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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report
(Date of earliest event reported):
April 3, 1998
________________________________________
SAVILLE SYSTEMS PLC
(Exact name of Registrant as specified in its charter)
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Republic of Ireland 0-27176 Not Applicable
(State or other juris- (Commission (I.R.S. Employer
diction of incorpora- File Number) Identification Number)
tion or organization)
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IDA Business Park, Dangan, Galway, Ireland
(Address of principal executive offices, including zip code)
011 353 9 152 6611
(Registrant's telephone number including area code from the United States)
-------------------------------------------
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Item 2. Acquisition or Disposition of Assets
------------------------------------
On April 3, 1998, Saville Systems PLC (the "Company") and its wholly-owned
subsidiary Saville Systems Aust. Pty Ltd ("Saville Australia"), acquired
substantially all of the assets of BHA Pty Ltd ("BHA") and its majority-owned
subsidiary BHA Computer Pty Ltd ("BHAC") for approximately $15.8 million in
cash, plus the assumption of approximately $3.3 million in net liabilities. The
Company funded the acquisition, in part, through the sale of 283,698 of the
Company's Ordinary Shares to BHA, as more fully described in Item 9 below. The
assets consist of those assets used by BHA and BHAC in developing and marketing
customer care and billing software for the telecommunications industry,
including property, plant and equipment, intellectual property and the benefit
of current BHA or BHAC contracts.
The purchase price was negotiated at arm's length between the Company, BHA
and BHAC; and the acquisition was made pursuant to a Business Acquisition
Agreement dated as of April 3, 1998 between the Company, Saville Australia, BHA,
BHAC and John E. Hendry and Prudence M. Hendry, the shareholders of BHA, as
guarantors to the obligations of BHA and BHAC. The Purchase Price was funded in
part by the borrowing of approximately $15 million from the Company's working
capital line of credit with the Bank of Nova Scotia, which amount was repaid
with the proceeds from the share purchase described in Item 9 below. Andrew
Campbell, an executive officer of the Company, is a shareholder of less than 1%
of the outstanding shares of BHAC of which he was an employee until December
1996.
The Company has no present intention to use the plant, equipment or other
physical property acquired for purposes materially different from the purposes
for which such assets were used prior to the acquisition. However, the Company
will review the use of the assets and may develop alternative plans or
proposals, including transfers of a material amount of assets or other
transactions or changes relating to the acquired assets.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
------------------------------------------------------------------
(a) Financial Statements of Business Acquired: not applicable.
(b) Pro Forma Financial Information: not applicable.
(c) Exhibits
2.1 Business Acquisition Agreement dated as of April 3, 1998 between
Saville Systems PLC, Saville Systems Aust. Pty Ltd, BHA Pty Ltd, BHA
Computer Pty Ltd, John Edward Hendry and Prudence Marianne Hendry.
Pursuant to Item 601(b)(2) of regulation S-K, schedules to this
Agreement have been omitted. The Company hereby undertakes to furnish
supplementally a copy of such schedules to the Commission upon
request.
10.1 Share Purchase Agreement dated as of April 3, 1998 between Saville
Systems PLC and BHA Pty Ltd.
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Item 9. Sales of Equity Securities Pursuant to Regulation S
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On April 3, 1998, the Company sold 283,698 of its Ordinary Shares to BHA
for an aggregate consideration of $14,046,649, which proceeds were used to repay
outstanding amounts under the Company's line of credit with the Bank of Nova
Scotia. No underwriters were involved in the foregoing sale of securities.
Such sales were made in reliance upon an exemption from the registration
provisions of the Securities Act of 1933 set forth in Section 4(2) thereof
relative to sales by an issuer not involving any public offering or Regulation S
promulgated thereunder, as the purchaser was not a US person as defined under
Regulation S.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 16th day of April 1998.
SAVILLE SYSTEMS PLC
By: /s/ Christopher A. Hanson
-------------------------
Christopher A. Hanson
Chief Financial Officer (Principal
Finanacial and Accounting
Officer)
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SAVILLE SYSTEMS PLC
Exhibit Index
-------------
Exhibit No. Description of Exhibit
----------- ----------------------
2.1 ........ Business Acquisition Agreement dated as of April 3, 1998 between
Saville Systems PLC, Saville Systems Aust. Pty Ltd, BHA Pty Ltd,
BHA Computer Pty Ltd, John Edward Hendry and Prudence Marianne
Hendry. Pursuant to Item 601(b)(2) of regulation S-K, schedules
to this Agreement have been omitted. The Company hereby
undertakes to furnish supplementally a copy of such schedules to
the Commission upon request.
10.1 ....... Share Purchase Agreement dated as of April 3, 1998 between
Saville Systems PLC and BHA Pty Ltd.
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Exhibit 2.1
------------------------------
BUSINESS ACQUISITION AGREEMENT
------------------------------
Between
The Vendors:
(1) BHA PTY LTD ACN 009 937 606 and
(2) BHA COMPUTER PTY LTD ACN 068 883 429
and
The Purchasers:
(3) SAVILLE SYSTEMS PLC and
(4) SAVILLE SYSTEMS AUST. PTY LTD ACN 080 026 551
and
The Vendors' Guarantors:
(5) JOHN EDWARD HENDRY and
(6) PRUDENCE MARIANNE HENDRY
3 March 1998
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TABLE OF CONTENTS
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CLAUSE PAGE
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1. DEFINITIONS AND INTERPRETATION 2
1.1 DEFINITIONS 2
1.2 INTERPRETATION 13
2. SALE AND PURCHASE OF ASSETS 14
2.1 IP ASSETS 14
2.2 NON-IP ASSETS 15
2.3 QIT LICENCES 15
2.4 BHAC LICENCE AGREEMENTS SURRENDER 15
3. PURCHASE PRICE AND PAYMENTS 15
3.1 IP ASSETS CONSIDERATION 15
3.2 NON-IP ASSETS CONSIDERATION 15
3.4 APPORTIONMENT 15
3.5 ALLOCATION OF PURCHASE PRICE 17
4. COMPLETION 17
4.1 COMPLETION DATE AND PLACE 17
4.2 VENDOR'S OBLIGATIONS ON COMPLETION 17
4.3 PURCHASERS OBLIGATIONS ON COMPLETION 19
4.4 TITLE AND RISK 19
4.5 SALE AND PURCHASE OF ASSETS INTERDEPENDENT 20
4.6 FURTHER ASSURANCE 20
4.7 SUCCESSION 20
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5. DEBTS AND LIABILITIES 20
5.1 ASSUMED LIABILITIES 20
5.2 DEBTS AND LIABILITIES OWING BY THE VENDOR 20
5.3 DEBTS OWING TO THE VENDOR AND TO THE PURCHASER 21
5.4 COLLECTION OF TRADE RECEIVABLES 21
5.5 PURCHASER TO PASS ON OTHER DEBTS RECEIVED 21
5.6 ACTIONS IN RESPECT OF COMPLETION DEBTS 21
6. PREMISES LEASES 22
6.1 ASSIGNMENT OF PREMISES LEASES 22
6.2 DOCUMENTATION 22
6.3 KANGAROO POINT PREMISES 22
6.4 INDEMNITIES 23
6.5 OBLIGATIONS PENDING ASSIGNMENTS 23
7. BUSINESS CONTRACTS 24
7.1 ASSIGNMENT OF BUSINESS CONTRACTS ON COMPLETION 24
7.2 NOVATIONS OR ASSIGNMENTS AFTER COMPLETION 24
7.3 OBLIGATIONS PENDING OR IF NO NOVATION OR ASSIGNMENT 25
7.4 INDEMNITIES 25
8. EMPLOYEES 26
8.1 PARTICULARS OF EMPLOYEES 26
8.2 OFFER OF EMPLOYMENT 26
8.3 ACCEPTANCE OF OFFERS OF EMPLOYMENT 27
8.4 TRANSFERRING EMPLOYEES 27
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8.6 WRITTEN EVIDENCE OF PAYMENTS 27
8.7 INDEMNITY 27
8.8 SUPERANNUATION 28
8.9 WORKERS' COMPENSATION 28
8.10 REDUNDANCY PAYMENTS 29
9. CLAIMS BY CUSTOMERS 29
9.1 PURCHASER'S AFTER-SALES SERVICE OBLIGATIONS 29
9.2 VENDOR'S INDEMNITY 29
9.3 CONDUCT OF LITIGATION 29
9.4 PURCHASER IS RESPONSIBLE FOR POST-COMPLETION SERVICES 30
10. ACCESS TO EXCLUDED BUSINESS RECORDS AFTER COMPLETION 30
11. WARRANTIES 30
11.1 VENDOR'S WARRANTIES 30
11.2 SURVIVAL OF WARRANTIES AND COVENANTS 31
11.3 ASSISTANCE 31
11.4 INDEMNITY 31
11.5 LIMITATION OF INDEMNITIES 31
11.7 YEAR 2000 WORK 34
11.8 MUTUAL WARRANTIES 34
11.9 ACKNOWLEDGMENT 35
12. INTELLECTUAL PROPERTY 35
12.1 TECHNICAL ASSISTANCE 35
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12.2 EMPLOYEES AND CONTRACTORS PERMITTED TO DISCLOSE 35
13. RESTRAINT OF TRADE 35
13.1 RESTRAINT OF TRADE 35
13.2 NO SHARE ENTITLEMENTS 37
13.3 SEVERANCE 37
13.4 RECEIPT OF LEGAL ADVICE 37
13.5 CHANGE OF VENDORS' NAMES 37
14. GUARANTEES AND INDEMNITIES 37
14.2 GUARANTEE OF SAVILLE AUSTRALIA'S OBLIGATIONS AND INDEMNITY 38
15. GENERAL 39
15.1 FURTHER ASSURANCE 39
15.2 GOVERNING LAW 39
15.3 WAIVER 40
15.4 SET-OFF 40
15.5 NOTICES 40
15.6 PUBLIC ANNOUNCEMENTS AND CONFIDENTIALITY 41
15.7 COUNTERPARTS 42
15.8 MODIFICATION 42
15.9 STAMP DUTIES 42
15.10 LEGAL COSTS 42
15.11 MERGER 42
15.12 SURVIVAL OF CERTAIN PROVISIONS 42
15.13 ENTIRE AGREEMENT 43
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SCHEDULES
SCHEDULE 1 BRAND NAMES 44
SCHEDULE 2 COMPANY, BUSINESS AND TRADE NAMES 45
SCHEDULE 3 PROPERTIES 45
SCHEDULE 4 INTELLECTUAL PROPERTY 47
SCHEDULE 5 MOTOR VEHICLES 48
SCHEDULE 6 PLANT AND EQUIPMENT 49
SCHEDULE 7 WARRANTIES 50
SCHEDULE 8 LISTED BUSINESS CONTRACTS 74
SCHEDULE 9 ACCOUNTS 76
SCHEDULE 10 GUARANTEE 77
SCHEDULE 11 CUSTOMERS 79
SCHEDULE 12 EMPLOYEES 81
SCHEDULE 13 COMMUNICATIONS SERVICES 82
SCHEDULE 14 WARRANTED COMPLETION DEBTS 83
SCHEDULE 15 ASSUMED LIABILITIES 84
SCHEDULE 16 NON-YEAR 2000 COMPLIANT ASSETS 85
SCHEDULE 17 PERMITS 86
SCHEDULE 18 KANGAROO POINT PREMISES LEASE 87
SCHEDULE 19 TECHNICAL ASSISTANCE AGREEMENT 88
SCHEDULE 20 QIT LICENCE 89
SCHEDULE 21 UNCONDITIONAL FINANCIAL UNDERTAKING 90
SCHEDULE 22 DISCLOSURE SCHEDULE 92
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BUSINESS ACQUISITION AGREEMENT
This DEED is made at BRISBANE, AUSTRALIA on the day of APRIL 1998
BETWEEN (1) BHA PTY LTD ACN 009 937 606 ("BHA"), and
(2) BHA COMPUTER PTY LTD ACN 068 883 429 ("BHAC"), both
incorporated in Queensland, Australia, having their
registered offices and principal places of business at
Leckhampton, 59-69 Shafston Avenue, Kangaroo Point, Brisbane
4169 (jointly and severally referred to as "VENDOR" or
"VENDORS")
AND (3) SAVILLE SYSTEMS PLC incorporated in Ireland ("SAVILLE
IRELAND") and
(4) SAVILLE SYSTEMS AUST. PTY LTD ACN 080 026 551 incorporated in
Queensland, Australia ("SAVILLE AUSTRALIA")
both C/- Clayton Utz, 215 Adelaide Street, Brisbane,
Queensland, Australia (jointly and severally referred to as
"PURCHASER" or "PURCHASERS")
AND (5) JOHN EDWARD HENDRY and PRUDENCE MARIANNE HENDRY of 37
Carwoola Street, Bardon Brisbane 4065 (jointly and severally
referred to as "VENDORS' GUARANTORS")
RECITALS
A. BHA owns the BHA Assets and conducts the BHA Business;
B. BHAC owns the BHAC Assets and since 1995 has conducted and
presently conducts the BHAC Business under licence using knowhow,
BHA Intellectual Property, concepts, business connections and
reputation developed and owned by BHA;
C. BHA provides business and financial support and makes premises
available to BHAC to enable BHAC to conduct the BHAC Business;
D. By Letter of Intent dated 6 February 1998 ("LOI") the parties set
forth the principles of a proposed acquisition and sale of the BHA
Business and the BHAC Business;
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E. The Vendors have agreed to sell and Saville Ireland has agreed to
purchase the IP Assets and Saville Australia has agreed to
purchase the Non-IP Assets;
F. The Vendors' Guarantors have agreed to guarantee the obligations
of the Vendors;
G. Saville Ireland has agreed to guarantee the obligations of Saville
Australia
THIS DEED WITNESSES
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Deed unless the context indicates a contrary intention:
"AGREEMENT" and "THIS AGREEMENT" means this Deed;
"ACCOUNTS" means the last accounts of BHA and of BHAC in respect
of the Business as set out in Schedule 9;
"ASSETS" means and includes individually and collectively the BHA
Assets and the BHAC Assets, but excludes the Excluded Assets;
"ASSUMED LIABILITIES" means the liabilities listed in Schedule 15
hereto;
"BHA ASSETS" means and includes individually and collectively:
(a) the BHA Goodwill;
(b) the BHA Intellectual Property;
(c) the BHA Plant and Equipment;
(d) the BHA Inventory;
(e) the BHA Motor Vehicles;
(f) the BHA Company Names;
(g) the BHA Business Names;
(h) the BHA Domain Names;
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(i) the BHA Brand Names;
(j) the BHA Email Addresses;
(k) the BHA Telephone Services;
(l) the BHA Business Records (other than the Excluded
Business Records);
(m) all cash including cash on hand and cash equivalent and
funds held with any bank or financial institution and
security held or entitled to be held by BHA at
Completion;
(n) the rights and benefits of BHA under those of the
Business Contracts described in clauses 71 and 72;
(o) the rights and benefits of BHA under the Premises
Leases;
(p) the BHA Permits;
(q) the BHA Business Claims;
(r) the BHA Systems;
(s) the BHA Prepayments Benefits; and
(t) the Other BHA Assets,
but excludes the Excluded Assets;
"BHA BRAND NAMES" means the brand names used in respect of the BHA
Business and identified in Schedule 1;
"BHA BUSINESS" means the business conducted by BHA in respect of
software products, including the exploitation of goodwill, the
licencing of intellectual property to BHAC and its customers and
the provision of business support and premises to BHAC, either
alone or jointly with any of its Related Bodies Corporate;
"BHA BUSINESS CLAIMS" means all claims, refunds, security
interests, causes of action, choses in action, rights to enforce
confidentiality, trade secrets and non-disclosure, rights to
enforce restrictive covenants or restraints of trade, rights of
recovery, rights of set off, rights of recoupment,
<PAGE>
rights under warranties and other similar assets relating to the
BHA Business;
"BHA BUSINESS NAMES" means the business names and trade names used
in respect of the BHA Business and identified in Schedule 2;
"BHA BUSINESS RECORDS" means all current operational records and
documents relating to the BHA Assets and the BHA Business
including but without limiting the generality thereof:
(a) all marketing and customer files and customer lists and
charging fee lists;
(b) service promotional descriptive sales trade and application
literature and other advertising material and catalogues;
(c) supplier lists;
(d) all records of trade debtors;
(e) wage and other employment benefit and payroll and personnel
records of the Transferring Employees;
(f) all computer software (including the media on which the same
is stored) and computer records;
(g) all product design and development records, production
outlines, flowcharts;
(h) all information and data stored by any means on computer
systems or otherwise;
(i) all records of the Business Contracts and the Premises
Leases;
(j) all agreements, documents and records relating to the
Assumed Liabilities; and
(k) stationery;
"BHA COMPANY NAMES" means the company names used in respect of the
BHA Business and identified in Schedule 2;
"BHA DOMAIN NAMES" means the Internet addresses of Web Sites used
in respect of the BHA Business or BHA and including but not
limited to those
<PAGE>
identified in Schedule 13;
"BHA EMAIL ADDRESS" means an address used by the Business to send
or receive information via an electronic network, including but
not limited to an electronic address used on the Internet and
including but not limited to an address specified in Schedule 13;
"BHA GOODWILL" means the goodwill of BHA in and attaching to the
BHA Business, including the benefit of the custom of the persons
named in Schedule 11 and the benefit of the custom of the persons
who became customers of the BHA Business after the date of the
LOI;
"BHA INTELLECTUAL PROPERTY" means and includes individually and
collectively all trade mark, service mark, design, patent,
copyright, algorithms, software programs, specifications,
semiconductor and circuit layout rights, in-process research and
development sketches, plans, blueprints, inventions, discoveries
(whether patentable or not) trade secrets, confidential
information, proprietary data, knowhow, tools, processes,
methodologies, auditing control standards, manuals, or other
proprietary rights or any rights to registration of such rights
whether created before or after the date of this Agreement and
whether Australian or foreign, and all customer and supplier
listings and other industrial and intellectual property, apart
from the BHA Business Names, the BHA Company Names and the BHA
Brand Names, subsisting in, used in or relating to the BHA
Business including without limitation the items particularised in
Schedule 4;
"BHA INVENTORY" means:
(a) raw materials of all kinds, including all consumables used
in or relating to the process of producing the goods,
products and services of the BHA Business or used in
purposes ancillary to that process and whether or not on the
Leased P roperties;
(b) finished goods and products (stock-in-trade) used in or
relating to the BHA Business;
"BHA MOTOR VEHICLES" means the motor vehicles owned and used by
BHA exclusively in relation to the BHA Business and which are
described in Schedule 5;
"BHA PERMITS" means those permits, registrations, licences and
regulatory approvals required for the operation of the BHA
Business;
"BHA PLANT AND EQUIPMENT" means those items of plant and
equipment, machinery, tools, gauges and other measuring devices,
dyes, jigs, benches,
<PAGE>
office furniture, office machines, office equipment, appliances,
fittings and spare parts and maintenance materials in relation to
any of the foregoing owned by BHA and used in or relating to the
BHA Business being the items which are more particularly described
in Schedule 6;
"BHA PREPAYMENT BENEFITS" means all payments and all deposits and
other prepayments paid or made by BHA prior to Completion:
(a) for items of the type described in the definition of Plant
and Equipment being bought-in items on hand at Completion or
to be supplied to the BHA Business after Completion but in
either case not being included in the BHA Assets, or brought
to account by BHA in the value of any of the BHA Assets;
(b) for other goods and services to be sold or supplied to the
BHA Business after Completion which are not included in the
BHA Assets or brought to account by BHA in the value of any
of the BHA Assets; and
(c) in respect of other benefits to be first received by the BHA
Business after Completion which are not included in the BHA
Assets or brought to account by BHA in the value of any of
the BHA Assets;
"BHA SYSTEMS" means all billing systems including all accounting,
invoicing, debt control, credit control, debt collection, debt
recovery, debt adjustment and all related processes and
documentation and further shall include all data processing
information, storage data and retrieval systems, computer records,
software, tapes, disks, archives, library and all ancillary data
systems, documentation and data storage equipment all as used in
respect of the BHA Business;
"BHA TELEPHONE SERVICES" means all telephone, mobile and facsimile
services used by BHA in connection with the BHA Business including
in particular (but without limiting the generality of the
foregoing) the telephone services using those numbers specified in
Schedule 13;
"BHA WEB SITES" means the series of files relating to the BHA
Business or BHA available for access on the Internet;
"BHAC ASSETS" means and includes individually and collectively:
(a) the BHAC Goodwill;
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(b) the BHAC Intellectual Property;
(c) the BHAC Plant and Equipment;
(d) the BHAC Inventory;
(e) the BHAC Motor Vehicles;
(f) the BHAC Company Names;
(g) the BHAC Business Names;
(h) the BHAC Domain Names;
(i) the BHAC Brand Names;
(j) the BHAC Email Addresses;
(k) the BHAC Telephone Services;
(l) the BHAC Business Records (other than the Excluded Business
Records);
(m) all cash including cash on hand and cash equivalent and
funds held with any bank or financial institution and
security held or entitled to be held by BHAC at Completion;
(n) the rights and benefits of BHAC under those of the Business
Contracts described in clauses 71 and 72;
(o) the rights and benefits of BHAC under the Premises Leases;
(p) the BHAC Permits;
(q) the BHAC Business Claims;
(r) the BHAC Systems;
(s) the BHAC Prepayments Benefits; and
(t) the Other BHAC Assets,
but excludes the Excluded Assets;
<PAGE>
"BHAC BRAND NAMES" means the brand names used in respect of the
BHAC Business and identified in Schedule 1;
"BHAC BUSINESS" means the business of designing, developing,
marketing, supplying, integrating and maintaining software
products and services, carried on by BHAC either alone or jointly
with any of its Related Bodies Corporate;
"BHAC BUSINESS CLAIMS" means all claims, refunds, security
interests, causes of action, choses in action, rights to enforce
confidentiality, trade secrets and non-disclosure, rights to
enforce restrictive covenants or restraints of trade, rights of
recovery, rights of set off, rights of recoupment, rights under
warranties and other similar assets relating to the BHAC Business;
"BHAC BUSINESS NAMES" means the business names and trade names
used in respect of the BHAC Business and identified in Schedule 2;
"BHAC BUSINESS RECORDS" means all current operational records and
documents relating to the BHAC Assets and the BHAC Business
including but without limiting the generality thereof:
(a) all marketing and customer files and customer lists and
charging fee lists;
(b) service promotional descriptive sales trade and application
literature and other advertising material and catalogues;
(c) supplier lists;
(d) all records of trade debtors;
(e) wage and other employment benefit and payroll and personnel
records of the Transferring Employees;
(f) all computer software (including the media on which the same
is stored) and computer records;
(g) all product design and development records, production
outlines, flowcharts;
(h) all information and data stored by any means on computer
systems or otherwise;
<PAGE>
(i) all records of the Business Contracts and the Premises
Leases;
(j) all agreements, documents and records relating to the
Assumed Liabilities; and
(k) stationery;
"BHAC COMPANY NAMES" means the company names used in respect of
the BHAC Business and identified in Schedule 2;
"BHAC DOMAIN NAMES" means the Internet addresses of Web Sites used
in respect of the BHAC Business or BHAC and including but not
limited to those identified in Schedule 13;
"BHAC EMAIL ADDRESS" means an address used by the Business to send
or receive information via an electronic network, including but
not limited to an electronic address used on the Internet and
including but not limited to an address specified in Schedule 13;
"BHAC GOODWILL" means the goodwill of BHAC in and attaching to the
BHAC Business, including the benefit of the custom of the persons
named in Schedule 11 and the benefit of the custom of the persons
who became customers of the BHAC Business after the date of the
LOI;
"BHAC INTELLECTUAL PROPERTY" means and includes individually and
collectively all trade mark, service mark, design, patent,
copyright, algorithms, software programs, specifications,
semiconductor and circuit layout rights, in-process research and
development sketches, plans, blueprints, inventions, discoveries
(whether patentable or not) trade secrets, confidential
information, proprietary data, knowhow, tools, processes,
methodologies, auditing control standards, manuals, or other
proprietary rights or any rights to registration of such rights
whether created before or after the date of this Agreement and
whether Australian or foreign, and all customer and supplier
listings and other industrial and intellectual property, apart
from the BHAC Business Names, the BHAC Company Names and the BHAC
Brand Names, subsisting in, used in or relating to the BHAC
Business including without limitation the items particularised in
Schedule 4;
"BHAC INVENTORY" means:
(a) raw materials of all kinds, including all consumables used
in or relating to the process of producing the goods,
products and services of the BHAC Business or used in
purposes ancillary to that process and whether or not on the
Leased P roperties;
<PAGE>
(b) finished goods and products (stock-in-trade) used in or
relating to the BHAC Business;
"BHAC LICENCE AGREEMENTS" means the Licence Agreement dated 4
August 1995 and the Licence Agreement dated the second day of
April 1998 between BHA as the Licensor and BHAC as the Licensee,
copies of which have been delivered by the Vendors to the
Purchaser prior to Completion;
"BHAC MOTOR VEHICLES" means the motor vehicles owned and used by
BHAC exclusively in relation to the BHAC Business and which are
described in Schedule 5;
"BHAC PERMITS" means those permits, registrations, licences and
regulatory approvals required for the operation of the BHAC
Business;
"BHAC PLANT AND EQUIPMENT" means those items of plant and
equipment, machinery, tools, gauges and other measuring devices,
dyes, jigs, benches, office furniture, office machines, office
equipment, appliances, fittings and spare parts and maintenance
materials in relation to any of the foregoing owned by BHAC and
used in or relating to the BHAC Business being the items which are
more particularly described in Schedule 6;
"BHAC PREPAYMENT BENEFITS" means all payments and all deposits and
other prepayments paid or made by BHAC prior to Completion:
(a) for items of the type described in the definition of Plant
and Equipment being bought-in items on hand at Completion or
to be supplied to the BHAC Business after Completion but in
either case not being included in the BHAC Assets, or
brought to account by BHAC in the value of any of the BHAC
Assets;
(b) for other goods and services to be sold or supplied to the
BHAC Business after Completion which are not included in the
BHAC Assets or brought to account by BHAC in the value of
any of the BHAC Assets; and
(c) in respect of other benefits to be first received by the
BHAC Business after Completion which are not included in the
BHAC Assets or brought to account by BHAC in the value of
any of the BHAC Assets;
"BHAC SYSTEMS" means all billing systems including all accounting,
invoicing, debt control, credit control, debt collection, debt
recovery, debt
<PAGE>
adjustment and all related processes and documentation and further
shall include all data processing information, storage data and
retrieval systems, computer records, software, tapes, disks,
archives, library and all ancillary data systems, documentation
and data storage equipment all as used in respect of the BHAC
Business;
"BHAC TELEPHONE SERVICES" means all telephone, mobile and
facsimile services used by BHAC in connection with the BHAC
Business including in particular (but without limiting the
generality of the foregoing) the telephone services using those
numbers specified in Schedule 13;
"BHAC WEB SITES" means the series of files relating to the BHA
Business or BHA available for access on the Internet;
"BRAND NAMES" means the BHA Brand Names and the BHAC Brand Names;
"BUSINESS" means the BHA Business and the BHAC Business;
"BUSINESS CONTRACTS" means all agreements and arrangements
exclusively relating to the Business to which a Vendor is a party
and which are, in whole or in part, executory as at Completion,
including without limiting the generality of the foregoing:
(a) customer and supplier orders, tenders, quotations and
similar dealings and other orders and agreements for the
supply of goods or services to or for the supply of services
by the Business;
(b) agreements granting rights to manufacture or distribute any
products or supply any services or to act as representative
or distributor or agent of the other party or to use know-
how, technology, confidential information, data, patents or
other industrial or intellectual property or intangible
assets; and
(c) loan, lease, licensing and hiring agreements under which a
Vendor has possession of certain assets which it does not
own and which are used in the Business,
but excluding:
(d) the Premises Leases; and
(e) any agreements to the extent they relate to the Excluded
Assets;
<PAGE>
"BUSINESS DAY" means a day on which all banks are open for
business generally in Brisbane, Australia;
"BUSINESS NAMES" means the BHA Business Names and BHAC Business
Names;
"BUSINESS RECORDS" means the BHA Business Records and the BHAC
Business Records;
"BUSINESS CLAIMS" means BHA Business Claims and the BHAC Business
Claims;
"CLAIM" means any claim, notice, demand, action, proceeding,
litigation, investigation or judgment whether based in contract,
tort, statute or otherwise;
"COMPANY NAMES" means BHA Company Names and BHAC Company Names;
"COMPLETION" means completion of this Agreement and the sale and
purchase of the Assets in accordance with the terms of this
Agreement;
"COMPLETION DATE" means the date on which Completion occurs;
"COMPLETION DEBTS" means:
(a) any notes receivable as between the Vendors or any Related
Body Corporate;
(b) any notes receivable relating to Employees of a Vendor; and
(c) the Trade Receivables,
as at the Specified Time as specifically set forth in Schedule 14;
"CUSTOMER CLAIMS" means any claims, demands, actions, suits or
proceedings made or commenced by customers of the Business
pertaining to defects in or arising directly or indirectly from or
relating to goods, products or services provided sold or supplied
by the Vendors prior to the Specified Time other than bona fide
warranty obligations pursuant to the specific terms of the
applicable Business Contract;
"DISCLOSURE SCHEDULE" means the disclosure schedule attached
hereto as Schedule 22;
<PAGE>
"DOMAIN NAMES" means the BHA Domain Names and the BHAC Domain
Names;
"EMAIL ADDRESS" means the BHA Email Address and the BHAC Email
Address;
"EMPLOYEES" means those persons employed by BHAC, or by a Related
Body Corporate of BHAC, exclusively in the Business as at
Completion;
"ENCUMBRANCE" includes any mortgage, charge, pledge, lien,
security interest and any other encumbrance whatsoever;
"EXCLUDED ASSETS" means:
(a) freehold property located at 59-69 Shafston Avenue, Kangaroo
Point, Brisbane;
(b) the antique furniture and the two large conference tables in
the boardroom at 59-69 Shafston Avenue, Kangaroo Point;
(c) shares in BHAC, Queensland Information Technology Pty Ltd
ACN 010 445 922 and in Information Technology International
(France); and
(d) prepaid insurance premiums and insurance expenses;
"EXCLUDED BUSINESS RECORDS" means those of the Business Records as
the Vendor is required by law to retain and debtor records (other
than trade debtors), including all documents relating to the
negotiation of the transaction, corporate records of the Vendors
and documents relating to the Malaysia and Singapore branches;
"FREEHOLD PROPERTIES" means the freehold properties at which the
Business is conducted as specified in Part A of Schedule 3,
together with all improvements erected on those properties;
"GOODWILL" means the BHA Goodwill and the BHAC Goodwill;
"INTELLECTUAL PROPERTY" means the BHA Intellectual Property and
BHAC Intellectual Property;
"INVENTORY" means the BHA Inventory and the BHAC Inventory;
"IP ASSETS" means all of the Intellectual Property;
<PAGE>
"IP ASSETS CONSIDERATION" means the Consideration to be provided
for the IP Assets calculated in accordance with clause 31;
"LEASED PROPERTIES" means the leased properties at which the
Business is conducted as specified in Part B of Schedule 3;
"MOST RECENT BALANCE SHEET" means the balance sheets included in
the Accounts;
"MOTOR VEHICLES" means BHA Motor Vehicles and BHAC Motor Vehicles;
"NON-IP ASSETS" means all of the Assets except the Intellectual
Property;
"NON-IP ASSETS CONSIDERATION" means the Consideration to be paid
or provided for the Non-IP Assets calculated in accordance with
clause 32;
"OTHER ASSETS" means the Other BHA Assets and the Other BHAC
Assets;
"OTHER BHA ASSETS" means all assets, properties and rights,
whether real, personal, tangible or intangible of every kind,
nature and description which BHA owns either alone or jointly,
other than those listed in the definition of BHA Assets, which are
used in or relate to the Business;
"OTHER BHAC ASSETS" means all assets, properties and rights,
whether real, personal, tangible or intangible of every kind,
nature and description which BHAC owns either alone or jointly,
other than those listed in the definition of BHAC Assets, which
are used in or relate to the Business;
"PERMITS" means the BHA Permits and the BHAC Permits;
"PLANT AND EQUIPMENT" means BHA Plant and Equipment and BHAC Plant
and Equipment;
"PREMISES" means the Freehold Properties and the Leased
Properties;
"PREMISES LEASES" means the leases specified in Part B of Schedule
3 relating to the Leased Properties;
"PREPAYMENT BENEFITS" means BHA Prepayment Benefits and BHAC
Prepayment Benefits;
"PURCHASE PRICE" means the total of the IP Assets Consideration
and the Non-IP Assets Consideration;
<PAGE>
"QIT LICENCE" means the software licence referred to in clause 23
and Schedule 20;
"RELATED BODY CORPORATE" has the meaning given in section 9 of the
Corporations Law;
"SPECIFIED TIME" means midnight at the end of the Completion Date;
"STATE" means the State of Queensland, Australia;
"SYSTEMS" means BHA Systems and BHAC Systems;
"TELEPHONE SERVICES" means BHA Telephone Services and BHAC
Telephone Services;
"TRADE RECEIVABLES" means all the debts and other moneys which at
or after the Specified Time are or become owing to BHAC in
relation to goods and products sold or servic es provided by BHAC
in respect of the Business up to that time as specifically set
forth in Schedule 14;
"TRANSFERRING EMPLOYEES" means such of the Employees who accept
the Purchaser's offer of employment made pursuant to clause 8;
"WEB SITES" means the BHA Web Sites and the BHAC Web Sites;
"WARRANTIES" means each of the covenants, undertakings,
representations and warranties made in Schedule 7;
"WORK IN PROGRESS" means work in progress used in or relating to
the Business; and
"$" means United States dollars.
1.2 INTERPRETATION
In this Agreement unless the context indicates a contrary
intention:
(a) words importing the singular include the plural and vice
versa, and words denoting a given gender include all other
genders;
(b) the expression "PERSON" includes an individual, the estate
of an individual, a body politic, a corporation and a
statutory or other authority or association (incorporated or
unincorporated);
<PAGE>
(c) headings and underlinings are for convenience only and do
not affect interpretation;
(d) references to parties, clauses, sub-clauses, schedules,
exhibits or annexures are references to parties, clauses,
sub-clauses, schedules, exhibits and annexures to or of this
Agreement and a reference to this Agreement includes any
schedule, exhibit and annexure;
(e) references to this Agreement, or any other deed, agreement,
instrument or document shall be deemed to include references
to this Agreement, or such other deed, agreement, instrument
or document as amended, novated, supplemented, or replaced
from time to time;
(f) a reference to an agreement includes a representation,
undertaking, deed, agreement or legally enforceable order or
arrangement or understanding whether or not in writing;
(g) a reference to a document includes any written agreement and
any certificate or note or other document of any kind;
(h) references to any person or to any party to this Agreement
include that person's or party's executors, administrators,
successors and permitted assigns;
(i) where any word or phrase is given a defined meaning any
other part of speech or grammatical form in respect of such
word or phrase has corresponding meaning;
(j) where the day on or by which any sum is payable hereunder or
any act, matter or thing is to be done is a day other than a
Business Day, such sum shall be paid and such act, matter or
thing shall be done on the immediately preceding Business
Day;
(k) where 2 or more parties to this Agreement make a joint
covenant, undertaking, representation or warranty, the same
shall be construed to refer to and bind each of such parties
jointly and each of them severally;
(l) references to payments to any party to this Agreement shall
be construed to include payments to another person upon the
direction of such party;
<PAGE>
(m) all payments to be made pursuant to this Agreement shall be
made by unendorsed bank cheque or other immediately
available funds;
(n) reference to any legislation or to any section or provision
of any legislation include any statutory modification or re-
enactment or any statutory provision substituted therefor
and all ordinances, by-laws, regulations and other statutory
documents issued thereunder; and
(o) the expression the "Vendors' Guarantor" shall be construed
to refer to, and the obligations of the "Vendors' Guarantor"
hereunder shall bind, each of them severally and every two
or more of them jointly and the expression "Vendors'
Guarantor" shall be deemed, unless the context indicates a
contrary intention, to include any person who has guaranteed
or may in the future guarantee to the Purchasers the due
performance of the Vendor's obligations under this
Agreement.
2. SALE AND PURCHASE OF ASSETS
2.1 IP ASSETS
Each of the Vendors hereby sells and assigns to Saville Ireland
and Saville Ireland hereby purchases and accepts an assignment
from each of the Vendors of all of the right, title and interest
in and to the IP Assets held by each of the Vendors for the IP
Assets Consideration, free of Encumbrances.
2.2 NON-IP ASSETS
Each of the Vendors hereby sells and assigns to Saville Australia
and Saville Australia hereby purchases and accepts an assignment
from each of the Vendors of all of the right, title and interest
in and to the Non-IP Assets held by each of the Vendors for the
Non-IP Assets Consideration, free of Encumbrances.
2.3 QIT LICENCES
On Completion the Vendors shall cause Queensland Information
Technology Pty Ltd ACN 010 445 922 to grant to Saville Australia
the software licence in respect of the product known as DbQ on the
terms set forth in the form of software licence contained in
Schedule 20 hereto.
2.4 BHAC LICENCE AGREEMENTS SURRENDER
<PAGE>
The Vendors shall terminate or surrender with effect on or before
Completion the BHAC Licence Agreements.
3. PURCHASE PRICE AND PAYMENTS
3.1 IP ASSETS CONSIDERATION
The full consideration for the IP Assets shall be four million,
eight hundred and forty six thousand, six hundred and forty-nine
dollars ($4,846,649).
3.2 NON-IP ASSETS CONSIDERATION
The full consideration for the Non-IP Assets shall be the
following:
(a) ten million, nine hundred and twenty five thousand, four
hundred and eighteen dollars ($10,925,418 ); and
(b) the assumption by Saville Australia of the Assumed
Liabilities.
3.3 COMPLETION DEBTS AND WORK IN PROGRESS WARRANTY
BHA, BHAC and the Vendors' Guarantors covenant, warrant, represent
and undertake to and with the Purchasers and each of them that the
total true and correct face amounts of the Completion Debts and
the Work in Progress are the amounts set out in Schedule 14.
3.4 APPORTIONMENT
The Non-IP Assets Consideration, other than the Assumed
Liabilities, shall be apportioned between the Non-IP Assets as
follows:
(a) $ 9,841,671 for the BHA Goodwill;
(b) $1.00 for the BHAC Goodwill;
(c) $1.00 for the BHA Plant and Equipment (which sum, together
with that which was paid in respect of the BHAC Plant and
equipment, is apportioned and appropriated between each
constituent item of the Plant and Equipment in Schedule 6
according to the respective values assigned thereto);
(d) $409,448 for the BHAC Plant and Equipment;
(e) $1.00 for the Inventory;
<PAGE>
(f) $264 for the Motor Vehicles (which sum is apportioned and
appropriated between each constituent item of the Motor
Vehicles in Schedule 5 according to the respective values
assigned thereto);
(g) $1.00 for the Company Names;
(h) $1.00 for the Business Names;
(i) $1.00 for the Domain Names;
(j) $1.00 for the Brand Names;
(k) $1.00 for the Email Addresses
(l) $1.00 for the Telephone Services;
(m) $1.00 for the Business Records (other than Excluded Business
Records);
(n) $1.00 for the cash, including cash on hand and cash
equivalent and funds held with an bank or financial
institution and security held or entitled to be held by BHAC
at Completion;
(o) $1.00 for the rights and benefits of the Vendor under the
Business Contracts;
(p) $1.00 for the rights and benefits of the Vendor under the
Premises Leases;
(q) $1.00 for the Permits;
(r) $1.00 for all Business Claims;
(s) $1.00 for the Systems;
(t) $127,019 for the Prepayment Benefits;
(u) $67,000 for the restraint of trade in respect of BHAC
pursuant to clause 13;
(v) $335,000 for the restraint of trade in respect of BHA
pursuant to clause 13;
<PAGE>
(w) $135,000 for the restraint of trade in respect of John
Edward Hendry pursuant to clause 13;
(x) $10,000 for the restraint of trade of Prudence Marianne
Hendry pursuant to clause 13; and
(y) $1.00 for the Other Assets.
3.5 ALLOCATION OF PURCHASE PRICE
The Vendors hereby direct the Purchasers to allocate the Purchase
Price between the Vendors as follows:
(a) To BHA: eleven million, four hundred and eight thousand,
three hundred and thirty six dollars ($ 11,408,336); and
(b) To BHAC: four million, two hundred and eighteen thousand,
seven hundred and thirty-one dollars ($4,218,731).
4. COMPLETION
4.1 COMPLETION DATE AND PLACE
Completion shall take place at the offices of Clayton Utz,
Brisbane, on 3 April 1998 at 4.30pm or such other date as the
parties may agree upon in writing.
4.2 VENDOR'S OBLIGATIONS ON COMPLETION
Subject to the Purchaser satisfying its obligations under clause
43, the Vendor shall on Completion:
(a) (POSSESSION): give and deliver to the Purchaser:
(i) the Plant and Equipment;
(ii) Motor Vehicles;
(ii) Business Records (other than the Excluded Business
Records);
(iv) hired, leased or any other assets the subject of any
of the Business Contracts as are in the possession of
the Vendor;
(v) Leased Properties (subject, where required, to the
Lessor's consent);
(vi) all cash including cash on hand and cash equivalent
<PAGE>
and funds held with any bank or financial institution
and security held or entitled to be held by at
Completion; and
(vii) Other Assets,
delivery to be made by leaving the same (other than goods in
transit and Motor Vehicles used by Transferring Employees)
where then situate or at such other location as may be
agreed;
(b) (TRANSFERS OF MOTOR VEHICLES): deliver to Saville Australia
or its nominee appropriate forms of transfer, duly executed
by the Vendor, of each of the Motor Vehicles and
certificates of roadworthiness in respect of the same;
(c) (CHANGE OF COMPANY NAME): deliver to Saville Australia
certified copies of all documents evidencing the change of
names of the Vendors pursuant to clause 135 hereof;
(d) (TRANSFER OF BUSINESS NAMES): deliver to Saville Australia
duly executed transfers (and/or its consent and/or the
consent of any Related Body Corporate of the Vendors, in
forms satisfactory to Saville Australia, naming Saville
Australia as proprietor) of the Business Names;
(e) (TRANSFER OF DOMAIN NAMES): deliver to Saville Australia
duly executed transfers of the Domain Names and Email
Addresses;
(f) (TRANSFER OF INTELLECTUAL PROPERTY): deliver to Saville
Ireland duly executed assignments of all trade marks,
designs, patents and copyrights included in the Intellectual
Property;
(g) (TRANSFER OF BRAND NAMES): deliver to Saville Australia duly
executed assignments of all Brand Names;
(h) (CERTIFICATES OF REGISTRATION AND ORIGINALS OF PREMISES
LEASES AND BUSINESS CONTRACTS): deliver to Saville Australia
registration certificates and other documents of title for
the Non-IP Assets and stamped originals of the Premises
Leases and Business Contracts;
(i) (NOTICES AND DOCUMENTS): deliver to Saville Australia or
Saville Ireland as required such notices and other documents
as may be required to be executed or registered under any
Statute or otherwise or reasonably requested by a Purchaser
in connection with the sale and/or assignment of the Assets;
<PAGE>
(j) (SERVICES): cause the Telephone Services to be transferred to
Saville Australia or, as required by Saville Australia, surrender
or cause to be surrendered all telephone and related lines,
electricity, gas and other utility services of the Business as
relate to the Leased Properties and use its best endeavours to
assist the transfer or grant of such services or the grant of new
services to Saville Australia;
(k) (PERMITS): assign or transfer the Permits to Saville Australia;
(l) (BUSINESS CLAIMS): assign or transfer to Saville Australia the
Business Claims;
(m) (SYSTEMS): assign or transfer the Systems to Saville Australia;
(n) (PREPAYMENT BENEFITS): assign or transfer the Prepayment Benefits
to Saville Australia;
(o) (QIT LICENCE): deliver the duly executed QIT Licence;
(p) (KANGAROO POINT LEASE): deliver all documents necessary or
desirable, duly stamped, to enable the surrender of the existing
lease over the Kangaroo Point Premises referred to in clause 6.3
hereof and the new lease to Saville Australia pursuant to clause
6.3 hereof, in form for immediate registration;
(q) (UNCONDITIONAL FINANCIAL UNDERTAKING): deliver the duly executed
Unconditional Financial Undertaking pursuant to clause 116 hereof;
(r) (TECHNICAL ASSISTANCE AGREEMENT): deliver the duly executed
Technical Assistance Agreement pursuant to clause 2.4 hereof; and
(s) (OTHER OBLIGATIONS): each of the Vendors will perform all other
obligations to be performed by a Vendor on Completion under any
other clause of this Agreement.
4.3 PURCHASERS OBLIGATIONS ON COMPLETION
Subject to the Vendors satisfying their respective obligations under
clause 4.2, on Completion:
<PAGE>
(a) Saville Australia shall pay or satisfy, as the case may be, to the
Vendors the Non-IP Assets Consideration as adjusted to take into
account all other payments or allowances due to be made on
Completion by Saville Australia to the Vendors or by the Vendors
to Saville Australia
(b) Saville Ireland shall pay or satisfy as the case may be, to the
Vendors the IP Assets consideration adjusted to take into account
all other payments or allowances due to be made on Completion by
Saville Ireland to the Vendors or by the Vendors to Saville
Ireland; and
(c) the Purchasers shall perform all other obligations to be performed
by the Purchasers on Completion under any other clause of this
Agreement.
4.4 TITLE AND RISK
(a) Upon Completion, title to the IP Assets shall pass to Saville
Ireland free from all Encumbrances and title to the Non-IP Assets
shall pass to Saville Australia free from all Encumbrances.
(b) Upon Completion, risk in the IP Assets shall pass to Saville
Ireland and risk in the Non-IP Assets shall pass to Saville
Australia.
4.5 SALE AND PURCHASE OF ASSETS INTERDEPENDENT
The sale and purchase of each of the Assets is interdependent and shall
be completed simultaneously.
4.6 FURTHER ASSURANCE
After Completion each of the Vendors shall do all other things
reasonably necessary or reasonably required by Saville Ireland or
Saville Australia for putting Saville Ireland or Saville Australia, as
the case may be, in full possession and control of the IP Assets and
the Non-IP Assets and to complete the transfer of the Assets. In
particular the Vendors shall provide or cause to be provided to Saville
Australia introduction to customers of the Business and the Vendors
shall use their best endeavours to ensure that such customers become
and remain customers of Saville Australia.
<PAGE>
4.7 SUCCESSION
After Completion Saville Australia shall be entitled to represent
itself to the suppliers and customers of the Business as the
successor to the Vendors in the Business.
5. DEBTS AND LIABILITIES
5.1 ASSUMED LIABILITIES
At Completion Saville Australia shall assume the Assumed
Liabilities.
5.2 DEBTS AND LIABILITIES OWING BY THE VENDOR
(a) Except for the Assumed Liabilities, no debts, obligations or
liabilities of a Vendor in respect of the Business are being
undertaken or assumed by a Purchaser, and accordingly, except
for the Assumed Liabilities, the Vendors shall remain solely
responsible for the payment, satisfaction and discharge of
all such debts, obligations and liabilities and the Vendors
shall pay and discharge in the ordinary course of business
all such debts, obligations and liabilities.
(b) Without in any way limiting clause 5.2(a), the Purchasers
shall not undertake or assume any debt, obligation or
liability of a Vendor:
(i) for any environmental conditions existing on or prior
to Completion at any facility or Premises owned,
operated or leased by a Vendor prior to Completion or
at any site to which any material generated by a
Vendor was transported prior to Completion or
otherwise as a result of the conduct of the Business
prior to Completion;
(ii) for any revenue or taxes attributable to periods prior
to Completion;
(iii) to any retired or other former Employees of a Vendor;
(iv) under any superannuation, pension or other benefit or
welfare plan maintained at any time by a Vendor;
(v) under any agreements with any employees of a Vendor
providing for severance payments; or
<PAGE>
(vi) to another Vendor or Related Body Corporate or to any
shareholder of a Vendor or Related Body Corporate.
5.3 DEBTS OWING TO THE VENDOR AND TO THE PURCHASER
(a) BHAC shall be entitled to receive and keep for its own
benefit payment of the Completion Debts and in respect of the
Work in Progress.
(b) Saville Australia shall be entitled to receive and keep for
its own benefit payments made or to be made in relation to
all debts due to it for services provided, sold or supplied
by it or otherwise due to it in the conduct of the Business
after Completion.
5.4 COLLECTION OF TRADE RECEIVABLES
(a) Saville Australia shall for a period of six (6) months
immediately following the Completion Date at no cost to BHAC
and on behalf of BHAC provide staff assistance in relation to
the collection of the Trade Receivables to the same extent as
if the Trade Receivables were owned by Saville Australia.
(b) Saville Australia shall invoice the Work in Progress after
Completion, the timing for which shall be substantially
similar to that used by Purchasers in conducting the Business
in the ordinary course and, after such invoicing, treat such
work in progress as a Trade Receivable in accordance with
clause 5.4(a) hereof.
(c) Any amount received by Saville Australia from a debtor of the
Business shall, when the amount cannot be identified as
having been paid in respect of a particular invoice, be
applied in payment of the oldest outstanding debt of that
debtor unless otherwise indicated in writing by that debtor.
5.5 PURCHASER TO PASS ON OTHER DEBTS RECEIVED
If Saville Australia receives a payment in respect of any of the
Completion Debts (not being a Trade Receivable), Saville Australia
shall promptly pay the amount received to BHAC.
<PAGE>
5.6 ACTIONS IN RESPECT OF COMPLETION DEBTS
(a) The Purchaser shall not have authority to nor be obliged to
commence, continue or defend either alone or jointly with or
on behalf of BHAC, any legal action for the recovery of any
Completion Debts.
(b) The Purchaser shall not be liable for any loss or damage
suffered by the Vendors as a result of or in any way arising
from or in connection with any act, omission, neglect or
default other than wilful neglect or default of Saville
Australia, its servants or agents in relation to the staff
assistance provided by Saville Australia in respect of the
Trade Receivables.
(c) Saville Australia shall for a period of 12 months after the
Completion Date allow the Vendors reasonable access to and to
photocopy the Business Records.
6. PREMISES LEASES
6.1 ASSIGNMENT OF PREMISES LEASES
In respect of each of the Premises Leases:
(a) upon Completion BHAC shall assign its rights and benefits
under the Premises Leases to Saville Australia with effect
from Completion;
(b) where the Premises Lease provides that assignments shall only
be permitted following the lessor's consent then prior to
such assignment any relevant lessor's consents, any necessary
mortgagee consents and the consent of any other party which
must give consent, shall be obtained by BHAC at the expense
of BHAC;
(c) Saville Australia shall accept such assignments and shall
execute any agreements or deeds that may reasonably be
required by the relevant lessor as a condition of the
lessor's consent.
6.2 DOCUMENTATION
The Vendor will on Completion deliver to the Purchaser a true copy
of the Premises Leases.
<PAGE>
6.3 KANGAROO POINT PREMISES
(a) On Completion, BHA and BHAC shall each surrender any and all
existing leases and licences in respect of that Leased
Property situated at 59-69 Shaftson Avenue, Kangaroo Point,
Brisbane.
(b) On Completion BHA shall grant to Saville Australia a lease of
that Leased Property situated at 59-69 Shafston Avenue,
Kangaroo Point, Brisbane
(c) The period of the lease shall commence on the Completion Date
and expire on 30 June 1999.
(d) The terms and conditions of the lease other than as
hereinbefore set forth shall (sofar as reasonably applicable)
be those set forth in the form of lease contained in Schedule
18.
6.4 INDEMNITIES
In respect of each of the Premises Leases assigned under clause
6.1:
(a) BHAC shall be responsible for complying with all obligations
under each lease in respect of the period up to and including
Completion and shall indemnify Saville Australia and keep
Saville Australia indemnified against all liabilities,
claims, demands, actions, suits, proceedings, costs, damages
and expenses arising out of or in relation to the non-
payment, non-observance, or non-performance of any
obligations arising in respect of each lease on and before
Completion; and
(b) Saville Australia shall be responsible for complying with all
obligations under each lease in respect of the period
following Completion and shall indemnify and keep indemnified
BHAC against all liabilities, claims, demands, actions,
suits, proceedings, costs, damages and expenses arising out
of or in relation to the non-payment, non-observance, or non-
performance of any obligations arising in respect of each
lease after Completion.
6.5 OBLIGATIONS PENDING ASSIGNMENTS
If any of the Premises Leases are not assigned to Saville
Australia on Completion, then pending their assignment after
Completion:
(a) to the extent it is lawfully able, BHAC shall procure that
such
<PAGE>
Premises Lease continues in full force and effect and
shall allow Saville Australia to use or occupy the properties
the subject of such Premises Leases as licensee; and
(b) to the extent it is lawfully able, Saville Australia shall
perform all obligations of BHAC thereunder in respect of the
period following Completion and BHAC shall, to the extent to
which Saville Australia is unable to lawfully perform an
obligation or exercise a right of BHAC under the Premises
Lease, upon the request and at the expense of Saville
Australia perform that obligation or exercise that right.
7. BUSINESS CONTRACTS
7.1 ASSIGNMENT OF BUSINESS CONTRACTS ON COMPLETION
(a) (ASSIGNMENT OF LISTED BUSINESS CONTRACTS):
(i) The Vendors and the Vendors' Guarantors represent and
warrant that each of the other parties to each of the
Business Contracts listed in Part A of Schedule 8 has
agreed to those Business Contracts being assigned to
Saville Australia and to performance of obligations
being subcontracted to Saville Australia with effect on
and from Completion;
(ii) BHA or BHAC, as the case may be, hereby assigns to
Saville Australia the benefit of the Business Contracts
listed in Part A of Schedule 8 and hereby sub-contracts
to Saville Australia the performance of obligations
under the Business Contracts listed in Part A of
Schedule 8, with effect on and from Completion.
(b) (ASSIGNMENTS WITHOUT CONSENT OF NON-LISTED BUSINESS
CONTRACTS): BHAC or BHA, as the case may be, hereby assigns
to Saville Australia with effect on and from Completion the
benefit of those of the Business Contracts not listed in Part
A of Schedule 8 in respect of which assignments are permitted
without the consent of the other party to such contract.
<PAGE>
7.2 NOVATIONS OR ASSIGNMENTS AFTER COMPLETION
(a) For a period of 3 months after Completion, BHA and BHAC, as
the case may be, shall use its best endeavours (short of
paying money or providing other valuable consideration to or
for the benefit of the other party thereto) with the
cooperation of Saville Australia to procure the agreement of
the other party to those of the Business Contracts not
assigned or agreed to be assigned pursuant to clause 7.1
being novated or assigned to Saville Australia by and with
effect from Completion.
(b) On request by Saville Australia from time to time within 3
months after Completion, BHAC or BHA, as the case may be,
shall at the expense of Saville Australia co-operate with
Saville Australia in relation to any novation or assignment
of any of the Business Contracts procured after Completion by
Saville Australia.
(c) The parties agree that the $250,000 paid by the Purchasers in
respect of each Business Contract listed in Part B of
Schedule 8 will become due and payable within 90 days of
Completion, unless the Business Contract is terminated by the
other party to the Business Contract within 90 days of
Completion.
(d) If the $250,000 paid by the Purchaser in respect of a
Business Contract listed in Part B of Schedule 8 does not
become due and payable then the $250,000 paid in respect of
that Business Contract will be refunded by the Vendors to the
Purchasers within 100 days of Completion.
7.3 OBLIGATIONS PENDING OR IF NO NOVATION OR ASSIGNMENT
If any of the Business Contracts are not novated or assigned under
clause 7.1 then, unless and until such a novation or assignment
occurs under clause 7.2, if:
(a) BHAC or BHA, as the case may be, is not prohibited from
delegating or subcontracting performance of obligations under
such Business Contract, Saville Australia shall perform on
behalf of BHAC or BHA all obligations of BHAC or BHA
thereunder in respect of the period following Completion and
providing that Saville Australia performs such obligations,
BHAC or BHA shall account to Saville Australia for any
amounts paid by the other party to such Business Contract to
BHAC or BHA after Completion in respect of that contract;
<PAGE>
(b) BHAC or BHA, as the case may be, is prohibited under any such
Business Contract from delegating or subcontracting
performance of some or all of the obligations thereunder:
(i) BHAC or BHA will retain the benefit of the Business
Contract;
(ii) the Assumed Liabilities relating to the Business
Contract will not be assumed by Saville Australia
under clause 5.1;
(iii) Saville Australia will provide BHA or BHAC with the
services reasonably necessary for BHA or BHAC to
fulfill the obligations under the Business Contract;
(iv) Saville Ireland will licence to BHA or BHAC any
Intellectual Property reasonably necessary for BHA or
BHA to fulfil the obligations under the Business
Contract;
(v) BHA or BHAC will, within 30 days after the end of each
calendar month pay a fee to Saville Australia equal to
the amount BHA or BHAC is entitled to receive under
that Business Contract, during that calendar month,
for the services supplied by Saville Australia;
(vi) BHA or BHAC will, at the written request of Saville
Australia, do all things necessary to terminate the
Business Contract as soon as possible, except for any
act or omission which would result in BHA or BHAC
being in breach of the Business Contract or would
require the payment of money by BHA or BHAC due to the
termination;
(vii) Saville Australia will assist BHA or BHAC in the
enforcement of any or all rights of BHA or BHAC
against the other party to the Business Contract.
7.4 INDEMNITIES
(a) Except for the Assumed Liabilities, BHAC or BHA, as the case
may be, shall be responsible for complying with all
obligations under the Business Contracts in respect of the
period up to and including Completion, and shall indemnify
Saville Australia and keep Saville Australia indemnified
against all liabilities, claims, demands, actions, suits,
proceedings, costs, damages and expenses arising out of or in
relation to the non-payment, non-observance, or non-
performance of any obligations arising under, or arising in
respect of the Business Contracts or founded upon any fact,
<PAGE>
matter, occurrence, event or circumstance happening during or
in respect of that period.
(b) In respect of each of the Business Contracts assigned under
this clause 7 Saville Australia is responsible for complying
with all obligations under such Business Contracts in respect
of the period following the effective date of assignment.
(c) In respect of the Business Contracts where Saville Australia
is to perform obligations under clause 7.3 for a particular
period, Saville Australia indemnifies BHAC or BHA, as the
case may be, and will keep BHAC or BHA indemnified against
all liabilities, claims, demands, actions, suits,
proceedings, costs, damages and expenses arising out of or in
relation to the non-payment, non-observance, or non-
performance of any such obligations of Saville Australia
arising under, or arising in respect of such Business
Contracts or founded upon any fact, matter, occurrence, event
or circumstance happening during or in respect of that period
for which Saville Australia is responsible under clause 7.3.
8. EMPLOYEES
8.1 PARTICULARS OF EMPLOYEES
The Vendors warrant that prior to the Completion Date BHAC has
supplied to the Purchaser a current list of all the Employees
giving details of the name, date of birth, sex, position, title or
classification, salary or wage, relevant award, rate of
remuneration and date of commencement of employment (and reason
for termination of employment if it was broken for a period
insofar as is necessary to determine long service leave
entitlements), of each of the Employees and any actual,
conditional or contingent entitlements to holiday pay, annual,
sick and long service leave, any motor vehicle provided or
allowance paid in lieu thereof and any other payments, allowances
or benefits derived by each of the Employees by virtue of his
employment by a Vendor and other relevant conditions of the
employment of each of the Employees and all such amounts have been
accrued on the Most Recent Balance Sheet.
8.2 OFFER OF EMPLOYMENT
Prior to Completion Saville Australia has offered employment to
such of the Employees as are listed in Schedule 12 hereto, to
commence from the day after the Completion Date. Unless otherwise
agreed in writing by BHAC and Saville Australia the employment so
offered shall be on terms and
<PAGE>
conditions as to wages and salaries no less favourable than those
on which the Employees are employed on the date of this Agreement.
8.3 ACCEPTANCE OF OFFERS OF EMPLOYMENT
The Vendors shall use their best endeavours to procure the
acceptance by those Employees receiving offers of employment in
Saville Australia, or in the case of an apprentice procure that
apprentice's agreement to the transfer of the indenture of
apprenticeship, and as at the Specified Time the services of each
Employee who accepts such offer of employment shall be terminated
by the Vendor and shall be employed by Saville Australia.
8.4 TRANSFERRING EMPLOYEES
The following provisions apply to the Transferring Employees:
(a) the Vendors will pay to each Transferring Employee the amount
of is accumulated wages and salary entitlements as at the
Specified Time whether pursuant to contract, award, statue or
otherwise and in relation thereto, will keep the Purchasers
indemnified against all claims made from time to time in the
future after the completion Date by such Transferring
Employee against a Purchaser;
(b) the Vendors will pay each Transferring Employee all annual
leave entitlements which exceed a period of 4 weeks as at the
Specified Time; and
(c) the Purchasers will indemnify the Vendors in respect of any
payments made to Transferring Employees under clause 8.4(b).
8.5 PAYMENTS
(a) Amounts payable under clause 8.4(a) will be paid within 7
days of the Completion Date.
(b) Amounts payable under clause 8.4(b) will be paid within 30
days of the Completion Date.
(c) Amounts payable under clause 8.4(c) will be paid within 10
days of the Vendors notifying that all payments under clause
8.4(b) have been paid.
<PAGE>
8.6 WRITTEN EVIDENCE OF PAYMENTS
The Vendors shall furnish to Saville Australia on or before
Completion full details of the calculation and written evidence of
the receipt by any such Transferring Employee of any payment made
directly to such Transferring Employee under this clause 8.
8.7 INDEMNITY
Subject to compliance by the Vendors with their obligations under
clause 8.4, after the Completion Date Saville Australia shall be
solely responsible for and shall keep the Vendors indemnified
against all claims, costs and expenses associated with or made in
respect of accumulated wages and salary attributable to the period
after the Completion Date or associated with or made in respect of
annual leave, sick leave and long service leave entitlements of
the Transferring Employees whether attributable to their
employment before or after the Completion Date, and Saville
Australia covenants with the Vendors that it will treat every such
Transferring Employee and deal with every such entitlement as if
every such entitlement had been accrued by the respective
Transferring Employee while in the employment of Saville
Australia.
<PAGE>
8.8 SUPERANNUATION
(a) In relation to each Transferring Employee, the Vendors shall
retain the responsibility for and shall indemnify and keep
indemnified Saville Australia in respect of any minimum
superannuation support to be provided by the Vendors in
respect of each such Employee up to and including the
completion Date in terms of the provisions of the
Superannuation Guarantee (Administration) Act, the
Superannuation Guarantee Charge Act and any associated
legislation and all costs, expenses, claims and charges in
respect thereof.
(b) In relation to each Transferring Employee, the Vendor shall
retain the responsibility for and shall indemnify and keep
indemnified Saville Australia in respect of any claim lodged
or made by any such Transferring Employee and whether lodged
prior to or subsequent to the Completion Date in relation to
any other claim under any contract, law, regulation
whatsoever in relation to the provision of superannuation
benefits where and to the extent that such a claim is founded
upon an event or circumstance alleged to have occurred during
the claimant's employment by a Vendor.
(c) Saville Australia shall not be obliged to make any
contributions to any superannuation fund to which
contributions formerly were made by any such Vendor in
respect of any relevant Transferring Employee.
Saville Australia however may offer alternative
superannuation arrangements to those Employees on such terms
and in its absolute discretion as it thinks fit.
8.9 WORKERS' COMPENSATION
In relation to each Transferring Employee, the Vendors shall
retain the responsibility for and shall indemnify Saville
Australia in respect of any workers' compensation claim lodged by
any such Transferring Employee and whether lodged prior or
subsequent to the Completion Date where and to the extent that
such claim is founded upon an event or circumstance alleged to
have occurred during the claimant's employment by a Vendor.
<PAGE>
8.10 REDUNDANCY PAYMENTS
The Vendors shall be liable for and shall indemnify Saville
Australia in respect of all amounts payable by way of redundancy
payments and payments in lieu of notice of termination to the
Employees (other than Transferring Employees) arising from
termination of their employment by a Vendor whether before, on or
after the Completion Date.
9. CLAIMS BY CUSTOMERS
9.1 PURCHASER'S AFTER-SALES SERVICE OBLIGATIONS
Saville Australia shall upon reasonable written request by BHAC
provide reasonable staff assistance to BHAC:
(a) in the investigation and settlement of any Customer Claims;
(b) in undertaking any timely rectification or replacement of
defective or unsatisfactory services provided, sold or
supplied, which are the subject of any such Customer Claims;
and
(c) in pursuing recovery through the normal avenues from any
principal, manufacturers or suppliers.
9.2 VENDOR'S INDEMNITY
BHAC shall indemnify Saville Australia in respect of any losses,
expenses, liabilities, damages and costs, which are not Assumed
Liabilities, resulting from or incurred by Saville Australia in
connection with any Customer Claims including any costs incurred
by Saville Australia in providing staff assistance under clause
9.1.
9.3 CONDUCT OF LITIGATION
(a) Saville Australia shall keep BHAC fully informed of all
Customer Claims which have been presented to Saville
Australia or of which Saville Australia is aware and BHAC
shall be entitled to inspect all records relating to such
Customer Claims.
(b) BHAC shall at all times be entitled to take over and conduct
at its own cost any action associated with any Customer
Claims.
(c) Saville Australia shall not make any admissions prejudicial
to the interests of BHAC to customers in relation to any
Customer
<PAGE>
Claims and shall permit BHAC to have full control of the
satisfaction, defence and settlement of Customer Claims.
9.4 PURCHASER IS RESPONSIBLE FOR POST-COMPLETION SERVICES
Saville Australia shall be responsible for satisfying and bearing
all costs associated with all claims made in respect of services
of the Business which after the Completion Date are provided, sold
or supplied by Saville Australia and shall keep BHAC indemnified
against all liability of whatsoever nature in relation to any such
claims.
10. ACCESS TO EXCLUDED BUSINESS RECORDS AFTER COMPLETION
BHAC shall for a period of 36 months after the Completion Date
allow Saville Australia reasonable access to and to photocopy the
Excluded Business Records.
11. WARRANTIES
11.1 VENDOR'S WARRANTIES
(a) As part of the terms of the sale of the Assets and the
Business the Vendors jointly and each of them severally and
the Vendors' Guarantors covenant, warrant, represent and
undertake to and with the Purchasers and each of them in the
terms set out in Schedule 7 and so warrant as at a time
immediately before Completion it being a term of this
Agreement that each of the covenants, warranties,
undertakings and representations are true and correct, except
as set forth in the Disclosure Schedule, in every respect and
shall be construed separately and the meaning of each shall
in no way be limited by reference to any other clause or
paragraph contained herein.
(b) The Disclosure Schedule shall be arranged in paragraphs
corresponding to the numbered and lettered paragraphs
contained in Schedule 7, and the disclosures in any paragraph
shall qualify only the corresponding paragraph in Schedule 7.
(c) The Warranties are given subject to matters fully and
completely disclosed in the Disclosure Schedule. Neither
Saville Australia nor Saville Ireland may claim that any fact
or circumstance disclosed in the Disclosure Schedule in
respect of a Warranty constitutes a breach of that Warranty.
<PAGE>
(d) The Vendors shall not be liable for any loss or damage
(including consequential loss) for which the Vendors may
otherwise have been liable arising from breach of a Warranty
but for the Vendors having disclosed a fact or circumstance
in respect of that Warranty in the Disclosure Schedule.
(e) No other information relating to the Business or the Assets
of which Saville Australia or Saville Ireland has knowledge
actual or constructive will, subject to this clause 11
prejudice any claim made by Saville Australia or Saville
Ireland under any Warranty nor operate to reduce any amount
recoverable.
11.2 SURVIVAL OF WARRANTIES AND COVENANTS
Each of the representations, warranties, covenants and
undertakings herein contained shall remain in full force and
effect on and after the Completion Date notwithstanding
Completion, and is and shall be given to the intent that liability
thereunder shall not be confined to breaches discovered on or
prior to the Completion Date.
11.3 ASSISTANCE
(a) Each of the Vendors shall on and from the Completion Date
take all such steps and provide all such information and
documents with regard to the Business and the Assets as the
Purchasers or either of them, their solicitors, accountants
and other advisers may reasonably require, and shall give
such assistance and facilities as they may reasonably require
to enable them to fully review the Business and the Assets
and to satisfy themselves respectively as to the accuracy of
the representations, undertakings, warranties and covenants
contained herein.
(b) No information relating to the Business of which the
Purchasers have knowledge (actual or constructive) shall
prejudice any claim made by the Purchasers or either of them
under or operate to reduce any amount recoverable by the
Purchasers or either of them for breach of any of the
covenants, warranties, representations and undertakings
contained in this Agreement and without prejudice to the
generality of the foregoing the Vendors agree that the rights
and remedies of each of the Purchasers in relation to any of
the covenants, warranties, representations and undertakings
contained in this Agreement shall not be affected by any
investigation made or to be made by or on behalf of the
<PAGE>
Purchasers about the Business.
11.4 INDEMNITY
Each of the Vendors and the Vendors' Guarantors shall indemnify
and hold each of the Purchasers harmless against all losses,
claims, costs, demands, liabilities and expenses whatsoever and
howsoever arising, whether by way of depletion of the Assets or
diminution of the Goodwill or otherwise, which may be suffered,
sustained or incurred by either of the Purchasers as a result of
or in respect of whether directly or indirectly a breach by any of
the Vendors or the Vendors' Guarantors of any of the warranties,
covenants, undertakings or representations referred to or
contained in this Agreement or in any Schedule or any certificate,
document or instrument executed in connection herewith.
11.5 LIMITATION OF INDEMNITIES
(a) The Purchasers have no right to indemnification under clause
11.4 with respect to the actual or alleged breach of any
representation or warranty in sections 2(a) through (d), 3(f)
through (k), 5, 6, 7, 8, 9, 10, 13, 14, 16, 17, 18, 19, 20,
21, and 22 of Schedule 7, except with respect to matters as
to which a Vendor has received a claim by written notice,
specifying the details of the claim on or before the date
three (3) years after the Completion Date.
(b) The Purchasers have no right to indemnification under clause
11.4 with respect to the actual or alleged breach of any
representation or warranty in sections 4 and 11 of Schedule
7, except with respect to matters as to which a Vendor has
received a claim from a Purchaser by written notice,
specifying the details of the claim on or before 90 days
after the expiration of the applicable underlying statute of
limitations.
(c) The right of the Purchasers to be indemnified under clause
11.4, for indemnification with respect to the actual or
alleged breach of any representation or warranty in sections
2(a) through (d), 3(f) through (k), 5, 6, 7, 8, 9, 17, 18,
20, 21, 22 and 23 of Schedule 7, is limited to the amount of
the Purchase Price.
(d) The right of the Purchasers to be indemnified under clause
11.4 shall not apply until the sum of the damages suffered by
the Purchasers on a cumulative basis, as to which the
Purchasers would be entitled to indemnification under clause
11.4 but for the provisions of this sentence, equals or
exceeds $50,000, at which
<PAGE>
point the Vendor's are liable for all such damages, not just
amounts in excess of $50,000.
(e) Notwithstanding the foregoing, this clause 11.5 shall not
apply in the event that a Vendor or the Vendor's Guarantor
has actual knowledge of a breach of a representation or
warranty as at the Completion Date.
(f) If, after the Vendors have made a payment to the Purchaser
pursuant to a Business Claim made under the Warranties, the
Purchaser receives any insurance payable by reason of the
matters to which the Business Claim specifically relates,
then the Purchaser must forthwith repay to the Vendors a sum
corresponding to the amount of such payment.
(g) If any facts arise to the knowledge of Saville Australia or
Saville Ireland which might give rise to a Business Claim
under the Warranties, Saville Australia must promptly give
written notice of that Business Claim to the Vendors setting
out reasonable particulars thereof and if then determinable a
reasonable estimate of the amount of the Business Claim
provided that delay or failure to notify shall not prejudice
or waive the rights of Saville Australia or Saville Ireland
except to the extent that the Vendors have been harmed by
such delay or failure.
(h) Saville Australia must, if the Vendors request within 28 days
of the notice referred to in sub-clause 11.5(g) being given
and thereafter with due expedition, take such action as the
Vendors may reasonably request from time to time by notice to
Saville Australia including, without limitation:
(i) prosecute any action or proceedings, judicial or
otherwise, including the making of any counter claim
or cross claim against any person;
(ii) conduct any negotiations and participate in any
investigation in respect of each Business Claim;
(iii) not accept, pay or compromise any Business Claim
without the Vendors' prior written consent;
(iv) cooperate and procure its solicitors, accountants and
other representatives to cooperate with the Vendor
and its solicitors, accountants and other
representatives in
<PAGE>
respect of such Business Claim including, without
limitation, access by the Vendor or any of its
solicitors, accountants or other representatives to
all the books, documents files and records and
appropriate personnel of Saville Australia,
in order to cause the demand or other action prompting the
Business Claim to be withdrawn or to appeal against, compromise,
contest, defend or settle such demand or other action. The matters
referred to in sub-clauses 11.5(h)(i) to 11.5(h)(iv) may be
conducted by the Vendor in the name and on behalf of the
Purchaser. The Purchaser will not have any obligation to act at
the request of the Vendors nor may the Vendors conduct the matters
referred to in sub-clauses 11.5(h)(i) to 11.5(h)(iv) in the name
of the Vendors on behalf of the Purchaser unless and until it is
indemnified to the Purchaser's reasonable satisfaction by the
Vendors against all losses, costs, damages and expenses which may
be incurred.
(i) The Purchasers have no right to indemnification under clause 11.4
for any loss, or liability (including consequential loss) in
connection with the fitness of the IP Assets for any purpose where
the Vendor has not used the IP Assets for that purpose, is not
presently using the IP Assets for that purpose or has not proposed
as at Completion to use the IP Assets for that purpose in the
Business.
11.6 UNCONDITIONAL FINANCIAL UNDERTAKING
(a) The Vendors will on the Completion Date, provide security in the
form of an unconditional and irrevocable financial undertaking
from National Australia Bank ("THE UNDERTAKING"), for any loss or
damage that a Purchaser may suffer for which it is entitled to
indemnification by a Vendor or the Vendors' Guarantors pursuant to
this Agreement.
(b) The Undertaking will be in the form and for the amount specified
in Schedule 2.1.
(c) All charges incurred by the Vendors in obtaining and maintaining
the Undertaking will be met by the Vendors.
(d) If, 6 months after the Completion Date, a Purchaser has not
<PAGE>
suffered or there has been no claim for any loss or damage for
which a Purchaser is entitled to indemnification by a Vendor or
the Vendors' Guarantors pursuant to this Agreement, the Purchasers
will, within 14 days after receiving a written request from the
Vendors, release the Undertaking in exchange for another
Undertaking in substantially the same form for half of the sum
specified in Schedule 21.
(e) If, 12 months after the Completion Date, a Purchaser has not
suffered or there has been no claim for any loss or damage for
which a Purchaser is entitled to indemnification by a Vendor or
the Vendors' Guarantors pursuant to this Agreement, the Purchasers
will, within 14 days after receiving a written request from the
Vendors, release the Undertaking.
11.7 YEAR 2000 WORK
The Vendors have made certain representations and warranties of
Year 2000 Compliance to customers of the Vendors' products known
as CMS and MMS. The Vendors represent and warrant that no more
than 500 and 600 professional hours are required to perform such
representations and warranties in respect of CMS and MMS,
respectively. To the extent that Saville Australia reasonably
requires more than the hours set forth in the immediately
preceding sentence to perform such representations and warranties
or to make CMS and MMS Year 2000 Compliant, the Vendors shall
promptly pay to Saville Australia $75 per additional professional
hour required for such tasks. For the purposes of this clause
11.7, a product shall by Year 2000 Compliant if and when such
product has the functionality set forth in clauses 3.(k)(iv)
through 3.(k)(x) of Schedule 7.
11.8 MUTUAL WARRANTIES
Each party warrants to each other party as at the date of this
Agreement and on Completion that:
(a) it has the power and authority to enter into and perform its
obligations under this Agreement;
(b) this Agreement constitutes a legal, valid and binding
obligation of it fully enforceable (subject to due stamping)
in accordance with its terms (subject to bankruptcy,
insolvency or other laws affecting creditors rights generally
and general principles of equity);
(c) its execution, delivery and performance of this Agreement do
not
<PAGE>
and will not violate in any respect any provision of:
(i) any legislation or rule of law or regulation,
authorisation, consent or other order or decree of any
government, authority of or applicable in its country
of incorporation;
(ii) its constitution, Memorandum and Articles of
Association or any legislation, bylaws, rules or other
documents constituting it or governing its activities;
or
(iii) any instrument to which it is a party or which is
binding upon it or any of its assets and do not and
will not result in the creation or imposition of any
incumbrance or restriction of any nature on any of its
assets; and
(d) no petition has been issued or is pending or is threatened to
be issued against it to wind it up, it has not resolved to
commence a winding up and no action has been taken or
threatened to be taken to place it in receivership or
voluntary administration, and no action has been taken or
threatened to be taken to seize or take possession of any of
its assets nor has any sequestration order been made or writ
of execution been issued against it or any of its assets.
11.9 ACKNOWLEDGMENT
Each of the Vendors and the Vendors' Guarantors acknowledges that
each of the Purchasers has entered into this Agreement in reliance
on the warranties and covenants set out in this Agreement.
12. INTELLECTUAL PROPERTY
12.1 TECHNICAL ASSISTANCE
The Vendors agree to cause John Edward Hendry and John Edward
Hendry agrees to and shall on Completion execute a technical
assistance agreement in the form set out in Schedule 19 with
Saville Australia as a part of the consideration and inducement
for Saville Australia and Saville Ireland to buy the Business and
the Assets.
12.2 EMPLOYEES AND CONTRACTORS PERMITTED TO DISCLOSE
Without limiting the generality of any other provision of this
Agreement, the
<PAGE>
Vendors will authorise:
(a) all present employees, officers, agents, advisers and
independent contractors of the Business to disclose to the
Purchasers any of the Intellectual Property on or prior to
the Completion Date; and
(b) any past employee, officer, agent, adviser or independent
contractor of the Business to disclose to the Purchasers any
of the Intellectual Property, as and when required by the
Purchasers.
13. RESTRAINT OF TRADE
13.1 RESTRAINT OF TRADE
To protect the interests of Saville Australia in the Goodwill,
each of the Vendors and the Vendors' Guarantors covenants with and
undertakes to the Purchasers and each of them that none of the
Vendors, the Vendors' Guarantors or any of their Related Bodies
Corporate will directly or indirectly:
(a)
(i) undertake, carry on or be engaged in or concerned with
or interested in any business which is directly or
indirectly competitive with the Business;
(ii) canvass or solicit any person who or which at any time
during the 12 months immediately preceding the
Completion Date is or was a client or customer of the
Business;
(iii) be a lender to or guarantor for any person, firm or
company which is engaged in any business referred to in
paragraph (i) of this clause 13.1(a) in competition
with Saville Australia;
(iv) canvass or solicit any Transferring Employee to leave
his employment with Saville Australia;
(v) counsel, procure or otherwise assist any person to do
any of the acts referred to in any of the above
paragraphs of this clause 13.1(a);
(b)
(i) on its own account;
(ii) jointly with or on behalf of any other person, firm or
company;
(iii) as an employee, manager, director, shareholder,
<PAGE>
member, partner, joint venture participant, consultant
or in any other capacity;
(c)
(i) within Queensland;
(ii) within New South Wales;
(iii) within Victoria;
(iv) within Tasmania;
(v) within the Australian Capital Territory;
(vi) within South Australia;
(vii) within Western Australia;
(viii) within the Northern Territory;
(ix) Malaysia;
(x) Singapore;
(xi) France;
(d)
(i) for the period of one year after the Completion Date;
(ii) for the period of one year commencing on the first
anniversary of the Completion Date;
(iii) for the period of one year commencing on the second
anniversary of the Completion Date;
(iv) for the period of one year commencing on the third
anniversary of the Completion Date.
13.2 NO SHARE ENTITLEMENTS
To further protect the interests of Saville Australia in the
goodwill of the Business each of the Vendors and the Vendors'
Guarantors each covenants with and undertakes to Saville Australia
that neither of the Vendors nor the Vendors' Guarantors will at
any time during the periods described in clause 13.1(d) be
entitled (within the meaning of section 609 of the Corporations
Law) to shares in any body corporate doing any of the things
referred to in clause 13.1(a) within any of the territories
described in clause 13.1(c) other than shares in Saville Ireland
or no more than 5% of the shares in any listed public company.
13.3 SEVERANCE
If any part or any provision or part of a provision of clauses
13.1 or 13.2 shall be held or found to be void, invalid or
otherwise unenforceable it shall be deemed to be severed to the
extent that it is void or to the extent of voidability, invalidity
or unenforceability but the remainder of that clause shall remain
in full force and effect.
<PAGE>
13.4 RECEIPT OF LEGAL ADVICE
Each of the Vendors and the Vendors' Guarantors each warrants that
it has received independent legal advice with respect to the
provisions of this clause 131 and considers them to go no further
than reasonably necessary to protect the Goodwill.
13.5 CHANGE OF VENDORS' NAMES
(a) With effect on and from Completion, each of the Vendors will
change its name to such other name as it shall think fit not
using the words "BHA" or "BHA Computer" or any colourable
imitation thereof.
(b) Each of the Vendors undertakes that it will not directly or
indirectly attempt to register as a company name, business
name or trade mark, the name "BHA" or the name "BHA Computer"
or any of the Brand Names or associated devices or logos in
any manner or combination whatever in relation to computer
software or hardware or telecommunications products or
services.
14. GUARANTEES AND INDEMNITIES
14.1 GUARANTEE OF VENDORS' OBLIGATIONS AND INDEMNITY
(a) This Agreement is entered into by each of the Purchasers at
the request of the Vendors' Guarantors and upon condition
that the Vendors' Guarantors should guarantee to each of the
Purchasers the due performance and observance by the Vendors
jointly and severally of the terms, covenants and conditions
of this Agreement to be observed and performed by the Vendors
whether jointly or severally.
(b) The Vendors' Guarantors by his execution of this Agreement
hereby guarantees to the Purchasers jointly and severally the
due performance and observance by the Vendors jointly and
severally of each and every of the obligations of each of the
Vendors undertaken by each of the Vendors in entering into
this Agreement, and without limiting the generality of the
foregoing, the due and punctual payment to the Purchasers and
each of them of all money due or which may become due from
the Vendor hereunder or arising out of any breach by the
Vendors or any of them of the terms, covenants, conditions
and warranties contained in or implied by this Agreement
("VENDORS' OBLIGATIONS").
<PAGE>
(c) If the Vendors or any of them defaults or fails to make any
such payment, or upon any breach or non-observance of any of
the said terms, covenants, conditions and warranties, and
notwithstanding that this Agreement may be terminated or
liable to termination at the instance of the Purchasers or
either of them, the Vendors' Guarantors shall be responsible
to the Purchasers and each of them in respect of the Vendors'
Obligations in the same manner as if the Vendors' Guarantors
was a Vendor or the Vendors under this Agreement.
(d) It is further agreed and declared that the provisions of
Schedule 10 apply to and are deemed to be incorporated in the
guarantee contained in this Agreement.
(e) The Vendors' Guarantors hereby covenants and agrees with the
Purchasers and each of them to indemnify and keep indemnified
the Purchasers and each of them from and against all and any
loss, damage, cost, charge or expense or other liability
whatsoever and howsoever incurred by the Purchasers or either
of them in connection with or in consequence of or arising
out of any breach or default or attempted breach or default
by the Vendors or any of them of any of the obligations of
the Vendors or any of them of the Vendors' Obligations.
(f) The Vendors' Guarantors will pay any moneys due to the
Purchasers or either of them by reason of this indemnity on
demand.
(g) The indemnity contained in clause 14 is a separate and
distinct and principal obligation of the Vendors' Guarantors
and shall not be construed otherwise.
14.2 GUARANTEE OF SAVILLE AUSTRALIA'S OBLIGATIONS AND INDEMNITY
(a)
(i) this Agreement is entered into by the Vendors at the
request of Saville Ireland and upon condition that
Saville Ireland should guarantee to the Vendors the
due performance and observance by Saville Australia of
the terms, covenants and conditions of this Agreement
to be observed and performed by Saville Australia;
(ii) Saville Ireland by his execution of this Agreement
<PAGE>
hereby guarantees to the Vendors the due performance
and observance by Saville Australia of each and every
of the obligations of Saville Australia undertaken by
Saville Australia in entering into this Agreement, and
without limiting the generality of the foregoing, the
due and punctual payment to the Vendors of all money
due or which may become due from Saville Australia
hereunder or arising out of any breach by Saville
Australia of the terms, covenants, conditions and
warranties contained in or implied by this Agreement;
(iii) if Saville Australia defaults or fails to make any
such payment, or upon any breach or non-observance of
any of the said terms, covenants, conditions and
warranties, and notwithstanding that this Agreement
may be terminated or liable to termination at the
instance of the Vendors, Saville Ireland shall be
responsible to the Vendors in the same manner as if
Saville Ireland was Saville Australia hereunder; and
(iv) it is further agreed and declared that the provisions
of clauses 2 and 3 of Schedule 10 shall apply to and
be deemed to be incorporated in the guarantee herein
contained.
(b)
(i) Saville Ireland hereby covenants and agrees with the
Vendors to indemnify and keep indemnified the Vendors
from and against all and any loss, damage, cost,
charge or expense or other liability whatsoever and
howsoever incurred by the Vendors in connection with
or in consequence of or arising out of any breach or
default or attempted breach or default by Saville
Australia of any of the obligations of Saville
Australia under or arising out of this Agreement;
(ii) Saville Ireland will pay any moneys due to the Vendors
by reason of this indemnity on demand; and
(iii) the indemnity contained in clause 14.2(b) is a
separate and distinct and principal obligation of
Saville Ireland and shall not be construed otherwise.
<PAGE>
15. GENERAL
15.1 FURTHER ASSURANCE
The parties covenant and agree that each will do all acts and
things and execute all deeds and documents and other writings as
are from time to time reasonably required for the purposes of or
to give effect to this Agreement.
15.2 GOVERNING LAW
This Agreement shall be governed by and construed in accordance
with the laws of the State and the parties agree to submit to the
jurisdiction of the Courts in the State.
15.3 WAIVER
No waiver of any breach of this Agreement shall be held or
construed to be a waiver of any other subsequent or antecedent
breach of this Agreement.
15.4 SET-OFF
Any undisputed amounts due and payable by any party to another
pursuant to this Agreement may be set-off against any other
undisputed amount or amounts that may be due and payable on the
same day to the firstmentioned party by the other provided that
the firstmentioned party when tendering payment shall accompany
the same with a statement setting out details of the gross amount
owing and all individual amounts set-off against the same.
15.5 NOTICES
All notices, requests, consents and other documents authorised or
required to be given by or under this Agreement shall be given in
writing and either personally served or sent by facsimile
transmission ("FAX") addressed as follows:
<TABLE>
<CAPTION>
THE VENDORS
<S> <C>
TO: BHA Computer Pty Ltd ACN 068 883 429
ADDRESS: C/- Dr J Hendry
37 Carwoola Street
BARDON QLD 4065
FAX NO:
WITH COPIES TO: Minter Ellison, Level 22, Waterfront Place, 1 Eagle
Street, BRISBANE QLD 4000
Attention: WD Thomson
</TABLE>
<PAGE>
Fax No: (07) 3229 1066
TO: BHA PTY LTD ACN 009 937 606
C/- Dr J Hendry
37 Carwoola Street
BARDON QLD 4065
FAX NO:
WITH COPIES TO: Minter Ellison, Level 22, Waterfront Place, 1 Eagle
Street, BRISBANE QLD 4000
Attention: WD Thomson
FAX NO: (07) 3229 1066
<TABLE>
<CAPTION>
THE PURCHAERS
<S> <C>
TO: Saville Systems Aust. Pty Ltd
ACN 080 026 551
ADDRESS: C/- Clayton Utz, 215 Adelaide Street, Brisbane,
Queensland
Attention: Jeremy Charlston
FAX NO: (07) 3292 7950
WITH COPIES TO: Mike Cayer, Saville Systems PLC, 1 Van de Graff
Drive, Burlington Massachusetts 01803, United States
of America
Fax No: 0015 1 781 270 6503
TO: Saville Systems PLC
ADDRESS: C/- Clayton Utz, 215 Adelaide Street, Brisbane,
Queensland
Attention: Jeremy Charlston
FAX NO:
WITH COPIES TO: Mike Cayer, Saville Systems Aust. Pty Ltd ACN 080
026 551, 1 Van de Graff Drive, Burlington
Massachusetts 01803, United States of America
Fax No: 0015 1 781 270 6503
</TABLE>
<TABLE>
<CAPTION>
THE VENDORS' GUARANTORS
<S> <C>
TO: John Edward Hendry
ADDRESS: 37 Carwoola Street, Bardon Brisbane 4065
FAX NO:
TO: Prudence Marianne Hendry
ADDRESS: 37 Carwoola Street, Bardon Brisbane 4065
FAX NO:
</TABLE>
<PAGE>
Notices, requests, consents and other documents ("NOTICES") shall
be deemed served or given:
(a) if personally served by being left at the address of the
party to whom the Notice is given between the hours of
9.00 am and 5.00 pm on any Business Day, then in such case
at the time the Notice is so delivered;
(b) if sent by fax, then in such case when successfully
transmitted during business hours, or if not during
business hours, then when business hours next commence.
Any party may change its address for receipt of Notices at any
time by giving notice of such change to the other party. Any
Notice given under this Agreement may be signed on behalf of any
party by the duly authorised representative of that party and
shall be sent to all other parties to this Agreement.
15.6 PUBLIC ANNOUNCEMENTS AND CONFIDENTIALITY
Each of the parties shall procure that neither it nor any of its
Related Bodies Corporate shall make any public announcement or
disclosure to any person in relation to this Agreement or
information of which it has become aware in connection with this
Agreement unless it first consults with and obtains the agreement
in writing of the other parties, which agreement shall not be
unreasonably withheld, provided however that:
(a) no party shall be entitled to withhold agreement in the
case of a public announcement or notification where and to
the extent that the same is required by law, legal process
or stock exchange rule; and
(b) a party shall be entitled to make such disclosures to the
directors, secretary, professional advisers and bankers of
that party and its Related Bodies Corporate so long as the
party uses all reasonable endeavours to ensure that the
matters disclosed are kept confidential.
15.7 COUNTERPARTS
This Agreement may be signed in any number of counterparts and all
such counterparts taken together shall be deemed to constitute one
and the same document.
<PAGE>
15.8 MODIFICATION
This Agreement may not be modified, amended, added to or otherwise
varied except by a document in writing signed by each of the
parties or signed on behalf of each party by a director under
hand.
15.9 STAMP DUTIES
The Purchaser shall bear all stamp duties (apart from receipts
duties, financial institutions duties or bank account debits taxes
which shall lie between the parties as they fall) assessed on or
in relation to this Agreement or in connection with any of the
matters or transactions or sales under this Agreement or in
pursuance of any document drawn in consequence of this Agreement.
15.10 LEGAL COSTS
Each party shall bear their own legal costs in relation to this
Agreement.
15.11 MERGER
The rights and obligations of the parties in respect of
agreements, indemnities, covenants and warranties contained herein
shall be continuing agreements, covenants, indemnities and
warranties, and accordingly shall not be merged or extinguished by
or upon Completion or be prejudiced or affected by the acceptance
by the Purchasers of the Assets pursuant to this Agreement or by
the payment of the Purchase Price or any part thereof or any other
moneys payable under this Agreement. Notwithstanding Completion of
the sale and purchase of the Assets, the provisions of this
Agreement shall remain in full force and effect as to the
obligations of the parties respectively remaining to be performed
after Completion.
15.12 SURVIVAL OF CERTAIN PROVISIONS
(a) Clause 15 survives the rescission or termination of this
Agreement.
(b) If this Agreement is rescinded or terminated, no party is
liable to the other parties except in respect of any
breach of this Agreement occurring before rescission or
termination.
15.13 ENTIRE AGREEMENT
This Agreement contains the entire understanding of its parties as
to its
<PAGE>
subject matter and any and all previous understandings or
agreements on that subject matter cease to have any effect from
the date of this Agreement.
EXECUTED as a Deed.
<PAGE>
SCHEDULE 7.
WARRANTIES
1. CAPACITY
(a) (NECESSARY CORPORATE ACTION BY VENDOR): Each of the Vendors has taken
all corporate action necessary to authorise it to execute, deliver and
perform this Agreement and all instruments, documents and agreements
to be executed and delivered in connection herewith, and to complete
the transactions contemplated hereby and thereby, and this Agreement
and all instruments, documents and agreements delivered or to be
delivered in connection herewith shall upon execution thereof be
valid, binding and enforceable in accordance with their respective
terms.
(b) (VENDORS DULY INCORPORATED): Each Vendor is duly incorporated and
validly existing under the laws of Queensland and is authorised and
qualified to own and operate the Assets and to conduct the Business in
all jurisdictions where the Assets or Business are owned operated or
conducted or in which the nature of its business or the ownership or
leasing of its properties requires such qualification. Each Vendor has
full power as authority to carry on the business in which it is
engaged and to own and use the properties owned and used by it.
(c) (VENDORS' AND THE VENDORS' GUARANTORS' AUTHORITY): Each Vendor and
each of the Vendors' Guarantors has the legal right, capacity and full
power and authority to enter into this Agreement, to perform its
respective obligations hereunder and each Vendor has the legal rights
capacity and full power and authority to transfer good and valid title
to the Assets and the Business to the Purchaser on and subject to the
terms and conditions of this Agreement.
(d) (NO RECEIVER): No receiver or official manager has been appointed of
the whole or any part of the Assets or undertaking of the Business,
and no such appointment has been threatened or is envisaged by each of
the Vendors and no judgment has been obtained nor any execution or
process of any court or other authority been issued against or been
levied or enforced upon each of the Vendors partly or wholly in
respect of the Business or the Assets or any part thereof.
(e) (NO LIQUIDATION OR OFFICIAL MANAGEMENT): No Vendor is in liquidation
or official
<PAGE>
management, and no order, petition, application, proceeding, meeting
or resolution has been made, presented, brought, called, threatened or
passed for the purpose of liquidating any Vendor or placing any Vendor
in official management.
(f) (NO INSOLVENCY OR INABILITY TO PAY DEBTS): No Vendor has stopped
payment to any creditor or is insolvent or unable to pay its debts for
the purposes of section 460 of the Corporations Law or otherwise, and
there is no unfulfilled or unsatisfied judgment or court order
outstanding against the Vendor, and there has been no unreasonable
delay by the Vendor in any payment of any obligation due for payment.
(g) (NO MORTGAGEE IN POSSESSION): No mortgagee is or is entitled to be in
possession of the whole or any part of the Assets or Business.
(h) (NO TRADE PRACTICES ACT INFRINGEMENT): There is no agreement,
arrangement or activity whether by commission or omission in which any
Vendor has been or will be concerned which infringes or which has been
or which is required to be authorised under the Trade Practices Act or
any other anti-trust legislation in relation to the Assets or the
Business.
(i) (NO CONSENT REQUIRED): No authorisation, approval or consent is
required in order for the Vendors and the Vendors' Guarantors to enter
into and perform their respective obligations under and pursuant to
this Agreement.
(j) (NO LEGAL ACTION): No legal action, suit or proceeding judicial or
administrative, or governmental investigation, is current or pending
or, to the best of the knowledge, information and belief of the
Vendors and the Vendors' Guarantors after full inquiry in respect
thereof has been made by the Vendors and the Vendors' Guarantors,
threatened against any Vendors or the Vendors' Guarantors which on
determination would prohibit consummation of this Agreement by the
Vendors or the Vendors' Guarantors.
(k) (EXECUTION WILL NOT RESULT IN BREACH): The execution, performance and
delivery of this Agreement and all documents executed pursuant hereto
by the Vendors or the Vendors' Guarantors and the completion of the
transactions contemplated hereby or thereby do not and will not,
directly or indirectly, with or without the giving of notice or the
lapse of time or both:
(i) result in the breach of the terms and conditions of or
constitute a default under or result in the acceleration of,
create in any party the right to accelerate, terminate, modify
or cancel, or require any notice, consent or waiver under any
agreement or undertaking oral or written or any indenture or
instrument by which any Vendor, the Vendors' Guarantors, the
Assets or the Business may be affected or bound which
consequence would have a
<PAGE>
material adverse affect on the Assets or the Business; or
(ii) violate or be in conflict with or constitute a default under or
permit the termination of any provision of or result in the
acceleration of or give the right to accelerate the maturity or
performance of any obligation of any Vendor or the Vendors'
Guarantors which would have a material adverse affect on the
Assets or the Business or result in the creation or imposition
of any Encumbrance upon any of the Assets or the Business or
the Premises under any agreement, undertaking, licence or
permit to which any Vendor is a party or by which it or the
Assets, the Business or the Premises is or may be bound; or
(iii) breach or contravene any order, writ, rule, regulation,
injunction or decree of any court, administrative agency or
governmental body, or any statute, code, rule or regulation
applicable to any Vendor, the Vendors' Guarantors, the Assets
or the Business or by which any Vendor or the Vendors'
Guarantors may be bound; or
(iv) require the filing with, or the obtaining of any permit,
consent, approval, authorisation, qualification, acknowledgment
or licence of any third party or of any domestic or foreign
governmental or regulatory authority or give any domestic or
foreign governmental or regulatory authority the right to
challenge any of the transactions contemplated by this
Agreement; or
(v) violate or conflict with or result in a breach of or constitute
a default under or result in the imposition of any Encumbrance
under the provisions of the Memorandum or Articles of
Association of any Vendor or any resolution adopted by the
Board of Directors or stockholders of any Vendor.
2. ACCOUNTS
(a) (ACCOUNTS TRUE AND FAIR):
(i) The Accounts exhibit a true and fair view of the Business and
the Assets for the period to which they relate, and have been
prepared in accordance with the requirements of the
Corporations Law and the accounting standards of the Australian
Society of Accountants and the Institute of Chartered
Accountants in Australia, and the trading statements and sales
figures forming part of the Accounts are accurate and give a
true and fair view of the affairs of the Vendor in respect of
the Business and correctly record and reflect the profits and
losses of each Vendor respectively as at the date at which such
accounts speak and for the period to which such accounts
relate; and no material change has taken place since the date
of the Most Recent Balance Sheet in the position or
profitability of the Vendors or Business as disclosed in the
Accounts.
(ii) There is no circumstance which would render misleading the
value attributed in the Accounts to any of the Assets.
(iii) The rates of depreciation adopted in the Accounts and for the
prior
<PAGE>
accounting periods (of 12 months each) are in accordance with
allowable and applicable taxation rates permitted by the
Commissioner of Taxation and are sufficient to ensure that each
of the fixed assets of the Business shall be written down to
nil by the end of its useful life.
(b) (RESERVES AND PROVISIONS PROPER AND ADEQUATE): The Accounts are true,
complete and accurate in all respects and the reserves and provisions
made therein for bad and doubtful debts, abandoned, obsolete or
unusable property or equipment, depreciation on Plant and Equipment,
and taxation on profits earned up to the end of the period to which
the Accounts relate were proper and adequate, and the profits
disclosed in the Accounts are not affected by any unusual or non-
recurring items other than as set out in the Accounts.
(c) (ALL RECORDS PROPERLY KEPT): All records of the Business have been
fully, properly and accurately kept and completed in accordance with
proper accounting and business practices and all legal requirements;
and there are at the date hereof no material inaccuracies or
discrepancies of any kind contained or reflected in any of them; and
at the date hereof they give and reflect a true and fair view of the
financial, contractual and trading position of the Business.
(d) (BOOKS OF ACCOUNT KEPT ON PROPER AND CONSISTENT BASIS): The books of
account and records of the Business have been kept on a proper and
consistent basis, are up to date, are in the possession of the Vendors
and contain true, complete and accurate records of the Assets and the
Business and all matters required to be entered therein by the
Corporations Law then and from time to time in force.
(e) (RELIANCE OF PURCHASER ON ACCOUNTS): The Vendors and the Vendors'
Guarantors acknowledge that the Purchaser has relied upon inter alia
the Accounts in entering into this Agreement and except in relation to
determining the value of the IP Assets, the BHA Goodwill and the BHAC
Goodwill has relied on the Accounts in determining the Purchase Price
of the Assets and the Business.
3. ASSETS
(a) (VENDOR'S TITLE TO ASSETS): The Vendor is the legal and beneficial
owner of and has good and valid title to all of the Assets, and there
is not any Encumbrance affecting any of the Assets.
(b) (TITLE TO PASS TO VENDOR): The Vendors shall on Completion pass to the
Purchaser absolute full, clear and valid title to all of the Assets
which shall be free from all Encumbrances on Completion.
(c) (CONDITION OF ASSETS): The Assets are in good condition and useable
for the purpose for which they were acquired by the Vendors and are
free from material
<PAGE>
defects, subject to the provisions of this Agreement relating to the
year 2000; and they have been and at the Completion Date they shall
have been properly maintained in accordance with prudent business
practice and (where applicable) the manufacturer's recommended
maintenance procedures.
(d) (ALL THE ASSETS OF THE BUSINESS): There exist no properties, assets or
businesses of any Vendor of any kind or description, tangible or
intangible, real, personal or mixed and wherever located which are
held, enjoyed, owned or used by any Vendor in relation to the Business
other than the Assets.
(e) (ALL NECESSARY ASSETS): The Assets are adequate for the conduct of the
Business as presently conducted and as proposed to be conducted by the
Vendors as at the Completion Date and constitute all the properties,
assets and business of any kind or description, tangible or
intangible, real, personal or mixed, which are appropriate material
and necessary for the conduct of the Business.
(f) (BENEFIT OF ASSET WARRANTIES): The Vendors and the Vendors' Guarantors
shall ensure that all warranties and guarantees whether of
manufacturers, wholesalers, retailers, repairers or otherwise existing
in relation to the Assets other than those that relate to Intellectual
property are assigned to the Purchasers or that Saville Australia
receive the benefit thereof.
(g) (BENEFIT OF INTELLECTUAL PROPERTY WARRANTIES): The Vendors and the
Vendors' Guarantors shall ensure that all warranties and guarantees
whether of manufacturers, wholesalers, retailers or repairers or
otherwise existing in relation to the Intellectual Property are
assigned to Saville Ireland or that Saville Ireland receives the
benefit thereof.
(h) (NO LITIGATION): There is no litigation current or pending or to the
best of the Vendors' information, knowledge and belief threatened
against the Vendor which might in any way affect any Vendor's title to
any of the Assets or the Purchasers' title to the Assets after the
Completion Date.
(i) (WARRANTIES): In respect of any goods or services provided, sold or
supplied by any Vendor relating to the Business during the 12 month
period prior to and including the Completion Date that the obligations
on the Vendor under that contract exceed the advantage to be gained by
the Vendor from that contract.
(j) (NO HIRING OF ASSETS): None of the Assets has been or has been agreed
to be let on hire or hire purchase or sold on deferred terms.
(k) (YEAR 2000 COMPLIANCE): Without limiting its other warranties under
this Agreement or otherwise, each Vendor and the Vendors' Guarantors
warrants that unless otherwise specified in Schedule 16:
<PAGE>
(i) neither the performance nor functionality of an Asset is
adversely affected with respect to all dates;
(ii) prior to Completion, the Vendors have or will specifically
design, manufacture, program and integrate all Assets to ensure
that the Assets will provide full functionality and operate
without adverse effect with respect to all dates; and
(iii) prior to Completion the Vendors will specifically and
comprehensively test each Asset to ensure that the Asset will
provide full functionality and operate without adverse effect
with respect to all dates.
Without limitation, the requirements that the Assets provide full
functionality and that the functionality and performance not be
adversely effected with respect to all dates includes:
(iv) being able to deal properly with the transaction to 1 January
2000;
(v) being able to deal properly with leap years, including
recognising the year 2000 as a leap year;
(vi) being able to deal properly with all calculations based on
dates, including calculations such as subtractions, additions,
percentages, sequences and comparisons;
(vii) being able to deal properly with functions that are programmed
to commence or end on a particular date ;
(viii) date based functionality behaving consistently for dates prior
to and after the year 2000;
(ix) in all interfaces developed by the Vendors and data storage,
the century in any date will be specified either explicitly or
by unambiguous algorithms or inferencing rules; and
(x) all data involving multiple dates being correctly processed,
calculated, sequenced, compared, managed and manipulated where
formulas involve dates in on century or in multiple centuries
and not:
A. causing any abnormal interruption, termination or
degradation in functionality or performance; or
B. resulting in the generation of incorrect values or invalid
results.
(l) Notwithstanding anything in this Agreement or any Schedule to this
Agreement to the contrary, the only representation and warranty made
by the Vendor in respect of the functionality of the IP Assets which
are computer software is that such computer software has the
functionality set out in any:
(i) operating manual;
(ii) on-line documentation;
(iii) specifications centred in all BHA Business Records and BHAC
Business Records; and
(iv) specifications contained in any documentation provided under
the Business Contracts.
<PAGE>
4. AUTHORITIES
(a) (RENEWAL AND TRANSFER OF AUTHORITIES):
(i) The Vendor has all permits, licences, authorities,
registrations and approvals ("AUTHORITIES") from any person
authority or body necessary for ownership of the Assets and for
the proper carrying on of the Business, except for those the
absence of which would not have a material adverse effect on
the Assets, the Business or the profitability of the Business
and has listed these Authorities in Schedule 17;
(ii) all such Authorities have been duly obtained on a permanent and
unconditional basis and are assignable by the Vendor to the
Purchasers without the consent or approval of any party, or if
such Authorities are not permanent and/or unconditional, the
Vendor possesses all documents necessary to permit the
Purchaser to renew or transfer the Authorities; and
(iii) such Authorities are and shall be in full force and effect
immediately after the completion of the transactions
contemplated by this Agreement.
(b) (NO REVOCATION OR VARIATION OF AUTHORITIES): To the best of the
Vendors' knowledge, information and belief, there is no circumstance
or fact involving the Business which may result in the revocation of
or variation in any material respect of any of the Authorities held by
the Vendors in connection with the ownership of the Assets or the
carrying on of the Business or any part thereof or which would hinder
or prevent the transfer or grant thereof to the Purchaser.
(c) (REPORTS AND RETURNS): All reports, returns and other information
required to be made or given in respect of any of the Authorities and
which would have a material adverse effect on the Assets, the Business
or the profitability of the Business have been duly made or given.
(d) (NO FURTHER AUTHORITIES REQUIRED): Continuation of the operation of
the Business by the Purchaser in substantially the same manner as
carried on by the Vendors shall not require any other permit, licence,
authority, registration or approval of any body person or authority
the absence of which would have a material adverse effect on the
Assets, the Business or the profitability of the Business.
(e) (NO CONTRAVENTION OF AUTHORITIES): There is not and at the Completion
Date there will not be any subsisting or imminent contravention of any
of the Authorities obtained by the Vendors in relation to the Business
which would have a material adverse effect on the Assets, the Business
or the profitability of the Business.
(f) (COMPLIANCE WITH LAWS): The Business is and has, during the 12 months
period prior to and including the Completion Date, been conducted in
compliance with all requirements of law whether federal, state or
local, or other country or place in
<PAGE>
which the Business is conducted and all requirements of all
governmental bodies or agencies applicable to the Vendor, the
Business, the Assets and the Premises; and without limiting the
generality of the foregoing, the use of the Premises for the purpose
of the Business is permitted under all relevant planning statutes and
regulations, and there is no contravention of those statutes or
regulations.
(g) (NO BREACH OF STATUTES, REGULATIONS ETC.): The Vendors are not in
breach or contravention of or default under or non-compliance with any
statute, rule, regulation or by-law whether Commonwealth, State,
Municipal or other country or place applicable to the Business or by
which it may be bound or in which any of the Assets may be located,
and no Vendor has received notice that it may be in such default
contravention or breach.
(h) (NO LITIGATION FOR NON-COMPLIANCE): There are no actions, suits or
proceedings pending or, to the best of the Vendors' knowledge,
information and belief, threatened against any Vendor in any way
relating to the Business by or before any court or governmental
authority or agency concerning any non-compliance or alleged non-
compliance with any regulation or requirements.
(i) (NO MATERIALLY ADVERSE PROPOSALS): No Vendor is aware nor should it
reasonably be aware of any decision or proposal of any person,
authority or body or any trade union the implementation of which
whether by force of law or voluntarily may have a material adverse
effect on the Business or the profitability thereof, or on the Assets.
(j) (NO OUTSTANDING NOTICES): There are no orders, notices or requirements
of any government body or governmental authority or provisions of any
legislation affecting or relating to or which may affect or relate to
the Business, the Assets or the Premises which have not been complied
with.
5. CLIENTS
(a) (SCHEDULE 11): The customers named in Schedule 11 are the only clients
(and all of the clients) of the Business and the Vendors and the
Vendors' Guarantors will use its best endeavours to procure that all
of those customers become and remain customers of the Purchasers after
Completion.
(b) (OBTAIN CUSTOM): The Vendors will give to the Purchasers the benefit
of the Vendor's custom of the customers named in Schedule 11.
(c) (NO INDEMNITY CLAIMS): Other than as disclosed in writing to the
Purchasers prior to the date hereof, no professional indemnity claims
other than maintenance and warranty claims under the Business
Contracts received in the ordinary course of business have been made
against any Vendor or in respect of the Business and
<PAGE>
nothing has been done or omitted to be done and to the best of the
Vendors' knowledge, information and belief, no facts or circumstances
exist which could give rise to any professional indemnity or
negligence claims against or liabilities in respect of any Vendor or
the Business.
6. CONTRACTS
(a) (NO CONTRACTS LIABLE TO BE TERMINATED): No Vendor is a party to any
contractual arrangement which may be terminated by any other party by
reason of a change in the ownership of the Business, including as a
result of the transactions contemplated hereby, or by reason of such
change being subject to the consent of the other party which consent
has not been obtained the result of which termination would have a
material adverse affect on the Business or the Assets.
(b) (NO DEFAULT): No Vendor is in default under or in violation of any
provision of its Memorandum and Articles of Association or in material
breach of any agreement, obligation or arrangement to which it is a
party or by which it is or may be bound or to which the Business or
the Assets are subject, nor has any Vendor any knowledge having made
all due and proper enquiries of the invalidity of or grounds for
rescission or avoidance or repudiation of any agreement entered into
by it, and no Vendor has received notice of any intention to terminate
any such agreement.
(c) (NO MATERIAL BREACH OF CONTRACTS): Entry into this Agreement will not
cause any Vendor to be in breach of any contract or agreement to which
any Vendor is a party nor will entry into this Agreement constitute
grounds for termination of any such contract or agreement the result
of which breach or termination would result in a material adverse
affect on the Business or the Assets.
(d) (CONTRACTS, ARRANGEMENTS, ENGAGEMENTS):
The Purchaser has received from the Vendors full written disclosure
prior to the date hereof of details of all contracts agreements or
arrangements whether written or not having or likely to have a
material effect on the Business or the carrying on thereof, including,
without limitation:
(i) any written arrangement (or group of related written
arrangements) for the lease of personal property from or to
third parties providing for lease payments in excess of $25,000
per annum;
(ii) any written arrangement (or group of related written
arrangements) for the purchase, sale, supply or manufacture of
raw materials, commodities, supplies, products or other personal
property or for the furnishing or receipt of services:
<PAGE>
A. which calls for performance over a period of more than one
year;
B. which involves more than the sum of $25,000; or
C. in which a Vendor has granted manufacturing rights, "most
favoured nation" pricing provisions or marketing or
distribution rights relating to any products or territory or
has agreed to purchase a minimum quantity of goods or
services, agreed to make a minimum payment or has agreed to
purchase goods or services exclusively from a certain party;
(iii) any written arrangement establishing a partnership, joint
venture or limited liability company;
(iv) any written arrangement (or group of related written
arrangements) under which a Vendor has created, incurred,
assumed, or guaranteed (or may create, incur, assume, or
guarantee) indebtedness (including capitalized lease
obligations) involving more than $25,000 or under which there
has been imposed (or may be imposed) an Encumbrance on any of
the Assets, tangible or intangible;
(v) any written arrangement concerning confidentiality, assignment
of inventions, or noncompetition or involving Intellectual
Property;
(vi) any written arrangement involving any Related Bodies Corporate;
and
(vii) any written arrangement under which the consequences of a
default or termination could have a material adverse effect on
the assets, business, financial condition, results of operations
or future prospects or the Business or could result in the
granting to any third party of any rights in or to the Assets.
(e) (OFFERS AND TENDERS): There are no offers, tenders or quotations given
or made by any Vendor in relation to the Assets or the Business still
capable of giving rise to a contract by the unilateral act of a third
party other than in the ordinary course of business consistent with
past custom and practice (including with respect to frequency and
amount).
(f) (NO SUBSTANTIAL CHANGE IN CONTRACTUAL TERMS): During the 12 months
preceding the date hereof there has been no substantial change in the
basis or terms upon which any person is prepared to enter into
contracts or do business with or supply goods or services to the
Vendors and no such change is or reasonably should be envisaged.
(g) (NO DEFAULT BY OTHER PARTIES TO CONTRACTUAL ARRANGEMENTS): To the best
of the Vendors' knowledge, information and belief, no party with whom
a Vendor has any contractual arrangement in respect of the Assets or
the Business is in material
<PAGE>
default without regard to any requirement of notice or grace period,
or both, in the observance or performance of any term, condition or
provision of any such contractual arrangement.
(h) (NO THIRD PARTY RIGHTS TO TERMINATE CONTRACTS): To the best of the
Vendors' knowledge, information and belief, no event has occurred or
in the reasonable opinion of the Vendors is likely to occur which
would entitle any third party to terminate any contract with or
benefit enjoyed by any Vendor in respect of the Assets or the
Business.
(i) (REPRESENTATIONS TO THIRD PARTIES TRUE AND CORRECT): Other than in
respect of Year 2000 representations relating to the CMS version 1 and
MMS products, which shall be governed by clause 117 of this Agreement,
all representations made by the Vendors to any party who has a
contractual arrangement with the Vendor, are true and correct in all
material respects.
(j) (NO CONTRACTS UNABLE TO BE FULFILLED): No Vendor is under any
obligation or party to any existing contract relating to the Assets or
the Business which cannot be fulfilled or performed by the Vendor in
accordance with the conditions of such obligation or contract and
without undue or unusual expenditure of money or effort including but
not limited to the payment of liquidated damages.
(k) (KNOWLEDGE, INFORMATION AND BELIEF OF THE VENDORS): No customer or
supplier of the Business has ceased or has indicated an intention to
cease or reduce trading with the Business and the Vendor has no
grounds to believe or suspect that after the date hereof or as a
result of the acquisition of the Business by the Purchaser:
(i) suppliers to the Business will cease supplying or may reduce
supplies to the Purchaser as owner of the Business; or
(ii) customers or distributors of the Vendor will terminate any
contracts, offers or benefits assigned to the Purchaser as owner
of the Business or cease or reduce trading with the Business.
(l) (NO CUSTOMERS AND SUPPLIERS MAY TERMINATE AGREEMENTS): The
transactions to be effected under this Agreement give no customer or
supplier of the Business the right to terminate any agreement or
arrangement with the Vendor the result of which termination would have
a material adverse affect on the Business or the Assets, and the
attitude and actions of suppliers, customers and employees and other
persons with regard to the Vendors shall not be directly or indirectly
prejudicially affected by this Agreement or Completion.
(m) (PARTICULARS OF ALL MATERIAL CONTRACTS): Prior to the date hereof, the
Vendors have provided the Purchasers with written particulars of all
the material contracts entered into by each Vendor relating to the
Assets and the conduct of the
<PAGE>
Business.
(n) (ALL CONTRACTS ENFORCEABLE): All contracts of the Vendors in relation
to the Assets and Business are valid, in full force and effect and
enforceable in accordance with their respective terms. The Vendors
have fulfilled or taken all action necessary to fulfil when due all of
their respective material obligations under such contracts. There has
not occurred any material default by any Vendor or any event which
with the lapse of time or at the election of any person other than the
Vendors shall become a material default under any such contract.
(o) (NO ADVERSE CONTRACTUAL ARRANGEMENTS): No Vendor is a party to any
agreement which will continue in effect after the Completion Date:
(i) limiting the freedom of any Vendor or the Purchaser or any of
their respective officers, employees or agents to engage in or
to compete in any line of business or with any person or in any
area;
(ii) requiring any Vendor or the Purchaser to share the profits of
the Business or to pay any royalties relating to the Business or
to waive or abandon any rights relating to the Business to which
it is entitled;
(iii) which is unprofitable or likely to be unprofitable;
(iv) which is outside the Vendors ordinary and proper course of
business;
(v) to which a Vendor is a party or in which a Vendor is interested
whether directly or indirectly which was not negotiated and
entered into on a totally arm's length basis; or
(vi) under which any officer, employee, agent, distributor, supplier
or independent contractor of the Business or any other person is
entitled to a commission, remuneration, royalty or payment of
any nature calculated by reference to the whole or part of the
turnover profits or sales of the Business.
7. INSURANCE
(a) (ALL INSURABLE ASSETS INSURED): All of the Assets of an insurable
nature are insured with a company of good repute and financial
substance in an amount not less than the full cost of replacement
against fire and all such other risks as are commonly insured against
by prudent persons carrying on a similar business including without
limitation third party injury and all other insurances required by law
and all current premiums on such insurance have been paid and such
insurance shall be in full force and effect until the Completion Date.
(b) (NO FAILURE TO CLAIM): No Vendor has failed to give any notice or
present any claim with respect to the Assets or the Business under any
insurance policy.
(c) (NO OUTSTANDING REQUIREMENTS OR RECOMMENDATIONS): There are no
outstanding requirements or recommendations by any insurance company
that issued a policy
<PAGE>
with respect to any of the Assets or the Business or by any
governmental authority requiring or recommending any material repairs
or other work done on or with respect to any of the Premises or the
Assets, or requiring or recommending any material equipment or
facilities to be installed on or with respect to any of the Premises
or the Assets or the Business.
(d) No Vendor:
(i) is in breach or default with respect to the payment of premiums
or the giving of notices under any insurance policy;
(ii) is in breach or default with respect to any other obligations
under any such policy, and no event has occurred which, with
notice or the lapse of time, would constitute such a breach or
default or permit termination, modification, or acceleration,
under any such policy; and
(iii) has received any notice from the insurer disclaiming coverage or
reserving rights with respect to a particular claim or any such
policy in general, or amending or cancelling any such policy. No
Vendor has incurred any loss, damage, expense or liability
covered by any such insurance policy for which it has not
properly asserted a claim under the policy.
8. CLAIMS
(a) (NO CLAIMS AGAINST VENDORS):
(i) There are no litigation, suits, arbitration, claims, demands or
proceedings against any Vendor either at law or in equity or
before or by any governmental agency or arbitrator pending, or
to the best of the knowledge of the Vendors threatened,
anticipated or contemplated against or relating to the Assets or
the Business;
(ii) there are no unsatisfied or outstanding judgments, orders,
decrees or stipulations affecting any Vendor, the Assets, the
Premises or the Business or to which it is or may become a
party;
(iii) to the best of the Vendors' knowledge, information and belief,
there does not exist nor has there occurred any fact, matter or
circumstance likely to give rise to any such litigation, suits,
arbitration, claims, demands or proceedings which could
materially affect the ability of the Business to continue
operating;
(iv) no Vendor either knows of or has any grounds to know of any
basis of any such action or of any government investigation
relating to the Assets the Premises or the Business; and
(v) there are no claims against any Vendor pending or threatened; or
to the knowledge, information or belief of any Vendor having
made all due and proper enquiries, anticipated or contemplated,
which if valid would constitute or result in a breach of any
representation warranty or covenant set forth
<PAGE>
herein.
(b) (NO CLAIMS AGAINST THE BUSINESS OR ASSETS): There is no outstanding
liability or claim against the Business or the Assets nor is there any
deficiency or defect (other than bona fide warranty claims included in
Assumed Liabilities) which may result in any claim being made against
the Business or the Assets in relation to any services provided, sold
or supplied in the course of the Business, and, without prejudice to
the generality of the foregoing, no dispute exists between any Vendor
and any customer or client of the Business nor to the best of the
Vendors' knowledge, information and belief, is there any circumstance
which may give rise to any such dispute.
(c) (NO GUARANTEES OR WARRANTIES): The Vendors have given no guarantee or
warranty nor made any representation in respect of services supplied
or contracted to be supplied by any Vendor save for any guarantee or
warranty implied by law or in relation to the Business otherwise as
disclosed in writing to the Purchaser prior to the date hereof.
(d) (DISCLOSURE OF EXPENSES OF WARRANTIES): The Vendors have disclosed to
the Purchasers in writing the aggregate expenses incurred by the
Vendors in fulfilling its obligations under its guarantee, warranty,
right of return and indemnity provisions in connection with the
Business during each of the fiscal years and the interim period
covered by the Accounts; and no Vendor knows of any reason why such
expenses should materially increase as a percentage of sales in the
future.
(e) (RECALL OF PRODUCTS): None of the products of the Vendors is subject
to any recall proceedings and, to the best of the Vendors' knowledge
and belief, no such proceedings have been threatened. To the best of
the Vendors' knowledge and belief, there is no basis for the recall,
withdrawal or suspension of any approval by any domestic or foreign
governmental authority with respect to any of the products sold or
proposed to be sold or services provided by the Vendors.
(f) (AMOUNT RESERVED FOR WARRANTY CLAIMS): The reserve for warranty claims
set forth in the Accounts and any reserves for warranty claims created
by the Vendors in the ordinary course of business subsequent to the
date of the Most Recent Balance Sheet are adequate.
9. PREMISES, PREMISES LEASES, BUSINESS CONTRACTS
(a) (VENDOR'S POSSESSION): The Vendors enjoy exclusive peaceful and
undisturbed possession under the Premises Leases.
(b) (ALL AGREEMENTS VALID): All Premises Leases and Business Contracts are
valid subsisting and enforceable in accordance with their terms, and
the Vendors have
<PAGE>
duly complied with and fulfilled all their respective obligations and
duties thereunder.
(c) (PREMISES): The Premises as at the date hereof:
(i) comprise all the freehold or leasehold properties owned,
leased, used or occupied by the Vendors for the purposes of the
Business;
(ii) are used for purposes permitted under provisions of all
relevant planning or zoning schemes and in compliance with all
relevant laws, by-laws and regulations made thereunder;
(iii) are not subject to any temporary or conditional planning
permission;
(iv) are not subject to any restrictive covenant or exception or
reservation which adversely affects the ability of the Vendor
to carry on the Business thereat;
(v) are used only in conformity with all local government building
health fire and public utility laws and regulations;
(vi) are not affected by any proposals for compulsory acquisition or
road widening;
(vii) are not otherwise adversely affected;
(viii) and all its improvements are, having regard to their age, in
such condition and state of repair as to be substantially fit
for the purpose for which they are presently used.
(d) (PERFORMANCE AND OBSERVANCE OF COVENANTS AND RESTRICTIONS): The
Vendors have performed and observed all covenants, conditions,
agreements, statutory requirements, orders, regulations and
restrictions including all appropriate by-laws relating to the
Premises including all covenants and restrictions contained in the
Premises Leases.
(e) (NOTICES FROM AUTHORITIES): There is no outstanding order or notice
affecting any of the Premises and there is no proposal of any local or
other authority or any other circumstance known to the Vendors which
may result in any such order or notice being made or served or which
may otherwise affect any of the Premises.
(f) (NO TERMINATION OR NOTICE OF TERMINATION): No party has given notice
to the Vendors of termination or intended termination of any of the
Premises Leases or the Business Contracts; there are no grounds for
such termination; and there is no litigation pending or to the best of
the Vendors' knowledge, information and belief, threatened in
connection with or arising out of them or any of them, nor has any
event occurred or any dispute, claim or demand in connection with or
arising out of them or any of them which may give rise to litigation.
(g) (PREMISES SUITABLE): The Premises are suitable for the continued
conduct of the Business as presently conducted at such premises.
<PAGE>
(h) (NO SUBSISTING DEFAULT OR BREACH OF PREMISES LEASE): There has not
been any subsisting default or breach of the provisions of the
Premises Leases the Vendors have observed and performed all the terms
and conditions to be observed and performed by them under the Premises
Leases and the Vendors have not received and failed to comply with any
notice received in respect of any of the Premises Leases received
before Completion.
(i) The lease or sublease will continue to be legal, valid, binding,
enforceable and in full force and effect immediately following the
Completion in accordance with the terms thereof as in effect prior to
the Completion.
(j) No Vendor has assigned, transferred, conveyed, mortgaged, deeded in
trust or encumbered any interest in the leasehold or subleasehold.
(k) All facilities leased or subleased are supplied with utilities and
other services necessary for the operation of said facilities.
(l) No lease imposes any penalty or cost, other than the payment of rent
at a rate not in excess of the maximum rate payable during the term of
the lease, for holdover occupancy by the tenant after the term of the
lease expires.
(m) To the best of Vendors' knowledge and belief, the owner of the
facility leased or subleased has good and clear record and marketable
title to the parcel of real property, free and clear of any
Encumbrance, easement, covenant or other restriction except for
recorded mortgages, easements and covenants and other restrictions
which do not impair the intended uses or occupancy of the property
subject thereto by the Vendors.
10. ENVIRONMENTAL COMPLIANCE
(a) (NO ENVIRONMENTAL CONTAMINATION): The Premises are free of all
environmental contamination including, without limitation, any patent
or latent environmental contamination of the atmosphere, air, soil,
sub-soil, ground water or surface waters within or adjacent to such
premises. There have been no releases of any "Materials of
Environmental Concern" (as defined below) into the environment at or
from:
(i) any parcel of real property or any facility formerly or
currently owned, leased, operated or controlled by the Vendors;
(ii) any facility to which a Vendor has delivered products for
manufacturing, processing, packaging or distribution; or
(iiI) to the Vendors' knowledge, any facility to which waste of a
Vendor has been transported for processing, storage or
disposal.
No Vendor is aware of any releases of Materials of Environmental
Concern at
<PAGE>
parcels of real property or facilities other than those owned, leased,
operated or controlled by any Vendor that could reasonably be expected
to have an impact on such real property or facilities. For purposes of
this Agreement, "Materials of Environmental Concern" means any
chemicals, pollutants or contaminants, hazardous substances, solid
wastes and hazardous wastes, pesticides, toxic materials, oil or
petroleum and petroleum products or any other material subject to
regulation under any environmental law.
(b) (NO VIOLATION OF ENVIRONMENT LAWS): No hazardous materials and no
other materials intended for use or generated in the Business have
been or are used, stored, treated or otherwise disposed of by the
Vendors in violation of applicable laws and regulations. The Vendors
have complied with, and its operations as of the Completion Date are
in compliance with, all Environmental Laws (as defined below). For
purposes of this Agreement, "Environmental Law" means any federal,
state, regional, county, local or foreign law, statute, rule or
regulation or the common law relating to the environment or
occupational health and safety, including without limitation any
statute, regulation or order pertaining to:
(i) treatment, storage, disposal, generation or transportation of
commercial, industrial, toxic or hazardous substances or solid
or hazardous waste;
(ii) air, water or noise pollution;
(iii) groundwater or soil contamination;
(iv) the release or threatened release into the environment of
commercial, industrial, toxic or hazardous substances, or solid
or hazardous waste, including without limitation emissions,
discharges, injections, spills, escapes or dumping of
pollutants, contaminants, pesticides or chemicals;
(v) the protection of wildlife, marine sanctuaries or wetlands,
including without limitation all endangered or threatened
species;
(vi) underground and other storage tanks or vessels, and abandoned,
disposed or discarded barrels, containers and other
receptacles;
(vii) health and safety of employees and other persons; and
(viii) manufacture, processing, use, distribution, treatment, storage,
disposal, transportation or handling of pollutants,
contaminants, pesticides, chemicals or commercial, industrial,
toxic or hazardous substances or oil or petroleum products or
solid or hazardous waste.
(c) (COMPLIANCE WITH ENVIRONMENTAL LAWS): All hazardous materials removed
or emitted from the Premises were and are documented, transported and
disposed of in compliance with all applicable laws and regulations.
(d) (NO ENVIRONMENTAL CONTAMINATION RESULTING FROM USE OF PREMISES): No
materials including, without limitation, effluence leachate, emissions
or hazardous materials, generated on or emitted from any of the
Premises have caused or will cause, in whole or in part, any
environmental contamination.
<PAGE>
(e) (NO AGREEMENTS RELATING TO ENVIRONMENTAL MATTERS): There is no
agreement or consent order to which any Vendor is a party in relation
to any environmental matter and no such agreement or order is
necessary for the continued compliance of the Business with applicable
laws and regulations.
(f) (NO ORDERS PURSUANT TO ENVIRONMENTAL LAWS): There have been no orders
issued which have not been fully complied with and cleared,
investigations conducted or other proceedings taken or to the best of
the Vendors' knowledge, information and belief, threatened by any
governmental body or other regulatory authority or threatened in
writing by any person under or pursuant to any applicable
environmental laws and regulations with respect to the Business.
(g) (NO NOTICES IN RESPECT OF ENVIRONMENTAL MATTERS): No Vendor has
received any written communications which have not been fully complied
with and cleared concerning alleged violations of environmental
legislation or claims with respect to environmental matters with
respect to the Business.
(h) (ALL PERMITS OBTAINED): All permits required under any applicable
environmental laws and regulations to own and operate the Business
have been obtained and are in good standing.
(i) (BUSINESS DOES NOT CONSTITUTE NUISANCE): The conduct of the Business
does not constitute a nuisance nor has any claim been made in respect
of the use or operation of the Premises by any adjoining landowner or
other party.
11. INTELLECTUAL PROPERTY
(a) (VENDORS OWN ALL INTELLECTUAL PROPERTY): Except as otherwise disclosed
herein the Vendor owns absolutely the Intellectual Property without
conflict with or infringement of any, and subject to no Encumbrance,
right, title or interest in others.
(b) (ALL MATERIAL INTELLECTUAL PROPERTY): The Intellectual Property
specified in Schedule 4 comprises all the intellectual property which
is material to the conduct of the Business.
(c) (NO INTELLECTUAL PROPERTY RIGHTS NOT TO PASS TO PURCHASER): There are
no intellectual property rights, benefits or arrangements used in or
relating to the Business which will not effectively pass or be
licensed to the Purchaser pursuant to this Agreement and each item of
Intellectual Property will be owned by or available for use by the
Purchaser on terms and conditions sufficient to enable the Purchasers
to conduct the Business.
(d) (REGISTERED INTELLECTUAL PROPERTY VALIDLY REGISTERED): Where
registrable in
<PAGE>
Australia, the Intellectual Property is validly registered and
subsisting in the name of a Vendor and is free of any Encumbrances.
(e) (NO DEALINGS PERMITTING USE OF INTELLECTUAL PROPERTY): The Vendors
have not dealt with, authorised or permitted any person to use any of
the Intellectual Property, except in the ordinary course of the
Business and except in respect of the BHAC licence and the Vendors
have no knowledge of the infringing use of any Intellectual Property
by any other person.
(f) (NO INFRINGEMENT OF OTHER INTELLECTUAL PROPERTY RIGHTS): None of the
Intellectual Property or the processes now or at any time employed or
the products now or at any time dealt in by the Business constitutes
or may constitute an unauthorised infringement of any intellectual
property rights of any other person and no claims have been asserted
or are or may be pending or to the best of the Vendors' knowledge,
information and belief, threatened by any person in respect of the use
or the validity of the Intellectual Property.
(g) (NO CLAIMS AS TO VALIDITY OF BUSINESS CONTRACTS): No claims have been
asserted or are expected to be asserted by any person to the use of
any of the Intellectual Property by the Vendors or challenging or
questioning the validity or effectiveness of any Business Contract
relating thereto.
(h) (NO SIMILAR BUSINESS OR TRADE NAMES OR MARKS): The Vendors have no
knowledge that and has not received any notice of any claims to the
effect that any business or trade name or trade mark used or owned by
the Vendors and used in the Business is the same as or is confusingly
or deceptively similar to the name of any other company or any
business or trade name or trade mark owned or used by any other
person.
(i) (NO DEPENDENCE ON LICENSED BUSINESS OR TRADE NAMES OR MARKS): In
carrying on the Business the Vendors are not dependent upon or using
any trade marks trade names or business names in respect of which any
registration in the name of or licence from another party exists or
has been applied for.
(j) (PROTECTION OF INTELLECTUAL PROPERTY): The Vendors have taken or
caused to be taken all reasonably necessary steps to protect and
defend the Intellectual Property, and to maintain in confidence all
trade secrets and confidential information, that the Vendors own or
use in connection with the Business. No other person or entity has any
rights to any of the Intellectual Property used in the business, and
to the best of the Vendors' knowledge, information and belief, no
other person or entity is infringing, violating or misappropriating
any of the Intellectual Property used in the Business.
(k) (NO ROYALTIES TO THIRD PARTIES): The Vendors do not pay any royalty or
other
<PAGE>
payment to any third party or require the permission of or consent of
any third party in relation to the use of the Intellectual Property.
(l) (MORAL RIGHTS): The Purchaser may in respect of any moral rights which
the Vendors may posses in the Intellectual Property, deal with the
Intellectual Property in such manner as the Purchaser sees fit,
including altering the Intellectual Property and using the
Intellectual Property or any part of it in any way and in any place
without recognition to the author(s). The Vendors may not enforce any
moral rights which the Vendors may have or claim in respect of
Intellectual Property or any part of it, against the Purchaser or any
other person.
(m) (ROYALTIES): As at Completion, there are no outstanding royalties
payable by the Vendor in respect of any Intellectual Property.
(n) (COPYRIGHT SUBSISTS): Copyright in any software or materials related
to that software which is part of the Intellectual Property, exists
and is owned either jointly or severally by the Vendors within the
meaning of the Copyright Act (Cwth) 1968.
(o) The Vendors have delivered to the Purchasers correct and complete
copies of all patents, registrations, applications, licenses and
agreements (as amended to date) used or to be used in connection with
the operation of the Business and have made available to the
Purchasers correct and complete copies of all other written
documentation evidencing ownership of, rights to use and any claims or
disputes relating to, each such item. With respect to each such item
of Intellectual Property that the Vendors own, license or distribute:
(i) the Vendors possess all right, title and interest in and to
such item;
(ii) such item is not subject to any outstanding judgment, order,
decree, stipulation or injunction; and
(iii) other than in the ordinary course of business, the Vendors have
not agreed to indemnify any person or entity for or against any
infringement, misappropriation or other conflict with respect
to such item.
12. MATERIAL DISCLOSURE
(a) (ALL MATERIAL INFORMATION): All information concerning the Business,
the Premises and the Assets which the Vendors or any of their
respective representatives have furnished to the Purchasers or their
respective representatives prior to the execution hereof is true and
correct in every material respect, and is not misleading or deceptive,
and any information known or which should be known to any Vendor or
the Vendors' Guarantee concerning the Assets, the Business or the
Premises which might reasonably be supposed to be material to a
purchaser of the Assets, the Business or the Premises in determining
whether or not to purchase the
<PAGE>
Assets the Business or the Premises or the price at which or the terms
upon which a purchaser would be prepared to purchase the Business the
Premises or any of the Assets has been disclosed to the Purchasers.
(b) (ALL INFORMATION TRUE COMPLETE AND ACCURATE): The information set out
in the letters, documents and communications supplied or conveyed to
the Purchasers or the Purchasers' respective agents, employees or
advisers by the Vendors, or any of the Vendors' respective agents,
employees or advisers, is true, complete and accurate in all material
respects and the information set out in the Recitals and Schedules to
this Agreement is true, complete and accurate in all respects.
(c) (NO REPRESENTATION CONTAINS MATERIAL ERROR OR MIS-STATEMENT): No
representation or warranty by any Vendor contained in this Agreement
and in its Schedules nor any written representation, statement or
certificate made or furnished or to be made or furnished hereafter by
such Vendor pursuant hereto in connection with the transactions
contemplated hereby contains or shall contain any material error or
mis-statement with respect to the Assets, the Premises or the
Business.
(d) (NO REPRESENTATION OR WARRANTY OMITS MATERIAL FACT): No representation
or warranty of the Vendors contained in this Agreement and in its
Schedules omits or will omit to state any material fact with respect
to the Assets, the Business, the Premises or the Vendors necessary to
make any such representation or warranty, in the light of the
circumstances in which it is made, misleading.
(e) (NO ADVERSE ACTS): Prior to the date hereof, nothing has been or shall
be done or omitted to be done in relation to the carrying on of the
Business or the Assets which might materially adversely affect the
interests of the Purchaser as an intending purchaser of the Business
or the Assets.
(f) (MATERIAL FACTS AND MATTERS): To the best of the knowledge and belief
of the Vendors there is no:
(i) fact or matter material to the value of the Assets hereby agreed
to be sold materially affecting the aggregate value of the Assets
which has not been disclosed to the Purchasers; or
(ii) fact or matter materially affecting the trading of the Business
and the continued operation of the Business as a going concern
and which has not been disclosed to the Purchasers.
13. EMPLOYEES
(a) (EMPLOYEES' PARTICULARS): The particulars of the Employees contained
in the list supplied by the Vendors to the Purchasers under clause 8.1
of this Agreement are
<PAGE>
true and correct and comprise all Employees engaged in employment by
the Vendor.
(b) (ALL MATERIAL TERMS OF EMPLOYMENT): The Vendors have disclosed to the
Purchaser prior to the date hereof all material terms and conditions
on which each of the Employees is employed, including a description of
all benefits received by any Employee, and warrants that there are no
service contracts or agreements in existence in relation to any of the
Employees which cannot be terminated on one month's notice or less
without the payment of any compensation; and the engagement of all
Employees is on the basis that the Vendor has no obligation to pay an
Employee any commission bonus incentive, retiring or similar payment
other than as disclosed herein. The Vendors have disclosed to the
Purchasers prior to the date hereof each:
(i) agreement with any Employee or director of the Vendors:
A. the benefits of which are contingent, or the terms of which
are materially altered, upon the occurrence of a transaction
involving a Vendor of the nature of any of the transactions
contemplated by this Agreement;
B. providing any term of employment or compensation guarantee;
or
C. providing severance benefits or other benefits after the
termination of employment of such employee or director; and
(ii) agreement, plan or arrangement, including without limitation any
stock option plan, stock appreciation right plan, restricted
stock plan, stock purchase plan, severance benefit plan, or any
other employee benefit plan, any of the benefits of which will be
increased, or the vesting of the benefits of which will be
accelerated, by the occurrence of any of the transactions
contemplated by this Agreement or the value of any of the
benefits of which will be calculated on the basis of any of the
transactions contemplated by this Agreement.
(c) (TRANSFER OF EMPLOYEES): No Vendor has any knowledge of any facts
which would indicate that any Employees shall not transfer their
employment to the Purchaser on the Completion Date.
(d) (NO VIOLATION OF EMPLOYMENT LAWS): No Vendor has violated any
applicable law or regulation relating to employment of labour
including without limitation Occupational Health and Safety
legislation, Equal Opportunity legislation and all other laws or
regulations relating to labour relations, labour standards or
employment practices and any regulations thereunder or engaged in any
conduct with respect to the Employees which will or may result in any
liability to any Vendor or any Purchaser.
<PAGE>
(e) (TAXES PAID FROM EMPLOYEES' WAGES): The Vendor has made timely
payments of any taxes required to be deducted and withheld from the
wages and salaries paid to the Employees and the Vendors have paid all
Employees in accordance with all applicable awards, legislation or
agreements whether registered or otherwise.
(f) (CLAIMS BY EMPLOYEES): Other than as previously disclosed in writing
by the Vendors to the Purchasers, the Vendors do not know of any facts
which will result in any present or former employee of the Vendor
having any valid claim on the date of termination of his employment as
contemplated herein, against any Vendor or the Business whether under
law or any employment agreement or otherwise on account of or for:
(i) overtime pay;
(ii) wages or salaries;
(iii) any statute, ordinance, regulation or award relating to minimum
wages or other working conditions;
(iv) redundancy pay or payment in lieu of notice;
(v) workers' compensation claims or common law claims for injury or
any kind of disease;
(vi) sick leave;
(vii) superannuation;
(viii) termination of employment;
(ix) discrimination or sexual harassment.
(g) (NO LABOUR DISPUTE): At the date of this Agreement there is no labour
dispute, strike, work stoppage or arbitration proceedings which will
affect or may affect the Business or interfere with its continued
operation.
(h) (NO ENTERPRISE AGREEMENT OR AGREEMENT WITH UNIONS): Other than as
disclosed herein there is no enterprise agreement or agreement,
arrangement or understanding between any Vendor and any trade union or
any representatives thereof in respect of the Employees.
(i) (NO RETIREMENT OR PENSION SCHEME): No Vendor has entered into any
retirement benefit schemes, pension schemes, other pension
arrangements or other benefit payable on retirement, death or
disability or on the attainment of a specified or agreed number of
years service, and no Vendor has undertaken to make any ex gratia
payment of any such nature whether legally enforceable or not,
relating to the Employees.
(j) (EMPLOYEES PERMIT TO DISCLOSE): On the Completion Date the Vendors
will authorise all past and present employees of the Business to
disclose to the Purchasers any of the Intellectual Property.
<PAGE>
14. SUPERANNUATION
(a) The Vendors shall deliver to the Purchaser if requested in the
possession or control of the Vendors the correct and complete copies
of all documents, information and other material relating to any
complying superannuation fund for the purposes of the Superannuation
Industry (Supervision) Act of which any relevant Transferring Employee
is a member and details of contributions made by any Vendor to such
fund(s) and such other information as a Purchaser may reasonably
require to satisfy itself to the extent and nature of any
superannuation arrangements existing in respect of Transferring
Employees as at the Completion Date.
(b) There are no pending or threatened claims by or on behalf of any
Employee or beneficiary of such Employee in respect of any
superannuation fund of which such Employee is or was a member alleging
a breach of fiduciary duty or violation of other applicable law which
could result in any liability on the part of a Vendor or a Purchaser.
(c) All and any claims in respect of superannuation and superannuation
entitlements against the Vendors have been disclosed to the Purchasers
in writing.
(d) The Vendors have provided the prescribed minimum level of
superannuation support in respect of each of their Employees and in
particular for each of the Transferring Employees and there is no
liability whether actual or contingent to any superannuation guarantee
charge in terms of the Superannuation Guarantee Charge Act and/or the
Superannuation Guarantee (Administration) Act for which a Vendor
and/or a Purchaser may be liable.
(e) Without limiting the generality of any other warranty herein
contained, the Vendors warrant with and covenant to the Purchaser that
each of them has complied with all and any obligations imposed upon
them whether under statute, by contract or otherwise in relation to
superannuation matters and that a Purchaser shall not suffer any loss
or damage in relation to such matters occurring on or before the
Completion Date in respect of any relevant Transferring Employee.
(f) None of the Vendors currently are party to any superannuation
arrangement under which a Purchaser may become liable to make
superannuation contributions in respect of any Transferring Employee.
(g) The Purchasers shall not be obliged to make any contributions to any
such superannuation arrangement in respect of any Employee of the
Vendors and in particular in respect of any Transferring Employee.
<PAGE>
15. STAMP DUTIES
All documents which are necessary to establish the title of the Vendors to
the Assets and any rights and benefits under any Premises Leases are in the
possession of or under the control of the Vendors and to the extent that
such documents attract stamp duty in Australia or elsewhere they have been
or will on the Completion Date be properly stamped.
16. ATTORNEYS AND FINDERS FEE
(a) (NO POWERS OF ATTORNEY): There are no powers of attorney given by any
Vendor which are or may come to be in force in relation to the
Business or the Assets.
(b) (NO FINDERS FEE): No Vendor has taken any action such that anyone
becomes entitled to receive from the Purchaser any finders fee,
brokerage or other commission in connection with the acquisition of
the Assets and the sale and purchase of the Business under the terms
and conditions of this Agreement.
17. CARRY ON BUSINESS
(a) (BENEFIT OF GOODWILL): The Vendors shall use their best endeavours to
secure for the Purchaser the full benefit of the interest and custom
of the Vendors in respect of the Business and shall preserve and
maintain the Goodwill.
(b) (INTRODUCE CUSTOMERS AND SUPPLIERS): The Vendors shall use their best
endeavours to introduce customers and suppliers of the Business to the
Purchasers to facilitate the transfer of the Business to the
Purchasers.
(c) (CONTINUED SERVICE OF EMPLOYEES): The Vendors shall use their best
endeavours to co-operate with the Purchasers in order to secure for
the Purchaser the continued services of the Employees.
18. NO TAX DISPUTE
There is no material dispute or difference between the Vendor and the
Commissioner of Taxation of the Commonwealth of Australia or any other
Federal State or Municipal body or authority or taxation or revenue
authority of any other country or place that may in any way affect the
Purchasers or the transactions contemplated by this Agreement.
19. SYSTEMS
(a) (SYSTEMS INDEPENDENT): The Systems used in respect of the Business by
the
<PAGE>
Vendors are independent of the Vendors, are discrete systems capable
of functioning without any recourse to any Systems operated by the
Vendors, and represent all of the systems necessary or useful for the
successful operation of the Business.
(b) (SYSTEMS IN GOOD ORDER): The Systems owned, developed and operated by
the Vendors in respect of the Business are in good working order and
repair, are free from any material design or operational problems that
would prevent the Purchaser from adequately utilising such systems in
the conduct of the Business, can be run, managed and obliged without
undue reliance on persons other than the Employees, and are properly
documented in a form that permits the utilisation of such systems
without resort to records not kept by the Vendors.
20. ABSENCE OF CHANGES
There has not been since the date of the Accounts:
(a) any material adverse change to the Assets or to the financial
circumstances or condition of the Vendors or the Business and the
financial prospects cash flow and trading pattern of the Business, and
having made all due and proper enquiries, the Vendors are not aware of
any fact or event which will or is likely to cause any such material
adverse change prior to or after the Completion Date;
(b) any damage destruction or casualty loss, whether covered by insurance
or not, materially and adversely affecting the Assets or the Business;
(c) any entry into any agreement commitment or transaction by the Vendor
material to the Business or the Assets, except agreements commitments
or transactions in the ordinary course of business consistent with
past custom and practice (including with respect to frequency and
amount);
(d) any change in the method of depreciation of the Plant and Equipment;
(e) any acquisition, sale transfer or other disposition of the Assets or
any other assets other than in the ordinary course of business
consistent with past custom and practice (including with respect to
frequency and amount); or
(f) any material change in the remuneration or other benefits paid to or
expected by the Employees.
No Vendor has, since the date of the Most Recent Balance Sheet, taken any
of the following actions:
(a) created, incurred or assumed any debt (including obligations in
respect of capital
<PAGE>
leases);
(b) changed its accounting methods, principles or practices, or made any
new elections with respect to taxes affecting the Assets or any
changes in current elections with respect to taxes affecting the
Assets;
(c) paid any obligation or liability other than in the ordinary course of
business consistent with past custom and practice (including with
respect to frequency and amount);
(d) mortgaged or pledged any property or assets or subjected any assets to
any Encumbrance;
(e) sold, assigned, transferred, licensed or sublicensed any Intellectual
Property, other than in the ordinary course of business consistent
with past custom and practice (including with respect to frequency and
amount);
(f) entered into, amended, terminated, taken or omitted to take any action
that would constitute a violation of or default under, or waived any
rights under, any material contract or agreement;
(g) entered into any written arrangement (including written agreements)
which creates a liability on a Vendor's part in excess of $10,000;
(h) made or committed to make any capital expenditure in excess of $10,000
per item or total capital expenditures in excess of $50,000 in the
aggregate;
(i) failed to take any action necessary to preserve the validity of any
Intellectual Property or Permit; or
(j) agreed in writing or otherwise to take any of the foregoing actions.
21. TRUST
No Vendor is the trustee of any trust or holds any of the Assets or
conducts the Business in that capacity.
22. BANKING FACILITIES
The Vendors have, prior to the date hereof, disclosed to the Purchasers in
writing a true, correct and complete list of:
(a) each bank, savings and loan or similar financial institution at which
the Vendors with respect to the Business has an account, safety
deposit box, line of credit or
<PAGE>
credit facility and the numbers of the accounts or safety
deposit boxes maintained by the Vendors with respect to the Business
thereat and details, including terms, of any line of credit or credit
facility; and
(b) the names of all persons authorized to draw on each such account or to
have access to any such safety deposit box facility, together with a
description of the authority (and conditions thereof, if any) of each
such person with respect thereto.
<PAGE>
THE COMMON SEAL of BHA PTY LTD )
ACN 009 937 606 was affixed by the authority of ) .............................
the Board of Directors in the presence of: ) (Signature of Director)
)
....................................... .............................
(Signature of a Secretary/Director) (Name of Director in Full)
.......................................
(Name of Secretary/Director in Full)
THE COMMON SEAL of BHA COMPUTER )
PTY LTD ACN 068 883 429 was affixed by the ) .............................
authority of the Board of Directors in the ) (Signature of Director)
presence of: )
....................................... .............................
(Signature of a Secretary/Director) (Name of Director in Full)
.......................................
(Name of Secretary/Director in Full)
THE COMMON SEAL of SAVILLE SYSTEMS AUST. )
PTY LTD ACN 080 026 551 was affixed by the ) .............................
authority of the Board of Directors in the ) (Signature of Director)
presence of: )
....................................... .............................
(Signature of a Secretary/Director) (Name of Director in Full)
.......................................
(Name of Secretary/Director in Full)
SAVILLE SYSTEMS PLC by JOHN J BOYLE )
<PAGE>
III, President and Chief Executive Officer in the) ............................
presence of: ) (Signature of President and
) Chief Executive Officer)
...................................(Signature of
Witness)
...................................(Name of
Witness in Full)
SIGNED SEALED AND DELIVERED by )
JOHN EDWARD HENDRY in the presence of: ) ............................
) (Signature)
..................................
(Signature of Witness)
..................................
(Name of Witness in Full)
SIGNED SEALED AND DELIVERED by )
PRUDENCE MARIANNE HENDRY in the ) .............................
presence of: ) (Signature)
..................................
(Signature of Witness)
..................................
(Name of Witness in Full)
<PAGE>
EXHIBIT 10.1
SHARE PURCHASE AGREEMENT
------------------------
This Agreement dated as of April 3, 1998 is entered into by and among
Saville Systems PLC, a public limited company incorporated in the Republic of
Ireland (the "Company"), and BHA Pty. Ltd. ACN 009 937 606, a company
incorporated in Queensland, Australia (the "Purchaser").
WHEREAS, the Company, Saville Systems Aust. Pty. Ltd. ACN 080 026 551, a
company incorporated in Queensland, Australia and a wholly-owned subsidiary of
the Company ("Saville Australia"), BHA Computer Pty. Ltd. ACN 068 883 429, a
company incorporated in Queensland, Australia and the Purchaser are entering
into a Business Acquisition Agreement on the date hereof (the "Acquisition
Agreement"), pursuant to which the Company and Saville Australia will acquire
the Business (as defined in the Acquisition Agreement); and
WHEREAS, as a condition to the completion of the transactions contemplated
by the Acquisition Agreement, the Company is required to sell, and the Purchaser
is required to purchase, Ordinary Shares, $0.0025 nominal value per share, of
the Company (the "Ordinary Shares") on the terms set forth herein.
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this Agreement, the Company and the Purchaser agree as follows:
1. Authorization and Sale of Shares.
--------------------------------
1.1 Authorization. The Company has, or before the Closing (as
-------------
defined in Section 2) will have, duly authorized the sale and issuance, pursuant
to the terms of this Agreement, of 283,698 Ordinary Shares ranking equally with
the other Ordinary Shares of the Company.
1.2 Sale of Shares. Subject to the terms and conditions of this
--------------
Agreement, at the Closing the Company will sell and issue to the Purchaser, and
the Purchaser will purchase, 283,698 Ordinary Shares for the purchase price of
US$49.5126 per share (equal to the average closing sale price of the Company's
American Depositary Receipts ("ADRs") on the Nasdaq National Market for the five
trading days preceding April 2, 1998). The Ordinary Shares being sold under
this Agreement are referred to as the "Shares."
2. The Closing. The closing ("Closing") of the sale and purchase of the
-----------
Shares under this Agreement shall take place at the offices of Clayton Utz, 125
Adelaide Street, Brisbane, Queensland, Australia at 2:00 p.m. (local time) on
April 3, 1998. At the Closing, the Company shall deliver to the Purchaser a
facsimile copy of the certificate for the number of Shares being purchased by
the Purchaser, registered
<PAGE>
in the name of the Purchaser, against payment to the Company of the purchase
price therefor, by wire transfer, check, or other method acceptable to the
Company. In addition, at the Closing, the Company shall deliver by facsimile a
certification of the Company's registrar and transfer agent certifying as to the
truth and accuracy of such facsimile share certificate. The Company has
instructed its registrar and transfer agent to deliver by facsimile a copy of
the register for the Ordinary Shares which lists the Purchaser as the owner of
the Shares to the Purchaser. Such facsimiles shall be sent c/o Minter Ellison
(facsimile # 61 7 3229 1066), Attn: W. D. Thompson. The date of the Closing is
hereinafter referred to as the "Closing Date."
3. Representations and Warranties of the Company.
---------------------------------------------
3.1 Organization and Good Standing. The Company is a corporation duly
------------------------------
organized, validly existing and in good standing as a public limited company
under the laws of the Republic of Ireland.
3.2 Issuance of Shares. The issuance, sale and delivery of the Shares
------------------
in accordance with this Agreement have been duly authorized by all necessary
corporate action on the part of the Company, and all such Shares have been duly
reserved for issuance. The Shares when so issued, sold and delivered against
payment therefor in accordance with the provisions of this Agreement will be
duly and validly issued, fully paid and non-assessable, will have no personal
liability attaching to the ownership thereof and will be free and clear of
liens, charges, restrictions, claims and encumbrances imposed by or through the
Company. Assuming the accuracy of the represenations and warranties of the
Purchaser in Section 4 hereof, the issuance of the Shares to the Purchaser
pursuant to this Agreement is (i) exempt from registration under the U.S.
Securities Act of 1933, as amended (the "Securities Act") and (ii) will not give
rise to a public offer within the meaning of the Companies Act (Ireland), 1963
to 1990.
3.3 American Depositary Receipts. The issuance and delivery of the
----------------------------
ADRs against the Shares in accordance with the provisions of the Deposit
Agreement (the "Deposit Agreement") between the Company and The Bank of New
York, as Depositary, (the "Depositary") have been duly authorized by all
necessary corporate action on the part of the Company, and all such ADRs have
been duly reserved for issuance. Other than the procedures set forth in the
Deposit Agreement, no consent, approval, order or authorization of any third
party is required for the deposit of the Shares by the Purchaser with the
Depositary. Upon the issuance by the Depositary of the ADRs against the Shares,
such ADRs will be duly and validly issued, and the holder of such ADRs will be
entitled to the rights specified therein and in the Deposit Agreement.
-2-
<PAGE>
4. Representations and Warranties of the Purchaser. The Purchaser
-----------------------------------------------
represents and warrants to the Company and agrees with the Company as follows:
4.1 The Purchaser has full power and authority to enter into and to
perform this Agreement in accordance with its terms. The Purchaser has not been
organized, reorganized or recapitalized specifically for the purpose of
acquiring the Shares.
4.2 The Purchaser has received a copy of a Confidential Offering
Memorandum dated March 27, 1998 from the Company (the "Offering Memorandum").
The Purchaser acknowledges that no federal or state agency has made any finding
or determination as to the fairness of the terms of this offering. The Shares
have not been recommended or endorsed by any federal, state or foreign
securities commission or regulatory agency nor have any of the foregoing
authorities confirmed the accuracy or determined the adequacy of the Offering
Memorandum.
4.3 The Purchaser is acquiring the Shares for its own account, for
investment and not with a view to the distribution thereof within the meaning of
the Securities Act.
4.4 The Purchaser agrees that the Company may place a legend on the
certificates delivered hereunder in substantially the following form:
"These Shares have not been registered under the Securities Act of
1933, as amended (the 'Securities Act') and may not be offered or
transferred by sale, assignment, pledge or otherwise prior to the end
of the restricted period specified in Regulation S of the Securities
Act, in the United States or to a US person unless the Shares are
registered under the Securities Act, or an exemption from the
registration requirements of the Securities Act is available. Terms
used herein that are defined in Regulation S of the Securities Act are
used herein as defined therein."
4.5 The Purchaser is not a U.S. person (as defined in Securities Act
Rule 902(k)) and is not acquiring the Shares for the account or benefit of any
U.S. person.
4.6 The Purchaser will resell the Shares only in accordance with (A)
the provisions of Regulation S promulgated under the Securities Act, (B)
pursuant to an effective registration statement under the Securities Act, or (C)
pursuant to an available exemption from registration under the Securities Act.
4.7 Other than pursuant to an effective registration statement under
the Securities Act, the Purchaser will not offer or sell the Shares to a U.S.
person or to
-3-
<PAGE>
or for the account or benefit of a U.S. person prior to the expiration of the
applicable period under Regulation S under the Securities Act.
4.8 The Purchaser was represented and advised by counsel in
connection with the purchase of the Shares and the execution of this Agreement
by the Purchaser.
5. Conditions to Closing.
---------------------
5.1 The obligation of the Company and the Purchaser to consummate the
transactions contemplated by this Agreement is subject to the execution of the
Acquisition Agreement and the completion by each of them of the transactions
contemplated thereby.
5.2 The obligation of the Company to consummate the transactions
contemplated by this Agreement is subject to the further condition that the
representations and warranties of the Purchaser set forth in Section 4 hereof
shall be true and correct on and as of the Closing Date.
6. Registration Rights.
-------------------
6.1 Registration of Shares. The Company shall file with the United
----------------------
States Securities and Exchange Commission (the "SEC") within 15 days following
the Closing, a registration statement on Form S-3 covering the resale to the
public by the Purchaser of the Shares (the "Registration Statement"). The
Company shall use its best efforts to cause the Registration Statement to be
declared effective by the SEC as soon as possible. The Company shall cause the
Registration Statement to remain effective for a period of 24 months after the
Closing or until such earlier time as the Shares then subject to the
Registration Statement are freely tradeable pursuant to Rule 144 under the
Securities Act without regard to volume limitations or are otherwise freely
tradable pursuant to Rule 144(k) under the Securities Act.
6.2 Limitations on Registration Rights.
----------------------------------
(a) The Company may delay filing the Registration Statement with the
SEC in the event that the Company is engaged in or plans to engage in a public
offering of its securities, acquisition or any other activity that the Company
in good faith determines might be adversely affected by the filing of the
Registration Statement; provided such right to delay a filing may not be
--------
exercised more than once in any 12 month period and any such delay shall be for
not more than 180 days. In addition, the Company may, by written notice to the
Purchaser, suspend the Registration Statement and require that the Purchaser
immediately cease sales of Shares pursuant to the Registration Statement, in any
period during which the Company is engaged in any activity or transaction or
preparations or negotiations for
-4-
<PAGE>
any activity or transaction ("Company Activity") that the Company desires to
keep confidential for business reasons, if the Company determines in good faith
that the public disclosure requirements imposed on the Company under the
Securities Act in connection with the Registration Statement would require
disclosure of the Company Activity. To the Company's knowledge, none of the
events referred to in the first clause of this Section 6.2(a) is occurring as of
the date of this Agreement.
(b) If the Company suspends the Registration Statement or requires the
Purchaser to cease sales of Shares pursuant to paragraph (a) above, the Company
shall, as promptly as practicable following the termination of the circumstance
which entitled the Company to do so, take such actions as may be necessary to
reinstate the effectiveness of the Registration Statement and/or give written
notice to the Purchaser authorizing them to resume sales pursuant to the
Registration Statement. If the prospectus included in the Registration
Statement has been amended to comply with the requirements of the Securities
Act, the Company shall enclose such revised prospectus with the notice to the
Purchaser given pursuant to this paragraph (b), and the Purchaser shall make no
offers or sales of Shares pursuant to the Registration Statement other than by
means of such revised prospectus.
6.3 Registration Procedures.
-----------------------
(a) In connection with the filing by the Company of the Registration
Statement, the Company shall furnish to the Purchaser a reasonable number of
copies of the prospectus, including a preliminary prospectus, in conformity with
the requirements of the Securities Act.
(b) The Company shall use its best efforts to register or qualify the
Shares covered by the Registration Statement under the securities laws of such
states of the United States as the Purchaser shall reasonably request; provided,
--------
however, that the Company shall not be required in connection with this
- -------
paragraph (b) to qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction.
(c) If the Company has delivered preliminary or final prospectuses to
the Purchaser and after having done so the prospectus is amended to comply with
the requirements of the Securities Act, the Company shall promptly notify the
Purchaser and, if requested by the Company, the Purchaser shall immediately
cease making offers or sales of shares under the Registration Statement and
return all prospectuses to the Company. The Company shall promptly provide the
Purchaser with revised prospectuses and, following receipt of the revised
prospectuses, the Purchaser shall be free to resume making offers and sales
under the Registration Statement.
-5-
<PAGE>
(d) The Company shall pay all expenses incurred by the Company in
complying with this Section 6 including, without limitation, all registration
and filing fees, exchange listing fees, printing expenses, fees and expenses of
counsel for the Company, United States state securities laws fees and expenses,
and the expense of any special audits incident to or required by any such
registration, but excluding underwriting discounts, selling commissions and the
fees and expenses of the Purchaser's own counsel (if any).
6.4 Requirements of Purchaser. The Company shall not be required to
-------------------------
include any Shares in the Registration Statement unless:
(a) the Purchaser furnishes to the Company in writing such information
regarding the Purchaser, the contemplated distribution of the Shares held by the
Purchaser and such other information regarding the proposed sale of Shares by
the Purchaser as the Company may reasonably request in writing in connection
with such Registration Statement or as shall be required in connection therewith
by the SEC or any state securities law authorities;
(b) the Purchaser shall have provided to the Company its written
agreement:
(i) to indemnify the Company and each of its directors and
officers against, and hold the Company and each of its directors and officers
harmless from, any losses, claims, damages, expenses or liabilities (including
reasonable attorneys fees) to which the Company or such directors and officers
may become subject by reason of any statement or omission in the Registration
Statement made in reliance upon, or in conformity with, a written statement by
such Purchaser furnished pursuant to this Section 6.4; and
(ii) to report to the Company sales made pursuant to the
Registration Statement.
6.5 Indemnification. The Company agrees to indemnify and hold
---------------
harmless the Purchaser against any losses, claims, damages, expenses or
liabilities to which the Purchaser may become subject by reason of any untrue
statement of a material fact contained in the Registration Statement or any
preliminary or final prospectus or any omission to state therein a fact required
to be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages, expenses or liabilities arise
out of or are based upon information furnished to the Company by or on behalf of
the Purchaser for use in the Registration Statement. The Company shall have the
right to assume and control the defense and settlement of any claim or suit for
which the Company may be responsible for indemnification under this Section 6.5.
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<PAGE>
6.6 Assignment of Rights. The Purchaser may not assign any of its
--------------------
rights under this Section 6.
7. Additional Covenants of the Company.
-----------------------------------
7.1 Listing of the Shares. Promptly after the Closing, and in any
---------------------
event prior to the deposit of such Shares by the Purchaser with the Depositary,
the Company will file an application to list the ADRs representing the Shares on
the Nasdaq National Market. The Company does not know of any reason why the ADRs
will not be approved for listing on the Nasdaq National Market. The Company
shall pay all expenses incurred by the Company in complying with this Section
7.1.
7.2 Stamp Duties. The Company shall pay all stamp duties, levies or
------------
taxes assessed by or in the Republic of Ireland required to be paid by the
Purchaser in connection with the issuance of the Shares.
8. Miscellaneous.
-------------
8.1 Notices. All notices, requests, consents, and other
-------
communications under this Agreement shall be in writing and shall be delivered
by hand or mailed by first class certified or registered mail, return receipt
requested, postage prepaid:
If to the Company, at Saville Systems PLC, One Van de Graaff Drive,
Burlington, Massachusetts 01803, USA, Attention: Michael Cayer, Esq., or at
such other address or addresses as may have been furnished in writing by the
Company to the Purchaser;
If to the Purchaser, at its address set forth on Schedule I, or at such
----------
other address or addresses as may have been furnished to the Company in writing
by the Purchaser.
Notices provided in accordance with this Section 6.5 shall be deemed
delivered upon personal delivery or three business days after deposit with a
reputable international express delivery service.
8.2 Brokers. Each of the Company and the Purchaser (i) represents
-------
and warrants to the other party hereto that it has retained no finder or broker
in connection with the transactions contemplated by this Agreement, and (ii)
will indemnify and save the other party harmless from and against any and all
claims, liabilities or obligations with respect to brokerage or finders' fees or
commissions, or consulting fees in connection with the transactions contemplated
by this Agreement asserted by any person on the basis of any statement or
representation alleged to have been made by such indemnifying party.
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<PAGE>
8.3 Entire Agreement. This Agreement embodies the entire agreement
----------------
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
8.4 Amendments and Waivers. Except as otherwise expressly set forth
----------------------
in this Agreement, any term of this Agreement may be amended and the observance
of any term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively), with the written consent of
the Company and the Purchaser. Any amendment or waiver effected in accordance
with this Section 8.4 shall be binding upon each holder of any Shares, each
future holder of all such securities and the Company. No waivers of or
exceptions to any term, condition or provision of this Agreement, in any one or
more instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
8.5 Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all of which
shall be one and the same document.
6.6 Section Headings. The section headings are for the convenience
----------------
of the parties and in no way alter, modify, amend, limit, or restrict the
contractual obligations of the parties.
8.7 Severability. The invalidity or unenforceability of any
------------
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
8.8 Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Delaware, USA.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
COMPANY
SAVILLE SYSTEMS PLC
By: /s/ John J. Boyle, III
----------------------
John J. Boyle, III,
President and Chief
Executive Officer
PURCHASER
BHA PTY. LTD.
By: /s/ John Edward Hendry
----------------------
Chairman
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