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STOCK PURCHASE AGREEMENT
AGREEMENT, dated as of November 10, 2000 (the "Agreement"), among Mira,
L.P. (the "Purchaser"), and EquitiLink Holdings Limited, EquitiLink Limited,
EquitiLink International Management Limited and EquitiLink U.S.A., Inc. (the
"Sellers").
1. Purchase and Sale. (a) The Sellers agree to sell, or cause one of
their affiliates to sell, to the Purchaser, and the Purchaser agrees to purchase
from the Sellers or such affiliate, upon the terms and subject to the conditions
set forth herein, 2,742,461 shares (the "Shares") of common stock, par value
$.01 per share (the "Fund Common Stock"), of The First Australia Fund, Inc., a
Maryland corporation (the "Fund"), at an aggregate price (the "Purchase Price")
equal to the product of (a) 2,742,461 (as may be adjusted pursuant to Section
1(b)) and (b) the average of the daily volume-weighted average price per share
of Fund Common Stock on the American Stock Exchange ("AMEX") over the Measuring
Period. The "Measuring Period" shall be the ten trading days immediately
following the earlier of (i) the fifth business day following the closing (the
"Aberdeen Closing") of the transactions contemplated by the Share Sale
Agreement, dated October 19, 2000, among Aberdeen Asset Management, PLC, the
Seller, EIML Australia Pty Limited and the shareholders of EquitiLink
International (Channel Islands) Limited (the "Aberdeen Agreement") and (ii)
January 15, 2001.
(b) If the number of outstanding shares of Fund Common Stock is
increased or decreased as a result of any stock dividend, stock split, stock
combination or other similar corporate action, the number of Shares subject to
this Agreement shall be equitably adjusted to take into account such event.
2. Withdrawal of Proxy Statement. In consideration of the terms and
conditions set forth herein, the Purchaser agrees promptly to make an
appropriate filing under the U.S. federal proxy rules stating that it will not
continue to solicit, and will not vote, proxies in opposition to the proposal to
approve the Fund's new management agreement and the new advisory agreement at
the special meeting of the Fund's stockholders scheduled to be held on November
30, 2000 (the "Proposal"), and that it will not solicit such proxies after the
date hereof.
3. Purchaser's Representations and Warranties. The Purchaser represents
and warrants to the Seller that (a) the Purchaser is duly authorized to execute
and deliver this Agreement, (b) this Agreement is a valid and binding agreement,
enforceable against the Purchaser in accordance with its terms and (c) the
Purchaser has, or will have by Closing, the funds needed to pay for the Shares.
4. Sellers' Representations and Warranties. The Sellers jointly and
severally represent and warrant to the Purchaser that (a) each Seller is duly
authorized to execute and deliver this Agreement and that this Agreement is a
valid and binding agreement,
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enforceable against such Seller in accordance with its terms, (b) the sale and
delivery of the Shares to Purchaser in accordance with the terms hereof will
vest in Purchaser legal and valid title to the Shares, free and clear of all
liens and encumbrances (other than any liens or encumbrances arising as a result
of the ownership of the Shares by the Purchaser), (c) the Sellers currently
anticipate that the Aberdeen Closing will occur prior to January 2001, and (d)
as of the date hereof and as of the date of the Closing, the Sellers have
aggregate net assets with a value of at least $80 million.
5. Closing. The closing of the purchase and sale of the Shares
contemplated hereby (the "Closing") shall take place at the offices of Debevoise
& Plimpton, 875 Third Avenue, New York, N.Y. 10022, at 10:00 a.m. on the first
business day after the later of (a) the date that the conditions set forth in
Section 6 shall be satisfied or waived and (b) the last day of the Measuring
Period, or such other time, date or place as the parties may mutually agree. At
the Closing:
(i) the Sellers or one of their affiliates will sell, transfer and
deliver the Shares, represented by certificates duly endorsed in blank or
other instruments of transfer; and
(ii) the Purchaser will purchase the Shares and deliver to the
Sellers or one of their affiliates the Purchase Price by a wire transfer
of immediately available funds to the previously designated account of
the Sellers or one of their affiliates.
6. Conditions Precedent. The respective obligations of the Purchaser and
the Sellers to consummate the purchase and sale of the Shares as provided herein
(the "Transaction") is subject to (a) the waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), having been terminated or expired; (b) there not being in effect any
injunction or other order issued by a court of competent jurisdiction
restraining or prohibiting the consummation of the Transaction; (c) the Aberdeen
Closing having occurred; and (d) all consents and approvals from all
governmental and self-regulatory authorities necessary for the consummation of
the Transaction having been obtained.
7. Certain Covenants. (a) The Purchaser agrees to vote all shares of Fund
Common Stock beneficially owned by the Purchaser in favor of the Proposal at the
Special Meeting.
(b) The Purchaser agrees that prior to the Closing it will not directly
or indirectly seek or propose (i) to initiate, or join any person in initiating,
any action to influence or control the Fund's management or policies (provided
that this covenant shall not restrict the Purchaser from voting its shares of
Fund Common Stock as it sees fit, except as otherwise provided in Sections 7(a)
and 7(b)(ii)), or (ii) to take any action or support any
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action by any other person that is in opposition to the Proposal or to
shareholder approval of the Proposal.
(c) The Purchaser agrees that it will not take any action intentionally
to depress the trading price of the Fund Common Stock.
(d) The Sellers and the Purchaser agree to use all commercially
reasonable efforts to obtain as promptly as possible all regulatory approvals
required for them to consummate the Transaction as provided herein, including,
without limitation, approvals under the HSR Act. The Sellers will not
intentionally take or omit to take any action to delay the Aberdeen Closing
beyond December 2000. The Sellers will give the Purchaser reasonable advance
notice, to the extent practicable, of the date of the Aberdeen Closing.
(e) The Sellers agree to notify the Purchaser promptly if (i) they learn
that the Aberdeen Closing will occur after December 2000, (ii) the Aberdeen
Agreement is terminated, or (iii) they learn of any event that would result in a
failure of the conditions set forth in Section 6 to be satisfied or that would
constitute a breach of their representations, warranties or covenants hereunder.
The Purchaser agrees to notify the Sellers promptly if it learns of any event
that would result in a failure of the conditions set forth in Section 6 to be
satisfied or that would constitute a breach of its representations, warranties
or covenants hereunder.
(f) The Purchaser acknowledges that the Sellers are affiliates of the
Fund, within the meaning of Rule 405 under the Securities Act. The Purchaser
agrees that it will not sell the Shares otherwise than in compliance with Rule
144 under the Securities Act of 1933, as amended (the "Securities Act"), or
otherwise in a transaction that does not require registration under the
Securities Act.
8. Distributions. The Purchaser acknowledges and agrees that the Sellers
shall be entitled to receive the distribution on the Fund Common Stock declared
in December 2000 (the "December Distribution") with respect to the Shares, to
the extent the December Distribution is in the ordinary course consistent with
past practice. The Sellers agree that the Purchaser shall be entitled to receive
any other distribution made or declared with respect to the Shares during the
term of this Agreement.
9. Expenses. Each of the parties hereto shall pay its own expenses
incurred in connection with this Agreement.
10. Survival. All representations, warranties and agreements made by the
Sellers and by the Purchaser in this Agreement shall survive the Closing
hereunder and any investigation at any time made by or on behalf of either party
hereto.
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11. Notices. All notices, claims, requests, demands and other
communications hereunder will be in writing and will be deemed to have been duly
given if delivered or mailed (registered or certified mail, postage prepaid,
return receipt) as follows:
(a) If to the Purchaser, to:
Mira, L.P.
C/o Zurich Capital Markets, Inc.
One Chase Manhattan Plaza
New York, NY 10005
Attention: Terence S. Leighton
with a copy to:
Wilmer, Cutler & Pickering
2445 M Street, N.W.
Washington, D.C. 20037
Attention: Matthew A. Chambers
(b) If to the Sellers, to:
EquitiLink Holdings Limited
Level 3, 190 George Street
Sydney, NSW, 2000
Australia
Attention: Barry G. Sechos
with a copy to:
Debevoise & Plimpton
875 Third Avenue
New York, N.Y. 10022
Attention: Meredith M. Brown
or such other address as the person to whom notice is to be given may
have previously furnished to the others in writing in the manner set
forth above (provided that notice of any change of address shall be
effective only upon receipt thereof).
12. Termination. This Agreement shall terminate without liability
to any party if all conditions to the Closing shall not have been
satisfied or waived on or prior to February 28, 2000, provided that such
termination shall not relieve any
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party from obligation for any breach of this Agreement prior to
termination.
13. Miscellaneous. This Agreement may not be modified, amended,
altered or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto. No party to this
Agreement may assign any of its rights or obligations under this
Agreement without the prior written consent of the other parties, except
that the rights and obligations of the Purchaser may be assigned by the
Purchaser to a third party, but no such transfer shall relieve the
Purchaser of its obligations hereunder if such transferee does not
perform such obligations. This Agreement may be executed in two or more
counterparts, each of which will be deemed to be an original but all of
which together will constitute one and the same instrument. This
Agreement shall be governed by and construed in accordance with the laws
of the State of New York (regardless of the laws that might otherwise
govern under applicable New York principles of conflicts of law). The
Sellers and the Purchaser agrees to use its commercially reasonable
efforts to cause the conditions to Closing set forth herein to be
satisfied and to cause the Closing to occur in accordance with the terms
hereof. At any time or times from and after the Closing, the Sellers, on
the one hand, and the Purchaser, on the other hand, shall, at the request
of the other party, execute and deliver any further instruments and
documents and take all such further action as such other may reasonably
request in order to evidence or effect the consummation of the
Transaction.
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IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the general partner of the Purchaser and by duly authorized officers of the
Sellers as of the date first written above.
MIRA, L.P.
By: Zurich Capital Markets, Inc.,
its General Partner
By: /s/Terence S. Leighton
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Name: Terence S. Leighton
Title: Managing Director
EQUITILINK HOLDINGS LIMITED
By: /s/ Laurence Freedman
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Name: Laurence Freedman
Title: Director
EQUITILINK LIMITED
By: /s/ Laurence Freedman
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Name: Laurence Freedman
Title:Director
EQUITILINK INVESTMENT
MANAGEMENT LIMITED
By: /s/ Laurence Freedman
-------------------------------------
Name: Laurence Freedman
Title:Director
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EQUITLINK U.S.A., INC.
By: /s/ Richard P. Strickler
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Name: Richard P. Strickler
Title: Managing Director
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