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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): March 26, 1996
IDENTIX INCORPORATED
(Exact name of registrant as specified in its charter)
California
(State or other jurisdiction of incorporation)
1-9641 94-2842496
(Commission File Number) (IRS Employer Identification No.)
510 North Pastoria Avenue, Sunnyvale, California 94086
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (408) 739-2000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 2. Acquisition or Disposition of Assets
Pursuant to the Share Purchase Agreement (the "Agreement") by and
among Identix Incorporated, a California corporation (the "Registrant"), Caprica
Pty Limited ("Caprica"), Permanent Trustee Australia Limited ("Permanent" and
together with Caprica the "Sellers"), John Lewis Boyd Parselle, Helen Adela
Parselle and Michael Milne Home, the Registrant acquired all of the ordinary
shares (the "Ordinary Shares") of Fingerscan Pty Limited ("Fingerscan"). The
transactions under the Agreement were consummated on March 26, 1996 (the
"Closing").
At the Closing, the Registrant issued 668,976 shares of its no par
value Common Stock (the "Shares") to the Sellers in exchange for the Ordinary
Shares. Of the Shares, 428,884 are being held in escrow relating to the Sellers'
indemnification obligations under the Agreement. The Shares are subject to
certain lock-up provisions and certain registration rights, as detailed more
fully in the Agreement.
In order to determine the consideration to be paid for the Ordinary
Shares, the Registrant considered such factors as Fingerscan's book value,
Fingerscan's revenues and profits, Fingerscan's manufacturing and research and
development capabilities, its marketing operations in the South Pacific,
Southeast Asia and other selected countries, as well as Fingerscan's technical
expertise.
Fingerscan designs, manufactures, integrates and markets commercial,
financial and industrial biometric verification systems in the Pacific Rim,
Southeast Asia and other selected countries.
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Financial Statements of Business Acquired Due to the fact that
it is impracticable to provide the required financial statements
of Fingerscan at the time of this Form 8-K Report, the Registrant
will file financial statements as soon as practical, but no
later than 60 days of the date this report is required to be
filed, in accordance with the instructions for item 7(a)(4) of
the Form 8-K.
(b) Pro Forma Financial Information Due to the fact that it is
impracticable to provide the required pro forma financial
information at the time of this Form 8-K Report, the Registrant
will file such pro forma financial information as soon as
practical, but no later than 60 days of the date this report
is required
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to be filed, in accordance with the instructions for item 7(b)(2)
of the Form 8-K.
(c) Exhibits
2.1 Share Purchase Agreement dated March 27, 1996 among Identix
Incorporated, Caprica Pty Limited, Permanent Trustee
Australia Limited, John Lewis Boyd Parselle, Helen
Adela Parselle and Michael Milne Home.
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Pursuant to the requirements of the Securities Exchange Act of 1934,
as amended, the Registrant has duly caused this Report to be signed on its
behalf by the undersigned hereto duly authorized.
IDENTIX INCORPORATED
Date: April 9, 1996 By: /s/ JAMES P. SCULLION
------------------------------
James P. Scullion,
Chief Financial Officer
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THIS SHARE PURCHASE AGREEMENT ("Agreement") is made on 27 March 1996 (26 March
1996 Pacific Standard Time) between the
following parties:
1. CAPRICA PTY LIMITED (ACN 069 889 961) of c/o Pannell Kerr Forster,
Level 20, 1 York Street, Sydney, New South Wales ("Caprica");
2. PERMANENT TRUSTEE AUSTRALIA LIMITED (ACN 008 412 913) (as trustee for
Australian Mezzanine Investments Trust No. 2) of 23 O'Connell Street,
Sydney, New South Wales ("Permanent");
3. JOHN LEWIS BOYD PARSELLE of 31 Killarney Street, Mosman, New South
Wales ("JP");
4. HELEN ADELA PARSELLE of 31 Killarney Street, Mosman, New South Wales
("HP"); and
5. MICHAEL MILNE HOME of 95 Bay Street, Mosman, New South Wales ("MH")
6. IDENTIX INCORPORATED, incorporated in California, of 510 North Pastoria
Avenue, Sunnyvale CA 94086, USA ("Buyer").
RECITALS
A. The Sellers are the owners of the Fingerscan Shares.
B. The Sellers agree to sell and the Buyer agrees to buy the Fingerscan
Shares on the terms and conditions set out in this Agreement.
C. The Proprietors hold all of the issued shares in Caprica and will
indirectly benefit from the sale of the Fingerscan Shares by Caprica.
THE PARTIES AGREE in consideration of, among other things, the mutual promises
contained in this Agreement:
PART 1
DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this Agreement:
"A$" means the lawful currency of the Commonwealth of Australia;
"ACCOUNTS" means the balance sheet of the Company as at the Accounts Date and
the profit and loss account and cash flow statements of the Company for the 6
months ending on the Accounts Date, in each case as reviewed by Price
Waterhouse;
"ACCOUNTS DATE" means 31 December 1995;
"AMIL" means Australian Mezzanine Investments Pty Limited (ACN 003 400 747);
"BRS" means Bio Recognition Systems Pty Limited (ACN 008 659 167);
"BUSINESS" means the business of designing, developing, manufacturing and
marketing of biometric fingerprint identification products and systems and
related activities carried on by the Company;
"BUSINESS DAY" means:
(a) for the purposes of clause 13.1, a day on which banks are open for
business in the city where the notice or other communication is
received, excluding a Saturday or a Sunday or a public holiday; and
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(b) for all other purposes, a day on which banks are open for business in
Sydney, excluding a Saturday, Sunday or public holiday;
"BUSINESS PREMISES" means the premises at 765 Pacific Highway, Chatswood, New
South Wales, at which the Business is carried on;
"CAPRICA ESCROW AGREEMENT" means the escrow agreement between the Buyer, Caprica
and First Trust of California, National Association entered into on or about the
date of this Agreement, in the form attached as annexure A;
"CLOSING" means completion of the sale and purchase of the Fingerscan Shares
under Parts 3 and 6;
"CLOSING DATE" means the date on which Closing occurs under clause 6.1;
"COMPANY" means Fingerscan Pty Limited (ACN 069 428 182);
"COMPANY INTELLECTUAL PROPERTY RIGHTS" means any Intellectual Property Rights
the Company owns, has the right to use or acquire, uses or needs to carry on its
business including but not limited to those listed in schedule 2 of the
Management Disclosure Letter;
"CONDITIONAL RELEASE DATE" means the date upon which the Buyer is obliged to
deliver the Release Certificate referred to in clause 4.2(c);
"DUTY" means any stamp, transaction or registration duty or similar charge
imposed by any Governmental Agency and includes, but it not limited to, any
interest, fine, penalty, charge or other amount imposed in respect of the above
but excludes any Tax;
"EMPLOYEES" means the employees of the Company listed in schedule 5 of the
Management Disclosure Letter;
"FINGERSCAN SHARES" means 100 ordinary shares, being all of the issued shares in
the Company;
"GOVERNMENT AGENCY" means any government or governmental, semi-governmental,
administrative, fiscal or judicial body, department, commission, authority,
tribunal, agency or entity;
"IDENTIX SHARES" means Common Stock of the Buyer, no par value;
"INTELLECTUAL PROPERTY RIGHTS" includes:
(a) any patents, patent applications, utility models, copyrights,
registered or unregistered trade marks or service marks, trade names,
brand names, indications of source or appellations of origin, eligible
layout rights, plant variety rights, registered designs and commercial
names, designations and rights to own other inventions;
(b) any invention, discovery, trade secret, know-how, computer software and
confidential, scientific, technical and product information;
(c) any other rights resulting from intellectual activity in the
industrial, scientific, literary and artistic fields whether
industrial, commercial or extractive and whether dealing with
manufactured or natural products; and
(d) any letters patent, deed of grant, certificate or document of title for
any thing referred to in paragraphs (a), (b) or (c) of this definition
and any medium in which any thing referred to in those paragraphs is
stored or embedded,
both in Australia and throughout the world, for the duration of those rights;
"IR&D GRANT AGREEMENTS" means Discretionary Grant Agreement No. 5484 and
Discretionary Grant Agreement No. 5536 between The Industry Research and
Development Board and BRS;
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"MANAGEMENT DISCLOSURE LETTER" means the letter from Caprica to the Buyer on the
same date as this Agreement and set out in annexure C, containing disclosures in
respect of the Management Warranties;
"MANAGEMENT WARRANTIES" means the warranties and representations set out in
schedule 1 of this Agreement;
"NEW INTELLECTUAL PROPERTY RIGHTS" means the Intellectual Property Rights
referred to in the report of Arthur Andersen dated March 1996;
"PERMANENT ESCROW AGENT" means the entity which enters into the Permanent Escrow
Agreement in the capacity of "Escrow Agent" (as defined in that agreement);
"PERMANENT ESCROW AGREEMENT" means an escrow agreement between the Buyer,
Permanent and any of the following as the "Escrow Agent" (as defined in that
agreement):
(a) State Street Bank and Trust Company;
(b) First Trust of California, National Association; or
(c) an escrow agent carrying on business in the United States of America of
comparable expertise, financial standing and reputation to either of
the entities referred to in paragraphs (a) and (b) of this definition,
nominated by Permanent and reasonably acceptable to the Buyer,
containing provisions to the substantive effect of the principal terms set out
in annexure B or an agreement in a form which the Buyer approves (such approval
not to be unreasonably withheld);
"POWER" means any right, power, authority, discretion or remedy conferred on the
Buyer by this Agreement or any applicable law;
"PROPERTY LEASE" means the lease of the Business Premises as described in
schedule 7 of the Management Disclosure Letter;
"PROPRIETORS" means JP, HP and MH jointly and severally;
"PURCHASE CONSIDERATION" means the purchase consideration payable for the
Fingerscan Shares under clause 4.1;
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset including, but not limited
to, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset under
a bill of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt or any other monetary obligation or
the performance of any other obligation and includes, but is not limited to, any
agreement to grant or create any of the above;
"SELLERS" means Caprica and Permanent, jointly and severally unless otherwise
expressly provided, except for the purposes of clause 4.2 where "Sellers" means
Caprica, Permanent and Roger Allen severally;
"SUPERANNUATION FUND" means the York Superannuation Fund, managed by York Funds
Management Limited;
"TAX" means any tax, levy, charge, impost, duty, fee, deduction, compulsory loan
or withholding, which is assessed, levied, imposed or collected by any
Government Agency and
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includes, but is not limited to any interest, fine, penalty, charge, fee or any
other amount imposed on, or in respect of any of the above but excludes Duty;
"TAX LAW" means any law relating to either Tax or Duty as the context requires;
"VALUE" in relation to an Identix Share means US$12.99 per share; and
"WARRANTIES" means, unless otherwise specified:
(a) as regards Caprica and the Proprietors, the Management Warranties;
(b) as regards Permanent, the Statements (which the parties acknowledge do
not constitute warranties by Permanent or by any other party on behalf
of Permanent);
(c) the warranties set out in clause 8.2(c); and
(d) the other warranties set out in clause 8.3.
1.2 INTERPRETATION
In this Agreement headings in bold type are for convenience only and do not
affect the interpretation of this Agreement and, unless the context otherwise
requires:
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include any gender;
(c) other parts of speech and grammatical forms of a word or phrase defined
in this Agreement have a corresponding meaning;
(d) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other body
corporate and any Government Agency;
(e) a reference to any thing (including, but not limited to, any right)
includes a part of that thing;
(f) a reference to a part, clause, party, annexure, exhibit or schedule is
a reference to a part and clause of, and a party, annexure, exhibit and
schedule to, this Agreement and a reference to this Agreement includes
any annexure, exhibit and schedule;
(g) a reference to a statute, regulation, proclamation, ordinance or by-law
includes all statutes, regulations, proclamations, ordinances or
by-laws amending, consolidating or replacing it, and a reference to a
statute includes all regulations, proclamations, ordinances and by-laws
issued under that statute;
(h) a reference to a document includes all amendments or supplements to, or
replacements or novations of, that document;
(i) a reference to a party to a document includes that party's successors
and permitted assigns;
(j) a reference to an agreement other than this Agreement includes an
undertaking, deed, agreement or legally enforceable arrangement or
understanding whether or not in writing;
(k) a reference to an asset includes all property of any nature, including,
but not limited to, a business, and all rights, revenues and benefits;
(l) a reference to a document includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind;
(m) a reference to liquidation includes official management, appointment of
an administrator, compromise, arrangement, merger, amalgamation,
reconstruction, winding-up,
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dissolution, assignment for the benefit of creditors, scheme,
composition or arrangement with creditors, insolvency, bankruptcy, or
any similar procedure or, where applicable, changes in the constitution
of any partnership or person, or death; and
(n) a reference to an obligation or clause binding Permanent and one or
more other parties severally means that the liability of Permanent is
limited to its own breach of that obligation or clause, and Permanent
will not be liable for any other party's breach of that obligation or
clause.
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done under this Agreement is not
a Business Day, that thing must be done on or by the preceding Business Day.
PART 2
CONDITIONS PRECEDENT FOR CLOSING
[Deleted]
PART 3
SALE AND PURCHASE
3.1 SALE OF SHARES
On the Closing Date the Sellers must sell and the Buyer must buy the Fingerscan
Shares for the Purchase Consideration.
3.2 ASSOCIATED RIGHTS
The Sellers must sell the Fingerscan Shares together with all rights attached to
them as at the date of this Agreement and all those rights which accrue between
the date of this Agreement and Closing.
PART 4
PURCHASE PRICE
4.1 AMOUNT
The consideration payable for the Fingerscan Shares is the issuing to the
Sellers of 668,976 Identix Shares, subject to the issuance of 428,884 of such
shares into escrow pursuant to clauses 4.2(b)(3), (4) and (5).
4.2 SATISFACTION OF THE PURCHASE PRICE
(a) The Buyer must satisfy the Purchase Consideration by issuing Identix
Shares to the Sellers in accordance with this clause 4.2.
(b) At Closing the Buyer must:
(1) issue 230,854 Identix Shares to Caprica;
(2) issue 9,238 Identix Shares to Roger Allen; and
(3) place 117,783 Identix Shares in escrow in accordance with the
terms of the Caprica Escrow Agreement;
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(4) subject to clause 4.2(j), place 192,456 Identix Shares in
escrow in accordance with the terms of the Permanent Escrow
Agreement ("BALANCE ESCROW SHARES"); and
(5) subject to clause 4.2(j), place 118,645 Identix Shares into
escrow in accordance with the terms of clause 4.2(c) and the
terms of the Permanent Escrow Agreement ("IR&D ESCROW
SHARES").
At Closing the Buyer shall deliver to the Sellers a facsimile copy of a
certificate of its transfer agent and registrar confirming that the
Identix Shares have been issued in accordance with this paragraph (b),
with an original copy to follow promptly.
(c) Subject to the terms of the Permanent Escrow Agreement and to clause
4.2(d), upon the earlier to occur of:
(1) receipt by the Buyer of:
(A) formal confirmation from the Industry Research and
Development Board to the effect that the Board waives
or will not exercise its rights under the IR&D Grant
Agreements arising as a result of the acquisition of
the Fingerscan Shares by the Buyer, in a form
reasonably acceptable to the Buyer; or
(B) evidence to the reasonable satisfaction of the Buyer
that the letters dated 18 March 1996 and 19 March 1996
purported to be sent on behalf of the Board have been
executed and delivered under proper authority from the
Board and are binding on the Board in accordance with
their terms; and
(2) the second anniversary of the Closing Date,
the Buyer shall deliver a RELEASE CERTIFICATE (as defined in the
Permanent Escrow Agreement) to the Permanent Escrow Agent authorising
the delivery of the IR&D Escrow Shares by the Permanent Escrow Agent to
Permanent.
(d) If during the period from the date of this Agreement until the
Conditional Release Date Permanent delivers to the Buyer written notice
stating that it is able to sell a specified number of the IR&D Escrow
Shares for US$18.19 or more per share ("CONDITIONAL RELEASE NOTICE")
then, provided that the sale is permitted under clauses 4.2(e) and (g),
the Buyer shall within 5 Business Days of receipt of the Conditional
Release Notice deliver a CONDITIONAL RELEASE CERTIFICATE (as defined in
the Permanent Escrow Agreement) to the Permanent Escrow Agent
authorising the delivery to Permanent of that number of the IR&D Escrow
Shares specified in the Conditional Release Notice. Permanent shall
promptly sell such shares at a price of US$18.19 or more and forthwith
deliver the entire proceeds of sale (net of the costs of such sale) to
the Permanent Escrow Agent to be held subject to clause 4.2(c) and the
terms of the Permanent Escrow Agreement. Permanent must not specify a
number of shares in the Conditional Release Notice that is greater than
the total number of IR&D Shares less the number of shares specified in
all Claim Certificates delivered by the Buyer in accordance with the
Permanent Escrow Agreement as at the date of the Conditional Release
Notice.
(e) The Identix Shares to be issued to the Sellers shall not be registered
under the United States Securities Act of 1933, as amended. The Buyer
shall use all reasonable efforts to register the Identix Shares issued
to each Seller pursuant to this Agreement after the Closing Date
(and in no event shall fail to file the registration statement
therefor by 1 June 1996), will not do anything to delay or impede
such registration, and shall maintain the effectiveness of such
registration until the earlier of:
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(1) the second anniversary of the Closing Date; or
(2) the public distribution of all such shares.
It shall be a condition precedent of the Buyer's obligations to a
particular Seller under this paragraph that such Seller furnish to the
Buyer such information regarding such Seller and the distribution
proposed by such Seller or Sellers as the Buyer may reasonably request.
If any Seller shall propose to sell any Identix Shares pursuant to the
registration statement, it shall notify the Buyer of its intent to do
so at least 5 full Business Days prior to such sale. Such notice shall
be deemed to constitute a representation that any information
previously supplied by such Seller is accurate as of the date of such
notice. At any time within such 5 Business Day period, the Buyer may
refuse to permit the Seller to resell any Identix Shares pursuant to
the registration statement and may require a delay of such sale for a
period not exceeding 10 days; provided however that in order to
exercise this right, the Buyer must deliver a certificate in writing to
the Seller to the effect that a delay in such sale is necessary
because, in the good faith judgment of the Buyer, a sale pursuant to
the registration statement would require the public disclosure of
information that would not otherwise be required to be disclosed at
that time (which disclosure would, in the good faith judgment of the
Buyer, have a significant adverse effect on the Buyer) or could in
other respects constitute a violation of the federal securities laws.
The Seller or Sellers may sell such Identix Shares prior to the
expiration of such 5 Business Day period upon the written authorization
of either the Chief Executive Officer or the Chief Financial Officer of
the Buyer.
(f) All Identix Shares issued pursuant to this Agreement shall have the
following legend until they are transferred pursuant to an effective
registration statement in accordance with this Part 4:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT
TO THE SECURITIES OR AN OPINION OF COUNSEL SATISFACTORY TO
IDENTIX THAT SUCH REGISTRATION IS NOT REQUIRED OR SOLD
PURSUANT TO RULE 144 OF SUCH ACT."
(g) Subject to paragraph (h), each Seller hereby agrees that (i) Identix
Shares may not be sold until 90 days have elapsed from the effective
date of the Registration Statement referenced in paragraph (e), and
(ii) if so requested by the Buyer in connection with a registered
underwritten public offering of securities of the Buyer, such Seller
shall not sell or otherwise transfer any Identix Shares or other
securities of the Buyer for the period beginning on the date of receipt
of such request and ending 180 days after the effective date of the
Registration Statement of the Buyer relating to such offering (or, if
earlier, ending on the date that the lockups signed by the officers and
directors of the Buyer in connection with such offering expire).
(h) Notwithstanding paragraph (g), the Buyer agrees that the Sellers may
sell 215,000 Identix Shares (allocated among the Sellers in proportion
to the number of shares acquired by each hereunder) during the period
beginning one day after the effective date of the Registration
Statement referenced in paragraph (e) and ending on the later of:
(1) 30 June 1996; and
(2) 14 days after the effective date of the Registration
Statement.
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The Sellers acknowledge that they will only sell that number of shares
as they reasonably estimate at the time of such sale (having regard to
the price or prices as are then reasonably attainable in the
marketplace) will be required to cover the payment of tax liability of
the Sellers (and in the case of Permanent, of the beneficiaries of the
Australian Mezzanine Investments No.2 Trust) relating to the
transactions contemplated by this Agreement.
(i) The Sellers agree that all sales of Identix Shares made pursuant to the
Registration Statement referenced in clauses 4.2(e) and (k) shall be
made through the Buyer's lead investment banking firm as notified to
the Sellers by the Buyer from time to time.
(j) The obligations of the Buyer under clauses 4.2(b)(4) and (5) are
conditional upon Permanent first delivering to the Buyer the Permanent
Escrow Agreement duly executed by Permanent and the Permanent Escrow
Agent ("EXECUTED AGREEMENT"), and if the Executed Agreement is not
delivered to the Buyer at Closing then the following provisions apply:
(1) Closing will occur (subject to any other provision of this
Agreement) but the Buyer is not under any obligation to
perform its obligations under clauses 4.2(b)(4) or (5) until
such time as Permanent delivers the Executed Agreement to the
Buyer;
(2) Permanent must use all reasonable endeavours to deliver the
Executed Agreement to the Buyer on or before 29 March 1996;
(3) upon Permanent delivering the Executed Agreement to the Buyer,
the Buyer must forthwith execute the Permanent Escrow
Agreement and perform its obligations under clauses 4.2(b)(4)
and (5);
(4) if Permanent has not delivered the Executed Agreement to the
Buyer within 10 Business Days after the Closing Date then the
Buyer may, by notice in writing to Permanent at any time
thereafter, elect to issue the relevant Identix Shares to
State Street Bank and Trust Company ("STATE STREET") as
custodian pending delivery of the Executed Agreement to the
Buyer, and Permanent must use all reasonable endeavours to
procure that State Street enters into such documentation as
the Buyer reasonably requires to ensure that the relevant
Identix Shares are not released by State Street other than as
contemplated by this Agreement.
(k) If during the period from the first anniversary of the date of this
Agreement until the second anniversary of the date of this Agreement
Permanent delivers to the Buyer written notice stating that it is able
to sell a specified number of the Balance Escrow Shares for US$18.19 or
more per share ("CONDITIONAL BALANCE RELEASE NOTICE") then, provided
that the sale is permitted under clauses 4.2(e) and (g), the Buyer
shall within 5 Business Days of receipt of the Conditional Release
Notice deliver a CONDITIONAL RELEASE CERTIFICATE (as defined in the
Permanent Escrow Agreement) to the Permanent Escrow Agent authorising
the delivery to Permanent of that number of the Balance Escrow Shares
specified in the Conditional Balance Release Notice. Permanent shall
promptly sell such shares at a price of US$18.19 or more and forthwith
deliver the entire proceeds of sale (net of the costs of such sale) to
the Permanent Escrow Agent to be held subject to the terms of the
Permanent Escrow Agreement. Permanent must not specify a number of
shares in the Conditional Balance Release Notice that is greater than
50% of the Balance Release Shares less the number of shares specified
in all Claim Certificates delivered by the Buyer in accordance with the
Permanent Escrow Agreement as at the date of the Conditional Balance
Release Notice.
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PART 5
PERIOD BEFORE CLOSING
5.1 CARRYING ON OF BUSINESS
From the date of this Agreement until Closing the Sellers must ensure that:
(a) the business of the Company is conducted in the ordinary course of
ordinary business;
(b) the Company does not enter into any commitment or loan for more than
A$25,000 or for longer than 1 year without the prior written consent of
the Buyer;
(c) the Company does not acquire, dispose of or create a Security Interest
over any of its assets other than acquisitions or disposals of stock in
trade in the ordinary course of the ordinary business;
(d) the Company does not distribute or return any capital to its members;
(e) the Company does not pay any dividend to its members or pay any
management fee, or similar amount, unless the Buyer first consents in
writing;
(f) the Company does not issue any shares, options or securities which are
convertible into shares in the Company;
(g) the Company does not do or omit to anything as a result of which any of
the Warranties, as qualified by the Management Disclosure Letter, would
not be true if given at any time before Closing;
(h) the Company does not engage any new employee, change the terms
(including remuneration) of any of the Employees, or pay or provide any
bonus to any Employee unless the Buyer first consents in writing; and
(i) the Company does not alter its Memorandum or Articles of Association
unless the Buyer first consents in writing.
5.2 ACCESS
From the date of this Agreement until the Closing Date, the Sellers must ensure
that the Buyer and any persons authorised by the Buyer, are given full access
during normal business hours to inspect the assets, Business Premises, books of
account, records and documents of the Company.
PART 6
CLOSING
6.1 CLOSING
Subject to clause 9.1, Closing must take place at the offices of Freehill
Hollingdale & Page in Sydney immediately following the entering into of this
Agreement, or any other time and date as the Buyer and the Sellers agree.
6.2 DELIVERY OF DOCUMENTS EXECUTED BY THE SELLERS
At Closing, the Sellers must give to the Buyer the following documents:
(a) share certificates for the Fingerscan Shares;
(b) duly executed and completed transfers of the Fingerscan Shares in
favour of the Buyer or its nominee;
(c) the certificate of incorporation, common seal, all statutory, minute
and other record books, share certificate books of the company and all
unused share certificate forms;
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(d) all ledgers, journals and books of account of the Company;
(e) the written resignations of:
(1) all directors of the Company;
(2) the secretary of the Company (if required by the Buyer); and
(3) the auditors of the Company,
to be effective on the appointment of the directors, secretary and
auditors to be appointed at the Board meeting to be convened under
clause 6.3;
(f) cheque books of the Company and a list of all bank accounts maintained
by the Company;
(g) all documents in the possession of the Company relating to the
ownership and use of the Business Premises;
(h) the forms of proxy required to give effect to clause 7.1;
(i) the Caprica Escrow Agreement, duly executed by Caprica; and
(j) a duly executed Form 312 under the Corporations Regulations in relation
to registered charge 502969.
6.3 BOARD MEETING
At Closing the Sellers must ensure that a meeting of the directors of the
Company is convened and conducts the following business:
(a) approval of the registration of the Buyer or its nominee as the holder
of the Fingerscan Shares in the books of the Company, subject to the
payment of Duty on the transfer of the Fingerscan Shares;
(b) appointment of the nominees of the Buyer as:
(1) directors of the Company;
(2) secretary of the Company; and
(3) auditors of the Company;
(c) alteration of the registered office of the Company to c/- Price
Waterhouse, Level 14, 201 Kent Street, Sydney, New South Wales; and
(d) (if requested by the Buyer) revocation of all existing mandates for the
operation of bank accounts of the Company and the approval of new
mandates in favour of the officers of the Company nominated by the
Buyer.
6.4 BUYER'S OBLIGATIONS AT CLOSING
Subject to the Sellers performing their obligations under clauses 6.2 and 6.3,
at Closing the Buyer must:
(a) perform its obligations under clause 4.2(b); and
(b) deliver to the Sellers the written consents to act from the persons
nominated by the Buyer as the directors, secretary and auditors of the
Company.
6.5 CONDITIONS OF CLOSING
(a) Closing is conditional on both the Buyer and the Sellers complying with
all of their obligations under this Part 6.
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(b) If any of the Sellers or the Buyer fails to fully comply with its
obligations under this Part 6 and the parties do not complete this
Agreement then:
(1) each party must return to the other all documents delivered to
it under this Part 6;
(2) each party must repay to the other all payments received by
them under this Part 6;
(3) each party must do everything reasonably required by the other
party to reverse any action taken under this Part 6;
without prejudice to any rights any party may have in respect of that
failure.
PART 7
PERIOD AFTER CLOSING
7.1 EXERCISE OF RIGHTS OF REGISTERED SHAREHOLDER
From Closing, until the Fingerscan Shares are registered in the name of the
Buyer, each Seller severally must:
(a) appoint the nominees of the Buyer as sole proxies of that Seller to
attend shareholders meetings and exercise the votes attached to the
Fingerscan Shares and must not itself attend or vote at those meetings;
and
(b) take all other actions in the capacity of a registered holder of the
Fingerscan Shares as the Buyer reasonably directs.
7.2 INDEMNITY
The Buyer indemnifies the Sellers from all liability arising out of the
implementation of any action taken pursuant to the proxies referred to in clause
7.1.
7.3 TAX REQUIREMENTS
(a) Caprica and the Proprietors severally must, and Permanent must use its
reasonable endeavours to, make available to the Buyer all information
relating to the Company which the Buyer needs to know to enable it to
cause the Company to complete any Tax return after the Closing Date in
respect of a period before the Closing Date.
(b) Each Seller severally must give to the Buyer all reasonable assistance
in connection with any Tax audit of the Company after the Closing Date
in respect of any period before the Closing Date.
7.4 PROPRIETOR GUARANTEES
(a) The Buyer must use its best endeavours to ensure the release of the
Proprietors from the guarantee provided in relation to the Property
Lease as soon as practicable after Closing.
(b) The Buyer indemnifies the Proprietors against any claim, action,
damage, loss, liability, cost, charge, expense or outgoing which the
Proprietors pay, suffer, incur, or are liable for under the guarantee
referred to in clause 7.4(a) in respect of the period from Closing
until the Proprietors are released from the guarantee.
7.5 BRS AGREEMENTS
(a) Caprica and the Proprietors must ensure that all agreements set out in
schedule 9 of the Management Disclosure Letter (or such of those
agreements as the Buyer may nominate) are novated from BRS in favour of
the Company as soon as practicable after Closing.
<PAGE> 12
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(b) Permanent must use all reasonable endeavours to ensure that all
agreements set out in schedule 9 of the Management Disclosure Letter
(or such of those agreements as the Buyer may nominate) are novated
from BRS in favour of the Company as soon as practicable after Closing.
(c) Caprica, the Proprietors and Permanent must each provide all reasonable
assistance requested by the Buyer to enable the Buyer to obtain formal
confirmation from The Industry Research and Development Board that the
Board will not exercise its rights under the IR&D Grant Agreements
arising as a result of the acquisition of the Fingerscan Shares by the
Buyer, as soon as practicable after Closing.
(d) The Buyer must provide all reasonable cooperation to the Sellers to
enable the Sellers to comply with their obligations under clauses
7.5(a), (b) and (c).
PART 8
WARRANTIES
8.1 GIVING OF MANAGEMENT WARRANTIES
Subject only to clear and specific qualifications made in the Management
Disclosure Letter, the Proprietors and Caprica jointly and severally give the
Management Warranties in favour of the Buyer, as at the date of this Agreement
and for each day up to and including Closing, provided that in the case of the
Management Warranties set out in paragraphs 3.1, 7.6 and 16.3 of schedule 1 of
this Agreement, those warranties are given to the best of the knowledge and
belief of the Proprietors and Caprica.
8.2 ACKNOWLEDGMENT
(a) Permanent and the Buyer acknowledge that the Purchase Consideration is
calculated and determined upon the basis that the statements set out in
schedule 1 of this Agreement, with the exception of the statements in
parts 8, 9 and 15 of schedule 1 and paragraphs 3.1, 3.2 and 14.2 of
schedule 1, ("STATEMENTS") are true and correct as at Closing, subject
only to clear and specific qualifications made in the Management
Disclosure Letter.
(b) The parties acknowledge that the Statements do not constitute
warranties or representations by Permanent or by any other party on
behalf of Permanent.
(c) Permanent warrants and represents that:
(1) it has full power and authority to enter into and perform its
obligations under this Agreement;
(2) it has taken all necessary action to authorise the execution,
delivery and performance of this Agreement;
(3) this Agreement constitutes its legal, valid and binding
obligations and, subject to any necessary stamping and
registration, it is enforceable in accordance with its terms;
(4) the execution and performance by it of this Agreement does not
and will not violate, breach or result in the contravention
of:
(A) any Australian law, regulation or authorisation; or
(B) its articles of association or other constituent
documents;
(5) Permanent is the legal owner of 49 of the Fingerscan Shares,
and holds all of those shares on trust under the terms of the
Australian Mezzanine Investments
<PAGE> 13
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No.2 Trust, which shares are free of all Security Interests
and other third party interests or rights, and is free to sell
and transfer those shares without the consent of any other
person and free of any pre-emptive rights or rights of first
refusal; and
(6) the Australian Mezzanine Investments No.2 Trust is a
development capital trust with net assets (including uncalled
capital) of approximately A$50 million and a vesting date of
not earlier than 14 May 2003,
in each case as at the date of this Agreement and for each day up to
and including Closing.
8.3 INVESTMENT REPRESENTATIONS
Each Seller severally represents and warrants to the Buyer as follows:
(a) the Identix Shares to be acquired by such Seller will be acquired for
investment for such Seller's own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof,
and that such Seller has no present intention of selling, granting any
participation in, or otherwise distributing the same, provided that:
(1) in the case of the Identix Shares acquired by Permanent, those
shares will be held by it as trustee of the Australian
Mezzanine Investments No.2 Trust; and
(2) Caprica may transfer up to 80,208 Identix Shares to Dr John
Scott in accordance with the terms of the Deed Amending
Development Service Agreement entered into prior to the
entering into of this Agreement, provided that prior to such
transfer Dr Scott must give to the Buyer undertakings
reflecting those provided in clause 4.2 and representations in
substantially the same form as this clause 8.3, in a form
reasonably acceptable to the Buyer;
(b) such Seller has been provided with a copy of the Buyer's Form 10-K for
the year ended 30 June 1995, Forms 10-Q for the quarters ended 30
September 1995 and 31 December 1995 and all press releases of the Buyer
since 30 June 1995. Such Seller believes it has received all the
information it considers necessary or appropriate for deciding whether
to acquire the Identix Shares. Such Seller further represents that it
has had an opportunity to ask questions and receive answers from the
Buyer regarding the Identix Shares;
(c) such Seller has substantial experience in evaluating and investing in
private placement transactions so that the Seller is capable of
evaluating the merits and risks of the Seller's investment in the
Buyer. The Seller by reason of its business or financial experience or
the business or financial experience of its professional advisers who
are unaffiliated with and who are not compensated by the Buyer or any
affiliate or selling agent of Identix, directly or indirectly, has the
capacity to protect its own interests in connection with the
acquisition of the Identix Shares under this Agreement; and
(d) such Seller acknowledges that such Seller has been advised to consult
with its own tax adviser with respect to the tax consequences of the
transactions contemplated by this Agreement and the acquisition,
ownership and sale of any Identix Shares. Such Seller acknowledges that
the Buyer has made no warranties or representations to such Seller with
respect to the tax consequences of the transactions contemplated by
this Agreement or the acquisition, ownership or sale of any Identix
Shares by such Seller and that such Seller is in no manner relying on
the Buyer or its representatives for an assessment of such tax
consequences.
<PAGE> 14
14
8.4 BUYER'S INVESTIGATION
Any investigation, whether before or after the date of this Agreement, made by
or for the Buyer in respect of the Company does not affect either:
(a) the Warranties; or
(b) the Power of the Buyer if any of those warranties is untrue, incorrect
or misleading.
8.5 INDEPENDENT WARRANTIES
Each of the Warranties is to be construed independently of the others and is not
limited by reference to any other Warranty.
8.6 INDEMNITY
(a) Subject to clause 8.7, Caprica and the Proprietors jointly and
severally indemnify the Buyer against any claim, action, damage, loss,
liability, cost, charge, expense or outgoing which the Buyer pays,
suffers, incurs or is liable for in respect of:
(1) any matter or thing in respect of the Company being other than
as represented or warranted in this Agreement; and
(2) any breach by Caprica or the Proprietors of this Agreement.
(b) Subject to clause 8.7, the part of the Purchase Consideration passing
from the Buyer to Permanent will be reduced by the amount of any claim,
action, damage, loss, liability, cost, charge, expense or outgoing
which the Buyer pays, suffers, incurs or is liable for in respect of:
(1) any of the Statements being other than true and correct as at
Closing (subject only to clear and specific qualifications
made in the Management Disclosure Letter);
(2) any breach by Permanent of any warranty set out in clause
8.2(c); and
(3) any breach by Permanent of this Agreement,
("REDUCTION AMOUNT").
8.7 LIMITATIONS ON LIABILITY
(a) The Buyer must not make any claim against the Sellers or the
Proprietors under clause 8.6 in relation to a Warranty contained in
part 4 of schedule 1 of this Agreement unless the amount of that claim
when aggregated with any other claim in respect of a Warranty contained
in part 4 of schedule 1 of this Agreement exceeds A$50,000.
(b) The Buyer must not make any claim against the Sellers or the
Proprietors under clause 8.6 in relation to a Warranty contained in
part 5 of schedule 1 of this Agreement unless the amount of that claim
when aggregated with any other claim in respect of a Warranty contained
in part 5 of schedule 1 of this Agreement exceeds A$50,000.
(c) If the Buyer is entitled to make a claim or claims against the Sellers
or the Proprietors in relation to a Warranty referred to in clause
8.7(a) or (b), the sum of A$50,000 shall be deducted from the amount of
the first of such claims.
(d) Clauses 8.7(a), (b) and (c) do not in any way limit the operation of
clause 8.6 in relation to any Warranty, other than a Warranty referred
to in clause 8.7(a) or (b), or any other breach of this Agreement.
(e) The Buyer must not:
<PAGE> 15
15
(1) make any claim against Permanent for a reduction of the
Purchase Consideration under clause 8.6(b) in relation to a
breach of a Warranty unless the Buyer has given written notice
of that claim with reasonable particularity to Permanent
within 2 years after the Closing Date; and
(2) make any claim against Caprica or the Proprietors under clause
8.6(a) in relation to a breach of a Warranty unless the Buyer
has given written notice of that claim with reasonable
particularity to Caprica or the Proprietors within 3 years
after the Closing Date.
(f) Any claim by the Buyer for indemnification or reduction under clause
8.6 is to be treated net of its tax effect on the Buyer, such that the
amount of any indemnity or Reduction Amount is reduced by the net
amount available to the Buyer as a tax deduction as a result of the
loss giving rise to that claim or reduction (after taking into account
any other tax impact relating to the circumstances giving rise to the
claim or reduction or relating to the payment of the claim or
reduction).
(g) The Sellers are not liable to the Buyer (or any person deriving title
from the Buyer) for any loss or Reduction Amount (whether based in
contract, tort or statute) in relation to this Agreement or the
Fingerscan Shares where the loss or reduction is as a result of or in
respect of any legislation not in force at the date of this Agreement,
including legislation which takes effect retrospectively.
(h) The Buyer must reimburse the Sellers for amounts paid by the Sellers to
the Buyer in respect of any loss or reduction under this Agreement to
the extent to which the same is recovered by the Buyer from any third
party including, without limitation, suppliers, manufacturers or
insurers, after deducting the costs of such recovery (including,
without limitation, any tax impact, or any increased cost of insurance
cover resulting from making a claim under the relevant insurance
policy).
(i) Any payment made by a Seller or Proprietor to the Buyer in satisfaction
of a claim or reduction under clause 8.6 shall constitute a reduction
in the Purchase Consideration.
(j) Notwithstanding any other provision of this Agreement (other than
clause 13.13), in no event will the Buyer be entitled to any Reduction
Amount for any claim, action, damage, loss, liability, cost, charge,
expense or outgoing ("LOSS") in relation to a Statement not being true
and correct as at Closing to the extent that the aggregate of all
Reduction Amounts exceed:
(1) until the Conditional Release Date, the sum of US$4.1 million;
and
(2) thereafter, the Value of 192,456 Identix Shares.
In no event will any Reduction Amount exceed 49% of any Loss where such
Loss also arises out of a breach of a Warranty by Caprica or the
Proprietors. In no event will the amount of any claim against Caprica
or the Proprietors exceed 51% of any Loss where such Loss also arises
out of a Statement being untrue or incorrect as at Closing.
(k) If the Buyer becomes entitled to the aggregate of Reduction Amounts in
accordance with clause 8.7(j) that exceed US$4,041,202 and has
exercised its rights against Permanent to claim Identix Shares to that
Value under the Permanent Escrow Agreement in full, then Permanent must
forthwith pay to the Buyer an amount equal to the amount of that
excess, subject to the other provisions of this Agreement, in
particular, clause 8.2(j)(1) and clause 13.13.
<PAGE> 16
16
(l) If the Buyer becomes entitled to a Reduction Amount as against
Permanent, the Buyer must first satisfy its entitlement from Identix
Shares held from time to time pursuant to the Permanent Escrow
Agreement until exhausted before recourse may be had to any other
further Reduction Amount pursuant to the terms of this Agreement,
provided that this clause 8.8(l) shall not in any way affect any right
or remedy available to the Buyer other than in relation to the recovery
of Reduction Amounts.
8.8 RELIANCE AND ACKNOWLEDGMENT
(a) The Buyer has entered into this Agreement in reliance on the Warranties
(other than the Statements).
(b) The Buyer acknowledges that:
(1) in entering into this document and proceeding to Closing the
Buyer does not rely on any representation, warranty, condition
or other conduct which may have been made by the Sellers or on
behalf of the Sellers, except the Warranties;
(2) subject to any law to the contrary and except as provided in
the Warranties or as otherwise provided in this Agreement, all
terms whether express, implied, written, oral, collateral,
statutory or otherwise are excluded and the Sellers disclaim
all liability in relation to these to the maximum extent
permitted by law.
(c) The Warranties (other than the Statements) are given for the benefit of
the Buyer only and may not be relied on by any other person.
(d) The provisions of this Agreement relating to the Statements may not be
relied on by any person other than the Buyer.
8.9 BUYER'S WARRANTIES AND INDEMNITIES
(a) The Buyer warrants and represents in favour of the Sellers that:
(1) it has full power and authority to enter into and perform its
obligations under this Agreement;
(2) it has taken all necessary action to authorise the execution,
delivery and performance of this Agreement;
(3) this Agreement constitutes its legal, valid and binding
obligations and, subject to any necessary stamping and
registration, it is enforceable in accordance with its terms;
and
(4) the execution and performance by it of this Agreement does not
and will not violate, breach or result in the contravention
of:
(A) any law, regulation or authorisation; or
(B) its articles of incorporation or other constituent
documents,
in each case as at the date of this Agreement and for each day up to
and including Closing.
(b) The Buyer indemnifies the Sellers against any claim, action, damage,
loss, liability, cost, charge, expense or outgoing which the Sellers
pay, suffer, incur or are liable for in respect of any breach by the
Buyer of any warranty set out in this clause 8.9.
(c) The Sellers have entered into this Agreement in reliance on the
warranties and representations set out in clause 8.9(a).
<PAGE> 17
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PART 9
TERMINATION AND DAMAGES
9.1 RIGHT OF BUYER TO TERMINATE
If at any time up to Closing:
(a) the Sellers materially breach a term of this Agreement;
(b) any Warranty is or becomes materially false, misleading or incorrect
when made or regarded as made under this Agreement (except to the
extent disclosed in the Disclosure Letter); or
(c) a material adverse change occurs in the Business, assets of the Company
or the financial or trading position or prospects of the Company since
the Accounts Date which was not disclosed in the Disclosure Letter,
then the Buyer may by giving written notice to the Sellers before or at Closing
elect to terminate its obligation to buy the Fingerscan Shares and its other
obligations under this Agreement.
9.2 RIGHT OF SELLERS TO TERMINATE
If at any time up to Closing:
(a) the Buyer materially breaches a term of this Agreement; or
(b) any warranty of the Buyer is or becomes materially false, misleading or
incorrect when made or regarded as made under this Agreement,
then the Sellers may by giving written notice to the Buyer before or at Closing
elect to terminate their obligations under this Agreement.
9.3 REMEDIES CUMULATIVE
A party may exercise its right of termination under this part 9 without
affecting any of its other rights and remedies.
PART 10
ANNOUNCEMENTS
10.1 AGREED ANNOUNCEMENT
(a) Immediately after this Agreement has been signed, the Buyer will make a
public announcement regarding this Agreement, the text of which the
Buyer will give the Sellers an opportunity to review prior to its
release.
(b) Within 15 days after Closing, the Buyer may lodge a Form 8-K with the
Securities Exchange Commission in relation to this Agreement, in the
prescribed form.
10.2 LEGAL REQUIREMENTS
A party may disclose anything in respect of this Agreement as required:
(a) by applicable law; or
(b) by any recognised stock exchange on which its shares or the shares of
any related body corporate are listed,
but to the extent possible, it must consult with the other parties before making
the disclosure and use reasonable endeavours to agree on the form and content of
the disclosure.
<PAGE> 18
18
10.3 DISCLOSURE TO OFFICERS AND PROFESSIONAL ADVISERS
A party may disclose anything in respect of this Agreement or the terms of the
sale of the Fingerscan Shares to the officers and professional advisers of that
party (and, in the case of Permanent, to AMIL and its officers and professional
advisers) to the extent which is reasonable but it must use its best endeavours
to ensure all matters disclosed are kept confidential.
10.4 FURTHER PUBLICITY
Subject to clauses 10.1, 10.2 and 10.3, no party may disclose the provisions of
this Agreement or the terms on which the Fingerscan Shares are sold unless:
(a) if the Buyer wishes to make the disclosure, it has provided the Sellers
with the opportunity to review the disclosure; and
(b) if any other party wishes to make the disclosure, the Buyer has first
consented in writing.
10.5 SURVIVAL
This part 10 survives termination of this Agreement.
PART 11
DUTY, COSTS AND EXPENSES
11.1 DUTY
(a) The Buyer must pay any stamp duty in respect of the execution, delivery
and performance of this Agreement.
(b) The Buyer must pay any fine, penalty or other cost in respect of a
failure to pay any stamp duty except to the extent that the fine,
penalty or other cost is caused by an act or default on the part of the
Sellers.
(c) The Buyer indemnifies the Sellers against any amount payable under
clause 11.1(a) or clause 11.1(b) or both.
(d) Each Seller indemnifies the Buyer against any fine, penalty or other
cost contemplated by clause 11.1(b) caused by an act or default on the
part of that Seller.
11.2 COSTS AND EXPENSES
Subject to clauses 11.1 and 11.4, each party must pay its own costs and expenses
in respect of the negotiation, preparation, execution, delivery and registration
of this Agreement or other Agreement or document entered into or signed under
this Agreement.
11.3 COSTS OF PERFORMANCE
Any action to be taken by a party in performing its obligations under this
Agreement must be taken at its own cost and expense unless otherwise provided in
this Agreement.
11.4 PERMANENT ESCROW AGREEMENT
Permanent must pay the costs and expenses of the Permanent Escrow Agent in
relation to the entering into and performance of the Permanent Escrow Agreement
by the Permanent Escrow Agent.
<PAGE> 19
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PART 12
GUARANTEE AND INDEMNITY
12.1 GUARANTEE
The Proprietors unconditionally and irrevocably jointly and severally guarantee
to the Buyer the performance of Caprica's obligations under this Agreement.
12.2 PERFORMANCE
If Caprica fails to perform its obligations under this Agreement when they are
due, the Proprietors must immediately on demand from the Buyer cause Caprica to
perform its obligations under this Agreement.
12.3 INDEMNITY
The Proprietors jointly and severally indemnify the Buyer against any claim,
action, damage, loss, liability, cost, charge, expense, outgoing or payment
suffered, paid or incurred by the Buyer in relation to:
(a) the failure of Caprica to perform its obligations under this Agreement;
or
(b) the failure of a Proprietor to cause Caprica to perform its obligations
under this Agreement,
provided that nothing in this clause 12.3 imposes a liability on a Proprietor in
respect of a matter referred to in clause 8.7 that is greater than the liability
imposed on Caprica and the Proprietors under clause 8.7 in respect of that same
matter.
12.4 EXTENT OF GUARANTEE AND INDEMNITY
(a) This part 12 applies:
(1) to the future obligations of Caprica under this Agreement; and
(2) to this Agreement, as amended, supplemented, renewed or
replaced.
(b) The obligations of the Proprietors under this part 12 extend to any
change in the obligations of Caprica as a result of:
(1) any amendment, supplement, renewal or replacement of this
Agreement; or
(2) the occurrence of any other thing.
(c) This part 12 is not affected nor are the obligations of the Proprietors
under this Agreement released or discharged or otherwise affected by
anything which but for this provision might have that effect.
(d) This clause 12.4 applies:
(1) regardless of whether a Proprietor is aware of or has
consented to or is given notice of any amendment, supplement,
renewal or replacement of any agreement to which the Sellers
and the Buyer are a party or the occurrence of any other
thing; and
(2) irrespective of any rule of law or equity to the contrary.
12.5 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to
or affecting any obligation of Caprica under this Agreement is:
(1) void, voidable or unenforceable in whole or in part; or
<PAGE> 20
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(2) is claimed to be void, voidable or unenforceable and that
claim is upheld, conceded or compromised in whole or in part,
the liability of the Proprietors under this part 12 and any Power is
the same as if:
(3) that payment, transaction, conveyance or transfer (or the
void, voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any
thing referred to in clause 12.5(a)(3),
had not been made and the Proprietors must immediately take all action
and sign all documents necessary or required by the Buyer to restore to
the Buyer this part 12 and any Security Interest held by the Buyer
immediately before the payment, conveyance, transfer or transaction.
(b) Clause 12.5(a) applies whether or not the Buyer knew, or ought to have
known of, anything referred to in that clause.
12.6 PRINCIPAL AND INDEPENDENT OBLIGATION
(a) This part 12 is a principal obligation and is not to be treated as
ancillary or collateral to any other right or obligation.
(b) This part 12 is enforceable against each Proprietor whether or not the
Buyer has:
(1) made demand upon Caprica; or
(2) given notice to Caprica or any other person in respect of any
thing; or
(3) taken any other steps against Caprica or any other person.
12.7 CONTINUING GUARANTEE AND INDEMNITY
This part 12 is a continuing obligation of the Proprietors, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) the obligations of Caprica under this Agreement have been
performed; and
(d) this part 12 has been finally discharged by the Buyer.
PART 13
GENERAL
13.1 NOTICES
(a) Any notice or other communication including, but not limited to, any
request, demand, consent or approval, to or by a party to this
Agreement:
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21
(1) must be in legible writing and in English addressed as below:
(A) if to Caprica or the Proprietors:
Address: 765 Pacific Highway
Chatswood NSW 2067
Australia
Attention: Mr John Parselle
Facsimile: 612 9904 7877;
(B) if to Permanent:
Address: c/- Australian Mezzanine Investments
Pty Limited
Level 2, The Terrace
155 George Street
Sydney NSW 2000
Attention: Mr Joe Skrzynski
Facsimile: 612 247 5551;and
(C) if to the Buyer:
Address: 510 North Pastoria Avenue
Sunnyvale, CA 94086
USA
Attention: Mr James P Scullion
Facsimile: 0011 1 408 730 3713,
or as specified to the sender by any party by notice;
(2) where the sender is a company, must be signed by an officer or
under the common seal of the sender;
(3) is regarded as being given by the sender and received by the
addressee:
(A) if by delivery in person, when delivered to the
addressee;
(B) if by prepaid airmail post, 10 Business Days from and
including the date of postage to the addressee; or
(C) if by facsimile transmission, when transmitted to the
addressee,
but if the delivery or receipt is on a day which is not a
Business Day or is after 4.00 pm (addressee's time) it is
regarded as received at 9.00 am on the following Business Day;
and
(4) can be relied upon by the addressee and the addressee is not
liable to any other person for any consequences of that
reliance if the addressee believes it to be genuine, correct
and authorised by the sender.
(b) A facsimile transmission is regarded as legible unless the addressee
telephones the sender within 24 hours after the transmission is
received or regarded as received under clause 13.1(a)(3) and informs
the sender that it is not legible.
(c) In this clause 13.1, reference to an addressee includes a reference to
an addressee's officers, agents or employees.
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13.2 GOVERNING LAW AND JURISDICTION
(a) This Agreement is governed by the laws of New South Wales except for
Part 4 which is governed by the laws of the State of California, United
States of America.
(b) Each party irrevocably submits to the non-exclusive jurisdiction of the
courts of New South Wales except with respect to any claim relating
solely to allegations of breach of the contractual provisions of Part 4
for which each party irrevocably submits to the non-exclusive
jurisdiction of the Federal District Court in the Northern District of
California.
13.3 PROHIBITION OR ENFORCEABILITY
(a) Any provision of, or the application of any provision of, this
Agreement which is prohibited in any jurisdiction is, in that
jurisdiction, ineffective only to the extent of that prohibition.
(b) Any provision of, or the application of any provision of this
Agreement, which is void, illegal or unenforceable in any jurisdiction
does not affect the validity, legality or enforceability of that
provision in any other jurisdiction or of the remaining provisions of
this Agreement in that or any other jurisdiction.
(c) The application of this clause 13.3 is not limited by any other
provision of this Agreement in relation to severability, prohibition or
enforceability.
13.4 WAIVERS
(a) A waiver, forbearance, abandonment, election or estoppel of, or
affecting:
(1) a term of this Agreement (including this clause 13.4);
(2) a right, power, authority, discretion or remedy under this
Agreement;
(3) a right, power, authority, discretion or remedy created or
arising on a breach of or default under this Agreement; or
(4) the exercise of a right, power, authority, discretion or
remedy referred to in either paragraph (2) or (3),
must be in writing, or, in the case of estoppel, must be based on, a
written statement signed by the party against whom the waiver,
abandonment, election, forbearance or estoppel is claimed.
(b) A failure or delay in the exercise, or a partial exercise, of a right,
power, authority, discretion or remedy referred to in clause 13.4(a)(2)
or (3) is not regarded as either a waiver, forbearance, abandonment or
election or the basis of an estoppel, of or affecting any thing
referred to in clause 13.4(a)(1), (2), (3) or (4).
13.5 VARIATION
A variation of any term of this Agreement must be in writing and signed by the
parties.
13.6 CUMULATIVE RIGHTS
The powers of a party under this Agreement do not exclude any other power.
13.7 NON-MERGER AND SURVIVAL OF WARRANTIES
(a) Neither the Warranties, nor the warranties of the Buyer under clause
8.9 nor any other provision of this Agreement merges on Closing.
(b) The Warranties and the warranties of the Buyer under clause 8.9 survive
completion of this Agreement.
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13.8 CONTINUING INDEMNITIES AND SURVIVAL OF INDEMNITIES
(a) Each indemnity of a party or parties contained in this Agreement is a
continuing obligation of that party or parties despite:
(1) any settlement of account; or
(2) the occurrence of any other thing,
and remains in full force and effect until all money owing,
contingently or otherwise, under any indemnity has been paid in full.
(b) Each indemnity of a party or parties contained in this Agreement:
(1) is an additional, separate and independent obligation of that
party or parties and no one indemnity limits the generality of
any other indemnity; and
(2) survives the termination of this Agreement.
13.9 FURTHER ASSURANCES
Each party must do all things necessary to give full effect to this Agreement
and the transactions contemplated by this Agreement.
13.10 SPECIFIC PERFORMANCE
(a) The Sellers acknowledge that monetary damages alone would not be
adequate compensation to the Buyer for the Sellers' breach of their
obligations under this Agreement and that accordingly specific
performance of those obligations is an appropriate remedy.
(b) The Buyer acknowledges that monetary damages alone would not be
adequate compensation to the Sellers for the Buyer's breach of their
obligations under this Agreement and that accordingly specific
performance of those obligations is an appropriate remedy.
13.11 ENTIRE AGREEMENT
(a) This Agreement embodies the entire agreement between the parties with
respect to the subject matter of this Agreement and supersedes any
prior negotiation, arrangement, understanding or agreement with respect
to the subject matter or any term of this Agreement.
(b) Any statement, representation, term, warranty, condition, promise or
undertaking made, given or agreed to in any prior negotiation,
arrangement, understanding or agreement, has no effect except to the
extent expressly set out or incorporated by reference in this
Agreement.
13.12 THIRD PARTY RIGHTS
No person (including, but not limited to, an Employee) other than the Buyer, the
Sellers and the Proprietors has or is intended to have any right, power or
remedy or derives or is intended to derive any benefit under this Agreement.
13.13 LIMITATION ON LIABILITY OF PERMANENT
Notwithstanding any other provision in this Agreement, the parties acknowledge
and agree that:
(a) Permanent enters into this document only in its capacity as trustee of
the Australian Mezzanine Investments No.2 Trust ("TRUST");
(b) any reference in this document to Permanent is a reference to Permanent
in that capacity;
<PAGE> 24
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(c) any liability of Permanent under this document is limited to the assets
of the Trust.
13.14 COUNTERPARTS
(a) This Agreement may be executed in any number of counterparts.
(b) All counterparts, taken together, constitute one instrument.
(c) A party may execute this Agreement by signing any counterpart.
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SCHEDULE 1
WARRANTIES
PART 1 SHARES AND CAPITAL
1.1 TITLE
The Sellers are the legal and beneficial owners of the Fingerscan Shares which
are free of all Security Interests and other third party interests or rights.
1.2 CONSENTS
The Sellers are able to sell and transfer the Fingerscan Shares without the
consent of any other person and free of any pre-emptive rights or rights of
first refusal.
1.3 ISSUED CAPITAL
The Fingerscan Shares are all the issued shares in the capital of the Company.
1.4 AUTHORISED CAPITAL
The authorised capital of the Company is $1,000,000 divided into 1,000,000
shares of $1.00 each.
1.5 FULLY PAID
The Fingerscan Shares are fully paid and no money is owing in respect of them.
1.6 ISSUE OF OTHER SECURITIES
The Company is not under any obligation to issue or allot, and has not granted
any person the right to call for the issue or allotment, of any shares or other
securities of the Company at any time.
1.7 NO LEGAL IMPEDIMENT
The execution, delivery and performance by the Sellers of this Agreement
complies with:
(a) each law, regulation, authorisation, ruling, judgement, order or decree
of any Government Agency; and
(b) the memorandum and articles of association or other constituent or
governing documents of the Sellers.
1.8 AUTHORISATIONS
The Sellers have taken all necessary action to authorise the execution, delivery
and performance of this Agreement in accordance with its terms.
PART 2 AUTHORITY
2.1 CORPORATE EXISTENCE
The Company:
(a) is a proprietary limited company;
(b) has the power to own its assets and carry on its business as it is now
being conducted;
(c) is not registered and is not required to be registered in any place as
a recognised foreign company; and
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(d) does not carry on business in any place other than Australia.
2.2 COMPLIANCE WITH CONSTITUENT DOCUMENTS
The business affairs of the Company have been conducted in accordance with the
memorandum and articles of association of the Company.
PART 3 ACCURACY OF INFORMATION
3.1 INFORMATION ACCURATE
All information given by or on behalf of the Sellers and the Proprietors or
their advisers to the Buyer or its advisers in respect of the sale of the
Fingerscan Shares is accurate and complete and not misleading.
3.2 DISCLOSURE LETTER ACCURATE
The information in the Management Disclosure Letter and the schedules to the
Management Disclosure Letter is accurate and complete and not misleading.
3.3 MATERIAL INFORMATION DISCLOSED
All information which is material to a buyer for value of the Fingerscan Shares
has been fully and specifically disclosed in writing to the Buyer.
PART 4 THE ACCOUNTS
4.1 BASIS OF PREPARATION
The Accounts:
(a) have been prepared in accordance with the accounting standards required
under the Corporations Law.
(b) where they have been prepared on a different basis at any time over the
previous 5 financial years, the deviation from the accounting standards
is explained in writing.
(c) show a true and fair view of the financial position and the assets and
liabilities of the Company at the Accounts Date and of the income,
expenses and results of the operations of the Company for the financial
period ended on the Accounts Date;
(d) are not affected by any unusual or non-recurring item;
(e) take account of all gains and losses, whether realised or unrealised
arising from foreign currency transactions;
(f) include all reserves and provisions for taxation that are necessary to
cover all Tax liabilities of the Company in respect of any period up to
the Accounts Date;
(g) include all liabilities of the Company at the Accounts Date; and
(h) set out all contingent liabilities of the Company at the Accounts Date.
4.2 VALUE OF STOCK
In the Accounts:
(a) the basis of valuation of stock in trade:
(1) is historic cost; and
(2) is substantially the same as in each of the previous 5
financial years of the Company; and
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(b) excessive, redundant, obsolete or slow-moving stock has been written
off or written down as appropriate.
4.3 DEPRECIATION
The rate of depreciation applied in the Accounts for each fixed asset:
(a) has been consistently applied over the preceding 5 financial years of
the Company (except where an accelerated depreciation rate is allowed
for income tax purposes); and
(b) is adequate to write down the value of each fixed asset to its net
realisable value at the end of its useful working life.
PART 5 POSITION SINCE ACCOUNTS DATE
5.1 POSITION SINCE ACCOUNTS DATE
Since the Accounts Date:
(a) the Business has been conducted in the ordinary course of ordinary
business and in a proper and efficient manner;
(b) the Company has not disposed of any of its assets except for the sale
of stock in the ordinary course of ordinary business;
(c) the Company has not acquired any assets, except for the purchase of
stock in the ordinary course of ordinary business;
(d) the Company has not incurred any liabilities other than in the ordinary
course of ordinary business;
(e) there has been no material adverse change affecting the Business, the
assets of the Company, or the financial or trading position or
prospects of the Company; and
(f) no dividends, bonus issues or other distributions or repayments of
shareholders' loans have been declared, made or paid by the Company.
PART 6 ASSETS
6.1 TITLE TO ASSETS
All the assets used in the Business and any other asset of the Company are:
(a) fully paid for;
(b) in the possession of the Company;
(c) used solely by the Company;
(d) the absolute property of the Company free of all Security Interests and
other third party rights; and
(e) not the subject of any lease or hire purchase agreement or agreements
for purchase on deferred terms.
6.2 SECURITY INTERESTS
The Company has not granted or created, or agreed to grant or create, any
Security Interests in respect of the assets of the Company.
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6.3 PLANT AND MACHINERY
All items of plant, machinery, equipment and vehicles of the Company or used in
the business of the Company are:
(a) in good repair and condition having regard to their age;
(b) in satisfactory working order;
(c) capable of doing the work for which they are designed;
(d) not surplus to the requirements of the Company; and
(e) recorded in the books of the Company.
6.4 STOCK
All stock of the Company is:
(a) of good and merchantable quality;
(b) fit for the purpose for which it is used; and
(c) manufactured to proper standards and will not be the subject of any
product liability claims.
6.5 CONFORMITY WITH DESCRIPTION
All current assets of the Company conform with all applicable descriptions,
specifications and standards.
PART 7 INTELLECTUAL PROPERTY RIGHTS
7.1 OWNERSHIP
(a) The Company beneficially owns or has an enforceable right to use all
the Company Intellectual Property Rights.
(b) Without limiting Warranty 7.1(a), as at Closing the Company
beneficially owns all of the New Intellectual Property Rights free of
all third party rights and interests and is not under any obligation
(whether financial or otherwise) to the inventor of those rights or any
third party in respect of those rights or the use of those rights.
7.2 LIST COMPLETE
The Company does not own, use, or require in its business any Intellectual
Property Rights other than those listed in schedule 2 of the Management
Disclosure Letter.
7.3 NO THIRD PARTY RIGHTS
No person, other than the Company or a licensor to the Company, has any right to
or may benefit from any Company Intellectual Property Right.
7.4 NO INFRINGEMENT
The use by the Company of the Company Intellectual Property Rights does not
breach or infringe any Intellectual Property Right of any other person.
7.5 REGISTRATION
All Company Intellectual Property Rights which are either capable of
registration or capable of being recorded or required to be registered or
recorded, are registered in the Company's name.
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7.6 DISCLOSURE
No trade secret or confidential information of the Company has been disclosed or
made available to any person except in the ordinary course of business and
subject to a binding obligation of confidentiality on the part of the recipient.
PART 8 PROPERTIES
8.1 COMPANY'S INTEREST
The Company has no interest in land except for its interest in the Business
Premises.
8.2 OCCUPATION
The Company has exclusive occupation and quiet enjoyment of the Business
Premises and holds all easements, rights, interests and privileges necessary or
appropriate for the conduct of the Business.
8.3 NO BREACH
The Company is not in breach of or in default under any agreement or covenant
affecting the Business Premises.
8.4 NO NOTICES
The Company has not received notice from any third party in respect of the
Business Premises and, so far as it is aware, no proposal has been made:
(a) in respect of the compulsory acquisition or resumption of any part of
the Business Premises;
(b) requiring work to be done or expenditure to be made on or in respect
the Business Premises; or
(c) which may adversely affect any part of the Business Premises or the
Company's use of them.
8.5 ENVIRONMENTAL LIABILITIES
(a) There are no obligations, expenses, penalties or fines under any
statute or common law concerning environmental matters which would or
could be imposed upon the Company, the Buyer or any occupier of the
Business Premises as a result of activities carried on during the
occupation of the Business Premises by the Company or by any previous
occupier of the Business Premises.
(b) There are no factors affecting the Business Premises which are to give
rise to any liability of the type referred to in Warranty 8.5(a).
PART 9 RECEIVABLES
9.1 COLLECTABILITY
All debts owing to and amounts due to the Company are collectable within 90 days
for their full amounts and are not subject to any counter claim or set-off
except to the extent described or provided for in the Accounts.
9.2 AMOUNTS OWING
The Company is not owed any money other than trade debts incurred in the
ordinary course of business and cash at bank.
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PART 10 SECURITY INTERESTS
10.1 LIST COMPLETE
The Company has not granted or created, nor agreed to grant or create, and is
not a party to any loans, guarantees, letters of comfort, indemnities, finance
leases, hire purchase agreements, or Security Interests.
PART 11 CONTRACTS
11.1 MATERIAL CONTRACTS
Schedule 3 of the Management Disclosure Letter contains a list of all agreements
to which the Company is a party which:
(a) are material to the proper and efficient operation of the Business; or
(b) impose on the Company an obligation:
(1) to pay more than A$50,000; or
(2) which is not capable of complete performance or termination
without payment of damages, within 12 months after the date of
this Agreement; or
(3) restricts the places or manner in which the Business may be
carried on; or
(4) is onerous in the context of the Business; or
(c) are not within the ordinary course of ordinary business of the Company;
or
(d) are not at arm's length; or
(e) are with any of the Sellers or Proprietors or any associate, as that
term is defined in the Corporations Law, of any of the Sellers or
Proprietors.
11.2 BRS AGREEMENTS
(a) [Deleted]
(b) All agreements, contracts and arrangements between Transec Pty Limited
(and any associates of that company or of that company's proprietors)
and BRS (or the Company, to the extent that they may have been assigned
or novated in favour of the Company) have been validly terminated prior
to Closing, and the Company will not incur any further liability in
respect of such agreements, contracts or arrangements.
(c) All agreements, contracts and arrangements in relation to marketing
products of the Company between Fujitsu Australia Limited (and any
associates of that company) and BRS (or the Company, to the extent that
they may have been assigned or novated in favour of the Company) have
been validly terminated prior to Closing, and the Company will not
incur any further liability in respect of such agreements, contracts or
arrangements.
11.3 IR&D GRANT AGREEMENTS
The Company is not a party to any other agreements or arrangements of a similar
nature to the IR&D Agreements.
11.4 NO RESTRICTIVE COVENANTS
The Company is not party to any agreement which restricts its freedom to engage
in any activity or business in any area.
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11.5 CHANGE OF CONTROL
The Company is not party to any agreement under which any third party is
entitled or likely, as a result of a change in ownership of the Fingerscan
Shares:
(a) to terminate the agreement; or
(b) to require the adoption of terms which are less favourable to the
Company than the current terms.
11.6 NO DEFAULT
No party to any agreement with the Company is in default under it or would be in
default, but for the requirements of notice or lapse of time, or both.
11.7 NO NOTICES
The Company has not received any notice which might affect any rights of the
Buyer or the exercise of any rights by the Buyer in respect of any agreement.
PART 12 DELEGATIONS AND OFFERS
12.1 POWERS OF ATTORNEY
No power of attorney given by the Company is in force.
12.2 OFFERS OUTSTANDING
Any offer, tender or quotation made by the Company in respect of the Business
which is outstanding and capable of acceptance by a third party, was made in the
ordinary course of ordinary business.
PART 13 OUTSTANDING NOTES
13.1 OUTSTANDING NOTES
No cheque, promissory note or bill of exchange drawn, accepted or endorsed by
the Company is still outstanding, other than cheques drawn to pay for
obligations incurred by the Company in the ordinary course of its ordinary
business.
PART 14 SHAREHOLDINGS AND MEMBERSHIPS
14.1 SHAREHOLDINGS
The Company is not the holder or the beneficial owner of any shares or other
capital or securities convertible into shares or other capital in any other
company.
14.2 MEMBERSHIPS
The Company is not a member of any joint venture, partnership or unincorporated
association (other than a recognised trade association).
14.3 PERMANENT ESTABLISHMENT
The Company does not have any permanent establishment (as that expression is
defined in any relevant double taxation agreement to which Australia is a party)
outside Australia.
14.4 OFFICERS
The details of the present directors, secretary, auditor and public officer of
the Company are as shown in schedule 6 of the Management Disclosure Letter.
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PART 15 EMPLOYEES
15.1 LIST COMPLETE
Schedule 5 of the Management Disclosure Letter contains a complete list of the
Employees.
15.2 EXCLUSIVE EMPLOYMENT
Each Employee is employed exclusively by the Company.
15.3 PAYMENTS MADE
The Company has paid all amounts in respect of the Employees other than the
payments and benefits listed in schedule 5 of the Management Disclosure Letter.
15.4 SUPERANNUATION ALLOWANCES
Other than contributions to the Superannuation Fund, the Company is not liable
to pay any allowance, annuity, benefit, lump sum, pension, premium or other
payment in respect of the death, disability, retirement, resignation or
dismissal of any Employee.
15.5 WRITTEN CONTRACTS
The Company is not a party to any written employment or service agreement other
than those listed in schedule 4 of the Management Disclosure Letter.
15.6 TERMINATION
The employment of each Employee can be lawfully terminated on 3 months' notice
or less without payment of any damages or compensation, including any severance
or redundancy payments.
15.7 INDUSTRIAL DISPUTES
The Company has not been involved in any material industrial dispute with any
Employee at any time within the 5 years preceding the date of this Agreement and
the Sellers and Proprietors do not know of any circumstances likely to give rise
to any material industrial dispute.
PART 16 SUPERANNUATION SCHEMES
16.1 LIST COMPLETE
The Superannuation Fund is the only superannuation scheme or other pension
arrangement:
(a) in operation by or in relation to the Employees; and
(b) to which the Company contributes which provides its directors or
Employees or their dependants with pensions, annuities or lump sum
payments.
16.2 FUNDING
With respect to the Superannuation Fund:
(a) there are no outstanding and unpaid contributions on the part of the
Company or any Employee;
(b) the Company has provided at least the prescribed minimum level of
superannuation support for each Employee so as not to incur a
Superannuation Guarantee Charge liability; and
(c) there are no outstanding and unpaid benefits currently due to any
Employee, dependant or beneficiary.
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16.3 APPROVALS
(a) The Superannuation Fund is a regulated superannuation fund under the
Superannuation Industry (Supervision) Act 1993 (the "SIS ACT").
(b) The Insurance and Superannuation Commissioner has issued notices under
either section 12 or section 13 of the Superannuation Entities
(Taxation) Act 1987 for all years of income up to and including the
1993/94 year of income and none of these notices have been revoked or
are expected to be revoked.
(c) The Superannuation Fund is or is reasonably expected to be a complying
superannuation funds as defined in section 45 of the SIS Act in respect
of the 1994/95 and 1995/96 years of income.
PART 17 UNIONS
17.1 AGREEMENTS
The Company is not a party to any agreement with a union or industrial
organisation in respect of the Employees.
17.2 AWARDS
No industrial awards or agreements apply to any Employee.
PART 18 COMPLIANCE WITH LEGISLATION
18.1 RESTRICTIVE TRADE PRACTICES
The Company is not a party to any agreement, contract, arrangement or
understanding whether legally enforceable or not which is in breach of any
restrictive trade practices legislation and has not engaged in any conduct or
practice in breach of that legislation.
18.2 LICENCES OBTAINED
(a) The Company has all necessary licences, consents, permissions,
authorities and permits required to conduct its business and has paid
all fees due in relation to them and complied with all conditions under
them.
(b) The Sellers and Proprietors do not know of any factor which might
prejudice the continuance or renewal of any licence, consent,
permission, authority or permit required under Warranty 18.2(a).
PART 19 LITIGATION
19.1 COMPANY NOT A PARTY TO ANY LITIGATION
The Company is not, nor has it in the last 2 years been:
(a) a party to any investigation, prosecution, litigation, arbitration
proceedings or any other form of mediation or dispute resolution; or
(b) subject to any investigation by any Government Agency,
in respect of the Business, the assets of the Company or the Business Premises.
19.2 NO LITIGATION PENDING OR THREATENED
No investigation, prosecution, litigation, proceeding or any other form of
mediation or dispute resolution referred to in Warranty 19.1 is pending or
threatened.
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19.3 NO CIRCUMSTANCES
There are no circumstances which might give rise to any investigation,
prosecution, litigation, proceeding or any other form of mediation referred to
in Warranty 19.1.
PART 20 SOLVENCY
20.1 NO LIQUIDATION OR WINDING-UP
The Company has not gone into liquidation or passed a winding-up resolution nor
received a notice under sections 572 or 573 of the Corporations Law.
20.2 NO PETITION
No petition or other process for winding-up has been presented or threatened
against the Company and there are no circumstances justifying a petition or
other process.
20.3 NO WRIT OF EXECUTION
No writ of execution has issued against the Company or the property of the
Company and there are no circumstances justifying a writ.
20.4 NO RECEIVER
No receiver or receiver and manager of any part of the undertaking or assets of
the Company, has been appointed or is threatened or expected to be appointed and
there are no circumstances justifying an appointment.
PART 21 RECORDS AND CONSTITUENT DOCUMENTS
21.1 RECORDS
All accounts, books, ledgers and financial and other records of the Company:
(a) are up-to-date;
(b) have been fully and accurately maintained; and
(c) comply with all legal requirements.
21.2 MEMORANDUM AND ARTICLES
The Company has supplied accurate and up-to-date copies of its memorandum and
articles of association to the Buyer.
21.3 REGISTER OF MEMBERS
The Company has not received notice of any application or intended application
for the rectification of its register of members or any other register which it
is required by law to maintain.
PART 22 TAXES AND DUTIES
22.1 TAX PAID
Any Tax arising under any Tax Law payable in respect of any transaction, income
or asset of the Company has been paid.
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22.2 PROVISION IN ACCOUNTS
Adequate provision has been made in the Accounts for any Tax on the Company
which the Sellers or the Company is aware is payable or may become payable but
which is unpaid.
22.3 WITHHOLDING TAX
Any obligation under any Tax Law to withhold amounts at source including but not
limited to withholding tax, PAYE tax, Prescribed Payments System tax and
royalties has been complied with.
22.4 NO CAPITAL GAINS TAX RELIEF
The Company has not sought capital gains tax relief under section 160ZZO of the
Income Tax Assessment Act with respect to any asset acquired by the Company
before Closing.
22.5 DOCUMENTS STAMPED
Any Duty payable in respect of any Tax Law in relation to any transaction or
agreement to which the Company is or has been a party or by which the Company
derives, or has derived a substantial benefit has been paid.
22.6 RECORDS
The Company has maintained proper and adequate records to enable it to comply
with its obligations to:
(a) prepare and submit any information, notices, computations, returns and
payments required in respect of any Tax Law;
(b) prepare any accounts necessary for the compliance of any Tax Law; and
(c) retain necessary records as required by any Tax Law.
22.7 RETURNS SUBMITTED
The Company has submitted any necessary information, notices, computations and
returns to the relevant Government Agency in respect of any Tax or any Duty
relating to the Company.
22.8 RETURNS ACCURATE
Any information, notice, computation and return which has been submitted by the
Company to a Government Agency in respect of any Tax or Duty:
(a) discloses all material facts that should be disclosed under any Tax
Law;
(b) is not misleading; and
(c) has been submitted on time.
22.9 COPIES ACCURATE
All copies of any information, notice, computation or return submitted by the
Company in respect of any Tax or Duty which have been supplied by the Sellers or
its advisers are true and complete copies of the originals.
22.10 PUBLIC OFFICER
The office of public officer as required under any Tax Law has always been
occupied.
22.11 NO TAX AUDIT
The Company is not aware of any pending or threatened Tax or Duty audit.
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22.12 NO DISPUTES
There are no disputes with any Government Agency in respect of any Tax or Duty.
22.13 AVAILABILITY OF FUTURE INCOME TAX BENEFITS
No event has occurred which has prevented or could prevent the Company obtaining
the benefit of any future income tax benefit provided for in the Accounts.
22.14 ANTI-AVOIDANCE
The Company has not entered into or been a party to any transaction which
contravenes the anti-avoidance provisions of any Tax Law.
22.15 NO PREJUDICIAL ACTION
The Company has not taken any action which has or might alter or prejudice any
arrangement, agreement or tax ruling which has previously been negotiated with
or obtained from the relevant Government Agency under any Tax Law.
22.16 NO THIRD PARTY LIABILITY
The Company is not and will not become liable to pay, reimburse or indemnify any
person in respect of any Tax or Duty relating to any act or omission occurring
before Closing because of the failure of any other person to discharge that Tax
or Duty.
22.17 EVENTS SINCE ACCOUNTS DATE
(a) Since the Accounts Date, the Company has not:
(1) made or incurred or committed to make or incur any payment or
expenditure which will not be wholly deductible in computing
its taxable income, other than expenditure on assets other
than stock-in-trade;
(2) disposed of any asset or supplied any service or business
facility (including a loan of money or the letting, hiring or
licensing of any property) in circumstances where the
consideration actually received or receivable for the disposal
or supply is less than the consideration regarded as received
for Tax purposes;
(3) acquired any asset or received any service or business
facility in circumstances where the consideration actually
paid for the acquisition or receipt is more than the
consideration which could be regarded as paid for Tax
purposes; and
(4) entered into or been a party to any transaction which will or
could give rise to any capital gain accruing to the Company
under any Tax Law.
(b) Since the Accounts Date, no event has occurred which gives rise to a
Tax liability in respect of the Company on deemed (as opposed to
actual) income, profits or gains or which results in the Company
becoming liable to pay or bear a Tax liability directly or primarily
chargeable against or attributable to another person.
22.18 DISCLOSURE
All information necessary for the calculation of any Tax liabilities of the
Company:
(a) up to the Accounts Date, has been disclosed to the Buyer in writing
before the date of this Agreement; and
(b) between the date of this Agreement and the Closing Date, has been or
will be disclosed to the Buyer in writing before the Closing Date.
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PART 23 INSURANCE
23.1 CURRENT INSURANCES
Schedule 8 of the Management Disclosure Letter contains complete and accurate
particulars of all current insurances and cover notes taken out in respect of
the Company.
23.2 POLICIES
All insurances listed in schedule 8 of the Management Disclosure Letter are
currently in full force and effect, all premiums due under them have been paid
and nothing has been done or omitted to be done which would make any of them
void, voidable or unenforceable.
23.3 CLAIMS
There are no claims outstanding, pending, threatened or capable of arising
against the Company (to the knowledge of the Sellers or the Proprietors) in
respect of any accident or injury which are not fully covered by insurance.
23.4 ADEQUACY OF COVER
The Company has, and at all material times has had, valid insurance cover in
respect of the Business, its Employees and assets:
(a) against all risks normally insured against by companies carrying on the
same type of business as the Company or having similar assets;
(b) for the full amount required by legislation;
(c) for the full replacement value of its assets; and
(d) from a well-established and reputable insurer.
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38
EXECUTED by the parties as an agreement:
SIGNED
for CAPRICA PTY LIMITED
by its representative
in the presence of:
"Michael Eyers" "John Parselle"
- --------------------------- ------------------------------------
Witness Representative
- --------------------------- ------------------------------------
Name (please print) Name (please print)
SIGNED
for PERMANENT TRUSTEE AUSTRALIA LIMITED
by its representative
in the presence of: "Common Seal"
"John Wall" "Peter Ham"
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Director Director
- --------------------------- ------------------------------------
Name (please print) Name (please print)
SIGNED
by JOHN LEWIS BOYD PARSELLE
the presence of:
"Michael Eyers" "John Parselle"
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Witness
- ---------------------------
Name (please print)
<PAGE> 39
39
SIGNED
by HELEN ADELA PARSELLE
the presence of:
"Michael Eyers" "Helen Parselle"
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Witness
- ---------------------------
Name (please print)
SIGNED
by MICHAEL MILNE HOME
the presence of:
"John Parselle" By his attorney "Michael Ayers"
- --------------------------- ------------------------------------
Witness
- ---------------------------
Name (please print)
SIGNED
for IDENTIX INCORPORATED
by its representative
in the presence of:
"Richard Friedman" "James Scullion"
- --------------------------- ------------------------------------
Witness Representative
- --------------------------- ------------------------------------
Name (please print) Name (please print)
