns 4,000,000 units.
11 There are no commitments in place under which the Company or any
Subsidiary is obligated at any time to issue any shares or other
securities of the company in question.
12 Other than with respect to satisfaction of the conditions set
forth in Clause 4.1, there is no restriction on the Vendors for
the sale or transfer of the Shares to the Purchaser except for the
consent of the directors of the Company to the registration of the
transfers of the Shares.
53
--------------------------------------------------------------------------------
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
13 No forecasts and projections relating to the Company and/or the
Subsidiaries have been given to the Purchaser or its professional
advisers by or on behalf of any Vendors. No such forecasts or
projections have been prepared by or on behalf of the Company, any
of its Subsidiaries or any of the Vendors relating to periods
subsequent to 31 December 1994. In the event any such forecasts or
projections are prepared, they will be promptly provided to
Purchaser.
14 The Last Accounts and the Interim Accounts each disclose a true
and fair view of the state of the affairs, financial position and
assets and liabilities of the Company and the Subsidiaries as at
the Last Balance Date and 24 March 1995, respectively, and the
income, expenses and results of operations of the Company and the
Subsidiaries for the respective financial periods ending on said
dates.
15 The Last Accounts and Interim Accounts each were prepared:
(a) in accordance with the requirements of the applicable
Companies Code or Corporations Law and any other applicable
laws;
(b) in accordance with the Accounting Standards;
(c) in the manner described in the notes to them and the
accompanying auditor's opinion (in the case of the Last
Accounts) and auditor's report (in the case of the Interim
Accounts);
(d) on a consistent basis with the audited accounts for the
prior financial year; and
(e) without revaluing upwards any assets during the period which
is the subject of the Last Accounts.
16 Subject to Clause 5.4, the Completion Accounts will disclose a
true and fair view of the state of the affairs, financial position
and assets and liabilities of the Company and the Subsidiaries as
at the Completion Date, and the income, expenses and results of
operations of the Company and the Subsidiaries for the financial
period ending on that date.
17 Subject to Clause 5.4, the Completion Accounts will be prepared;
54
--------------------------------------------------------------------------------
(a) in accordance with the requirements of the Corporations Law
and any other applicable laws;
(b) in accordance with the Accounting Standards;
(c) in the manner described in the notes to them and the
accompanying auditor's opinion;
(d) on a consistent basis with the Last Accounts; and
(e) without revaluing upwards any assets during the period
which is the subject of the Completion Accounts.
18 The Company as at the Last Balance Date was not and as at the date
hereof is not directly or indirectly obliged in any way to
guarantee, assume or provide funds to satisfy any obligation of
any person, other than a Subsidiary, and all of such obligations
with respect to any Subsidiary is adequately reflected in the Last
Accounts. No Subsidiary as at the Last Balance Date was nor as at
the date hereof is directly or indirectly obliged in any way to
guarantee, assume or provide funds to satisfy any obligations of
any person, other than the Company and any other Subsidiary and
all such obligations as at the Last Balance Date with respect to
the Company or any Subsidiary are adequately reflected in the Last
Accounts.
19 No letter of comfort has been given by the Company or any
Subsidiary.
BUSINESS
--------------------------------------------------------------------------------
20 The Company and each of the Subsidiaries is the legal and
beneficial owner and has good and marketable title to of all its
property (both real and personnel) and assets. There are no
mortgages, pledges, liens, encumbrances, charges or other security
interest over or affecting any property or assets except as set
out in Schedule 3.
21 The Company and each of the Subsidiaries:
(a) holds all statutory licenses, consents, authorizations and
permits necessary for the proper carrying on of the
business in the manner in which it has been carried on and
the use of the Business Premises;
(b) have provided the Purchaser with copies of all of the
licenses, consent, authorizations and permits (including
without limitation, all necessary licenses and consents
under the Gaming
55
--------------------------------------------------------------------------------
Control Act, 1993 of the Northern Territory of Australia,
liquor licenses and boarding house registrations)
("Licenses") for the proper carrying on of the business and
the use of the Business Premises;
(c) warrants the Licenses are all current and to the best
knowledge of Vendors after reasonable inquiry there is no
fact or matter that might prejudice the continuance,
renewal or cause a variation of the Licenses other than as
specifically contemplated in Clause 4.1(b). There are no:
(i) defaults under the Licenses or any applicable laws,
regulations, licenses or agreements;
(ii) fees outstanding for the Licenses;
(iii) prosecutions or proceedings pending concerning any
alleged breach of the Licenses or any conditions
attached to the Licenses.
22 The business of the Company and each of the Subsidiaries is
conducted in accordance with all applicable laws, regulations,
licenses and agreements, does not contravene any laws,
regulations, licenses or agreements and no allegation of any
contravention of any applicable laws, regulations, licenses or
agreements is known to the Company or any Subsidiary or any of the
Vendors.
23 The assets of the Company and the Subsidiaries are sufficient to
enable the effective conduct of the business of the Company after
Completion as it is carried on at the date of this Agreement, and
has been carried on since the Last Balance Date.
24 There has not been any breach of or default by the Company or any
Subsidiary (and in the case of the Territory Trust, any
unitholder) of any term or provision of:
(a) it memorandum and articles of association (and in the case
of the Territory Trust, its deed), as amended or
supplemented from time to time;
(b) any instrument to which it is a party or by which it is
bound which is material to its business or financial
condition; or
(c) any judgment, order or injunction of any court, commission,
board or other administrative or governmental authority,
56
--------------------------------------------------------------------------------
and to the knowledge of any Vendor there has not occurred any
event which, with the passage of time or giving of notice, would
constitute a breach or default of that kind.
25 The transfer of the Ultrabridge Shares, the Havewin Shares and the
Class D Shares in accordance with this Agreement does not and will
not constitute a breach of any obligation (including any
statutory, contractual or fiduciary obligation) or default under
any agreement or undertaking by which the Company or any
Subsidiary is bound.
26 As far as the Company and each of the Subsidiaries and each of the
Vendors are aware, there is no existing customer or supplier of
the Company or any Subsidiary who will or is likely to:
(a) cease trading with the Company or any Subsidiary; or
(b) materially reduce its trading with the Company or any
Subsidiary.
27 No person has given or entered into any guarantee, indemnity or
letter of comfort in respect of the Company or any Subsidiary.
28 There are no powers of attorney given by the Company or any
Subsidiary in force except the power of attorney in Clause 16 and
powers of attorney which have been disclosed to Purchaser and are
contained in any financial facility or security documentation or
other use given in the ordinary course of business.
29 The names and locations of all banks in which the Company and each
of the Subsidiaries has an account and the names of all persons
authorised to sign on the accounts are listed in Schedule 4.
30 Except as disclosed in schedule 5 neither Ultrabridge, Havewin,
any Vendor or relative, affiliate or associate of a Vendor or body
corporate associated (as that term is defined in the Corporations
Law) with a Vendor is a party to any contract or arrangement with
the Company or any Subsidiary or has been such a party since
January 1, 1992.
31 At no time since January 1, 1992 has the Company or any Subsidiary
had a direct or indirect interest in any contract or arrangement
containing terms which were not of an entirely arm's length
nature, nor have the profits or financial position of the Company
or any Subsidiary during that period been affected by any contract
or arrangement with terms of that nature.
32 The Company:
57
--------------------------------------------------------------------------------
(a) does not hold any shares in the capital of any company other than the
Subsidiaries;
(b) is not a member of any partnership or other unincorporated association;
(c) is not a trustee of any trust estate or fund; and
(d) does not have a permanent establishment (as that expression is defined
in any relevant double taxation Agreement) outside Australia.
The same is true of each Subsidiary, except that Fernbank is the Trustee of
the Territory Trust.
33 Since February 23, 1995, the Company and the Subsidiaries have complied with
the provisions of Clauses 7.1, 7.2 and 7.3.
BUSINESS PREMISES
-------------------------------------------------------------------------------
34 Schedule 6 accurately describes all the Business Premises owned, leased or
occupied by the Company and each of its Subsidiaries. It includes details of
the nature of the Company or the Subsidiaries' interest in the Business
Premises. For the freehold property comprised in the Business Premises, the
Company or the Subsidiaries is the beneficial owner of the Land. For the
leasehold property comprised in the Business Premises, the Company or the
Subsidiaries are entitled to quiet enjoyment and possession of the leasehold
property. The Company or the Subsidiaries hold appurtenant to the Business
Premises all easements, rights, interests and privileges necessary or
appropriate for the conduct of the business at the Business Premises,
including without limitation with respect to the car park adjacent to the
Business Premises. The Company has taken all requisite steps to assure the
continued availability to the Company of such car park on a long term basis.
35 The Company or relevant Subsidiary has exclusive rights to occupy the
Business Premises free from all encumbrances or third party rights including
without limitation any rights obtained by adverse possession except as set
out in Certificate of Title Volume 112 Folio 148 and Schedule 6. No other
party has any right to occupy any part of the Business Premises except with
the consent of the Company or the relevant Subsidiary or as set out in
Schedule 7. The land which is occupied by the Business Premises complies with
all laws applicable to land and the requirements of all public statutory
authorities including the provisions of any planning scheme, planning permit
or interim development order affecting the Business Premises.
58
--------------------------------------------------------------------------------
36 The Company or relevant Subsidiary has properly performed and observed all
material covenants affecting the Business Premises.
37 There are no restrictions, stipulations or outgoings affecting the Business
Premises which in the reasonable opinion of Vendors are of an onerous or
unusual nature or conflict with the present use. The use of the Business
Premises by the Company or relevant Subsidiary does not constitute a breach
of any of the Property Leases or any applicable law.
38 Schedule 7 accurately describes all of the leases and licenses of real
property to the Company or any Subsidiary including the car park license
granted by the Darwin City Council. The Company or relevant Subsidiary has
made all payments required by and has otherwise complied with the terms of
each of the Property Leases. Nothing has occurred which may be used as
grounds for termination of any of the Property leases.
39 No development, alterations or works have been carried out in relation to the
Business Premises which would require any permission or consent under any
statute or regulation which has not been obtained and all conditions
attaching or any such permission or consent have been fully complied with.
Vendors are aware that the Business Premises may be developed by the
Purchaser and they are not aware of any features on or under the Business
Premises (including, without limitation, drains, sewers or electricity
easements or the registration of any part of the Business Premises with the
Aboriginal Areas Protection Authority) or any latent defects affecting any
part of the Business Premises which may prejudicially affect any proposed
development or use or, in their reasonable opinion, the value of the Business
Premises to any material extent. Vendors have advised Purchaser of any such
matters of which they are aware which may in their reasonable opinion
prejudicially affect the value of the Business Premises to any extent,
whether or not material.
40. As far as the Company and each of the Subsidiaries and each of the Vendors
are aware, there are no proposals by any competent authority or other person
which would adversely affect the Business Premises including:
(a) a proposal of any competent authority of an intention to resume or
compulsorily acquire the whole or any part of the Business Premises;
(b) requiring the carrying out of any alterations, works, improvements or
maintenance or other action in relation to the Business Premises
involving any substantial expenditure, and
59
--------------------------------------------------------------------------------
there are no circumstances likely to result in the service of any such
notices.
41 Each of the buildings and other erections on the Business Premises:
(a) is in such condition and repair as to be substantially fit for the
purpose for which it is presently used; and
(b) is approved and otherwise complies with applicable laws and industrial
health and safety regulations.
42 The connections to power, water and waste disposal services existing in the
buildings and other erections on the Business Premises are approved and
otherwise comply with applicable laws and are sufficient for the conduct of
the Company's and the Subsidiaries' businesses. None of the Company or any
Subsidiary or any of the Vendors are aware of any imminent or likely
interruption of those services.
43 There are no current disputes relating to any of the Business Premises or
their use.
PLANT AND EQUIPMENT
--------------------------------------------------------------------------------
44 Schedule 8 is a complete list of all items of Plant and Equipment owned by
the Company and each of the Subsidiaries with a written down value in excess
of Aus$5,000 as at the Last Balance Date. Schedule 9 accurately describes all
of the Equipment Leases.
45 The rate of depreciation applied in the Last Accounts for each item of Plant
and Equipment has been applied over previous accounting periods of the
Company or relevant Subsidiary and is adequate to write down its value to nil
realisable value at the end of its useful working life.
46 Each item of Plant and Equipment and Leased Plant and Equipment:
(a) is in good repair taking into account normal wear and tear;
(b) is in satisfactory working condition and capable of doing the work for
which it is designed; and
(c) has been maintained in a manner that does not prejudice any rights under
any maintenance contract in connection with any of that plant and
equipment.
60
--------------------------------------------------------------------------------
47 There is no claim outstanding against any supplier of the Plant and Equipment
or Leased Plant and Equipment or of maintenance services for that plant and
equipment in connection with any defect in that plant and equipment.
48 Each item of Plant and Equipment and Leased Plant and Equipment is in the
physical possession of the Company or relevant Subsidiary.
49 Each item of Plant and Equipment and Leased Plant and Equipment is erected or
positioned in accordance with all applicable laws and is operated by the
Company or relevant Subsidiary without contravening any laws or industrial
health and safety regulations.
50 The Company or relevant Subsidiary has made all payments required by and has
otherwise complied with the terms of each of the Equipment Leases.
INVENTORY
--------------------------------------------------------------------------------
51 The level of Inventory (including spare parts) is sufficient to meet the
requirements for the business of the Company or relevant Subsidiary and is
not materially surplus to the requirements of that business.
52 The level of Inventory which is obsolete or slow moving does not exceed that
at the Last Balance Date.
53 All the Inventory is in the physical possession of the Company or relevant
Subsidiary.
54 To the best of Vendors' knowledge and belief, after reasonable inquiry, none
of the Inventory has been sold to the Company or any Subsidiary on a term to
the effect that the seller retains title in the relevant goods until payment
in full for the goods.
INTELLECTUAL PROPERTY RIGHTS
--------------------------------------------------------------------------------
55 Schedule 10 is a complete and accurate list of:
(a) all registered and unregistered business names and trade marks;
(b) all registered patents and designs; and
(c) all applications for registration of patents and designs,
61
--------------------------------------------------------------------------------
owned or used at any time by the Company or any Subsidiary in connection with
its business and contains full details of the Intellectual Property Licenses.
56 The Company or relevant Subsidiary owns all right, title and interest in
Australia in and to the Intellectual Property Rights except that the right to
use the Aspinall name is limited to the Northern Territory. The Company or
relevant Subsidiary has not licensed any of the Intellectual Property Rights
and has not assigned or in any way disposed of any right, title or interest
in the Intellectual Property Rights.
57 The Company has not disclosed any of the Confidential Information except
properly in the ordinary course of its business.
58 The Intellectual Property Rights are to the best knowledge and belief of
Vendors, after reasonable inquiry, valid and enforceable in Australia. The
Company or relevant Subsidiary has taken all necessary steps to obtain and
maintain appropriate registrations for the Intellectual Property Rights and
to protect and defend the Intellectual Property Rights.
59 To the knowledge and belief of the Vendors, after reasonable inquiry, neither
the carrying on of its business by the Company or relevant Subsidiary nor the
use of the Intellectual Property Rights:
(a) infringes, or is alleged to infringe, the intellectual property rights
(including business names, trade marks, patents, designs, copyright and
rights to confidential information) of any third party; or
(b) is, or is alleged to be, in breach of any obligation of confidence owed
to any third party.
60 To the best knowledge and belief of Vendors, after reasonable inquiry, there
has not been:
(a) any infringement of any of the Intellectual Property Rights;
(b) any misuse or unauthorized disclosure of the Confidential Information; or
(c) any other act which may affect the validity or enforceability of the
Intellectual Property Rights.
61 Except with respect to the use of the Aspinall name outside of the Northern
Territory, none of the Company or any Subsidiary or any of the Vendors are
aware of any use by any other person of any of the
62
--------------------------------------------------------------------------------
business names or the trade marks owned or used by the Company or relevant
Subsidiary.
62 To the best knowledge and belief of Vendors, after reasonable inquiry, each
of the Intellectual Property Licenses is valid, binding and enforceable
against the parties to it. The Company or relevant Subsidiary has complied at
all times with the terms of the Intellectual Property Licenses and no
licensor has any right to terminate an Intellectual Property License.
CONTRACTS
--------------------------------------------------------------------------------
63 Schedule 11 is a complete list of all material contracts (i.e., contracts
entered into by the Company or any Subsidiary which individually require
aggregate consideration in excess of Aus$100,000 or which cannot be
terminated on 60 days notice or less). Full details of all material contracts
entered into by the Company or any Subsidiary have been duly disclosed to the
Purchaser in writing. Schedule 12 is a complete list of all banking
facilities available to the Company or any Subsidiary.
64 The Company or relevant Subsidiary has complied at all times with its
obligations under all material contracts entered into by it.
65 Each of the material contracts entered into by the Company or any Subsidiary
is valid, binding and enforceable against the parties to it and there is no
party in breach of, or in default under, any such contract.
66 None of the material contracts entered into by the Company or any Subsidiary
contain in the reasonable opinion of Vendors any onerous, unusual or other
provision material for disclosure to a prudent intending purchaser of the
Shares.
67 None of the material contracts entered into by the Company or any Subsidiary
is known to the Company or any Subsidiary or any of the Vendors to be likely
to result in a loss for that company.
68 The Company has not made any offers, tenders or quotations which are still
outstanding and capable of giving rise to a contract by the unilateral act of
a third party, other than in the ordinary course of business and on customary
terms. The same is true of each Subsidiary.
69 Except to the extent of the provision for doubtful debts in the Interim
Accounts, the Vendors have no reason to believe that all accounts receivable
of and other debts owed to the Company or any of the
63
--------------------------------------------------------------------------------
Subsidiaries will not be good and collectable in the ordinary course of
business and in any event not later than 3 months after the Completion Date.
70 The total amount borrowed by the Company and each of the Subsidiaries from
its bankers does not exceed its overdraft accommodation and the total amount
borrowed or raised by the Company and each of the Subsidiaries from any
source does not exceed any limitation in its articles of association or in
any deed or Agreement executed by it.
INSURANCE
--------------------------------------------------------------------------------
71 Schedule 13 comprises a complete list of all contracts of insurance and
indemnity in force in respect of the business and the property and assets.
72 Each of the contracts of insurance is in force and there is no fact or
circumstance known to the Company or any Subsidiary or any of the Vendors
which would lead to any of them being prejudiced. None of the contracts of
insurance will be terminated or cease to have effect as a consequence of the
change in ownership of the Shares.
73 All of the property and assets of the Company and the Subsidiaries of an
insurable nature are insured in amounts representing their full replacement
or reinstatement value against fire and other risks normally insured against.
All risks, whether in relation to damage to property, personal injury,
product liability or otherwise are adequately insured for such amounts as
would be maintained in accordance with prudent business practice.
TAXATION
--------------------------------------------------------------------------------
74 All tax and duty returns required by law (including, but not limited to, all
laws imposing or relating to income tax, fringe benefits tax, sales tax,
payroll tax, group tax, land tax, water and municipal rates and stamp and
customs duty) to be lodged or filed by the Company or any Subsidiary have
been lodged or filed.
75 No tax or duty return referred to in warranty 74 contains a statement that is
false or misleading in any material particular or omits to refer to any
matter which is required to be included or without which the statement is
false or misleading.
64
--------------------------------------------------------------------------------
76 All records relating to tax or duty returns referred to in warranty 74 or to
the preparation of those returns required by law to be maintained by the
Company or any Subsidiary have been duly maintained.
77 All taxes, levies, assessments, contributions, fees, rates, duties, and other
governmental or municipal charges or impositions (other than those which may
be still paid without penalty or interest) for which the Company or any
Subsidiary is liable, including any penalty or interest, have been paid.
78 There is no current dispute between the Company or any Subsidiary and the
Commissioner of Taxation of the Commonwealth of Australia or any other
federal, state, territorial or municipal body or authority responsible for
the collection of tax or duty.
79 All amounts of income tax required by law to be deducted by the Company or
any Subsidiary from the salary or wages of employees have been duly deducted
and, where appropriate, duly paid.
80 No dividend has been paid by the Company or any Subsidiary:
(a) in respect of which the required franking amount (as provided for in
section 160AQE of the Income Tax Assessment Act ("Tax Act") has exceeded
the franked amount (as defined in section 160APA of the Tax Act) of the
dividend; or
(b) which has been franked in excess of the required franking amount,
which would result in that company being liable to pay franking deficit tax
under section 160AQJ of the Tax Act or additional tax under section 160ARX of
the Tax Act.
81 All documents entered into by the Company or any Subsidiary, if required,
have been duly stamped.
82 All stamp duty payable on any transfer of the Shares or shares in any
Subsidiary before the Completion Date has been duly paid.
65
--------------------------------------------------------------------------------
RECORDS
--------------------------------------------------------------------------------
83 The Records:
(a) are complete, true and accurate in all material respects;
(b) give a true and fair view of the trading transactions, financial and
contractual position of the Company and each of the Subsidiaries and of
its assets and liabilities and those of the Subsidiaries;
(c) as far as is relevant, have been prepared in accordance with the
applicable Companies Code or Corporations Law and the Accounting
Standards; and
(d) are in the possession of the Company, the relevant Subsidiary or their
professional advisors in their original form where applicable.
84 The Company and each of the Subsidiaries has filed all annual returns and
other forms as and where required to be filed or registered under the
Companies Code or Corporations Law (as applicable) and neither the Company
nor any of the Subsidiaries is liable to be struck off the register of
companies.
LITIGATION
--------------------------------------------------------------------------------
85 Except as disclosed on Schedule 14, the Company is not involved in any
litigation or arbitration proceedings and there are no facts likely to give
rise to any such proceedings. The same is true of each Subsidiary. The
matters referred to on Schedule 14 will not, individually or in the
aggregate, have a material and adverse effect on the Company or any
Subsidiary.
86 No claim has been made against the Company or any Subsidiary in connection
with any defective product or services supplied by it in the course of
carrying on its business. The Company has not breached the provisions of the
Trade Practices Act or any equivalent state or territory enactments or the
requirements of consumer product safety standard or consumer product
information standard prescribed by law. The same is true of each Subsidiary.
87 None of the operations of the Company or any Subsidiary are subject to any
unsatisfied judgment or any order, award or decision handed down in any
litigation or arbitration proceedings.
66
--------------------------------------------------------------------------------
ENVIRONMENT
--------------------------------------------------------------------------------
88 There is no Contaminant present in, on, under or above the Business Premises
and there is nothing which may become or give rise to such a Contaminant in
the future.
89 The Business Premises are and have been operated in material compliance with
all applicable Environmental Laws and other laws and regulations pertaining
to health and safety and occupational hazards or conditions, including
without limitation with respect to passive smoking. Except as may be
adequately covered by insurance, neither the Company nor any Subsidiary has
any liability, contingent or otherwise, with respect to such matters.
90 The Company in the conduct of its business or the occupation and use of the
Business Premises, has not harmed the Environment in a manner not permitted
by any Environmental Law. The same is true of each Subsidiary.
91 All authorisations and approvals required under any Environmental Law
relating to the business of the Company and each of the Subsidiaries are in
full force and effect and will not be terminated or cease to have effect as a
consequence of the change in ownership of the Shares.
92 No authorisations or approvals under any Environmental Law relating to the
business of the Company or any Subsidiary are subject to a right of appeal by
any person.
93 The Company and each of the Subsidiaries has at all times complied with all
the terms of any authorisations and approvals under any Environmental Law
relating to the business of the Company or relevant Subsidiary.
94 There is no proposal to revoke, suspend modify or not renew any authorisation
or approval under any Environmental Law relating to the business of the
Company or any Subsidiary.
95 There is no actual or contingent obligation to pay money or carry out any
work in relation to the Business Premises or any other assets of the Company
or any Subsidiary to comply with an Environmental Law. The Company is not
subject to any liability under any Environmental Law or under the common law
arising from the carrying on of its business at any time. The same is true of
each Subsidiary.
67
--------------------------------------------------------------------------------
96 The carrying on of its business by the Company and each of the Subsidiaries
has not been negligent and has not resulted in or caused any public or
private nuisance or contravention of the rule known as the Rule in Xxxxxxx v
Xxxxxxxx (1868) LR3 (HL) 330.
97 The carrying on of its business by the Company and each of the
Subsidiaries, including proposed expansion plans, is in conformity with all
applicable laws, rules and regulations pertaining to aboriginal land claims,
including with respect to "sacred sites."
EMPLOYEES
--------------------------------------------------------------------------------
98 All contracts of service or for services and letters of appointment in
respect of any employees of, or consultants to, the Company or any
Subsidiary, being employees or consultants with an annual remuneration of in
excess of Aus$30,000 or required to be given at least three (3) months
notice of termination, have been fully disclosed to the Purchaser in
writing. Each of the contracts entered into with employees or consultants
are enforceable against the parties to it and there is no party in breach
of, or in default under, any such contract.
99 No loans or other advances have been made to any directors or employees of
the Company or any Subsidiary.
100 The Company and each of the Subsidiaries has made all payments in respect of
occupational superannuation required under any contract or award in respect
of each of its employees.
101 The Company is not involved in any industrial or trade dispute or any
dispute regarding any claim with any of its employees or with any trade
union and there are no facts or circumstances which are likely to result in
such a dispute.
102 Since the Last Accounts Date there has not been any material change in the
remuneration or emoluments or benefits of any executives who are employees.
103 Schedule 15 sets forth a list of all employee benefit plans, including but
not limited to pension plans, health plans and life insurance plans.
SUPERANNUATION
--------------------------------------------------------------------------------
104 The Company and each of the Subsidiaries has complied with all its
obligations under the relevant trust deeds, including the payment of all
68
--------------------------------------------------------------------------------
contributions and expenses to the applicable Fund required to be made under
the relevant trust deeds.
105 Full disclosure has been made to the Purchaser in writing of all material
facts relating to contributions and benefit arrangements in connection with
the Fund including the current levels of contributions and benefits, the
basis upon which they are calculated and whether contributions are paid in
advance or arrears and there are no superannuation or other benefit schemes,
other than the Fund, to which the Company or any Subsidiary is contributing
or has entered into a commitment which could involve future contributions,
or under which any of the employees of that company receives or is entitled
to receive or reasonably expects to receive any benefits.
106 Neither the Company nor any Subsidiary has received notice of any claim or
dispute in relation to the Fund.
107 The transfer of the Shares will not cause any increase in the obligations of
the Company or any Subsidiary to make contributions to the Fund.
108 Neither the Company nor any Subsidiary has misrepresented to any person the
benefits which are or may be available in respect of the Fund.
CHANGES SINCE THE LAST BALANCE DATE
--------------------------------------------------------------------------------
109 Since the Last Balance Date:
(a) the business of the Company and each of the Subsidiaries has been
carried on in the ordinary and usual course and no contracts or
commitments differing from those ordinarily necessitated by the nature
of that business have been entered into or incurred;
(b) there has been no change in the assets, the liabilities or the financial
position or profits of the Company and the Subsidiaries from that set
out in the Last Accounts except changes in the ordinary course of
business, none of which individually or in the aggregate is materially
adverse to the company; and
(c) the business or financial position of the Company or any Subsidiary has
not been materially and adversely affected by any matter, either
financial or otherwise and whether covered by insurance or not.
69
--------------------------------------------------------------------------------
110 Since the Last Balance Date:
(a) no distributions of cash or specific assets by way of dividend or
otherwise on the share capital of the Company or any Subsidiary have
been made and no securities of the Company or any Subsidiary have been
purchased by any of them;
(b) no shares in or debentures of the Company or any Subsidiary have been
issued or agreed to be issued or put under option;
(c) no alteration has been made to the rights attached to any existing
shares in the Company or any Subsidiary;
(d) no alteration has been made to the memorandum or articles of association
of the Company or any Subsidiary;
(e) no alteration has been made to the capital structure of the Company or
any Subsidiary;
(f) no additional directors have been appointed to the Company or any
Subsidiary.
BROKERAGE
--------------------------------------------------------------------------------
111 No person is entitled to recover from the Company or any Subsidiary any fee
or commission in connection with the purchase or sale of the Shares.
INFORMATION
--------------------------------------------------------------------------------
112 All written information given by the Company or any Subsidiary or any of the
Vendors or the Vendors' professional advisers to the Purchaser or to the
Purchaser's professional advisers in the course of negotiations leading to
this Agreement and Completion are true and accurate in all respects. None of
that written information is misleading in any material particular, whether
by omission or otherwise.
113 There are no facts or circumstances which might reasonably be expected
materially and adversely to affect the financial position, operations, or
prospects of the Company or any Subsidiary other than facts and
circumstances which have been fully disclosed to Purchaser or affecting as a
whole the industry in which the business of the Company and the Subsidiaries
is carried on.
70
--------------------------------------------------------------------------------
114 None of the written information supplied to the Purchaser prior to or after
the date of this Agreement contains or will contain an untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated in order to make such statements, in light of the circumstances under
which they were made, not misleading.
APPENDIX B
71
--------------------------------------------------------------------------------
APPENDIX B WARRANTIES AND REPRESENTATIONS WITH RESPECT TO
ULTRABRIDGE DARWIN LIMITED
--------------------------------------------------------------------------------
VENDORS' QUALIFICATIONS
--------------------------------------------------------------------------------
1 The Ultrabridge Vendors are the registered holders and beneficial owners of
the Ultrabridge Shares as set out in Schedule 1.
2 There are no mortgages, charges, pledges, liens, encumbrances or other
security interests over or affecting the Ultrabridge Shares.
ULTRABRIDGE
--------------------------------------------------------------------------------
3 Ultrabridge:
(a) is accurately described in Recitals B and E;
(b) has full corporate power to own its properties, assets and business and
to carry on its business as now conducted; and
(c) has done everything necessary to do business lawfully in all
jurisdictions in which its business is carried on.
4 No meeting has been convened or resolutions proposed, or petition presented,
and no order has been made, for the winding-up of Ultrabridge. No distress,
execution or other similar order or process has been levied on any of the
property or assets of Ultrabridge. No voluntary arrangement has been proposed
or reached with any creditors of Ultrabridge. No receiver, receiver and
manager, provisional liquidator, liquidator or other officer of the court has
been appointed in relation to Ultrabridge. Ultrabridge is able to pay its
debts as and when they fall due.
THE SHARES
--------------------------------------------------------------------------------
5 The Ultrabridge Shares comprise the whole of the issued share capital,
whether ordinary or preference, of Ultrabridge, and are fully paid.
6 There are no commitments in place under which Ultrabridge is obliged at any
time to issue any shares or other securities of the Company.
7 There is no restriction on Ultrabridge or the Ultrabridge Vendors with
respect to the sale or transfer of the Ultrabridge Shares to the
72
--------------------------------------------------------------------------------
Purchaser except for the consent of the directors of Ultrabridge to the
registration of the transfers of the Ultrabridge Shares.
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
8 No forecasts and projections relating to Ultrabridge have been given to the
Purchaser or its professional advisers by or on behalf of any Ultrabridge
Vendor no such forecasts or projections have been prepared by or on behalf of
Ultrabridge Vendors relating to periods subsequent to 31 December, 1994. In
the event any such forecasts or projections are prepared, they will be
promptly provided to Purchaser.
9 The Last Ultrabridge Accounts disclose a true and fair view of the state of
the affairs, financial position and assets and liabilities of Ultrabridge
as at the Last Balance Date, and the income, expenses and results of
operations of Ultrabridge for the financial period ending on that date.
10 The Last Ultrabridge Accounts were prepared:
(a) in accordance with the requirements of the applicable Companies Code or
Corporations Law and any other applicable laws;
(b) in accordance with the Accounting Standards (except that Ultrabridge will
not comply with the equity accounting provisions of International
Accounting Standards 28 in respect of its investment in the Company);
(c) in the manner described in the notes to them and the accompanying
auditor's opinion;
(d) on a consistent basis with the audited accounts for the prior financial
year; and
(e) without revaluing upwards any assets during the period which is the
subject of the Last Ultrabridge Accounts.
11 The Ultrabridge Completion Accounts will disclose a true and fair view of the
state of the affairs, financial position and assets and liabilities of
Ultrabridge as at the Completion Date, and the income, expenses and results
of operations of Ultrabridge for the financial period ending on that date.
The Ultrabridge Completion Accounts will not reflect any indebtedness,
liability or obligation of any nature (contingent or otherwise) except as
specifically provided for by this Agreement.
73
--------------------------------------------------------------------------------
12 The Ultrabridge Completion Accounts will be prepared:
(a) in accordance with the requirements of the Companies Code or Corporations
Law and any other applicable laws of the Cayman Islands or any other
jurisdiction;
(b) in accordance with the Accounting Standards;
(c) in the manner described in the notes to them and the accompanying
auditor's opinion;
(d) on a consistent basis with the Last Ultrabridge Accounts; and
(e) without revaluing upwards any assets during the period which is the
subject of the Ultrabridge Completion Accounts.
13 Ultrabridge is not directly or indirectly obliged in any way to guarantee,
assume or provide funds to satisfy any obligation of any person. No
Subsidiary is directly or indirectly obliged in any way to guarantee, assume
or provide funds to satisfy any obligations of any person, including the
Company and any other Subsidiary.
14 No letter of comfort has been given by Ultrabridge.
BUSINESS
--------------------------------------------------------------------------------
15 Ultrabridge is the legal and beneficial owner of all its property and assets,
including the shares of the Company reflected on Schedule 1A. At Completion
there will be no mortgages, pledges, liens, encumbrances, charges or other
security interests over or affecting such shares.
16 Ultrabridge holds all statutory licenses, consents and authorisations
necessary, if any, for the carrying on of its business. Copies of any such
licenses, consents and authorizations have been provided to the Purchaser.
There is no fact or matter that might prejudice the continuance or renewal of
those licenses, consents or authorisations.
17 The business of Ultrabridge is conducted in accordance with all applicable
laws, regulations, licenses and agreements, does not contravene any laws,
regulations, licenses or agreements and no allegation of any contravention of
any applicable laws, regulations, licenses or agreements is known to
Ultrabridge or any of the Ultrabridge Vendors.
74
--------------------------------------------------------------------------------
18 There has not been any breach of or default by Ultrabridge of any term or
provision of:
(a) its memorandum and articles of association;
(b) any instrument to which it is a party or by which it is bound which is
material to its business or financial condition; or
(c) any judgment, order or injunction of any court, commission, board or
other administrative or governmental authority,
and there has not occurred any event which, with the passage of time or
giving of notice, would constitute a breach or default of that kind.
19 The transfer of the Ultrabridge Shares in accordance with this Agreement does
not and will not constitute a breach of any obligation (including any
statutory, contractual of fiduciary obligation) or default under any
agreement or undertaking by which Ultrabridge is bound.
20 On Completion no guarantee, indemnity or letter of comfort in respect of
Ultrabridge given by any person will be outstanding.
21 There are no powers of attorney given by Ultrabridge in force except the
power of attorney in Clause 16.
22 The names and locations of all banks in which Ultrabridge has an account and
the names of all persons authorised to sign on the accounts are listed in
Schedule B1.
23 Since incorporation, the sole activity of Ultrabridge has been the holding of
shares in the Company and loans related thereto and Ultrabridge has
conducted no business or entered into any agreements or other arrangements.
Except for matters as referred to in Clause 7.5, Ultrabridge does not have
any indebtedness, liability or obligation of any nature (contingent or
otherwise), so that Ultrabridge can be put into voluntary members liquidation
and its assets distributed to Purchaser. Ultrabridge has no employees and
does not own or rent any property (other than the shares of the Company).
24 Ultrabridge:
(a) does not hold any shares in the capital of any company other than the
Company;
(b) is not a member of any partnership or other unincorporated association;
75
--------------------------------------------------------------------------------
(c) is not a trustee of any trust estate or fund; and
(d) does not have a permanent establishment (as that expression is defined in
any relevant double taxation Agreement) outside the Cayman Islands.
25 Since February 23, 1995, Ultrabridge has complied with the provisions of
Clauses 7.1, 7.2 and 7.3.
INSURANCE
--------------------------------------------------------------------------------
26 Schedule B2 comprises a complete a complete list of all contracts of
insurance and indemnity, if any, in force in respect of the business and the
property and assets of Ultrabridge.
27 Each of the contracts of insurance is in force and there is no fact or
circumstances known to Ultrabridge or any of the Vendors which would lead to
any of them being prejudiced. None of the contracts of insurance will be
terminated or cease to have effect as a consequence of the change in
ownership of the Ultrabridge Shares.
TAXATION
--------------------------------------------------------------------------------
28 All tax and duty returns required by law (including, but not limited to, all
laws imposing or relating to income tax, fringe benefits tax, sales tax,
payroll tax, group tax, land tax, water and municipal rates and stamp and
customs duty) to be lodged or filed or filed by Ultrabridge have been lodged
or filed.
29 No tax or duty returns referred to in Ultrabridge warranty 28 contains a
statement that is false or misleading in any material particular or omits to
refer to any matter which is required to be included or without which the
statement is false or misleading.
30 All records relating to tax or duty returns referred to in Ultrabridge
warranty 28 or to the preparation of those returns required by law to be
maintained by Ultrabridge have been duly maintained.
31 All taxes, levies, assessments, contributions, fees, rates, duties, and other
governmental or municipal charges or impositions (other than those which may
be still paid without penalty or interest) for which Ultrabridge is liable,
including any penalty or interest, have been paid.
32 There is no current dispute between Ultrabridge and any authority responsible
for the collection of tax or duty.
76
--------------------------------------------------------------------------------
33 No dividend has been paid by Ultrabridge.
34 All documents entered into by Ultrabridge, if required, have been duly
stamped.
35 All stamp duty payable on any transfer of the Ultrabridge Shares before the
Completion Date has been duly paid.
RECORD
--------------------------------------------------------------------------------
36 The Records relating to Ultrabridge:
(a) are complete, true and accurate in all material respects;
(b) give a true and fair view of the trading transactions, financial and
contractual position of Ultrabridge and of its assets and liabilities;
(c) as far as is relevant, have been prepared in accordance with the
applicable Companies Code or Corporations Law and the Accounting
Standards; and
(d) are in the possession of Ultrabridge or its professional advisers in
their original form where applicable.
37 Ultrabridge has filed all annual returns and other forms as and where
required to be filed or registered under the Companies Code or Corporations
Law (as applicable) and Ultrabridge is not liable to be struck off the
register of companies.
LITIGATION
--------------------------------------------------------------------------------
38 Ultrabridge is not involved in any litigation or arbitration proceedings and
there are no facts which could give rise to any such proceedings.
39 None of the operations of Ultrabridge are subject to any unsatisfied judgment
or any order, award or decision handed down in any litigation or arbitration
proceedings.
CHANGES SINCE THE DATE OF THE LAST ULTRABRIDGE ACCOUNTS
--------------------------------------------------------------------------------
40 Since the date of the Last Ultrabridge Accounts:
77
--------------------------------------------------------------------------------
(a) the business of Ultrabridge has been carried on in the ordinary and usual
course and no contracts or commitments have been entered into or
incurred;
(b) there has been no change in the assets, the liabilities or the financial
position or profits of Ultrabridge from that set out in the Last Accounts
except changes in the ordinary course of business, none of which
individually or in the aggregate is materially adverse to Ultrabridge;
and
(c) the business or financial position of Ultrabridge has not been materially
and adversely affected by any manner, either financial or otherwise and
whether covered by insurance or not.
41 Since the date of the Last Ultrabridge Accounts:
(a) no distributions of cash or specific assets by way of dividend or
otherwise on the share capital of Ultrabridge have been made and no
securities of Ultrabridge have been purchased;
(b) no shares in or debentures of Ultrabridge have been issued or agreed to
be issued or put under option;
(c) no alteration has been made to the rights attached to any existing shares
in Ultrabridge;
(d) no alteration has been made to the memorandum or articles of association
of Ultrabridge;
(e) no alteration has been made to the capital structure of Ultrabridge;
(f) no additional directors have been appointed to Ultrabridge.
INFORMATION
--------------------------------------------------------------------------------
42 All written information given by Ultrabridge or any of the Ultrabridge
Vendors or the Ultrabridge Vendors' professional advisers to the Purchaser or
to the Purchaser's professional advisers in the course of negotiations
leading to this Agreement and Completion are true and accurate in all
respects. None of that written information is misleading in any material
particular, whether by omission or otherwise.
43 There are no facts or circumstances which might reasonably be expected
materially and adversely to affect the financial position, operations, or
prospects of Ultrabridge other than facts and
78
--------------------------------------------------------------------------------
circumstances which have been fully disclosed to Purchaser or affecting as a
whole the industry in which the business of Ultrabridge, the Company and the
Subsidiaries is carrried on.
44 None of the written information supplied to the Purchaser prior to or after
the date of this Agreement contains or will contain an untrue statement of a
material fact or omits or will omit to state a material fact required to be
stated therein or in connection therewith or necessary to be stated in order
to make such statements, in light of the circumstances under which they were
made, not misleading.
APPENDIX C
79
--------------------------------------------------------------------------------
APPENDIX C WARRANTIES AND REPRESENTATIONS WITH RESPECT TO HAVEWIN TRADING
LIMITED
--------------------------------------------------------------------------------
VENDORS' QUALIFICATIONS
--------------------------------------------------------------------------------
1 The Havewin Vendors are the registered holders and beneficial owners of the
Havewin Shares as set out in Schedule 1.
2 There are no mortgages, charges, pledges, liens, encumbrances or other
security interests over or affecting the Havewin Shares.
HAVEWIN
--------------------------------------------------------------------------------
3 Havewin:
(a) is accurately described in Recitals C and F;
(b) has full corporate power to own its properties, assets and business and
to carry on its business as now conducted; and
(c) has done everything necessary to do business lawfully in all
jurisdictions in which its business is carried on.
4 No meeting has been convened or resolution proposed, or petition presented,
and no order has been made, for the winding-up of Havewin. No distress,
execution or other similar order or process has been levied on any of the
property or assets of Havewin. No voluntary arrangement has been proposed or
reached with any creditors of Havewin. No receiver, receiver and manager,
provisional liquidator, liquidator or other officer of the court has been
appointed in relation to Havewin. Havewin is able to pay its debts as and
when they fall due.
THE SHARES
--------------------------------------------------------------------------------
5 The Havewin Shares comprise the whole of the issued share capital of Havewin,
whether ordinary or preference, and are fully paid.
6 There are no commitments in place under which Havewin is obliged at any
time to issue any shares or other securities of the Company.
7 There is no restriction on Havewin or the Havewin Vendors with respect to
the sale or transfer of the Havewin Shares to the Purchaser
80
--------------------------------------------------------------------------------
except for the consent of the directors of Havewin to the registration of the
transfers of the Havewin Shares.
FINANCIAL STATEMENTS
--------------------------------------------------------------------------------
8 No forecasts and projects relating to Havewin have been given to the
Purchaser or its professional advisers by or on behalf of any Havewin
Vendor. No such forecasts or projections have been prepared by or on behalf
of Havewin or any of the Havewin Vendors relating to periods subsequent to 31
December 1994. In the event any such forecasts or projections are prepared,
they will be promptly provided to Purchaser.
9 The Last Havewin Accounts disclose a true and fair view of the state of the
affairs, financial position and assets and liabilities of Havewin as at the
Last Balance Date, and the income, expenses and results of operations of
Havewin for the financial period ending on that date.
10 The Last Havewin Accounts were prepared:
(a) in accordance with the requirements of the applicable Companies Code or
Corporations Law and any other applicable laws;
(b) in accordance with the Accounting Standards;
(c) in the manner described in the notes to them and the accompanying
auditor's opinion;
(d) on a consistent basis with the audited accounts for the prior financial
year; and
(e) without revaluing upwards any assets during the period which is the
subject of the Last Havewin Accounts
11 The Havewin Completion Accounts will disclose a true and fair view of the
state of the affairs, financial position and assets and liabilities of
Havewin as at the Completion Date, and the income, expenses and results of
operations of Havewin for the financial period ending on that date. The
Havewin Completion Accounts will not reflect any indebtedness, liability or
obligation of any nature (contingent or otherwise except as specifically
provided for by this Agreement).
12 The Havewin Completion Accounts will be prepared:
81
--------------------------------------------------------------------------------
(a) in accordance with the requirements of the Companies Code or Corporations
Law and any other applicable laws of Hong Kong or any other jurisdiction;
(b) in accordance with the Accounting Standards;
(c) in the manner described in the notes to them and the accompanying
auditor's opinion;
(d) on a consistent basis with the Last Havewin Accounts; and
(e) without revaluing upwards any assets during the period which is the
subject of the Havewin Completion Accounts.
13 Havewin is not directly or indirectly obliged in any way to guarantee, assume
or provide funds to satisfy any obligation of any person. No Subsidiary is
directly or indirectly obliged in any way to guarantee, assume or provide
funds to satisfy any obligations of any person, including the Company and any
other Subsidiary.
14 No letter of comfort has been given by Havewin.
BUSINESS
--------------------------------------------------------------------------------
15 Havewin is the legal and beneficial owner of all its property and assets,
including the shares of the Company reflected on Schedule 1B. At Completion
there will be no mortgages, pledges, liens, encumbrances, charges or other
security interests over or affecting such shares.
16 Havewin holds all statutory licences, consents and authorisations necessary,
if any, for the carrying on of its business. Copies of any such licences,
consents and authorizations have been provided to the Purchaser. There is no
fact or matter that might prejudice the continuance or renewal of those
licences, consents or authorisations.
17 The business of Havewin is conducted in accordance with all applicable laws,
regulations, licenses and agreements, does not contravene any laws,
regulations, licenses or agreements and no allegation of any contravention of
any applicable laws, regulations, licenses or agreements is known to Havewin
or any of the Havewin Vendors.
18 There has not been any breach of or default by Havewin of any term or
provision of:
(a) its memorandum and articles of association;
82
--------------------------------------------------------------------------------
(b) any instrument to which it is a party or by which it is bound which is
material to its business or financial condition; or
(c) any judgment, order or injunction of any court, commission, board or
other administrative or governmental authority,
and there has not occurred any event which, with the passage of time or
giving of notice, would constitute a breach or default of that kind.
19 The transfer of the Havewin Shares in accordance with this Agreement does not
and will not constitute a breach of any obligation (including any statutory,
contractual or fiduciary obligation) or default under any agreement or
undertaking by which Havewin is bound.
20 On Completion no guarantee, indemnity or letter of comfort in respect of
Havewin given by any person will be outstanding.
21 There are no powers of attorney given by Havewin in force except the power of
attorney in Clause 16.
22 The names and locations of all banks in which Havewin has an account and the
names of all persons authorised to sign on the accounts are listed in
Schedule C1.
23 Since incorporation, the sole activity of Havewin has been the holding of
shares in the Company and loans related thereto and Havewin has conducted no
business or entered into any agreements or other arrangements. Except for
matters as referred to in Clause 7.5, Havewin does not have any indebtedness,
liability or obligation or any nature (contingent or otherwise), so that
Havewin can be put into voluntary members liquidation and its assets
distributed to Purchaser. Havewin has no employees and does not own or rent
any property (other than the shares of the Company).
24 Havewin:
(a) does not hold any shares in the capital of any company other than the
Company;
(b) is not a member of any partnership or other unincorporated association;
(c) is not a trustee of any trust estate or fund; and
(d) does not have a permanent establishment (as that expression is defined in
any relevant double taxation Agreement) outside Hong Kong.
83
--------------------------------------------------------------------------------
25 Since February 23, 1995, Havewin has complied with the provisions of Clauses
7.1, 7.2 and 7.3.
INSURANCE
--------------------------------------------------------------------------------
26 Schedule C2 comprises a complete list of all contracts of insurance and
indemnity, if any, in force in respect of the business and the property and
assets.
27 Each of the contracts of insurance is in force and there is no fact or
circumstance known to Havewin or any of the Vendors which would lead to any
of them being prejudiced. None of the contracts of insurance will be
terminated or cease to have effect as a consequence of the change in
ownership of the Havewin Shares.
TAXATION
--------------------------------------------------------------------------------
28 All tax and duty returns required by law (including, but not limited to, all
laws imposing or relating to income tax, fringe benefits tax, sales tax,
payroll tax, group tax, land tax, water and municipal rates and stamp and
customs duty) to be lodged or filed by Havewin have been lodged or filed.
29 No tax or duty return referred to in Havewin warranty 28 contains a statement
that is false or misleading in any material particular or omits to refer to
any matter which is required to be included or without which the statement is
false or misleading.
30 All records relating to tax or duty returns referred to in Havewin warranty
28 or to the preparation of those returns required by law to be maintained by
Havewin have been duly maintained.
31 All taxes, levies, assessments, contributions, fees, rates, duties, and other
governmental or municipal charges or impositions (other than those which may
be still paid without penalty or interest) for which Havewin is liable,
including any penalty or interest, have been paid.
32 There is no current dispute between Havewin and any authority responsible for
the collection of tax or duty.
33 No dividend has been paid by Havewin.
34 All documents entered into by Havewin, if required, have been duly stamped.
84
--------------------------------------------------------------------------------
35 All stamp duty payable on any transfer of the Havewin Shares before the
Completion Date has been duly paid.
RECORDS
--------------------------------------------------------------------------------
36 The Records relating to Havewin:
(a) are complete, true and accurate in all material respects;
(b) give a true and fair view of the trading transactions, financial and
contractual position of Havewin and of its assets and liabilities;
(c) as far as is relevant, have been prepared in accordance with the
applicable Companies Code or Corporations Law and the Accounting
Standards; and
(d) are in the possession of Havewin or its professional advisers in their
original form where applicable.
37 Havewin has filed all annual returns and other forms as and where required to
be filed or registered under the Companies Code or Corporations Law (as
applicable) and Havewin is not liable to be struck off the register of
companies.
LITIGATION
--------------------------------------------------------------------------------
38 Havewin is not involved in any litigation or arbitration proceedings and
there are no facts which could give rise to any such proceedings.
39 None of the operations of Havewin are subject to any unsatisfied judgment or
any order, award or decision handed down in any litigation or arbitration
proceedings.
CHANGES SINCE THE DATE OF THE LAST HAVEWIN ACCOUNTS
--------------------------------------------------------------------------------
40 Since the date of the Last Havewin Accounts:
(a) the business of Havewin has been carried on in the ordinary and usual
course and no contracts or commitments have been entered into or
incurred;
(b) there has been no change in the assets, the liabilities or the financial
position or profits of Havewin from that set out in the
85
--------------------------------------------------------------------------------
Last Accounts except changes in the ordinary course of business, none of
which individually or in the aggregate is materially adverse to Havewin;
and
(c) the business or financial position of Havewin has not been materially and
adversely affected by any matter, either financial or otherwise and
whether covered by insurance or not.
41 Since the date of the Last Havewin Accounts:
(a) no distributions of cash or specific assets by way of dividend or
otherwise on the share capital of Havewin have been made and no
securities of Havewin have been purchased;
(b) no shares in or debentures of Havewin have been issued or agreed to be
issued or put under option;
(c) no alteration has been made to the rights attached to any existing shares
in Havewin;
(d) no alteration has been made to the memorandum or articles of association
of Havewin;
(e) no alteration has been made to the capital structure of
Havewin;
(f) no additional directors have been appointed to Havewin.
INFORMATION
--------------------------------------------------------------------------------
42 All written information given by Havewin or any of the Havewin Vendors or
the Havewin Vendors' professional advisers to the Purchaser or to the
Purchaser's professional advisers in the course of negotiations leading to
this Agreement and Completion are true and accurate in all respects. None of
that written information is misleading in any material particular, whether by
omission or otherwise.
43 There are no facts or circumstances which might reasonably be expected
materially and adversely to affect the financial position, operations, or
prospects of Havewin other than facts and circumstances which have been fully
disclosed to Purchaser or affecting as a whole the industry in which the
business of Havewin, the Company and the Subsidiaries is carried on.
44 None of the written information supplied to the Purchaser prior to or after
the date of this Agreement contains or will contain an untrue statement of a
material fact or omits or will omit to state a material
86
--------------------------------------------------------------------------------
fact required to be stated therein or in connection therewith or
necessary to be stated in order to make such statements, in light of
the circumstances under which they were made, not misleading.
115
--------------------------------------------------------------------------------
Executed as a Deed with effect
from 30 June 1995 for and on
behalf of MGM Grand, Inc. in
accordance with its articles
of incorporation in the
presence of:
/s/ K. Xxxxxx Xxxxxxx
------------------------------
Signature of authorized person
Executive Vice President & General
Counsel /s/ Xxxxxx Xxxxxx
---------------------------------- -----------------------------------
Office held Witness
K. Xxxxxx Xxxxxxx
--------------------------------
Name of authorized person
(block letters) Date: July 24, 1995
-------
Executed as a Deed with effect from
30 June 1995 for and on behalf of
MGM Grand Australia Pty Ltd in
accordance with its articles of
incorporation in the presence of:
/s/ Xxxxxxxxx Xxxxxxxxxxx
---------------------------------
Signature of authorized person
Director /s/ K. Xxxxxx Xxxxxxx
--------------------------------- ------------------------------------
Office held Witness
Xxxx Xxxxxxxxxxx
---------------------------------
Name of authorized person Date: July 21, 1995
(block letters) -------
116
--------------------------------------------------------------------------------
Executed as a Deed with effect from
30 June 1995 for and on behalf of
Ultrabridge Securities Limited in
accordance with its articles of
incorporation in the presence of:
/s/ X. XxXxxxxx /s/ X. Xxxxxxxxxxxx
-------------------------------------------
Signature of authorized person
Director Director /s/ X. Xxxxxxxxx
------------------------------------------- ----------------------------------
Office held Witness
X. XxXxxxxx X. Xxxxxxxxxxxx
-------------------------------------------
Name of authorized person Date: July 26, 1995
(block letters) -------
Executed as a Deed with effect from
30 June 1995 for and on behalf of
Enderbury Limited in accordance
with its articles of incorporation
in the presence of:
/s/ X. XxXxxxxx /s/ X. Xxxxxxxxxxxx
-------------------------------------------
Signature of authorised person
Director Director
-------------------------------------------
Office held
/s/ X. Xxxxxxxxx
-------------------------------
Witness
X. XxXxxxxx X. Xxxxxxxxxxxx
-------------------------------------------
Name of authorised person Date: July 26, 1995
(block letters) -------
117
--------------------------------------------------------------------------------
Executed as a Deed with effect from
30 June 1995 for and on behalf of
HPLF Investments (II) Limited in
accordance with its articles of
incorporation in the presence of:
/s/ Xxxxx Xxxxxxx
-----------------------------------
Signature of authorized person
Director /s/ X. Xxxxxxx
----------------------------------- -----------------------------------
Office held Witness
X. X. Xxxxxxx
-----------------------------------
Name of authorized person Dated: 21 July, 1995
(block letters) -------
SIGNED with effect from 30 June
1995 by Xxxx Xxxxxx Xxxxxxxx in the
presence of: /s/ X. Xxxxxxx
-----------------------------------
Witness
/s/ Xxxx Xxxxxx Xxxxxxxx
----------------------------------- Dated: 20 July, 1995
Signature -------
SIGNED with effect from 30 June
1995 by Xxxxx Xxxxxxx Xxxxxxx in
the presence of: /s/ X. Xxxxxxx
----------------------------------
Witness
/s/ Xxxxx Xxxxxxx
----------------------------------- Dated: 20 July, 1995
Signature -------
118
--------------------------------------------------------------------------------
Signed by Xxx Xxxxx Xxxxx and
Xxxxxxx Xxxxxxx Xxxxxxxx, for the
Trustees of Howletts and Port
Lympne Foundation with effect from
30 June 1995, in accordance with
its trust deed in the presence of:
/s/ Xxxxx Xxxxx /s/ X. X. Xxxxxxxx
----------------------------------- ----------------------------------
Signature of authorized person Signature of authorized person
Office held: Administrative
Office held: Trustee Secretary to the Trustees
XXX XXXXX XXXXX XXXXXXX XXXXXXX XXXXXXXX
----------------------------------- ----------------------------------
Name of authorized person Name of authorized person
(block letters) (block letters)
/s/ /s/ Xxxxxx Xxxxxx
----------------------------------- ----------------------------------
Witness Witness
Dated: ______________, 1995
Executed as a Deed with effect from
30 June 1995 for and on behalf of
Rizona (Hong Kong) Limited in
accordance with its articles of
association in the presence of:
/s/ Ong Xxxx Xxxx
-----------------------------------
Signature of authorised person
Director /s/
----------------------------------- ----------------------------------
Office held Witness
Ong Xxxx Xxxx
----------------------------------- Dated: 28 July, 1995
Name of authorised person
(block letters)
119
--------------------------------------------------------------------------------
Executed as a Deed with effect from
30 June 1995 for and on behalf of Xxxxx
Singapore Pte. Limited in accordance with
its articles of association in the presence
of:
/s/ XXXXX XXX HIE KOAN
-----------------------------------
Signature of authorized person
Director
----------------------------------- /s/
Office held ----------------------------------
Witness
XXXXX XXX HIE KOAN
-----------------------------------
Name of authorized person
(block letters) Dated: 28 July, 1995
-------
Executed as a Deed with effect from
30 June 1995 for and on behalf of Cortrust
Aktiengesellschaft fur Treuhandschaften
and Xx. Xxxxxxx Grasern, Trustees of the
X. Xxxxxxx Family Trust in accordance
with its trust deed in the presence of:
/s/ XXXXXX XXXXX /s/ XX. XXXXXXX GRASERN
------------------------------------------
Signature of authorised person
/s/ Xx. XXXXXXX GRASERN
----------------------------------
--------------------------------------- Signature of authorized person
Office held: Trustee
----------------------------------
XXXXXX XXXXX Xx. XXXXXXX GRASERN Office held: Trustee
------------------------------------------
Name of authorised person
(block letters) XX. XXXXXXX GRASERN
----------------------------------
Name of authorized person
------------------------------------- (block letters)
Witness
/s/ XXXXXX XXXXX
----------------------------------
Dated: 28.07, 1995 Witness Xxxxxx Xxxxx
----- Soliciter
Dated: 28.07, 1995
-----
