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EXHIBIT 2.6A
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IAA SHARE SUBSCRIPTION AGREEMENT
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DATED AS OF SEPTEMBER 24, 1999
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TABLE OF CONTENTS
Clauses and Headings Page
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1. AGREEMENT TO SUBSCRIBE FOR THE SHARES 1
1.1 Subscription 1
1.2 Subscription Price of Subscription Shares 1
1.3 Closing 2
1.4 Meetings 3
2. REPRESENTATIONS AND WARRANTIES OF THE VENDORS 3
2.1 Organization; Good Standing and Qualification 4
2.2 Certificate of Incorporation and Constitution Records 4
2.3 Capitalization 5
2.4 No Conflict 6
2.5 Proprietary Rights; Proprietary Information and Inventions Agreement 6
2.6 Actions Pending 7
2.7 Offering Valid 7
2.8 Financial Position 7
2.9 Absence of Changes Since Last Accounts 9
2.10 Title to Assets 11
2.11 Bank Accounts 12
2.12 Receivables; Major Customers 12
2.13 Equipment, Etc. 12
2.14 Real Property 13
2.15 Proprietary Assets 13
2.16 Year 2000 13
2.17 Contracts 14
2.18 Liabilities; Major Suppliers 16
2.19 Compliance with Legal Requirements 16
2.20 Governmental Authorisations 17
2.21 Governmental Action 18
2.22 Tax Matters 18
2.23 Employee and Labor Matters 20
2.24 Benefit Plans 22
2.25 Sale of Products; Performance of Services 22
2.26 Insurance 23
2.27 Related Party Transactions 24
2.28 Certain Payments, Etc. 24
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2.29 Proceedings 25
2.30 Brokers 26
2.31 The Vendors 26
2.32 Full Disclosure 27
2.33 Insolvency Events 28
2.34 Restructure 29
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER 30
3.1 Acquisition of Shares 30
3.2 Authority; Binding Nature of Agreement 30
4. PRE-CLOSING COVENANTS OF THE VENDORS 30
4.1 Access and Investigation 30
4.2 Operation of Business 31
4.3 Filings and Consents 33
4.4 Notification; Updates to Disclosure Schedule 34
4.5 Payment of Indebtedness by Related Parties 35
4.6 No Negotiation 35
4.7 Best Efforts 35
4.8 Confidentiality 35
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE 36
5.1 Satisfactory Completion of Pre-Acquisition Review 37
5.2 Accuracy of Representations 37
5.3 Performance of Obligations 37
5.4 Consents 37
5.5 No Adverse Change 37
5.6 Additional Documents 38
5.7 No Proceedings 38
5.8 No Claim Regarding Share Ownership or Subscription Proceeds 38
6. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS TO CLOSE 38
6.1 Accuracy of Representations 38
6.2 Purchaser's Performance 38
6.3 No Injunction 39
7. TERMINATION 39
7.1 Termination Events 39
7.2 Termination Procedures 40
7.3 Effect of Termination 40
7.4 Non-exclusivity of Termination Rights 40
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8. INDEMNIFICATION, ETC. 40
8.1 Survival of Representation and Covenants 40
8.2 Indemnification by the Vendors 41
8.3 Purchaser's Indemnity 42
8.4 Right to Require Cure of Breach 42
8.5 No Contribution 42
8.6 Interest 42
8.7 Non-exclusivity of Indemnification Remedies 43
8.8 Defense of Third Party Claims 43
8.9 Exercise of Remedies by Indemnities other than Purchaser 44
8.10 Limitations on Liability 44
8.11 Purchaser Warranty as To No Breach 45
8.12 Restructure 45
8.13 Maximum Cap on Indemnities 45
9. RESTRICTION OF THE VENDORS 45
10. MISCELLANEOUS PROVISIONS 48
10.1 Further Assurances 48
10.2 Fees, Expenses and Stamp Duty 48
10.3 Attorneys' Fees 48
10.4 Notices 48
10.5 Time of the Essence 49
10.6 Headings 49
10.7 Counterparts 49
10.8 Governing Law; Venue 49
10.9 Successors and Assigns 50
10.10 Remedies Cumulative; Specific Performance 50
10.11 Waiver 50
10.12 Amendments 51
10.13 Severability 51
10.14 Parties in Interest 51
10.15 Entire Agreement 51
10.16 Construction 51
10.17 Trust Representations and Warranties 52
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Exhibits
EXHIBIT A CERTAIN DEFINITIONS A-1
EXHIBIT B COMPANY FINANCIAL STATEMENTS *
EXHIBIT C [NOT USED] *
EXHIBIT D LIST OF SHAREHOLDERS D-1
EXHIBIT E PROPRIETARY INFORMATION AND INVENTIONS DEED *
EXHIBIT F [NOT USED] *
EXHIBIT G LIST OF CONSULTANTS AND INDEPENDENT CONTRACTORS *
EXHIBIT H LIST OF GOVERNMENTAL LICENSES, PERMITS, ORDERS, ETC. *
EXHIBIT I FORM OF EMPLOYMENT AGREEMENTS *
EXHIBIT J DESIGNATED SENIOR OFFICERS AND EMPLOYEES *
EXHIBIT K SHAREHOLDERS DEED *
EXHIBIT L CONSTITUTION *
* Exhibit omitted -- will be provided supplementally to the Commission upon
request.
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SHARE SUBSCRIPTION
AGREEMENT RELATING TO
INTERNET ACCESS AUSTRALIA PTY LTD (ACN 064 758 747)
This Share Subscription Agreement (the "Agreement") is entered into as of
24 September, 1999, by and among the parties listed in Part II of Exhibit D
hereto (collectively referred to as the "Vendors"), Asia Online - Australia Pty
Limited (ACN 089 444 691) (the "Purchaser"), the parties listed in Part III of
Exhibit D (the "Covenantors") and Internet Access Australia Pty Ltd
(ACN 064 758 747) (the "Company").
RECITALS:
WHEREAS, the Vendors own the entire issued share capital of INTERNET ACCESS
AUSTRALIA PTY LTD (ACN 064 758 747).
WHEREAS the Vendors and the Purchaser have a common strategy to develop the
business of the Company and have agreed that the best way to implement that
strategy is through common ownership of the Company.
WHEREAS, the Covenantors acknowledge that they are receiving a commercial
benefit from the Transactions contemplated under this Agreement and are prepared
to covenant or undertake certain matters.
WHEREAS, the Vendors and the Purchaser have agreed that the Purchaser subscribe
for shares in the capital of the Company on the terms hereof.
Now, therefore, in consideration of the mutual promises and covenants
hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SUBSCRIBE FOR THE SHARES
1.1 Subscription
At the Closing, the Purchaser shall subscribe for the shares
in the Company listed in Part I of Exhibit D (the
"Subscription Shares"), and the Company shall (and the Vendors
shall cause the Company to) issue those shares, on the terms
and subject to the conditions set forth in this Agreement.
1.2 Subscription Price of Subscription Shares
The Subscription Price for the Subscription Shares shall be
satisfied by the Purchaser undertaking the obligations for
ongoing funding of the Company as set out in clause 9 of the
Shareholders Deed.
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1.3 Closing
(a) The closing of the Subscription of the Subscription
Shares to the Purchaser (the "Closing") shall take
place at the offices of the Purchaser's Australian
counsel, Xxxxx & XxXxxxxx, Level 39, Rialto, 000
Xxxxxxx Xxxxxx, Xxxxxxxxx Xxxxxxxxx at 10:00 a.m.
(Melbourne Time) on the later of 22 September, 1999
or the date two business days following the
satisfaction of the Closing Conditions set forth in
Section 5 and Section 6. For the purposes of this
Agreement "Scheduled Closing Time" shall mean the
time and date as of which the Closing is required to
take place pursuant to this Section 1.3(a); and
"Closing Date" shall mean to the time and date as of
which the Closing actually takes place.
(b) At the Closing the Company shall (and the Vendors
shall cause the Company to):
(i) deliver to the Purchaser the certificates
representing the Subscription Shares to the
Purchaser (or its nominees) and a certified
copy of the resolutions of the Board of
Directors of the Company authorising the
issue of the Subscription Shares to the
Purchaser (or its nominee);
(ii) any waiver, consent or other document
necessary to give the Purchaser (or its
nominee(s)) full legal and beneficial
ownership of the Subscription Shares;
(iii) deliver to the Purchaser:
(A) employment contracts in the form of
the draft annexed as Exhibit I,
entered into between the Company
and the senior officers and
employees designated in Exhibit J
provided that if the Vendors are
not able to deliver the employment
contract for Xxxxxx Xxxxxxx Closing
shall not be delayed by the
Purchaser on that ground alone;
(B) copies of the Proprietary
Information and Inventions Deed
executed by each of the senior
officers and employees designated
in Exhibit J;
(iv) execute and deliver to the Purchaser a
certificate (the "Closing Certificate")
setting forth the Vendors' representations
and warranties that (A) each of the
representations and warranties made by the
Vendors in this Agreement was accurate in
all respects as of the date of this
Agreement, (B), each of the representations
and warranties made by the Vendors in this
Agreement is accurate in all respects as of
the Closing Date as if made on the Closing
Date, (C) each of the covenants and
obligations that the Vendors are required to
have complied with
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or performed pursuant to this Agreement at
or prior to the Closing has been duly
complied with and performed in all respects,
and (D), each of the conditions set forth in
Sections 5.3, 5.4, 5.7 and 5.8 has been
satisfied in all respects;
(v) Xxxxxxx Xxxxxxxxxxxx resigns from his
position as director and officer of the
Company and any subsidiary, in (with effect
from the end of the meetings held pursuant
to clause 1.4) and acknowledging in a form
reasonably acceptable to the Purchaser that
the writer has no claim against the Company
or any of its subsidiaries for compensation
for loss of office or otherwise;
(vi) the revocation or amendment of the bank
signing mandates and authorities and powers
of attorney given by the Company as the
Purchaser notifies to the Vendors shall be
revoked or amended.
(c) At the Closing, the parties shall execute and deliver
to each other counterpart copies of the Shareholders
Deed.
1.4 Meetings
On or before Closing, the Company shall (and the Vendors shall
cause the Company to) cause to be held a meeting of the
directors and/or shareholders of the Company at which the
following resolutions are passed:
(a) approve and authorise the issue of the Subscription
Shares in favour of the Purchaser (or its
nominees(s));
(b) appoint persons nominated by the Purchaser as
directors and secretary of the Company with effect
from the end of the meeting;
(c) the issue of a certificate for the Subscription
Shares in favour of the Purchaser (or its
nominee(s));
(d) the Constitution is approved and adopted as a
replacement to the existing constitution.
2. REPRESENTATIONS AND WARRANTIES OF THE VENDORS
The representations and warranties in this Section 2 shall be read
subject to the following:
(a) prior to 20 August 1999, the Company carried on the Business
as trustee of the Internet Access Australia Unit Trust;
(b) on 20 August 1999, the Company was replaced as trustee of the
Internet Access Australia Unit Trust by ACN 078 210 938 Pty
Ltd;
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(c) on 20 August 1999, the Company acquired the Business from ACN
078 210 938 Pty Ltd with effect from 30 June 1999; and
(d) except for the Warranty in Section 2.1(f), the representations
and warranties in this Section 2 are to be treated as having
been made as if the Business was owned and carried on by the
Company in its own right at all times before and after 20
August 1999.
The Vendors hereby jointly and severally represent and warrant (except
where this Section expressly provides for the representations and
warranties to be given severally, in which case they are given
severally), to and for the benefit of the Purchaser, as follows:
2.1 Organization; Good Standing and Qualification
(a) The Company is a corporation duly organized, validly
existing and in good standing under the laws of
Victoria, Australia. The Company has all requisite
corporate power and authority to own and operate its
properties and assets, to perform its obligations
under all material contracts, and to carry on its
business as presently conducted and as presently
proposed to be conducted.
(b) The Company has never conducted any business under or
otherwise used, for any purpose or in any
jurisdiction, any fictitious name, assumed name,
trade name or other name, other than the name
"Internet Access Australia Pty Ltd".
(c) Part 2.1 of the Disclosure Schedule accurately sets
forth the names of the members of the Company's board
of directors and company secretary.
(d) Neither the Company nor any of its shareholders has
ever approved, or commenced any proceeding or made
any election contemplating, the dissolution or
liquidation of the Company or the winding up or
cessation of the Company's business or affairs.
(e) Except as set out in the Disclosure Schedule the
Company has no subsidiaries.
(f) Prior to 20 August 1999 the Company acted only as
trustee of the Internet Access Unit Trust and has not
prior to that date carried on business in its own
right.
2.2 Certificate of Incorporation and Constitution Records
(a) The Vendors have delivered to the Purchaser accurate
and complete copies of:
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(i) the Company's certificate of incorporation
and Constitution, including all amendments
thereto;
(ii) the shareholding records of the Company; and
(iii) the minutes and other records of the
meetings and other proceedings (including
any actions taken by written consent or
otherwise without a meeting) of the
shareholders of the Company, the board of
directors of the Company and all committees
of the board of directors of the Company.
(b) There has not been any violation of any of the
provisions of the Company's constitution or of any
resolution adopted by the Company's shareholders, the
Company's board of directors or any committee of the
Company's board of directors; and no event has
occurred, and no condition or circumstance exists,
that might (with or without notice or lapse of time)
constitute or result directly or indirectly in such a
violation.
(c) The books of account, shareholder records, and other
records (but not the minute book) of the Company are
accurate, up-to-date and complete, and have been
maintained in accordance with sound and prudent
business practices. All of the records of the Company
are in the actual possession and direct control of
the Company.
2.3 Capitalization
(a) The issued share capital of the Company, immediately
prior to the Closing, will consist of 2,198,010 fully
paid shares. All issued and outstanding shares of the
Company's issued capital (a) have been validly issued
or transferred to the persons listed in Part II of
Exhibit D hereto, (b) are fully paid, and (c) were
issued in compliance with all applicable Legal
Requirements concerning the issuance of securities.
The rights, preferences, privileges and restrictions
of the Shares are as stated in the Constitution.
(b) The Purchaser will acquire at the Closing, good and
valid title to the Subscription Shares free and clear
of any Encumbrances.
(c) There is no:
(i) outstanding subscription, option, call,
warrant or right (whether or not currently
exercisable) to acquire any shares or other
securities of the Company except as set out
in the Disclosure Schedule;
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(ii) outstanding security, instrument or
obligation that is or may become convertible
into or exchangeable for any shares or other
securities of the Company;
(iii) Contract under which the Company is or may
become obligated to sell or otherwise issue
any shares of its capital stock or any other
securities; or
(iv) condition or circumstance that may directly
or indirectly give rise to or provide a
basis for the assertion of a claim by any
Person to the effect that such Person is
entitled to acquire or receive any shares or
other securities of the Company;
2.4 No Conflict
Neither the execution and delivery of this Agreement by the
Vendors or the Company or the consummation by the Vendors or
the Company of the transactions contemplated by this Agreement
will (i) result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, bond, mortgage,
indenture, or other evidence of indebtedness related to the
Company or any material license agreement, lease or other
material contract, instrument or obligation related to the
Company to which it is a party or by which it may be bound;
(ii) violate any order, writ, injunction, decree or
arbitration award specifically applicable to the Company;
(iii) result in the loss of, or in a violation or breach of
any Government Authorisation of the Company; or (v) result in
the creation of any material (individually or in the
aggregate) lien, including any claims, mortgages, pledges,
liens, security interests, encumbrances or charges of any kind
(collectively, "Lien") on any of the assets owned or used by
the Company.
2.5 Proprietary Rights; Proprietary Information and Inventions
Agreement
(a) The Company has not received any communications
alleging that it has violated or, by conducting its
business as proposed would violate, any proprietary
rights of any other person, nor are the Vendors aware
of any basis for the foregoing.
(b) The Vendors do not believe it is or will be necessary
for the Company to utilize any inventions, trade
secrets or proprietary information of any of the
Company's employees made prior to their employment by
the Company, except for inventions, trade secrets or
proprietary information that have been assigned to
the Company.
(c) The Company owns, licenses or has rights to all of
the (i) patents, patent applications, registrations
and applications for registration thereof; (ii)
trademarks, tradenames, service marks and
registrations and applications for registration
thereof; (iii) copyrights and
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registrations and applications for registration
thereof; (iv) mask works and registrations and
applications for registration thereof; (v) computer
software, data and documentation; (vi) trade secrets
and confidential business information, know-how,
research and development information, copyrightable
works, financial, marketing and business data,
pricing and cost information, marketing plans and
customer lists and information; and (vii) other
proprietary rights relating to any of the foregoing
owned or used by the Company (collectively,
"Intellectual Property").
(d) The Company has conducted its business without
infringement or claim of infringement of any license,
patent, copyright, service xxxx, trademark, trade
name, trade secret or other intellectual property
right of others that would have a material adverse
effect on the business or assets of the Company. To
the knowledge of the Vendors, there is no claim of
infringement by others of any license, patent,
copyright, service xxxx, trademark, trade name, trade
secret or other Intellectual Property right of the
Company.
2.6 Actions Pending
There is no action, suit or proceeding pending or, to the best
Knowledge of the Vendors, threatened against or affecting the
Company or any of its respective properties or rights before
any court or by or before any governmental body or arbitration
board or tribunal.
2.7 Offering Valid
None of the Vendors, nor any agent on their behalf, have
solicited or will solicit any offers to sell or has offered to
sell or will offer to sell all or any part of the Subscription
Shares to any person or persons so as to bring the offer or
sale of the Subscription Shares by the Vendors to the
Purchaser (or its nominee(s)) within the provisions of
Division 2 of Part 7.12 of the Corporations Law.
2.8 Financial Position
(a) The Vendors have delivered to the Purchaser the
Company's pro forma unaudited profit and loss
statement for the financial year ending on the
Accounts Date together with all statements, reports
and notes attached to or intended to be read with any
or all of the profit and loss statement.
(b) All of the Company Financial Statements are true,
fair and complete in all respects and present fairly
the financial position of the Company for the period
to which they relate and the results of operations,
any changes in shareholders' equity of the Company
for the period to which they relate. The Company
Financial Statements have been
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prepared in accordance with GAAP, applied on a
consistent basis throughout the periods covered.
(c) At the Accounts Date, (i) the Company had no
Liabilities required by GAAP to be provided for in
the Company Financial Statements or described in the
notes thereto which were not provided for in the
Company Financial Statements or described in the
notes thereto and (ii) all reserves and provisions
established by the Company and set forth in the
Company Financial Statements were adequate for the
purposes for which they were established.
(d) Except as disclosed in Part 2.8(d) in the Disclosure
Schedule since the Accounts Date:
(i) the Company has not entered into any
transaction which was not in the Ordinary
Course of its Business;
(ii) there has been no material adverse change in
the condition (financial or otherwise) of
the Company;
(iii) there has been no damage to, or destruction
or loss of, physical property (whether or
not covered by insurance) which may have a
Material Adverse Effect on the business or
operations of the Company;
(iv) the Company has not declared or paid any
dividend or made any distribution on its
securities, redeemed, purchased or otherwise
acquired any of its securities, granted any
options to purchase or subscribe for any
securities, or issued any securities;
(v) the Company has not increased the
compensation of any of its officers, or the
rate of pay of its employees as a group,
except as part of regular compensation
increases in the Ordinary Course of its
Business;
(vi) neither the number of subscribers for the
services offered by the Company nor the
revenues generated therefrom have materially
decreased;
(vii) there has been no resignation or termination
of employment of any officer or key employee
of the Company;
(viii) there has been no labor dispute or
industrial disruption involving the Company
or its employees and none is pending or, to
the best of the knowledge of any Vendor,
threatened;
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(ix) there has been no borrowing or agreement to
borrow by the Company or change in the
contingent obligations of the Company by way
of guarantee, endorsement, indemnity,
warranty or otherwise or grant of a mortgage
or security interest in any property of the
Company;
(x) there have been no loans made by the Company
to its shareholders, employees, officers and
directors other than travel advances and
office advances made in the Ordinary Course
of Business;
(xi) there has not been any payment of any
obligation or liability of the Company other
than current liabilities paid in the
Ordinary Course of Business;
(xii) there has been no sale, assignment or
transfer of any tangible asset of the
Company except in the Ordinary Course of
Business and no sale, assignment or transfer
of any patent, trademark, trade secret or
other intangible asset of the Company; and
(xiii) the Company has not incurred any Liabilities
that (i) individually exceed A$10,000 or
(ii) in the aggregate exceed A$100,000.
(e) The Company has good and marketable title to its
properties and assets. Such properties and assets are
not subject to Encumbrance except liens for current
taxes and assessments not delinquent or those which
are not material in scope or amount and do not
materially interfere with the conduct of the
Company's business. All leases pursuant to which the
Company leases real or personal property are in good
standing and are valid and effective in accordance
with their respective terms and, to the Vendors'
knowledge, there exists no default thereunder or
occurrence or condition which could result in a
default thereunder or termination thereof. The
Company's buildings, equipment and other tangible
assets are in good operating condition and are suable
in the ordinary course of business, and the Company
owns, or has a valid leasehold interest in, all
assets necessary for the conduct of its business as
presently conducted.
2.9 Absence of Changes Since Last Accounts
Except as set forth in Part 2.9 of the Disclosure Schedule,
since the Accounts Date.
(a) there has not been any adverse change in the
Company's business, condition, assets, liabilities,
operations, financial performance, net income or
prospects (or in any aspect or portion thereof), and
no event
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has occurred that might have an adverse effect on the
Company's business, condition, assets, liabilities,
operations, financial performance, net income or
prospects (or on any aspect or portion thereof);
(b) there has not been any loss, damage or destruction
to, or any interruption in the use of, any of the
Company's assets (whether or not covered by
insurance);
(c) the Company has not (i) declared, accrued, set aside
or paid any dividend or made any other distribution
in respect of any shares or (ii) repurchased,
redeemed or otherwise reacquired any shares or other
securities;
(d) the Company has not sold or otherwise issued any
shares or any other securities;
(e) the Company has not amended its certificate of
incorporation or constitution and has not effected or
been a party to any Acquisition Transaction,
recapitalization, reclassification of shares, share
consolidation or division, capital reduction, share
buy back or similar transaction;
(f) the Company has not purchased or otherwise acquired
any asset from any other Person, except for supplies
acquired by the Company in the Ordinary Course of
Business;
(g) the Company has not leased or licensed any asset from
any other Person;
(h) the Company has not made any capital expenditure over
A$20,000;
(i) the Company has not sold or otherwise transferred,
and has not leased or licensed, any asset to any
other Person except for products sold by the Company
from its inventory in the Ordinary Course of
Business;
(j) the Company has not written off as uncollectable, or
established any extraordinary reserve or provision
with respect to, any account receivable or other
indebtedness;
(k) the Company has not pledged or hypothecated any of
its assets or otherwise permitted any of its assets
to become subject to any Encumbrance;
(l) the Company has not made any loan or advance to any
other Person;
(m) the Company has not (i) established or adopted any
Employee Benefit Plan, or (ii) paid any bonus or made
any profit-sharing or similar
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payment to, or increased the amount of the wages,
salary, commissions, fringe benefits or other
compensation or remuneration payable to, any of its
directors, officers or employees;
(n) the Company has not entered into, and neither the
Company nor any of the assets owned or used by the
Company has become bound by, any Contract that is not
an Excluded Contract;
(o) no Contract by which the Company or any of the assets
owned or used by the Company is or was bound, or
under which the Company has or had any rights or
interest, has been amended or terminated;
(p) the Company has not incurred, assumed or otherwise
become subject to any Liability, other than accounts
payable (of the type required to be reflected as
current liabilities in the "liabilities" column of a
balance sheet prepared in accordance with GAAP)
incurred by the Company in the Ordinary Course of
Business;
(q) the Company has not discharged any Encumbrance or
discharged or paid any indebtedness or other
Liability, except for accounts payable that (i) have
been incurred by the Company since June 30, 1999 in
the Ordinary Course of Business, and (ii) have been
discharged or paid in the Ordinary Course of
Business;
(r) the Company has not forgiven any debt or otherwise
released or waived any right or claim;
(s) the Company has not changed any of its methods of
accounting or accounting practices in any respect;
(t) the Company has not entered into any transaction or
taken any other action outside the Ordinary Course of
Business; and
(u) the Company has not agreed, committed or offered (in
writing or otherwise), and has not attempted, to take
any of the actions referred to in clauses "(c)"
through "(t)" above.
2.10 Title to Assets
(a) The Company owns, and has good, valid and marketable
title to, all assets purported to be owned by it,
including:
(i) all assets reflected on the Company
Financial Statements (except for inventory
sold by the Company since 30 June, 1999 in
the Ordinary Course of Business);
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(ii) all assets acquired by the Company since 30
June, 1999 (except for inventory sold by the
Company, since 30 June, 1999 in the Ordinary
Course of Business);
(iii) all of the Company's rights under the
Company Contracts; and
(iv) all other assets reflected in the Company's
books and records as being owned by the
Company.
Except as set forth in Part 2.10 of the Disclosure
Schedule, all of said assets are owned by the Company
free and clear of any Encumbrances.
(b) Part 2.10 of the Disclosure Schedule identifies all
assets that are being leased or licensed to the
Company.
2.11 Bank Accounts
There are no safe deposit boxes or similar arrangements
maintained by or for the benefit of the Company.
2.12 Receivables; Major Customers
(a) Except as set forth in Part 2.12 of the Disclosure
Schedule, all existing accounts receivable of the
Company (including those accounts receivable
reflected in the Company Financial Statements that
have not yet been collected and those accounts
receivable that have arisen since the Inception and
have not yet been collected):
(i) represent valid obligations of customers of
the Company arising from bona fide
transactions entered into in the Ordinary
Course of Business; and
(ii) are current and will be collected in full
(without any counterclaim or setoff) in the
Ordinary Course of Business.
(b) The Company has not received any notice or other
communication (in writing or otherwise), and has not
received any other information, indicating that any
customer or other Person may cease dealing with the
Company or may otherwise reduce the volume of
business transacted by such Person with the Company
below historical levels.
2.13 Equipment, Etc.
(a) To the best of the Vendor's Knowledge, each asset of
the Company:
(i) is structurally sound, free of defects and
deficiencies and in good condition and
repair (ordinary wear and tear excepted);
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18
(ii) complies in all respects with, and is being
operated and otherwise used in full
compliance with, all applicable Legal
Requirements; and
(iii) is adequate for the uses to which it is
being put.
(iv) are adequate for the conduct of the
Company's business in the manner in which
such business is currently being conducted.
2.14 Real Property
The Company does not own any real property or any interest in
real property, except for the leaseholds created under the
real property leases identified in Part 2.14 of the Disclosure
Schedule. Part 2.14 of the Disclosure Schedule provides an
accurate summary description of the premises covered by said
leases and the facilities located on such premises. The
Company enjoys peaceful and undisturbed possession of such
premises.
2.15 Proprietary Assets
(a) Except as set forth in Part 2.15 of the Disclosure
Schedule, there is no Proprietary Asset that is not
owned by or licensed to the Company that is otherwise
used or useful in connection with the Company's
business.
(b) To the best of the Vendor's Knowledge, the Company is
not infringing, and has not at any time infringed or
received any notice or other communication (in
writing or otherwise) of any actual, alleged,
possible or potential infringement of, any
Proprietary Asset owned or used by any other Person.
To the best of the Knowledge of each of the Vendors,
no other Person is infringing, and no Proprietary
Asset owned or used by any other Person infringes or
conflicts with, any Proprietary Asset owned or used
by the Company.
(c) The Proprietary Assets identified in Part 2.15 of the
Disclosure Schedule constitute all of the Proprietary
Assets necessary to enable the Company to conduct its
business in the manner in which its business is
currently being conducted and in the manner in which
its business is proposed to be conducted.
2.16 Year 2000
To the best of the Vendors' Knowledge, the Company's products
and services are "Year 2000 Compliant", meaning that (i) date
data from at least 1900 through 2001 will process without
error or interruption (other than an error or interruption not
expected to have a material adverse effect on the Company) in
any level of computer hardware, software or services the
Company provides, including but not limited to, microcode,
firmware, system or application programs, files, databases and
computer services, (ii) there will be no loss of
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19
functionality of the Company's products and services (other
than any loss not expected to have a material adverse effect
on the Company) with respect to the introduction, processing
or output of records containing dates on or after January 1,
2000 and (iii) the Company's products and services will be
interoperable with other software/hardware which may deliver
records to, receive records from or interact with the
Company's products and services in the course of processing
data; provided, however, that the foregoing shall not apply to
any adverse effects caused by any products and services
(including any third party software or hardware) not developed
by the Company or by any modification to the Company's
products and services which are made by a party other than the
Company.
2.17 Contracts
(a) Part 2.17 of the Disclosure Schedule identifies and
provides an accurate and complete description of all
contracts, agreements, commitments and undertakings
of any nature, written or oral, of the Company, each
of which involves future payments, performance of
services or delivery of goods or materials to or by
the Company of an aggregate amount or value in excess
of $50,000 per individual contract or which otherwise
is material to the business or prospects of the
Company (collectively, the "Material Contracts"),
except for any Excluded Contract. The Company has
delivered to the Purchaser accurate and complete
copies of all the Company Contracts identified in
Part 2.17 of the Disclosure Schedule, including all
amendments, supplements, modifications and waivers
thereto.
(b) Each Company Contract is valid and in full force and
effect, and is enforceable by the Company in
accordance with its terms.
(c) To the Vendor's Knowledge, except as set forth in
Part 2.17 of the Disclosure Schedule:
(i) no Person has violated or breached, or
declared or committed any default under, any
Company Contract;
(ii) no event has occurred, and no circumstance
or condition exists, that might (with or
without notice or lapse of time) (A) result
in a violation or breach of any of the
provisions of any Company Contract, (B) give
any Person the right to declare a default or
exercise any remedy under any Company
Contract, (C) give any Person the right to
accelerate the maturity or performance of
any Company Contract, or (D) give any Person
the right to cancel, terminate or modify any
Company Contract;
(iii) the Company has not received any notice or
other communication (in writing or
otherwise) regarding any actual,
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20
alleged, possible or potential violation or
breach of, or default under, any Company
Contract; and
(iv) the Company has not waived any of its rights
under any Company Contract.
(d) The Vendors have no notice of the fact that any
Person against which the Company has or may acquire
any rights under any Company Contract is insolvent or
unable to satisfy all of such Person's current and
future monetary obligations and other obligations and
Liabilities to the Company.
(e) Except as set forth in Part 2.17 of the Disclosure
Schedule:
(i) the Company has never guaranteed or
otherwise agreed to cause, insure or become
liable for, and has never pledged any of its
assets to secure, the performance or payment
of any obligation or other Liability of any
other Person; and
(ii) the Company is not a party to or bound by
(A) any joint venture agreement, partnership
agreement, profit-sharing agreement,
cost-sharing agreement, loss-sharing
agreement or similar Contract, or (B) any
Contract that creates or grants to any
Person, or provides for the creation or
grant of, any stock appreciation right,
phantom stock right or similar right or
interest.
(f) The performance of the Material Company Contracts
will not result in any violation of or failure to
comply with any Legal Requirement.
(g) No Person is renegotiating, or has the right to
renegotiate, any amount paid or payable to the
Company under any Company Contract or any other term
or provision of any Company Contract.
(h) Except as disclosed in Part 2.17 of the Disclosure
Schedule, the Contracts identified in Part 2.17 of
the Disclosure Schedule and the Excluded Contracts
collectively constitute all of the Material Contracts
necessary to enable the Company to conduct its
business in the manner in which its business is
currently being conducted and in the manner in which
its business is proposed to be conducted.
(i) Part 2.17 of the Disclosure Schedule identifies and
provides an accurate summary of each proposed
Material Contract as to which any bid, offer, written
proposal, term sheet or similar document has been
submitted or received by the Company.
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21
2.18 Liabilities: Major Suppliers
(a) The Company has no Liabilities, except for:
(i) liabilities identified as such in the
"liabilities" column of the Company
Financial Statements;
(ii) accounts payable (of the type required to be
reflected as current liabilities in the
"liabilities" column of a balance sheet
prepared in accordance with GAAP) incurred
by the Company in the Ordinary Course of
Business since 30 June 1999; and
(b) Part 2.18 of the Disclosure Schedule provides an
accurate and complete breakdown of the Company's
long-term debt as of the date of this Agreement.
(c) Part 2.18 of the Disclosure Schedule accurately
identifies, and provides an accurate and complete
breakdown of the amounts paid to, each supplier or
other Person who were the ten leading recipients of
payments from the Company for the year ending 30 June
1999.
2.19 Compliance with Legal Requirements
(a) Except as set forth in Part 2.19 of the Disclosure
Schedule:
(i) the Company is in full compliance with each
Legal Requirement that is applicable to it
or to the conduct of its business or the
ownership or use of any of its assets;
(ii) the Company has at all times been in full
compliance with each Legal Requirement that
is or was applicable to it or to the conduct
of its business or the ownership or use of
any of its assets;
(iii) no event has occurred, and no condition or
circumstance exists, that might constitute
or result directly or indirectly in a
violation by the Company of, or a failure on
the part of the Company to comply with, any
Legal Requirement; and
(iv) the Company has not received, at any time,
any notice or other communication (in
writing or otherwise) from any Governmental
Body or any other Person regarding (i) any
actual, alleged, possible or potential
violation of, or failure to comply with, any
Legal Requirement, or (ii) any actual,
alleged, possible or potential obligation on
the part of the Company to undertake, or to
bear all or any portion of the cost of, any
cleanup or any remedial, corrective or
response action of any nature.
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22
2.20 Governmental Authorisations
(a) The Company holds each Governmental Authorisation
required for the operation of its businesses. Each
Governmental Authorisation is valid and in full force
and effect.
(b) Except as set forth in Part 2.20 of the Disclosure
Schedule:
(i) the Company and its employees are, and have
at all times been, in full compliance with
all of the terms and requirements of each
Governmental Authorisation;
(ii) no event has occurred, and no condition or
circumstance exists, that might (with or
without notice or lapse of time) (A)
constitute or result directly or indirectly
in a violation of or a failure to comply
with any term or requirement of any
Governmental Authorisation, or (B) result
directly or indirectly in the revocation,
withdrawal, suspension, cancellation,
termination or modification of any
Governmental Authorisation;
(iii) the Company has never received, and, to the
best of the knowledge of the Vendors, no
employee of the Company has ever received,
any notice or other communication (in
writing or otherwise) from any Governmental
Body or any other Person regarding (A) any
actual, alleged, possible or potential
violation of or failure to comply with any
term or requirement of any Governmental
Authorisation, or (B) any actual, proposed,
possible or potential revocation,
withdrawal, suspension, cancellation,
termination or modification of any
Governmental Authorisation; and
(iv) all applications required to have been filed
for the renewal of the Governmental
Authorisations have been duly filed on a
timely basis with the appropriate
Governmental Bodies, and each other notice
or filing required to have been given or
made with respect to such Governmental
Authorisations has been duly given or made
on a timely basis with the appropriate
Governmental Body.
(c) The Company has all of the Governmental
Authorisations necessary (i) to enable the Company to
conduct its business in the manner in which its
business is currently being conducted, and (ii) to
permit the Company to own and use its assets in the
manner in which they are currently owned and used.
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23
(d) The Vendors will make any filing with or give any
notice to, or to obtain any Consent from, any Person
necessary for the execution and delivery of any of
the Transactional Agreements and the consummation and
performance of the Transactions.
2.21 Governmental Action
To the best of the Vendor's Knowledge, no Authorisation,
consent or approval of, or filing with, any court or any
federal, state or local governmental authority or agency is
required by the Vendors in connection with the execution and
delivery of this Agreement and the issuance of the
Subscription Shares other than those that have been or will be
made or obtained prior to the Closing.
2.22 Tax Matters
(a) Each Tax required to have been paid, or claimed by
any Governmental Body to be payable, by the Company
(whether pursuant to any Tax Return or otherwise) has
been duly paid in full or on a timely basis. Any Tax
required to have been withheld or collected by the
Company has been duly withheld and collected; and (to
the extent required) each such Tax has been paid to
the appropriate Governmental Body.
(b) All the Company Returns (i) have been or will be
filed when due, and (ii) have been, or will be when
filed, accurately and completely prepared in full
compliance with all applicable Legal Requirements.
All amounts shown on the Company Returns to be due on
or before the Closing Date, and all amounts otherwise
payable in connection with the Company Returns on or
before the Closing Date, have been or will be paid on
or before the Closing Date. The Company has delivered
to the Purchaser accurate and complete copies of all
the Company Returns filed since the Inception.
(c) The Company Financial Statements fully accrue all
actual and contingent liabilities for Taxes with
respect to all periods through the dates thereof in
accordance with Section 2.22. The Company has paid
all Taxes due and payable for the period from the
Inception through the Closing Date.
(d) Except as specifically set out in Part 2.22 of the
Disclosure Schedule, each Company Return relating to
income Taxes has been filed with respect to any
period ended on or prior to Closing. The Vendors have
delivered to the Purchaser accurate and complete
copies of all audit reports and similar documents (to
which the Company has access) relating to the Company
Returns. Except as set forth in Part 2.22 of the
Disclosure Schedule, no extension or waiver of the
limitation period applicable to any of the Company
Returns has been granted (by
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24
the Company or any other Person), and no such
extension or waiver has been requested from the
Company.
(e) Except as set forth in Part 2.22 of the Disclosure
Schedule, no claim or other Proceeding is pending or
has been threatened against or with respect to the
Company in respect of any Tax. There are no
unsatisfied Liabilities for Taxes (including
liabilities for interest, additions to tax and
penalties thereon and related expenses) with respect
to any notice of deficiency or similar document
received by the Company.
(f) There is no agreement, plan, arrangement or other
Contract covering any employee or independent
contractor or former employee or independent
contractor of the Company that, individually or
collectively, could give rise directly or indirectly
to the payment of any amount that would not be
deductible pursuant to Australian tax legislation.
The Company is not, a party to or bound by any tax
indemnity agreement, tax sharing agreement, tax
allocation agreement or similar Contract.
(g) The Company: has not lodged a private ruling request;
is not and has not been the subject of any Tax audit;
is not a party to any action or proceeding for the
assessment or collection of Tax; does not have any
dispute or disagreement with any Governmental Body
for Tax; and has not made any agreement with or
undertaking to any Governmental Body for Tax and
there is no fact or matter known to the Vendors which
might give rise to any of the above.
(h) The Company has not entered into any agreement which
now or in the future may extend the period of
assessment or collection of any Tax.
(i) Since the Accounts Date no additional liability for
Tax has accrued to the Company other than as a result
of trading activities in the Ordinary Course of
Business and no payment or expenditure has been made
or incurred or committed which will not be wholly
deductible (other than items of a capital nature
incurred or committed in the Ordinary Course of
Business or otherwise disclosed in Part 2.22(i) of
the Disclosure Schedule) in computing the Company's
Taxable income.
(j) To the best of the Vendors' knowledge the Company has
complied with the provisions of Part IIIAA of the
Income Tax Assessment Act, and has maintained proper
records of franking debits and franking credits for
the purposes of that Act.
(k) The Company does not have any permanent establishment
(as that expression is defined in any relevant Double
Taxation Agreement current at the date of this
Agreement) outside Australia.
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25
(l) All documents to which the Company is a party or may
be interested in the enforcement of, and all
transfers of any issued shares (other than as
contemplated by this Agreement), have been properly
stamped under applicable stamp duty legislation.
2.23 Employee and Labor Matters
(a) Part 2.23 of the Disclosure Schedule accurately sets
forth, with respect to each employee of the Company
(including any employee of the Company who is on a
leave of absence or on layoff status):
(i) the name of such employee and the date as of
which such employee was originally hired by
the Company;
(ii) such employee's title, and a description of
such employee's duties and responsibilities;
(iii) the aggregate dollar amount of the
compensation (including wages, salary,
commissions, director's fees, fringe
benefits, bonuses, allowances, share
options, profit-sharing payments and other
payments or benefits of any type) received
by such employee from the Company with
respect to services performed in 1999;
(iv) such employee's annualized compensation as
of the date of this Agreement;
(v) particulars of accrued long service leave,
annual leave, sick leave and rostered days
off for each employee;
(vi) particulars of any redundancy or severance
pay owing as at the execution date of this
Agreement;
(vii) each Current Benefit Plan in which such
employee participates or is eligible to
participate; and
(viii) any Governmental Authorisation that is held
by such employee and that relates to or is
useful in connection with the Company's
business.
(b) Part 2.23 of the Disclosure Schedule accurately
identifies each former employee of the Company who is
receiving or is scheduled to receive (or whose spouse
or other dependent is receiving or is scheduled to
receive) any benefits (whether from the Company or
otherwise) relating to such former employee's
employment with the Company; and Part 2.23 of the
Disclosure Schedule accurately describes such
benefits.
-20-
26
(c) Exhibit G contains a list of individuals who are
currently performing services for the Company related
to its business and are classified as "consultants"
or "independent contractors".
(d) Except as set forth in Part 2.23 of the Disclosure
Schedule, the Company is not a party to or bound by,
a party to or bound by, any employment agreement or
any union contract, industrial award or determination
collective bargaining agreement or similar Contract.
(e) The Vendors have delivered to the Purchaser accurate
and complete copies of all employee manuals and
handbooks, disclosure materials, policy statements
and other materials relating to the employment of the
current and former employees of the Company.
(f) The Vendors have no notice of the fact that:
(i) any employee of the Company intends to
terminate his employment with the Company;
(ii) any employee of the Company has received an
offer to join a business that may be
competitive with the Company's business; and
(iii) any employee of the Company is a party to or
is bound by any confidentiality agreement,
noncompetition agreement or other Contract
(with any Person) that may have an adverse
effect on (A) the performance by such
employee of any of his duties or
responsibilities as an employee of the
Company, or (B) the Company's business or
operations.
(g) the Company is not engaged, in any unfair labor
practice of any nature. There is no slowdown, work
stoppage, labor dispute or union organizing activity,
or any similar activity or dispute, affecting the
Company or any of its employees. There is not now
pending, and no Person has threatened to commence,
any such slowdown, work stoppage, labor dispute or
union organizing activity or any similar activity or
dispute.
(h) Except as set forth in the form of employment
agreements in Exhibit I, the Company does not have:
any existing service or other agreements with any
officers, consultants or employees of the Company
which (subject to unfair dismissal laws) cannot be
fairly terminated by three months' notice or less
without giving rise to a claim for damages or
compensation; liability for compensation to
ex-employees or ex-consultants; obligation to
re-instate or re-employ any ex-officer, ex-consultant
or ex-employee of the Company; policy, practice or
obligation regarding redundancy payments to employees
which is more generous than the applicable award(s)
or legislation; or any industrial
-21-
27
agreement or enterprise agreement (whether registered
or not) or plans to introduce any such agreement,
that applies to any employee or officer of the
Company.
2.24 Benefit Plans
(a) Part 2.24 of the Disclosure Schedule sets out the
name and trustee of all Relevant Schemes.
(b) The Company does not have any accrued liability,
unfunded or contingent obligations in relation to any
Relevant Scheme.
(c) The Company has made all occupational superannuation
contributions required under any award or prescribed
industrial agreement for its employees and has
satisfied all laws. There is no superannuation
guarantee charge or liability accrued or payable for
employees.
2.25 Sale of Products; Performance of Services
(a) To the best of the Vendor's Knowledge, each product
or service that has been sold or performed by the
Company to or for any Person:
(i) conformed and complied in all respects with
the terms and requirements of any applicable
warranty or other Contract and with all
applicable Legal Requirements; and
(ii) was free of any design defects, construction
defects or other defects or deficiencies at
the time of sale.
All repair services and other services that have been
performed by the Company were performed properly and
in full conformity with the terms and requirements of
all applicable warranties and other Contracts and
with all applicable Legal Requirements.
(b) To the best of the Vendors' Knowledge the Company
will not incur or otherwise become subject to any
Liability arising directly or indirectly from any
product sold, or any services performed by, the
Company on or at any time prior to the Closing Date.
(c) No product developed or sold by the Company has been
the subject of any recall or other similar action;
and to the best of the Vendor's knowledge no event
has occurred, and no condition or circumstance
exists, that might (with or without notice or lapse
of time) directly or indirectly give rise to or serve
as a basis for any such recall or other similar
action relating to any such product.
-22-
28
(d) Except as set forth in Part 2.25 of the Disclosure
Schedule, no customer or other Person has claimed
against the Company (i) under or based upon any
warranty provided by or on behalf of the Company, or
(ii) under or based upon any other warranty relating
to any product sold by the Company or any services
performed by the Company. To the best of the
Knowledge of the Vendors, no event has occurred, and
no condition or circumstance exists, that might (with
or without notice or lapse of time) directly or
indirectly give rise to or serve as a basis for the
assertion of any such claim.
2.26 Insurance
(a) Part 2.26 of the Disclosure Schedule attaches, with
respect to each insurance policy maintained by or at
the expense of, or for the direct or indirect benefit
of the Company true and up to date copies of the
Schedules issued by the insurer or broker relating to
such insurance policies.
Part 2.26 of the Disclosure Schedule also identifies
(1) each pending application for insurance that has
been submitted by or on behalf of the Company, and
(2) each self-insurance or risk-sharing arrangement
affecting the Company or any of its assets. The
Company has delivered to the Purchaser accurate and
complete copies of all of the insurance policies
identified in Part 2.26 of the Disclosure Schedule
(including all renewals thereof and endorsements
thereto) and all of the pending applications
identified in Part 2.26 of the Disclosure Schedule.
(b) To the best of the Vendor's Knowledge, each of the
policies identified in Part 2.26 of the Disclosure
Schedule is valid, enforceable and in full force and
effect. All of the information contained in the
applications submitted in connection with said
policies was (at the times said applications were
submitted) accurate and complete, and all premiums
and other amounts owing with respect to said policies
have been paid in full on a timely basis.
(c) Except as set forth in Part 2.26 of the Disclosure
Schedule, there is no pending claim under or based
upon any of the policies identified in Part 2.26 of
the Disclosure Schedule made by the Company; and to
the best of the Vendor's Knowledge no event has
occurred, and no condition or circumstance exists,
that might (with or without notice or lapse of time)
directly or indirectly give rise to or serve as a
basis for any such claim.
(d) The Company has not received:
(i) any notice or other communication (in
writing or otherwise) regarding the actual
or possible cancellation or invalidation of
any of the policies identified in Part 2.26
of the Disclosure
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29
Schedule or regarding any actual or possible
adjustment in the amount of the premiums
payable with respect to any of said
policies;
(ii) any notice or other communication (in
writing or otherwise) regarding any actual
or possible refusal of coverage under, or
any actual or possible rejection of any
claim under, any of the policies identified
in Part 2.26 of the Disclosure Schedule; or
(iii) any indication that the issuer of any of the
policies identified in Part 2.26 of the
Disclosure Schedule may be unwilling or
unable to perform any of its obligations
thereunder.
2.27 Related Party Transactions
Except as set forth in Part 2.27 of the Disclosure Schedule
and other than on arms length ordinary commercial terms:
(a) no Related Party has any direct or indirect interest
of any nature in any asset used in or otherwise
relating to the business of the Company;
(b) no Related Party is indebted to the Company;
(c) no Related Party has entered into, or has any direct
or indirect financial interest in, any Contract,
transaction or business dealing of any nature
involving the Company;
(d) no Related Party is competing directly or indirectly,
with the Company in any market served by the Company;
(e) no Related Party has any claim or right against the
Company; and
(f) no event has occurred, and no condition or
circumstance exists, that might (with or without
notice or lapse of time) directly or indirectly give
rise to or serve as a basis for any claim or right in
favour of any Related Party against the Company.
2.28 Certain Payments, Etc.
Neither the Company, nor any officer, employee, agent or other
Person associated with or acting for or on behalf of the
Company, has at any time, directly or indirectly:
(a) used any corporate funds (i) to make any unlawful
political contribution or gift or for any other
unlawful purpose relating to any political activity,
(ii) to make any unlawful payment to any governmental
official or employee, or (iii) to establish or
maintain any unlawful or unrecorded fund or account
of any nature;
-24-
30
(b) made any false or fictitious entry, or failed to make
any entry that should have been made, in any of the
books of account or other records of the Company;
(c) made any unlawful payoff, influence payment, bribe,
rebate, kickback or payment to any Person;
(d) agreed, committed, offered or attempted to take any
of the actions described in clauses "(a)" through
"(e)" above.
2.29 Proceedings
(a) Except as set forth in Part 2.29 of the Disclosure
Schedule, there is no pending Proceeding or
investigation, and no Person has threatened to
commence any Proceeding:
(i) that involves the Company and that otherwise
relates to or might materially affect the
Company's business or any of the assets
owned or used by the Company (whether or not
the Company is named as a party thereto); or
(ii) that challenges, or that may have the effect
of preventing, delaying, making illegal or
otherwise interfering with, any of the
Transactions.
Except as set forth in Part 2.29 of the Disclosure
Schedule, to the best of the Vendor's knowledge no
event has occurred, and no claim, dispute or other
condition or circumstance exists, that might directly
or indirectly give rise to or serve as a basis for
the commencement of any such Proceeding.
(b) The Vendors have delivered to the Purchaser accurate
and complete copies of all pleadings, correspondence
and other written materials to which the Company has
access that relate to the Proceedings identified in
Part 2.29.
(c) There is no Order to which the Company, or any of the
assets owned or used by the Company, is subject that
(i) may have an adverse effect on the Company's
business, condition, assets, liabilities, operations,
financial performance, net income or prospects (or on
any aspect or portion thereof) or on the ability of
the Company or any of the Vendors to comply with or
perform any covenant or obligation under any of the
Transactional Agreements, or (ii) may have the effect
of preventing, delaying, making illegal or otherwise
interfering with any of the Transactions.
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31
(d) To the best of the Knowledge of the Vendors, no
officer or employee of the Company is subject to any
Order that prohibits such officer or employee from
engaging in or continuing any conduct, activity or
practice relating to the Company's business.
2.30 Brokers
Neither the Company nor any of the Vendors have agreed or
become obligated to pay, or has taken any action that might
result in any Person claiming to be entitled to receive, any
brokerage commission, finder's fee or similar commission or
fee in connection with any of the Transactions.
2.31 The Vendors
(a) In respect of each of the Vendors who are
incorporated, they severally warrant that they are a
corporation duly organised, validly existing and in
good standing under the laws of Victoria and have all
requisite corporate powers and authority to execute
and deliver this Agreement and to carry out and
perform their obligations under the Agreement and the
Certificate. Each of the Vendors severally warrants
that they have the capacity and financial capability
to comply with and perform all of their covenants and
obligations under each of the Transactional
Agreements to which they are or may become a party.
(b) None of the Vendors:
(i) have at any time, (A) made a general
assignment for the benefit of creditors, (B)
filed, or had filed against it, any
bankruptcy petition or similar filing, (C)
suffered the attachment or other judicial
seizure of all or a substantial portion of
its assets, (D) admitted in writing its
inability to pay its debts as they become
due, (E) been convicted of, or pleaded
guilty to, any felony, or (F) taken or been
the subject of any action that may have an
adverse effect on such its ability to comply
with or perform any of its covenants or
obligations under any of the Transactional
Agreements; or
(ii) is subject to any Order that may have an
adverse effect on its ability to comply with
or perform any of its covenants or
obligations under any of the Transactional
Agreements.
(c) To the best of the Vendor's Knowledge, there is no
Proceeding pending, and no Person has threatened to
commence any Proceeding, that may have an adverse
effect on the ability of any of the Vendors to comply
with or perform any of its covenants or obligations
under any of the Transactional Agreements. To the
best of the Vendor's Knowledge, no event has
occurred, and no claim, dispute or other condition or
circumstance exists, that might directly or
indirectly give
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rise to or serve as a basis for the commencement of
any such Proceeding.
(d) Those of the Vendors that are corporations severally
warrant that all corporate action on the part of the
Company, its officers, directors and shareholders
necessary for the Authorisation of this Agreement,
the performance of all the Company's obligations
hereunder at the Closing and the allotment and issue
of the Subscription Shares the Company is issuing has
been taken or will be taken prior to the Closing.
Each Vendor severally warrants that this Agreement
constitutes the legal, valid and binding obligation
of each of the Vendors and the Company, enforceable
against each of the Vendors and the Company in
accordance with its terms except to the extent that
enforcement may be limited by bankruptcy, insolvency,
moratorium or similar laws affecting the rights of
creditors generally and except to the extent that
enforcement may be limited by the application of
general equitable principles.
2.32 Full Disclosure
(a) Except as set forth in Part 2.32 of the Disclosure
Schedule, there is no fact within the Knowledge of
any of the Vendors (other than publicly known facts
relating exclusively to political or economic matters
of general applicability that will adversely affect
all Comparable Entities) that (i) may have an adverse
effect on the Company's business, condition, assets,
liabilities, operations, financial performance, net
income or prospects (or on any aspect or portion
thereof) or on the ability of any or all of the
Vendors to comply with or perform any covenant or
obligation under any of the Transactional Agreements,
or (ii) may have the effect of preventing, delaying,
making illegal or otherwise interfering with any of
the Transactions.
(b) All of the information set forth in the Disclosure
Schedule, and all other information regarding the
Company and its business, condition, assets,
liabilities, operations, financial performance, net
income and prospects that has been furnished to the
Purchaser or any of its Representatives by or on
behalf of the Vendors or any of the Vendors'
Representatives represents a true and fair view of
the matters to which they relate.
(c) The Vendors provided the Purchaser and the
Purchaser's Representatives with full and complete
access to all of the Company's records and other
documents and data.
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2.33 Insolvency Events
(a) Liquidation/winding up/appointment of administrator
or receiver etc.
The Company has not had:
(i) a liquidator or provisional liquidator
appointed;
(ii) a receiver, receiver and manager, trustee,
controller, official manager or similar
officer appointed;
(iii) an administrator appointed, whether under
Part 5.3A of the Corporations Law or
otherwise; or
(iv) an application made for the appointment of
an administrator, liquidator or provisional
liquidator;
over all or part of the business, Assets or revenues
of the Company and neither the Company nor its
directors have passed a resolution for any such
appointment; or
(v) an application made for the winding up of
the Company.
(b) Execution
No execution, distress or similar process has been
levied upon or against all or any part of the
business, Assets or revenues of the Company.
(c) Schemes of arrangement
The Company has not:
(i) entered into or resolved to enter into any
scheme of arrangement, composition,
assignment for the benefit of, or other
arrangement with its creditors or any class
of creditors; or
(ii) proposed or had proposed on its behalf a
reorganisation, moratorium, deed of company
arrangement or other administration
involving one or more of its creditors, or
its winding up or dissolution.
(d) Statutory demands
The Company has not received any unsatisfied demand under
section 459E of the Corporations Law, or been taken to have
failed to comply with a statutory demand as a result of the
operation of section 459F(1) of the Corporations Law.
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(e) Solvency
The Company:
(i) is able to pay its debts as and when they
fall due;
(ii) is not insolvent or presumed to be insolvent
under any law; and
(iii) is not insolvent under administration as
defined in section of the Corporations Law
or has not taken any action which could
result in that event.
(f) Striking off
The Company:
(i) has not received a notice under sections
601AA or 601AB of the Corporations Law; and
(ii) has not been struck off the register of
Companies or dissolved and there is no
action proposed by the Australian Securities
Commission to do so.
2.34 Restructure
Notwithstanding the transactions described in the preamble to
Section 2 (the "Restructuring Transactions"):
(a) the Company owns or has the use of all assets,
property, rights and interests (previously held in
its capacity as trustee of the Internet Access
Australia Unit Trust) necessary to carry on the
Business in the same manner as it was conducted
immediately prior to the Restructuring Transactions;
(b) the Restructuring Transactions have been completed
and consummated in accordance with their terms and in
accordance with all Legal Requirements;
(c) the Company has no present claim against any of the
parties to the Restructuring Transactions in respect
of the Restructuring Transactions;
(d) neither the execution nor performance of the
Restructuring Transactions (or any document
contemplated as part of the Restructuring
Transactions) has or could:
(i) result in the Company losing the benefit of
any Governmental Authorisation or an asset,
licence, grant, right or privilege
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which was used in or enjoyed by the Business
immediately prior to the Restructuring
Transactions;
(ii) conflict with or result in a breach of, or
give rise to an event of default under, or
require the consent of a person under, or
enable a person to terminate or relieve a
person from an obligation under, an
agreement, arrangement or obligation of the
Business.
3. REPRESENTATIONS AND WARRANTIES OF PURCHASER
The Purchaser represents and warrants, to and for the benefit of the
Vendors, as follows:
3.1 Acquisition of Shares
The Purchaser is not acquiring the Subscription Shares with
the current intention of making a public distribution thereof.
3.2 Authority; Binding Nature of Agreement
(a) The Purchaser has the absolute and unrestricted
right, power and authority to enter into and perform
its obligations under this Agreement;
(b) The execution, delivery and performance of this
Agreement by the Purchaser has been duly authorized
by all necessary action on the part of the Purchaser
and its board of directors; and
(c) This Agreement constitutes the legal, valid and
binding obligation of the Purchaser, enforceable
against the Purchaser in accordance with its terms.
4. PRE-CLOSING COVENANTS OF THE VENDORS
4.1 Access and Investigation
The Vendors shall jointly and severally, ensure that, at all
times during the Pre-Closing Period:
(a) the Company and its Representatives provide the
Purchaser and its Representatives with free and
complete access to the Company's Representatives,
personnel and assets and to all existing books,
records, Tax Returns, work papers and other documents
and information relating to the Company to enable the
Purchaser to conduct its due diligence enquiries;
(b) the Company and its Representatives provide the
Purchaser and its Representatives with such copies of
existing books, records, Tax
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36
Returns, work papers and other documents and
information relating to the Company as the Purchaser
may request in good faith to enable the Purchaser to
conduct its due diligence enquiries; and
(c) the Company and its Representatives compile and
provide the Purchaser and its Representations with
such additional financial, operating and other data
and information regarding the Company as the
Purchaser may request in good faith to enable the
Purchaser to conduct its due diligence enquiries.
4.2 Operation of Business
The Vendors and the Covenantors shall jointly and severally
ensure that, during the Pre-Closing Period:
(a) none of the existing issued shares in the Company are
sold or otherwise transferred, or offered for sale,
and thus no agreement or commitment is entered into
(in writing or otherwise) to sell or otherwise
transfer, any of the existing issued shares in the
Company or any interest in or right relating thereto;
(b) it does not permit offer, agree or commit (in writing
or otherwise) to permit, any of the existing issued
shares in the Company to become subject, directly or
indirectly, to any Encumbrance;
(c) the Company conducts its operations exclusively in
the Ordinary Course of Business and in the same
manner as such operations have been conducted prior
to the date of this Agreement;
(d) the Company preserves intact its current business
organization, keeps available the services of its
current officers and employees and maintains its
relations and good will with all suppliers,
customers, landlords, creditors, licensors,
licensees, employees and other Persons having
business relationships with the Company;
(e) the Company keeps in full force all insurance
policies identified in Part 2.26 of the Disclosure
Schedule;
(f) the Company's officers confer regularly with the
Purchaser concerning operational matters and
otherwise report regularly to the Purchaser
concerning the status of the Company's business,
condition, assets, liabilities, operations, financial
performance and prospects;
(g) the Company immediately notifies the Purchaser of any
inquiry, proposal or offer from any Person relating
to any Acquisition Transaction;
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37
(h) the Company and its officers use their Best Efforts
to cause the Company to operate profitably and to
maximize its net income;
(i) the Company does not declare, accrue, set aside or
pay any dividend or make any other distribution in
respect of any shares, and does not repurchase,
redeem or otherwise reacquire any shares or other
securities;
(j) the Company does not sell or otherwise issue any
shares or any other securities;
(k) except as contemplated in this Agreement, the Company
does not amend its constitution, and does not effect
or become a party to any Acquisition Transaction,
recapitalization, reclassification of shares, share
consolidation or division, capital reduction or share
buy back or similar transaction;
(l) the Company does not form any subsidiary or acquire
any equity interest or other interest in any other
Entity;
(m) the Company does not make any capital expenditure,
except for capital expenditures that are made in the
Ordinary Course of Business and that, when added to
all other capital expenditures made on behalf of the
Company during the Pre-Closing Period, do not exceed
A$10,000 in the aggregate;
(n) the Company does not enter into or permit any of the
assets owned or used by the Company to become bound
by any Contract, except for any Excluded Contract;
(o) the Company does not incur, assume or otherwise
become subject to any Liability, except for current
liabilities (of the type required to be reflected in
the "liabilities" column of a balance sheet prepared
in accordance with GAAP) incurred in the Ordinary
Course of Business;
(p) the Company does not establish or adopt any Employee
Benefit Plan, and does not pay any bonus or make any
profit-sharing or similar payment to, or increase the
amount of the wages, salary, commissions, fringe
benefits or other compensation or remuneration
payable to, any of its directors, officers or
employees;
(q) the Company does not change any of its methods of
accounting or accounting practices in any respect;
(r) the Company does not make any Tax election;
(s) the Company does not commence any Proceeding other
than debt collection in the Ordinary Course of
Business;
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(t) the Company does not enter into any transaction or
take any other action of the type referred to in
Section 2.9;
(u) the Company does not enter into any transaction or
take any other action outside the Ordinary Course of
Business;
(v) the Company does not enter into any transaction or
take any other action that might cause or constitute
a Breach of any representation or warranty made by
the Vendors in this Agreement or in the Closing
Certificate; and
(w) the Company does not agree, commit or offer (in
writing or otherwise), and does not attempt, to take
any of the actions described in clauses "(a)" through
"(v)" of this Section 4.2.
4.3 Filings and Consents
The Vendors shall ensure that:
(a) each filing or notice required to be made or given
(pursuant to any applicable Legal Requirement,
Government Authorisation, Order or Contract, or
otherwise) by the Company or the Vendors in
connection with the execution and delivery of any of
the Transactional Agreements or in connection with
the consummation or performance of any of the
Transactions (including each of the filings and
notices identified in Part 2.20 of the Disclosure
Schedule but excluding payment of stamp duty for
which the Purchaser is responsible) is made or given
as soon as possible after the date of this Agreement;
(b) each Consent required to be obtained (pursuant to any
applicable Legal Requirement, Order or Contract, or
otherwise) by the Company or the Vendors in
connection with the execution and delivery of any of
the Transactional Agreements or in connection with
the consummation or performance of any of the
Transactions (including each of the Consents
identified in Part 2.20 of the Disclosure Schedule)
is obtained as soon as possible after the date of
this Agreement and remains in full force and effect
through the Closing Date;
(c) the Company and the Vendors promptly delivers to the
Purchaser a copy of each filing made, each notice
given and each Consent obtained by them during the
Pre-Closing Period; and
(d) during the Pre-Closing Period, the Vendors, the
Company and their Representatives cooperate with the
Purchaser and with the Purchaser's Representatives,
and prepare and make available such documents and
take such other actions as the Purchaser may request
in good faith, in
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connection with any filing, notice or Consent that
the Purchaser is required or elects to make, give or
obtain.
4.4 Notification; Updates to Disclosure Schedule
(a) During the Pre-Closing Period, the Vendors shall
promptly notify the Purchaser in writing of:
(i) the discovery of any event, condition, fact
or circumstance that occurred or existed on
or prior to the date of this Agreement and
that caused or constitutes a Breach of any
representation or warranty made by the
Vendors in this Agreement;
(ii) any event, condition, fact or circumstance
that occurs, arises or exists after the date
of this Agreement and that would cause or
constitute a Breach of any representation or
warranty made by the Vendors in this
Agreement if (A) such representation or
warranty had been made as of the time of the
occurrence, existence or discovery of such
event, condition, fact or circumstance, or
(B) such event, condition, fact or
circumstance had occurred, arisen or existed
on or prior to the date of this Agreement;
(iii) any Breach of any covenant or obligation of
the Vendors; and
(iv) any event, condition, fact or circumstance
that may make the timely satisfaction of any
of the conditions set forth in Section 5 or
Section 6 impossible or unlikely.
(b) If any event, condition, fact or circumstance that is
required to be disclosed pursuant to Section 4.4(a)
requires any change in the Disclosure Schedule, or if
any such event, condition, fact or circumstance would
require such a change assuming the Disclosure
Schedule were dated as of the date of the occurrence,
existence or discovery of such event, condition, fact
or circumstance, then the Vendors shall promptly
deliver to the Purchaser an update to the Disclosure
Schedule specifying such change. No such update shall
be deemed to supplement or amend the Disclosure
Schedule for the purpose of (i) determining the
accuracy of any of the representations and warranties
made by the Vendors in this Agreement or in the
Closing Certificate, or (ii) determining whether any
of the conditions set forth in Section 5 has been
satisfied.
(c) During the Pre-Closing Period, the Purchaser shall
promptly notify the Vendors in writing of the
discovery of any event, condition, fact or
circumstance that occurred or existed on or prior to
the date of this Agreement and that caused or
constitutes a Breach of any representation or
warranty made by the Vendors in this Agreement.
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(d) The Purchasers and the Vendors shall meet and discuss
in good faith any update to the Disclosure Schedule
referred to in Section 4.4(b) or any notification
given under Section 4.4(d).
4.5 Payment of Indebtedness by Related Parties
The Vendors shall cause all indebtedness and other Liabilities
of each Related Party to the Company (including any such
indebtedness or other Liability identified in Part 2.27 of the
Disclosure Schedule but excluding indebtedness or other
liabilities incurred in the Ordinary Course of Business) to be
discharged and paid in full prior to the Closing.
4.6 No Negotiation
The Vendors shall ensure that, during the Pre-Closing Period,
neither the Company nor any of the Company's Representatives
directly or indirectly:
(a) solicits or encourages the initiation of any inquiry,
proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction;
(b) participates in any discussions or negotiations with,
or provides any non-public information to, any Person
(other than the Purchaser) relating to any
Acquisition Transaction; or
(c) considers the merits of any unsolicited inquiry,
proposal or offer from any Person (other than the
Purchaser) relating to any Acquisition Transaction.
4.7 Best Efforts
During the Pre-Closing Period, each of the Vendors shall use
its Best Efforts to cause the conditions set forth in Sections
5 and 6.3 to be satisfied on a timely basis.
4.8 Confidentiality
(a) Subject to Section 4.8(c), the Vendors and the
Covenantors shall ensure that, during the Pre-Closing
Period, and, in so far as the obligations relate to
the Vendors and the Covenantors alone, at all times
after Closing:
(i) the Vendors, the Covenantors, the Company
and their Representatives keep strictly
confidential the terms (but not the
existence) of this Agreement;
(ii) neither the Vendors, the Company nor any of
their Representatives issues or disseminates
any press release or other
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41
publicity or otherwise makes any disclosure
of any nature (to any of the Company's
suppliers, customers, landlords, creditors
or employees or to any other Person)
regarding any of the Transactions (a
"Disclosure"), except to the extent set out
in Section 4.8(b) and except to the extent
that the Company or the Vendors are required
by law to make any such Disclosure regarding
the Transactions and the Purchaser, acting
reasonably, has given its prior written
consent to the terms of the relevant
Disclosure; and
(iii) subject to section 4.8(b), if the Company,
the Covenantors or the Vendors are required
by law or for the purposes of inclusion in a
prospectus to be issued by any of the
Vendors or the Covenantors to make any
Disclosure regarding the Transactions (but
only to the extent required by law), the
Vendors shall inform the Purchaser, at least
five business days before making such
Disclosure, of the terms, nature and content
of the intended Disclosure and take into
account the Purchaser's reasonable
requirements relating to the preservation of
confidentiality. The Vendors shall use their
reasonable endeavours to avail themselves of
any relief or other exemption relating to
any prospectus issue which may allow any
information concerning the Transactions not
to be disclosed to the general public or to
be disclosed in general (as opposed to
specific) terms only, save that the
percentage interest of the Purchaser in the
Company and the amount subscribed may be
disclosed.
(b) Notwithstanding Section 4.8(a) and subject to Section 4.8(c),
the Vendors shall be entitled to disclose the existence (but
not the terms) of this Agreement and the Shareholders Deed and
the percentage interest of the Purchaser in the Company in any
publicity materials, press release roadshow, briefing
information sessions and any other dissemination of
information to potential investors and their advisers in I.T.
& e. Limited.
(c) Neither the Vendors nor the Covenantors may before or after
Closing, and they shall ensure that their respective
Representatives do not before or after closing, make or send
any public announcement, communication, release or other
disclosure concerning the Transactions unless the relevant
party has first obtained the prior written consent of the
Purchaser which may not be unreasonably withheld or delayed.
5. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE
The Purchaser's obligation to subscribe for the Subscription Shares and
to take the other actions required to be taken by the Purchaser at the
Closing is subject to the satisfaction, at or prior to the Closing, of
each of the following conditions (any of
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which may be waived by the Purchaser, in whole or in part, in
accordance with Section 10.11):
5.1 Satisfactory Completion of Pre-Acquisition Review
The Purchaser shall have satisfactorily completed its
pre-acquisition investigation and review of the Company's
business, condition, assets, liabilities, operations,
financial performance, net income, prospects and regulatory
matters and shall be satisfied with the results of that
investigation and review.
5.2 Accuracy of Representations
All of the representations and warranties made by the Vendors
in this Agreement (considered collectively), and each of said
representations and warranties (considered individually),
shall have been accurate in all material respects as of the
date of this Agreement, and shall be accurate in all material
respects as of the Scheduled Closing Time as if made at the
Scheduled Closing Time, without giving effect to any update to
the Disclosure Schedule.
5.3 Performance of Obligations
(a) The Company shall have delivered to the Purchaser the
certificates representing all (and not less than all)
of the Subscription Shares as required by Section
1.3(b)(i), and shall have executed and/or delivered
each of the other documents required to be executed
and/or delivered by it pursuant to Sections 1.3(b)
and (c) such that subject only to payment of stamp
duty (if any), the Purchaser shall upon Closing
become the registered holder of 51% of the issued
voting share capital of the Company (calculated on a
fully diluted basis).
(b) All of the other covenants and obligations that the
Vendors are required to comply with or to perform at
or prior to the Closing (considered collectively),
and each of said covenants and obligations
(considered individually), shall have been duly
complied with and performed in all material respects.
5.4 Consents
Each of the Consents identified in Part 2.20 of the Disclosure
Schedule shall have been obtained and shall be in full force
and effect.
5.5 No Adverse Change
There shall have been no material adverse change in the
Company's business, condition, assets, liabilities,
operations, financial performance, net income or prospects (or
in any aspect or portion thereof) since the date of this
Agreement.
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5.6 Additional Documents
The Purchaser shall have received such other materials or
evidence as the Purchaser, in good faith, may reasonably
require for the purpose of (i) evidencing the accuracy of any
representation or warranty made by the Vendors, (ii)
evidencing the compliance by the Vendors with, or the
performance by the Vendors of, any covenant or obligation set
forth in this Agreement, (iii) evidencing the satisfaction of
any condition set forth in this Section 5, or (iv) otherwise
facilitating the consummation or performance of any of the
Transactions.
5.7 No Proceedings
Since the date of this Agreement, there shall not have been
commenced or threatened against the Vendors, or against any
Person affiliated with the Vendors, any Proceeding (a)
involving any challenge to, or seeking damages or other relief
in connection with, any of the Transactions, or (b) that may
have the effect of preventing, delaying, making illegal or
otherwise interfering with any of the Transactions.
5.8 No Claim Regarding Share Ownership or Subscription Proceeds
No Person shall have made or threatened any claim asserting
that such Person (a) may be the holder or the beneficial owner
of, or may have the right to acquire or to obtain beneficial
ownership of, any shares or other securities of the Company,
or (b) may be entitled to all or any portion of the
Subscription Price.
6. CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS TO CLOSE
The Company's obligations to issue the Subscription Shares and to take
the other actions required to be taken by each of them at the Closing
is subject to the satisfaction, at or prior to the Closing, of each of
the following conditions (any of which may be waived by the Vendors, in
whole or in part, in accordance with Section 10.11):
6.1 Accuracy of Representations
All of the representations and warranties made by the
Purchaser in this Agreement (considered collectively), and
each of said representations and warranties (considered
individually), shall have been accurate in all material
respects as of the date of this Agreement and shall be
accurate in all material respects as of the Scheduled Closing
Time as if made at the Scheduled Closing Time.
6.2 Purchaser's Performance
All of the other covenants and obligations that the Purchaser
is required to comply with or to perform pursuant to this
Agreement at or prior to the
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Closing (considered collectively), and each of said covenants
and obligations (considered individually), shall have been
complied with and performed in all material respects.
6.3 No Injunction
There shall not be in effect any injunction that shall have
been entered by a court of competent jurisdiction since the
date of this Agreement and that prohibits the sale of the
Subscription Shares by the Vendors to the Purchaser.
7. TERMINATION
7.1 Termination Events
This Agreement may be terminated prior to the Closing:
(a) by the Purchaser if (i) there is a material Breach of
any covenant or obligation of any of the Vendors or
(ii) the Purchaser reasonably determines that the
timely satisfaction of any condition set forth in
Section 5 has become impossible or impractical (other
than as a result of any failure on the part of the
Purchaser comply with or perform its covenants and
obligations under this Agreement);
(b) by the Vendors if (i) there is a material Breach of
any covenant or obligation of the Purchaser, or (ii)
the Vendors reasonably determine that the timely
satisfaction of any condition set forth in Section 6
has become impossible or impractical (other than as a
result of any failure on the part of any of the
Vendors to comply with or perform any covenant or
obligation set forth in this Agreement);
(c) by the Purchaser at or after the Scheduled Closing
Time if any condition set forth in Section 5 has not
been satisfied by the Scheduled Closing Time;
(d) by the Vendors at or after the Scheduled Closing Time
if any condition set forth in Section 6 has not been
satisfied by the Scheduled Closing Time;
(e) by the Purchaser if the Closing has not taken place
on or before 30 September, 1999 (other than as a
result of any failure on the part of the Purchaser to
comply with or perform its covenants and obligations
under this Agreement);
(f) by the Vendors if the Closing has not taken place on
or before 30 September, 1999 (other than as a result
of the failure on the part of the Vendors to comply
with or perform any covenant or obligation set forth
in this Agreement); or
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45
(g) by the mutual consent of the Purchaser and the
Vendors.
7.2 Termination Procedures
If the Purchaser wishes to terminate this Agreement pursuant
to Section 7.1(a), Section 7.1(c) or Section 7.1(e), the
Purchaser shall deliver to any Vendor a written notice stating
that the Purchaser is terminating this Agreement and setting
forth a brief description of the basis on which the Purchaser
is terminating this Agreement. If the Vendors wishes to
terminate this Agreement pursuant to Section 7.1(b), Section
7.1(d) or Section 7.1(f), the Vendors shall deliver to the
Purchaser a written notice stating that the Vendors are
terminating this Agreement and setting forth a brief
description of the basis on which the Vendors are terminating
this Agreement.
7.3 Effect of Termination
If this Agreement is terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement shall
terminate; provided, however, that:
(a) no party shall be relieved of any obligation or other
Liability arising from any Breach by such party of
any provision of this Agreement;
(b) the Vendors shall, in all events, remain bound by and
continue to be subject to Section 4.8.
7.4 Non-exclusivity of Termination Rights
The termination rights provided in Section 7.1 shall not be
deemed to be exclusive. Accordingly, the exercise by any party
of its right to terminate this Agreement pursuant to Section
7.1 shall not be deemed to be an election of remedies and
shall not be deemed to prejudice, or to constitute or operate
as a waiver of, any other right or remedy that such party may
be entitled to exercise (whether under this Agreement, under
any other Contract, under any statute, rule or other Legal
Requirement, at common law, in equity or otherwise).
8. INDEMNIFICATION, ETC.
8.1 Survival of Representation and Covenants
(a) The representations, warranties, covenants and
obligations of each party shall survive (without
limitation):
(i) the Closing and the subscription of the
Subscription Shares by the Purchaser;
(ii) any sale or other disposition of any or all
of the Subscription Shares by the Purchaser;
and
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46
(iii) any Acquisition Transaction effected by or
otherwise involving the Purchaser, the
Vendors or the Company.
(b) For purposes of this Agreement, each statement or
other item of information set forth in the Disclosure
Schedule or in any update to the Disclosure Schedule
shall be deemed to be a representation and warranty
made by the Vendors in this Agreement.
8.2 Indemnification by the Vendors
(a) The Vendors shall hold harmless and
indemnify each of the Indemnitees from and
against, and shall compensate and reimburse
each of the Indemnitees for, any Damages
which are directly or indirectly suffered or
incurred by any of the Indemnitees or to
which any of the Indemnitees may otherwise
become subject at any time (regardless of
whether or not such Damages relate to any
third-party claim) and which arise directly
or indirectly from or as a direct or
indirect result of, or are directly or
indirectly connected with:
(i) any Breach of any representation or warranty
made by the Vendors in this Agreement
(without giving effect to any update to the
Disclosure Schedule) or in the Closing
Certificate;
(ii) any Breach of any representation, warranty,
statement, information or provision
contained in the Disclosure Schedule or in
any other document delivered or otherwise
made available to the Purchaser or any of
its Representatives by or on behalf of the
Vendors or any of its Representatives;
(iii) any Breach of any covenant or obligation of
the Vendors;
(iv) any matter identified or referred to in Part
2.21 or Part 2.29 of the Disclosure
Schedule; or
(v) any Proceeding relating directly or
indirectly to any Breach, alleged Breach,
Liability or matter of the type referred to
in clause "(i)", "(ii)", "(iii)" or "(iv)"
above (including any Proceeding commenced by
any Indemnitee for the purpose of enforcing
any of its rights under this Section 8).
(b) Each of the Vendors acknowledges and agrees that, if
there is any Breach of any representation, warranty
or other provision relating to the Company or the
Company's business, condition, assets, liabilities,
operations, financial performance, net income or
prospects (or any aspect or portion thereof), then
the Purchaser itself shall be deemed, by virtue of
its ownership of shares in the Company, to have
incurred Damages as a result of such Breach or
Liability. Nothing contained in this Section 8.2(b)
shall have the effect of (i) limiting the
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circumstances under which the Purchaser may otherwise
be deemed to have incurred Damages for purposes of
this Agreement, (ii) limiting the other types of
Damages that the Purchaser may be deemed to have
incurred (whether in connection with any such Breach
or Liability or otherwise), or (iii) limiting the
rights of the Company or any of the other Indemnitees
under this Section 8.2.
8.3 Purchaser's Indemnity
(a) The Purchaser indemnifies, and must keep indemnified,
the Vendors against any Damages which may be suffered
or incurred by the Vendors or the Company directly or
indirectly as a result of any breach of the terms of
this Agreement by the Purchaser including a breach of
any warranty in Section 3.
(b) The Purchaser shall not be liable for any claim under
Section 8.3 unless the amount finally adjudicated or
agreed as being payable in respect of the claim and
all other claims over the preceding 12 months exceeds
$50,000.
8.4 Right to Require Cure of Breach
Without limiting the generality of anything contained in
Section 8.2, if there is any Breach of any representation or
warranty made by the Vendors, then the Vendors shall be
obligated to pay such amounts to the Company and take such
other actions as the Purchaser may in good faith request for
the purpose of causing such Breach to be corrected, cured and
eliminated in all respects (at no cost to the Company or the
Purchaser).
8.5 No Contribution
Each of the Vendors waives, and acknowledges and agrees that
it shall not have and shall not exercise or assert or attempt
to exercise or assert, any right of contribution or right of
indemnity or any other right or remedy against the Company or
any of its employees, officers or agents in connection with
any indemnification obligation or any other Liability to which
any of the Vendors may become subject under any of the
Transactional Agreements or otherwise in connection with any
of the Transactions.
8.6 Interest
Any party that is required to indemnify any other Person
pursuant to this Section 8 with respect to any Damages shall
also be required to pay such other Person interest on the
amount of such Damages (for the period commencing as of the
date on which such other Person first incurred or otherwise
became subject to such Damages and ending on the date on which
the applicable indemnification payment is made by such party)
at a floating rate three percentage points above the rate of
interest publicly announced by Bank of America, N.T. & S.A.
from time to time as its prime, base or reference rate.
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8.7 Non-exclusivity of Indemnification Remedies
The indemnification remedies and other remedies provided in
this Section 8 shall not be deemed to be exclusive.
Accordingly, the exercise by any Person of any of its rights
under this Section 8 shall not be deemed to be an election of
remedies and shall not be deemed to prejudice, or to
constitute or operate as a waiver of, any other right or
remedy that such Person may be entitled to exercise (whether
under this Agreement, under any other Contract, under any
statute, rule or other Legal Requirement, at common law, in
equity or otherwise).
8.8 Defense of Third Party Claims
In the event of the assertion or commencement by any Person of
any claim or Proceeding (whether against the Company, against
any other Indemnity or against any other Person) with respect
to which the Vendors may become obligated to indemnify, hold
harmless, compensate or reimburse any Indemnity pursuant to
this Section 8, the Purchaser shall have the right, at its
election, to designate the Vendors to assume the defense of
such claim or Proceeding at the sole expense of the Vendors.
If the Purchaser so elects to designate the Vendors to assume
the defense of any such claim or Proceeding:
(a) the Vendors shall proceed to defend such claim or
Proceeding in a diligent manner with counsel
satisfactory to the Purchaser;
(b) the Purchaser shall make available to the Vendors any
non-privileged documents and materials in the
possession of the Purchaser that may be necessary to
the defense of such claim or Proceeding;
(c) the Vendors shall keep the Purchaser informed of all
material developments and events relating to such
claim or Proceeding;
(d) the Purchaser shall have the right to participate in
the defense of such claim or Proceeding;
(e) the Vendors shall not settle, adjust or compromise
such claim or Proceeding without the prior written
consent of the Purchaser provided, however, that the
Purchaser shall not unreasonable withhold such
consent; and
(f) the Purchaser may at any time (notwithstanding the
prior designation of the Vendors to assume the
defense of such claim or Proceeding) assume the
defense of such claim or Proceeding.
If the Purchaser does not elect to designate the Vendors to
assume the defense of any such claim or Proceeding (or if,
after initially designating the Vendors to assume such
defense, the Purchaser elects to assume such defense), the
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Purchaser may proceed with the defense of such claim or
Proceeding on its own. If the Purchaser so proceeds with the
defense of any such claim or Proceeding on its own:
(i) all expenses relating to the defense of such claim or
Proceeding (whether or not incurred by the Purchaser)
shall be borne and paid exclusively by the Vendors;
(ii) the Vendors shall make available to the Purchaser any
documents and materials in the possession or control
of any of the Vendors that may be necessary to the
defense of such claim or Proceeding;
(iii) the Purchaser shall keep the Vendors informed of all
material developments and events relating to such
claim or Proceeding; and
(iv) the Purchaser shall have the right to settle, adjust
or compromise such claim or Proceeding with the
consent of the Vendors; provided, however, that the
Vendors shall not unreasonably withhold such consent.
8.9 Exercise of Remedies by Indemnities other than Purchaser
No Indemnity (other than the Purchaser or any successor
thereto or assign thereof) shall be permitted to assert any
indemnification claim or exercise any other remedy under this
Agreement unless the Purchaser (or any successor thereto or
assign thereof) shall have consented to the assertion of such
indemnification claim or the exercise of such other remedy.
8.10 Limitations on Liability
The liability of a party for any breach of a warranty or
representation given in Sections 2 or 3:
(a) ceases after 31 August 2001 except for matters
contained in a written claim made before that date by
an Indemnitee to the Vendors;
(b) is limited to a maximum aggregate amount of:
(i) $4,800,000 plus the amount of capital
subscribed by the Purchaser pursuant to
Section 1.2 in the event the Conditional
Sale under the Shareholders Deed is
completed in accordance with terms of the
Shareholders Deed; or
(ii) The amount of capital subscribed by the
Purchaser pursuant to Section 1.2 in the
event such Conditional Sale is not
completed;
(c) shall not arise unless the loss thereby sustained
(together with the
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aggregate amount of losses sustained from any
previous claims) exceeds $50,000 and once exceeded,
all such losses shall be recoverable.
8.11 Purchaser Warranty as To No Breach
The Purchaser represents and warrants that:
(a) it has no actual knowledge of any fact, matter or
circumstance which it fairly considers and
appreciates to be a material breach of any of the
warranties or representations in Section 2; and
(b) it has had the opportunity to carry out due diligence
on the Company.
8.12 Restructure
The Vendors shall indemnify and keep indemnified the Company
against any income tax liability or stamp duty liability the
Company incurs as a result of the transactions referred to in
paragraphs (a) to (d) in the preamble to Section 2, but
excluding any liability to income tax or stamp duty incurred
as a result of any further transactions, any changes (either
prospective or retrospective) to the law, any changes to or
the issue of any rulings, proclamations, orders or
interpretations of any governmental or regulatory authority
issued after the date of this Agreement and having either a
retrospective or prospective effect and any judgments, orders
or rulings of any court, tribunal or similar authority. The
Vendors shall indemnify and keep indemnified the Company
against any debts which were sold and assigned to the Company
as part of the Restructuring Transactions and which
subsequently prove to be outstanding for more than three
months and in respect of which the Company does not receive
immediate payment from the vendors under the relevant
agreement for sale of business under which the debts were sold
and assigned to the Company as part of the Restructuring
Transactions.
8.13 Maximum Cap on Indemnities
All indemnities under this Agreement shall be subject to a
maximum monetary limit referred to in Section 8.10(b).
9. RESTRICTION OF THE VENDORS
9.1 Each of the Vendors and the Covenantors undertakes with the
Purchaser (for itself and as trustee for the Company) that,
except with the consent in writing of the Purchaser:
9.1.1 for the period of two years after Completion it will
not within any country or place in which the Company
has carried on business during the year preceding the
date of this Agreement either on its own account or
in conjunction with or on behalf of any person, firm
or company carry on or be engaged, concerned or
interested, directly or indirectly,
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whether as shareholder, director, employee, partner,
agent or otherwise in carrying on business in
competition with the Business (or any part of it) as
carried on by the Company on the date of this
Agreement (other than as a holder of not more than 5
per cent (5%) of the issued shares or debentures of
any company listed on a recognised stock exchange);
9.1.1 for the period of two years after Completion it will
not either on its own account or in conjunction with
or on behalf of any other person, firm or company
solicit or entice away or attempt to solicit or
entice away from the Company the custom of any
person, firm, company or organisation who shall at
any time within six months preceding the date hereof
have been a customer, representative, agent, or
correspondent of the Company
9.1.2 for the period of two years after Completion it will
not either on its own account or in conjunction with
or on behalf of any other person, firm or company
employ, solicit, entice away or attempt to employ,
solicit or entice away from the Company any person
who at the date hereof is or at the date of or within
the year preceding such employment, solicitation,
enticement or attempt shall have been an officer,
manager, consultant or employee of the Company
whether or not such person would commit a breach of
contract by reason of leaving such employment;
9.1.3 it will not at any time hereafter make use of or
disclose or divulge to any person (other than to
officers or employees of the Company whose province
it is to know the same) any information (other than
any information properly available to the public or
disclosed or divulged pursuant to an order of a court
of competent jurisdiction) relating to the Company,
the identity of its customers, its products, finance,
contractual arrangements, business or methods of
business and shall use its best endeavours to prevent
the publication or disclosure of any such
information;
9.1.4 if, in connection with the business or affairs the
Company, it shall have obtained trade secrets or
other confidential information belonging to any third
party under an agreement purporting to bind the
Company which contained restrictions on disclosure it
will not without the previous written consent of the
board of directors of the Purchaser at any time
infringe or take any action which would or might
result in an infringement of such restrictions;
9.1.5 it will not at any time hereafter in relation to any
trade, business or company use a name or trade xxxx
including the word "Internet Access Australia" or
"IAA" or any word or symbol confusingly similar
thereto in such a way as to be capable of or likely
to be confused with the name or any trade xxxx the
Company and shall use its best endeavours
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to procure that no such name or trade xxxx shall be
used by any person, firm or company with which he is
connected.
9.2 Vendors and Covenantors to Procure
The Vendors and the Covenantors shall procure that each of
their subsidiaries and holding companies will observe the
restrictions contained in the foregoing provisions of this
Section and that their respective employees will observe the
restrictions contained in this Section.
9.3 Restraints Fair and Reasonable
The Vendors and the Covenantors acknowledge that:
(a) the covenants given in Section 9.1 are material to
the Purchaser's decision to enter into this
Agreement; and
(b) the restraints contained in Section 9.1 are:
(i) fair and reasonable regarding the subject
matter, area and duration; and
(ii) reasonably required by the Purchaser to
protect the business financial and
proprietary interests of the Company.
9.4 Severability
While the restrictions contained in this Clause are considered
by the parties to be reasonable in all the circumstances, it
is recognised that restrictions of the nature in question may
fail for technical reasons and accordingly it is hereby agreed
and declared that if any of such restrictions shall be
adjudged to be void as going beyond what is reasonable in all
the circumstances for the protection of the interests of the
Purchaser but would be valid if part of the wording thereof
were deleted or the periods thereof reduced or the range of
activities or area dealt with thereby reduced in scope the
said restriction shall apply with such modifications as may be
necessary to make it valid and effective.
9.5 First Right of Refusal
I.T. & e. Limited shall first offer to the Company any
business conducted or proposed to be conducted by I.T. & e.
Limited (and which I.T. & e. Limited intends to engage another
Person to provide) that is carried on by the Company on the
date of this Agreement. Any such offer shall be made and
considered in good faith. The Company shall be allowed a
reasonable period (having regard to the circumstances in which
the offer is made) in which to consider the offer before I.T.
& e. Limited may offer the business to any other Person. I.T.
& e. Limited may not offer the business to any other Person on
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terms more favourable than those offered to the Company
without first offering the same terms to the Company in
accordance with this Section 9.5.
10. MISCELLANEOUS PROVISIONS
10.1 Further Assurances
Each party hereto shall execute and/or cause to be delivered
to each other party hereto such instruments and other
documents, and shall take such other lawful actions within its
power, as such other party may reasonably request (prior to,
at or after the Closing) for the purpose of carrying out or
evidencing any of the Transactions.
10.2 Fees, Expenses and Stamp Duty
Each party shall bear its own expenses of and incidental to
the negotiation leading to the entering into of this Agreement
all the Transaction Agreement, and the preparation, execution
and performance of such agreement. All stamp duties assessed
or assessable on the transfer of the Subscription Shares to
the Purchaser shall be borne by the Purchaser.
10.3 Attorneys' Fees
If any legal action or other legal proceeding relating to any
of the Transactional Agreements or the enforcement of any
provision of any of the Transactional Agreements is brought
against any party hereto, the prevailing party shall be
entitled to recover reasonable attorneys' fees, costs and
disbursements (in addition to any other relief to which the
prevailing party may be entitled).
10.4 Notices
Any notice or other communication required or permitted to be
delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and
received when delivered (by hand, by registered mail, by
courier or express delivery service or by facsimile) to the
address or facsimile number set forth beneath the name of such
party below (or to such other address or facsimile number as
such party shall have specified in a written notice given to
the other parties hereto):
If to the Vendors: I.T. & e. Limited
Xxxxx 0
000 Xxxxxx Xxxx
Xxxxx Xxxxx Xxxxxxxx 0000
Attention : MR. XXXXXXX XXXXX
Facsimile : (000) 0000 0000
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If to the Purchaser: Asia Online - Australia Pty Ltd
23rd Floor, Citicorp Centre
00 Xxxxxxxxx Xxxx
Xxxxxxxx Xxx
Xxxx Xxxx
Attention : XX. XX XXXXXXX
Facsimile : (000) 0000 0000
10.5 Time of the Essence
Time is of the essence of this Agreement.
10.6 Headings
The underlined headings contained in this Agreement are for
convenience of reference only, shall not be deemed to be a
part of this Agreement and shall not be referred to in
connection with the construction or interpretation of this
Agreement.
10.7 Counterparts
This Agreement may be executed in several counterparts, each
of which shall constitute an original and all of which, when
taken together, shall constitute one agreement.
10.8 Governing Law: Venue
(a) This Agreement and all definitive Agreements
contained herein shall be construed in accordance
with, and governed in all respects by, the laws of
New South Wales.
(b) Any legal action or other legal proceeding relating
to this Agreement or the enforcement of any provision
of this Agreement may be brought or otherwise
commenced in any court having jurisdiction in New
South Wales. Each party to this Agreement:
(i) expressly and irrevocably consents and
submits to the non-exclusive jurisdiction of
the Courts of New South Wales;
(ii) waives any claim based on absence of
jurisdiction or inconvenient form.
(c) The Vendors agree that, if any Proceeding is commenced against
any Indemnitee by any Person in or before any court or other
tribunal anywhere in the world, then such Indemnitee may
proceed against the Vendors in such court or other tribunal
with respect to any indemnification claim or other claim
arising directly or indirectly from or relating directly or
indirectly to such
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55
Proceeding or any of the matters alleged therein or any of the
circumstances giving rise thereto.
(d) Nothing contained in Section 10.8(b) or 10.8 (c) shall be
deemed to limit or otherwise affect the right of any Indemnity
to commence any legal proceeding or otherwise proceed against
the Vendors in any other forum or jurisdiction.
(e) Each of the Vendors irrevocably waives the right to a jury
trial in connection with any legal proceeding relating to this
Agreement or the enforcement of any provision of this
Agreement.
10.9 Successors and Assigns
This Agreement shall be binding upon the Vendors and the
Purchaser and their respective successors and assigns (if
any). This Agreement shall inure to the benefit of the
Purchaser; the other Indemnitees (subject to Section 8.9); and
the respective successors and assigns (if any) of the
foregoing. The Purchaser may only assign its rights under this
Agreement (including its indemnification rights under Section
8)to a related body corporate (as defined in the Corporations
Law) of the Purchaser. If such assignee ceases to be a related
body corporate of the Purchaser, the Purchaser must procure
that such rights are re-assigned to the Purchaser or another
related body corporate of the Purchaser forthwith.
10.10 Remedies Cumulative: Specific Performance
The rights and remedies of the parties hereto shall be
cumulative (and not alternative). The Vendors agree that:
(a) in the event of any Breach or threatened Breach by
any one or more of the Vendors of any covenant,
obligation or other provision set forth in this
Agreement, the Purchaser shall be entitled (in
addition to any other remedy that may be available to
it) to (i) a decree or order of specific performance
or mandamus to enforce the observance and performance
of such covenant, obligation or other provision, and
(ii) an injunction restraining such Breach or
threatened Breach; and
(b) neither the Purchaser nor any other Indemnitee shall
be required to provide any bond or other security in
connection with any such decree, order or injunction
or in connection with any related action or
Proceeding.
10.11 Waiver
(a) No failure on the part of any Person to exercise any
power, right, privilege or remedy under this
Agreement, and no delay on the part of any Person in
exercising any power, right, privilege or remedy
under this Agreement, shall operate as a waiver of
such power, right, privilege or remedy; and no single
or partial exercise of any such power, right,
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privilege or remedy shall preclude any other or
further exercise thereof or of any other power,
right, privilege or remedy.
(b) No Person shall be deemed to have waived any claim
arising out of this Agreement, or any power, right,
privilege or remedy under this Agreement, unless the
waiver of such claim, power, right, privilege or
remedy is expressly set forth in a written instrument
duly executed and delivered on behalf of such Person;
and any such waiver shall not be applicable or have
any effect except in the specific instance in which
it is given.
10.12 Amendments
This Agreement may not be amended, modified, altered or
supplemented other than by means of a written instrument duly
executed and delivered on behalf of the Purchaser and the
Vendors.
10.13 Severability
In the event that any provision of this Agreement, or the
application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful,
void or unenforceable to any extent, the remainder of this
Agreement, and the application of such provision to Persons or
circumstances other than those as to which it is determined to
be invalid, unlawful, void or unenforceable, shall not be
impaired or otherwise affected and shall continue to be valid
and enforceable to the fullest extent permitted by law.
10.14 Parties in Interest
Except for the provisions of Section 8 hereof, none of the
provisions of this Agreement is intended to provide any rights
or remedies to any Person other than the parties hereto and
their respective successors and assigns (if any).
10.15 Entire Agreement
The Transactional Agreements set forth the entire
understanding of the parties relating to the subject matter
thereof and supersede all prior agreements and understandings
among or between any of the parties relating to the subject
matter thereof.
10.16 Construction
(a) For purposes of this Agreement, whenever the context
requires: the singular number shall include the
plural, and vice versa; the masculine gender shall
include the feminine and neuter genders; the feminine
gender shall include the masculine and neuter
genders; and the neuter gender shall include the
masculine and feminine genders.
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57
(b) The parties hereto agree that any rule of
construction to the effect that ambiguities are to be
resolved against the drafting party shall not be
applied in the construction or interpretation of this
Agreement.
(c) As used in this Agreement, the words "include" and
"including", and variations thereof, shall not be
deemed to be terms of limitation, but rather shall be
deemed to be followed by the words "without
limitation".
(d) Except as otherwise indicated, all references in this
Agreement to "Sections" and "Exhibits" are intended
to refer to Sections of this Agreement and Exhibits
to this Agreement.
10.17 Trust Representations and Warranties
ACN 078 210 938 Pty Ltd represents and warrants to each other
party that:
(a) it is the only trustee of the Trust;
(b) it has the power under the Trust Deed to:
(i) execute and deliver this Agreement; and
(ii) perform its obligations under this
Agreement;
(c) all action required by the Trust Deed to authorise:
(i) it's execution and delivery of this
Agreement to which it is a party; and
(ii) the performance of its obligations under
this Agreement, has been taken;
(d) the execution by it of this Agreement to which it is
a party and the performance by it of its obligations
or the exercise of its rights under this Agreement
does not contravene the Trust Deed;
(e) no action is currently taking place or pending to
remove it as trustee of the Trust or appoint a new or
additional trustee of the Trust;
(f) it has entered into this Agreement in its capacity as
trustee of the Trust and for the benefit of the
Beneficiary;
(g) it has a right to be fully indemnified out of the
Trust Fund in respect of the obligations incurred by
it under the Transactional Agreements and it has not
released, disposed of or restricted its equitable
lien over the Trust Fund which secures that
indemnity;
(h) it is not and has never been in breach of the Trust
Deed;
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58
(i) it and its directors, officers, employees and agents
have complied with their obligations in connection
with the Trust;
(j) the Trust has not been terminated and no action is
pending to terminate the Trust;
(k) the Beneficiary is not presently entitled to any of
the assets of the Trust.
In this Section 10.17:
"BENEFICIARY" means any beneficiary or beneficiaries of the
Trust;
"TRUST" means the deed of trust dated 11 July 1994 as
constituted under the Trust Deed;
"TRUST DEED" means the Internet Access Australia Unit Trust;
and
"TRUST FUND" means the property which is at any time subject
to the Trust.
The parties hereto have caused this Agreement to be executed and delivered as of
the date stated at the commencement hereof.
Signed for and on behalf of )
Asia Online - Australia Pty Limited )
by its duly authorised representative )
in the presence of: )
/s/ XXXXX XXXXXXX XXXXXXXXX /s/ XXXXX X. XXXXXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of authorised representative
Xxxxx Xxxxxxx Xxxxxxxxx Xxxxx X. Xxxxxxxx
--------------------------------------------------- ---------------------------------------------------
Name of witness (please print) Name of authorised representative
(please print)
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Signed by )
I.T & e. Limited ) [I.T & e. LIMITED SEAL]
by a director and secretary/director: )
/s/ XXXXXXX XXXXX /s/ XXXXXXX XXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of director Signature of director
Xxxxxxx Xxxxx Xxxxxxx Xxxxx
--------------------------------------------------- ---------------------------------------------------
Name of director (please print) Name of director (please print)
Signed by )
Xxxxx Xxxxxxx Xxxxxxx )
in the presence of: )
/s/ XXXXXX XXXXX /s/ XXXXX XXXXXXX XXXXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of Xxxxx Xxxxxxx Xxxxxxx
Xxxxxx Xxxxx
---------------------------------------------------
Name of witness (please print)
Signed by )
Xxxxxxx Xxxxxxx Xxxxx )
in the presence of: )
/s/ XXXXXX XXXXX /s/ XXXXXXX XXXXXXX XXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of Xxxxxxx Xxxxxxx Xxxxx
Xxxxxx Xxxxx
---------------------------------------------------
Name of witness (please print)
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Signed by )
Xxxxxxx Xxxxxxxxxxxx )
in the presence of: )
/s/ XXXXXX XXXXX /s/ XXXXXXX XXXXXXXXXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of Xxxxxxx Xxxxxxxxxxxx
Xxxxxx Xxxxx
---------------------------------------------------
Name of witness (please print)
Signed by )
Xxxx Xxxxxx )
in the presence of: )
/s/ XXXXXX XXXXX /s/ XXXX XXXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of witness Signature of Xxxx Xxxxxx
Xxxxxx Xxxxx
---------------------------------------------------
Name of witness (please print)
Signed by )
Internet Access Australia Pty Ltd )
by a director and secretary )
/s/ XXXXX XXXXXXXXXXXX /s/ XXXXXXX XXXXX
--------------------------------------------------- ---------------------------------------------------
Signature of secretary Signature of director
Xxxxx Xxxxxxxxxxxx Xxxxxxx Xxxxx
--------------------------------------------------- ---------------------------------------------------
Name of secretary (please print) Name of director (please print)
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EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
ACCOUNTS DATE "Accounts Date" means 30 June 1999
ACQUISITION TRANSACTION "Acquisition Transaction" shall mean any
transaction involving:
(a) the sale or other disposition of
all or any portion of the Company's
business or assets (other than in
the Ordinary Course of Business);
(b) the issuance, sale or other
disposition of (i) any capital
stock of the Company, (ii) any
option, call, warrant or right
(whether or not immediately
exercisable) to acquire any capital
stock of the Company, or (iii) any
security, instrument or obligation
that is or may become convertible
into or exchangeable for any
capital stock of the Company; or
(c) any merger, consolidation, business
combination, share exchange,
reorganization or similar
transaction involving the Company.
AGREEMENT "Agreement" shall mean the Share
Subscription Agreement to which this Exhibit
A is attached (including the Disclosure
Schedule), as it may be amended from time to
time.
BEST EFFORTS "Best Efforts" shall mean the efforts that a
prudent Person desiring to achieve a
particular result would use in order to
ensure that such result is achieved as
expeditiously as possible.
BREACH There shall be deemed to be a "Breach" of a
representation, warranty, covenant,
obligation or other provision if there is or
has been (a) any inaccuracy in or breach of,
or any failure to comply with or perform,
such representation, warranty, covenant,
obligation or other provision, or (b) any
claim (by any Person) or other circumstance
that is inconsistent with such
representation, warranty, covenant,
obligation or other provision; and the term
"Breach" shall be deemed to refer to any
such inaccuracy, breach, failure, claim or
circumstance.
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BUSINESS "Business" means the business carried on by
the Internet Access Australia Unit Trust
prior to 20 August 1999 and subsequently
acquired by the Company on 20 August 1999
from ACN 078 210 938 Pty Ltd and involving
the provision of connectivity in the form of
web hosting, co-location, consumer dial up,
corporate dial up and dedicated access.
BUSINESS DAY "Business day" means a day (excluding
Saturday) when banks are open for business
in both Hong Kong and New South Wales.
CLOSING "Closing" shall have the meaning specified
in Section 1.3(a) of the Agreement.
CLOSING CERTIFICATE "Closing Certificate" shall have the meaning
specified in Section 1.3(b)(iv) of the
Agreement.
CLOSING DATE "Closing Date" shall have the meaning
specified in Section 1.3(a) of the
Agreement.
COMPANY CONTRACT "Company Contract" shall mean any Contract:
(a) to which the Company is a party;
(b) by which the Company or any of its
assets is or may become bound or
under which the Company has, or may
become subject to, any obligation;
or
(c) under which the Company has or may
acquire any right or interest.
COMPANY FINANCIAL STATEMENTS "Company Financial Statements" means the
proforma balance sheet of the Company as at
30 June 1999 attached as Exhibit B and the
financial statement and accompanying
statements, notes and reports referred to in
Section 2.8(a).
COMPANY PLAN "Company Plan" shall mean any Current
Benefit Plan or Past Benefit Plan.
COMPANY RETURNS "Company Returns" shall have the meaning
specified in Section 2.22(b) of the
Agreement.
CONSENT "Consent" shall mean any approval, consent,
ratification, permission, waiver or
Authorisation (including any Governmental
Authorisation).
CONSTITUTION "Constitution" means the constitution in the
form attached as Exhibit L.
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CONTRACT "Contract" shall mean any written, oral,
implied or other agreement, contract,
understanding, arrangement, instrument,
note, guaranty, indemnity, representation,
warranty, deed, assignment, power of
attorney, certificate, purchase order, work
order, insurance policy, benefit plan,
commitment, covenant, assurance or
undertaking of any nature.
CURRENT BENEFIT PLAN "Current Benefit Plan" shall mean any
Employee Benefit Plan that is currently in
effect and:
(a) that was established or adopted by
the Company or is maintained or
sponsored by the Company;
(b) in which the Company participates;
(c) with respect to which the Company
is or may be required or permitted
to make any contribution; or
(d) with respect to which the Company
is or may become subject to any
Liability.
DAMAGES "Damages" shall include any loss (but not
consequential loss), damage, injury,
Liability, claim, demand, settlement,
judgment, award, fine, penalty, Tax, fee
(including any legal fee, expert fee,
accounting fee or advisory fee), charge,
cost (including any cost of investigation)
or expense of any nature.
DISCLOSURE SCHEDULE "Disclosure Schedule" shall mean the
schedule (dated as of the date of the
Agreement) delivered to the Purchaser on
behalf of the Vendors, a copy of which is
attached to the Agreement and incorporated
in the Agreement by reference.
EMPLOYEE BENEFIT PLAN National Australia Bank Superannuation Fund
ENCUMBRANCE "Encumbrance" shall mean any lien, pledge,
hypothecation, charge, mortgage, security
interest, encumbrance, equity, trust,
equitable interest, claim, preference, right
of possession, lease, tenancy, license,
encroachment, covenant, infringement,
interference, Order, proxy, option, right of
first refusal, pre-emptive right, community
property interest, legend, defect,
impediment, exception, reservation,
limitation, impairment, imperfection or
retention of title, condition or restriction
of any nature (including any restriction on
the voting of any security, any restriction
on the transfer
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of any security or other asset, any
restriction on the receipt of any income
derived from any asset, any restriction on
the use of any asset and any restriction on
the possession, exercise or transfer of any
other attribute of ownership of any asset).
ENTITY "Entity" shall mean any corporation
(including any non-profit corporation),
general partnership, limited partnership,
limited liability partnership, joint
venture, estate, trust, cooperative,
foundation, society, political party, union,
company (including any limited liability
company or joint stock company), firm or
other enterprise, association, organization
or entity.
EXCLUDED CONTRACT "Excluded Contract" shall mean any Company
Contract that:
(a) the Company has entered into in the
Ordinary Course of Business;
(b) is identical in all material
respects to one of the Standard
Form Agreements;
(c) has a term of less than 90 days or
may be terminated by the Company
(without penalty) within 90 days
after the delivery of a termination
notice by the Company; and
(d) does not contemplate or involve the
payment of cash or other
consideration in an amount or
having a value in excess of
A$10,000.
GAAP "GAAP" shall mean the accounting standards
applicable for the purposes of the
Corporations Law; the requirements of the
Corporations Law for the preparation and
content of financial statements, directors'
reports and auditor's reports; and generally
accepted and consistently applied accounting
principles and practices in Australia;
except those inconsistent with any of the
foregoing; and for any company incorporated
outside Australia, the equivalent accounting
standards in that company's jurisdiction of
incorporation.
GOVERNMENTAL AUTHORISATION "Governmental Authorisation" shall mean any:
(a) permit, license, certificate,
franchise, concession, approval,
consent, ratification, permission,
clearance, confirmation,
endorsement, waiver, certification,
designation, rating, registration,
qualification or Authorisation that
is, has been or
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may in the future be issued,
granted, given or otherwise made
available by or under the authority
of any Governmental Body or
pursuant to any Legal Requirement;
or
(b) right under any Contract with any
Governmental Body.
GOVERNMENTAL BODY "Governmental Body" shall mean any:
(a) commonwealth, state, province,
nation, principality, territory,
county, municipality, district or
other jurisdiction of any nature;
(b) federal, state, local, municipal,
foreign or other government;
(c) governmental or quasi-governmental
authority of any nature (including
any governmental division,
subdivision, department, agency,
bureau, branch, office, commission,
council, board, instrumentality,
officer, official, representative,
organization, unit, body or Entity
and any court or other tribunal);
(d) multi-national organization or
body; or
(e) individual, Entity or body
exercising, or entitled to
exercise, any executive,
legislative, judicial,
administrative, regulatory, police,
military or taxing authority or
power of any nature.
INDEMNITEES The Purchaser and its subsidiaries and after
Closing, the Company, and their respective
directors officers and agents.
KNOWLEDGE An individual shall be deemed to have
"Knowledge" of a particular fact or other
matter if:
(a) such individual is actually aware
of such fact or other matter; or
(b) a prudent individual could be
expected to discover or otherwise
become aware of such fact or other
matter in the course of conducting
a reasonable and diligent
investigation concerning the truth
or existence of such fact or other
matter.
The Vendors shall be deemed to have
"Knowledge" of a particular fact or other
matter if any officer, employee or
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other Representative of the Vendors has
Knowledge of such fact or other matter.
LEGAL REQUIREMENT "Legal Requirement" shall mean any federal,
state, local, municipal, foreign or other
law, statute, legislation, constitution,
principle of common law, resolution,
ordinance, code, edict, decree,
proclamation, treaty, convention, rule,
regulation, ruling, directive,
pronouncement, requirement, specification,
determination, decision, opinion or
interpretation that is, has been or may in
the future be issued, enacted, adopted,
passed, approved, promulgated, made,
implemented or otherwise put into effect by
or under the authority of any Governmental
Body.
LIABILITY "Liability" shall mean any debt, obligation,
duty or liability of any nature (including
any unknown, undisclosed, unmatured,
unaccrued, unasserted, contingent, indirect,
conditional, implied, vicarious, derivative,
joint, several or secondary liability),
regardless of whether such debt, obligation,
duty or liability would be required to be
disclosed on a balance sheet prepared in
accordance with generally accepted
accounting principles and regardless of
whether such debt, obligation, duty or
liability is immediately due and payable.
MATERIAL ADVERSE EFFECT For the purposes of the Agreement, "Material
Adverse Effect" as it applies to the Company
or Purchaser means an adverse effect on the
business, operations, condition (financial
or otherwise), assets or prospects of the
Company or Purchaser, taken as a whole,
which is material. For purposes of this
Agreement, documents, objects, effects,
conditions, events or occurrences shall be
deemed "material" if they involve amounts,
or result in Purchaser Damages (as
hereinafter defined), in excess of A$50,000
(or equivalent in any other currency)
individually or when aggregated with other
Purchaser Damages incurred due to a breach
of a representation or warranty by the
Vendors or if they in any way materially and
adversely affect the value of, or the
Company's rights, title or interest in, any
of its assets. For purposes of this
Agreement, "Purchaser Damages" means any
material loss, expense, liability, or other
damages, including the reasonable costs of
investigation, interest, penalties and
attorney's and accountant's fees.
ORDER "Order" shall mean any:
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(a) order, judgment, injunction, edict,
decree, ruling, pronouncement,
determination, decision, opinion,
verdict, sentence, subpoena, writ
or award that is, has been or may
in the future be issued, made,
entered, rendered or otherwise put
into effect by or under the
authority of any court,
administrative agency or other
Governmental Body or any arbitrator
or arbitration panel; or
(b) Contract with any Governmental Body
that is, has been or may in the
future be entered into in
connection with any Proceeding.
ORDINARY COURSE OF BUSINESS An action taken by or on behalf of the
Company shall not be deemed to have been
taken in the "Ordinary Course of Business"
unless:
(a) such action is recurring in nature,
is consistent with the Company's
past practices and is taken in the
ordinary course of the Company's
normal day-to-day operations;
(b) such action is taken in accordance
with sound and prudent business
practices;
(c) such action is not required to be
authorized by the Company's
shareholders, the Company's board
of directors or any committee of
the Company's board of directors
and does not require any other
separate or special Authorisation
of any nature; and
(d) such action is similar in nature
and magnitude to actions
customarily taken, without any
separate or special Authorisation,
in the ordinary course of the
normal day-to-day operations of
other Entities that are engaged in
businesses similar to the Company's
business.
PAST BENEFIT PLAN "Past Benefit Plan" shall mean any Employee
Benefit Plan (other than a Current Benefit
Plan):
(a) which the Company has at any time
established, adopted, maintained or
sponsored;
(b) in which the Company has ever
participated;
(c) with respect to which the Company
has ever made, or has ever been
required or permitted to make, any
contribution; or
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(x) with respect to which the Company
has ever been subject to any
Liability.
PERSON "Person" shall mean any individual, Entity
or Governmental Body.
PRE-CLOSING PERIOD "Pre-Closing Period" shall mean the period
commencing as of the date of the Agreement
and ending on the Closing Date.
PROCEEDING "Proceeding" shall mean any action, suit,
litigation, arbitration, proceeding
(including any civil, criminal,
administrative, investigative or appellate
proceeding and any informal proceeding),
prosecution, contest, hearing, inquiry,
inquest, audit, examination or investigation
that is, has been or may in the future be
commenced, brought, conducted or heard by or
before, or that otherwise has involved or
may involve, any Governmental Body or any
arbitrator or arbitration panel.
PROPRIETARY ASSET "Proprietary Asset" shall mean any patent,
patent application, trademark (whether
registered or unregistered and whether or
not relating to a published work), trademark
application, trade name, fictitious business
name, service xxxx (whether registered or
unregistered), service xxxx application,
copyright (whether registered or
unregistered), copyright application,
maskwork, maskwork application, trade
secret, know-how, franchise, system, domain
name or internet address, computer software,
invention, design, blueprint, proprietary
product, technology, proprietary right or
other intellectual property right or
intangible asset.
PROPRIETARY INFORMATION
AND INVENTIONS DEED "Proprietary Information and Inventions
Deed" means the proprietary information and
inventions deed in the form attached as
Exhibit E.
RELATED PARTY Each of the following shall be deemed to be
a "Related Party":
(a) the Vendors;
(b) each individual who is, or who has
at any time been, an officer of the
Vendors;
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(c) each member of the family of each
of the parties who are individuals
referred to in clauses "(a)" and
"(b)" above; and
(d) any Entity in which any one of the
parties referred to in clauses
"(a)", "(b)" and "(c)" above holds
(or in which more than one of such
parties collectively hold),
beneficially or otherwise, a
material voting, proprietary or
equity interest.
RELEVANT SCHEME shall mean: all superannuation schemes,
retirement benefit schemes or other pension
schemes or arrangements; and all employment
benefit plans, programs or arrangements
including medical, dental or life insurance
to which the Company or any of its
subsidiaries is a party or which the Company
or any of its subsidiaries makes available
or obtains for its officers or employees or
former officers or employees;
REPRESENTATIVES "Representatives" shall mean officers,
directors, employees, agents, attorneys,
accountants, advisors and representatives.
SUBSCRIPTION SHARES "Subscription Shares" shall have the meaning
as specified in Section 1.1 of the
Agreement.
SCHEDULED CLOSING TIME "Scheduled Closing Time" shall have the
meaning specified in Section 1.3(a) of the
Agreement.
SHAREHOLDERS DEED "Shareholders Deed" means the shareholders
deed in the form attached as Exhibit K.
SUBSCRIPTION PRICE "Subscription Price" means the sum of
A$4,995,918.
SUBSIDIARY "Subsidiary" has the meaning given to that
term in Division 6 of part 1.2 of the
Corporations Law.
TAX "Tax" shall mean any tax (including any
income tax, franchise tax, capital gains
tax, estimated tax, gross receipts tax,
value-added or goods and services tax,
surtax, excise tax, ad valorem tax, transfer
tax, stamp tax, sales tax, use tax, land or
property tax, business tax, occupation tax,
inventory tax, occupancy tax, withholding
tax or payroll tax), levy, assessment,
tariff, impost, imposition, toll, duty
(including any customs duty), deficiency or
fee, and any related charge or amount
(including any fine, penalty or interest),
that is, has been or may in the future be
(a) imposed, assessed or collected by or
under the authority of any Governmental
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70
Body, or (b) payable pursuant to any
tax-sharing agreement or similar Contract.
TAX RETURN "Tax Return" shall mean any return
(including any information return), report,
statement, declaration, estimate, schedule,
notice, notification, form, election,
certificate or other document or information
that is, has been or may in the future be
filed with or submitted to, or required to
be filed with or submitted to, any
Governmental Body in connection with the
determination, assessment, collection or
payment of any Tax or in connection with the
administration, implementation or
enforcement of or compliance with any Legal
Requirement relating to any Tax.
TRANSACTIONAL AGREEMENTS "Transactional Agreements" shall mean:
(a) the Agreement;
(b) the Employment Agreements referred
to in Section 1.3(b)(viii) of the
Agreement;
(c) the Shareholders Deed;
(d) the Proprietary Information and
Inventions Deed; and
(e) the Closing Certificate.
TRANSACTIONS "Transactions" shall mean (a) the execution
and delivery of the respective Transactional
Agreements, and (b) all of the transactions
contemplated by the respective Transactional
Agreements, including:
(i) the subscription of the
Subscription Shares by the
Purchaser (or its nominee) in
accordance with the Agreement; and
(ii) the performance by the Vendors and
the Purchaser of their respective
obligations under the Transactional
Agreements and the exercise by the
Vendors and the Purchaser of their
respective rights under the
Transactional Agreements.
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XXXXXXX X
LIST OF SHAREHOLDERS
PART I: SUBSCRIPTION SHARES
2,287,725 fully paid shares in the capital of the Company representing 51% of
the total outstanding voting equity of the Company on a fully diluted basis
immediately following the issue of such shares.
PART II: THE VENDORS
SHAREHOLDER SHARES
----------- ------
I.T. & e. Ltd 2,088,111
ACN 078 210 938 Pty Ltd 109,899
PART III: THE COVENANTORS
1. Xxxxx Xxxxxxx Xxxxxxx
2. Xxxxxxx Xxxxxxx Xxxxx
3. Xxxxxxx Xxxxxxxxxxxx
4. Xxxx Xxxxxx
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