Exhibit 10(p)
AUSTRALIA STOCK PURCHASE AGREEMENT
dated as of
July 5, 1995,
between
NATIONAL MEDICAL ENTERPRISES, INC.
and
PARKWAY HOLDINGS LIMITED
TABLE OF CONTENTS
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Section Page
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Recitals
ARTICLE I
PURCHASE AND SALE; CLOSING.................. 1
1.1 SALE AND PURCHASE OF STOCK.................................... 1
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1.2 PURCHASE PRICE................................................ 2
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1.3 THE CLOSING................................................... 2
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1.4 RELEASE AND WAIVER............................................ 2
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ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER........... 2
2.1 COMPANY AND AME; ORGANIZATION AND RELATED MATTERS............ 2
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2.2 STOCK........................................................ 3
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2.3 FINANCIAL STATEMENTS; CHANGES; CONTINGENCIES................. 4
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2.4 TAX MATTERS.................................................. 5
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2.5 MATERIAL CONTRACTS........................................... 6
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2.6 REAL PROPERTY................................................ 8
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2.7 ASSETS OTHER THAN REAL PROPERTY.............................. 9
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2.8 AUTHORIZATION; NO CONFLICTS.................................. 9
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2.9 LEGAL PROCEEDINGS............................................ 10
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2.10 DIVIDENDS AND OTHER DISTRIBUTIONS............................ 11
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2.11 INSURANCE.................................................... 11
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2.12 COMPLIANCE WITH LAW.......................................... 11
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2.13 ENVIRONMENTAL MATTERS........................................ 11
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2.14 INTELLECTUAL PROPERTY........................................ 12
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2.15 BENEFIT PLANS................................................ 12
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2.16 EMPLOYEE AND LABOR MATTERS................................... 13
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2.17 CERTAIN INTERESTS............................................ 14
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2.18 BANK ACCOUNTS, POWERS, ETC................................... 14
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2.19 NO BROKERS OR FINDERS........................................ 14
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2.20 TRUE AND COMPLETE COPIES OF DOCUMENTS........................ 15
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2.21 OVERHEAD EXPENSE............................................. 15
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2.22 STOCK EXCHANGE INFORMATION................................... 15
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER........... 15
3.1 ORGANIZATION AND RELATED MATTERS.............................. 15
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3.2 AUTHORIZATION................................................. 16
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3.3 NO CONFLICTS; CONSENTS AND APPROVALS.......................... 16
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3.4 NO BROKERS OR FINDERS......................................... 16
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3.5 LEGAL PROCEEDINGS............................................. 16
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3.6 INVESTMENT.................................................... 17
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3.7 FUNDS AVAILABLE............................................... 17
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ARTICLE IV
COVENANTS WITH RESPECT TO CONDUCT
PRIOR TO CLOSING....................... 17
4.1 ACCESS........................................................ 17
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4.2 MATERIAL ADVERSE CHANGES...................................... 18
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4.3 CONDUCT OF BUSINESS........................................... 18
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4.4 PERMITS AND APPROVALS......................................... 21
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4.5 CONFIDENTIALITY............................................... 21
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4.6 INSURANCE PROCEEDS............................................ 21
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4.7 AMOUNTS DUE TO SELLER......................................... 22
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4.8 PROPRIETARY INFORMATION....................................... 22
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ARTICLE V
ADDITIONAL CONTINUING COVENANTS AND INDEMNITIES........ 22
5.1 COOPERATION IN AUDITS......................................... 22
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5.2 TAX MATTERS.................................................... 22
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5.3 ACCESS......................................................... 26
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5.4 USE OF AND RIGHT TO NAMES...................................... 27
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5.5 EMPLOYMENT MATTERS............................................. 27
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5.6 RECORDS........................................................ 27
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5.7 AGREEMENT NOT TO COMPETE....................................... 28
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5.8 THIRD PARTY OFFERS............................................. 30
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ARTICLE VI
CONDITIONS OF PURCHASE..................... 31
6.1 CONDITIONS PRECEDENT TO BINDING EFFECT......................... 31
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6.2 GENERAL CONDITIONS............................................. 33
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6.3 CONDITIONS TO OBLIGATIONS OF BUYER............................. 33
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6.4 CONDITIONS TO OBLIGATIONS OF SELLER............................ 35
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ARTICLE VII
TERMINATION OF OBLIGATIONS;
INDEMNIFICATION; SURVIVAL................... 36
7.1 TERMINATION OF AGREEMENT....................................... 36
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7.2 EFFECT OF TERMINATION.......................................... 37
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7.3 INDEMNIFICATION................................................ 37
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7.4 SURVIVAL OF REPRESENTATIONS.................................... 43
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ARTICLE VIII
GENERAL............................ 43
8.1 AMENDMENTS; WAIVERS........................................... 43
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8.2 SCHEDULES; EXHIBITS; INTEGRATION.............................. 43
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8.3 REASONABLE BEST EFFORTS; FURTHER ASSURANCES................... 43
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8.4 GOVERNING LAW................................................. 44
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8.5 NO ASSIGNMENT................................................. 44
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8.6 HEADINGS...................................................... 45
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8.7 COUNTERPARTS.................................................. 45
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8.8 PUBLICITY AND REPORTS......................................... 45
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8.9 REMEDIES CUMULATIVE........................................... 45
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8.10 PARTIES IN INTEREST........................................... 45
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8.11 NOTICES....................................................... 45
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8.12 STAMP DUTIES.................................................. 47
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8.13 EXPENSES AND ATTORNEYS FEES................................... 47
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8.14 SEVERABILITY.................................................. 47
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8.15 DOLLARS....................................................... 47
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ARTICLE IX
DEFINITIONS.......................... 47
9.1 DEFINITIONS................................................... 47
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Schedules
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Disclosure Schedule dated June 20, 1995
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AUSTRALIA STOCK PURCHASE AGREEMENT
This Australia Stock Purchase Agreement is entered into as of July 5,
1995, between Parkway Holdings Limited, a Singapore corporation ("Buyer"), and
National Medical Enterprises, Inc., a Nevada corporation ("Seller").
R E C I T A L S
WHEREAS, Seller, through its subsidiaries, owns and operates a
hospital, diagnostic, pathology and related healthcare services business in
Australia (as currently conducted, the "Business");
WHEREAS, the Business is conducted by Seller through Tenet Healthcare
Australia Pty Limited, an Australian corporation (the "Company"), and through
the ownership of an interest in Australian Medical Enterprises Limited, an
Australian corporation ("AME"); and
WHEREAS, pursuant to this Agreement, Seller desires to sell, and Buyer
desires to buy, all of the issued shares of the Company (the "Stock") for the
consideration described herein.
A G R E E M E N T
In consideration of the mutual promises contained herein and, subject
to Section 6.1, intending to be legally bound the parties agree as follows
(except as otherwise expressly provided, all defined terms in this Agreement
shall have the meanings assigned to them in Article IX hereof):
ARTICLE I
PURCHASE AND SALE; CLOSING
1.1 SALE AND PURCHASE OF STOCK.
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Subject to the terms and conditions of this Agreement, Seller agrees
to sell, and to cause International - NME, Inc. ("International - NME") to sell,
the Stock and convey, transfer, assign and deliver the certificates evidencing
the Stock to Buyer at the Closing, and Buyer agrees to purchase the Stock from
Seller and International - NME. The certificates will be accompanied by share
transfers duly executed by Seller or International - NME, as the case may be, in
respect of the Stock and a duly executed power of attorney by each of them to do
any and all things in respect of the Stock until the time the share transfers in
respect of the Stock are registered in favor of
1
Buyer, and otherwise in a form acceptable for transfer on the books of the
Company.
1.2 PURCHASE PRICE.
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Subject to the terms and conditions of this Agreement, Buyer agrees to
pay to Seller or its order at the Closing in exchange for the Stock the amount
of U.S.$63,000,000 (the "Purchase Price"). The Purchase Price shall be paid in
cash (in funds immediately available in Hong Kong).
1.3 THE CLOSING.
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The Closing shall take place at the offices of O'Melveny & Myers in
Hong Kong, on the tenth business day after the satisfaction of the conditions
specified in Sections 6.1(a), 6.2(b), 6.3(c) and 6.4(b), or at such other place
or on such other date as Seller and Buyer may agree.
1.4 RELEASE AND WAIVER.
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Except as expressly provided for in this Agreement, the Closing shall
constitute an unconditional release and waiver by Seller and its subsidiaries
and Affiliates (other than the Company, AME and its Subsidiaries) of, and Seller
thereby covenants to cause its subsidiaries and Affiliates to unconditionally
release and waive, any and all claims it or any of its subsidiaries or
Affiliates may have against or with respect to the Company, AME or any of its
Subsidiaries or any other assets constituting part of the Business.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller has invited Buyer to perform and Buyer has performed due
diligence and business investigations with respect to the Company and AME, with
the intention that Buyer form its own conclusions regarding the condition and
value of the Business pursuant to the parties' express intention that the sale
of the Business be without representation or warranty by Seller, express or
implied, except as set forth in this Agreement and the Disclosure Schedule,
which representations and warranties Seller acknowledges Buyer is relying upon
in entering into this Agreement. Unless the context otherwise requires,
references to AME in this Article II shall include AME and its Subsidiaries.
Seller represents and warrants to Buyer as of the date of the Disclosure
Schedule as follows:
2.1 COMPANY AND AME; ORGANIZATION AND RELATED MATTERS.
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Seller is a corporation duly organized, validly existing and in good
standing under the laws of the State of
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Nevada. The Company is a corporation duly incorporated and validly existing
under the laws of New South Wales and AME is a corporation duly incorporated and
validly existing under the laws of Western Australia. Section 2.1 of the
Disclosure Schedule correctly sets forth the capitalization of each of the
Company and AME and each jurisdiction in which each of the Company and AME is
qualified or licensed to do business as a foreign person. Seller has all
necessary corporate power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated by this Agreement.
Each of the Company and AME has all necessary corporate power and authority to
own or lease its properties and assets and to carry on its business as now
conducted. Section 2.1 of the Disclosure Schedule correctly lists the current
registered directors and executive officers of each of the Company and AME
(other than its Subsidiaries). True, correct and complete copies of the
respective memorandum and articles of association of each of the Company and AME
(other than its Subsidiaries) have been delivered to Buyer. The Company and AME
constitute all the entities through which Seller conducts, directly or
indirectly, the Business, and, except as set forth in Section 2.1 of the
Disclosure Schedule, the assets and properties owned or leased by the Company
and AME constitute all the material assets, properties and rights used by Seller
and its subsidiaries and Affiliates in connection with the conduct of the
Business.
2.2 STOCK.
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(a) Except as described in Section 2.1 of the Disclosure Schedule,
Seller, directly or indirectly, owns all of the issued Equity Securities of
the Company beneficially and of record. The Company owns 101,006,395
shares (the "AME Stock") of AME, beneficially and of record. Except as
described in Section 2.2 of the Disclosure Schedule, all of such Equity
Securities of Company and the AME Stock are owned free and clear of any
Encumbrance. At the Closing, Buyer will acquire good and valid title to
and complete ownership of the Stock, with all rights attaching thereto as
of the Closing Date, free and clear of any Encumbrance. The authorized,
issued and outstanding capital stock of each of the Company and AME is
described in Section 2.1 of the Disclosure Schedule. Except as described
in Section 2.2 of the Disclosure Schedule, there are no outstanding
Contracts or other rights to subscribe for or purchase, or Contracts or
other obligations to issue or grant any rights to acquire, any Equity
Securities of the Company or the AME Stock or, to the knowledge of Seller,
the Equity Securities of AME, or to restructure or recapitalize the Company
or, to the knowledge of Seller, AME. Other than this Agreement and except
as set forth in Section 2.2 or Section 2.8 of the Disclosure Schedule,
neither the Stock nor the AME Stock nor, to the knowledge of Seller, the
Equity Securities of AME is subject to any voting trust
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agreement or other Contract, agreement, arrangement, commitment or
understanding, including any such agreement, arrangement, commitment or
understanding restricting or otherwise relating to the voting, dividend
rights or disposition thereof.
(b) Except as set forth in Section 2.2 of the Disclosure Schedule,
the Company does not own directly or indirectly any Equity Securities of
any Person and the Company is not a member of or participant in any
partnership, joint venture or similar Person (other than passive investment
holdings in amounts not material in the aggregate and the AME Stock).
2.3 FINANCIAL STATEMENTS; CHANGES; CONTINGENCIES.
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(a) Seller has delivered to Buyer a consolidated balance sheet for
the Business at each of May 31, 1994 and 1993 and the related consolidated
statements of operations, changes in owner's equity and cash flow
(including the notes thereto and the consolidating schedules) for the two-
year period ended May 31, 1994, and for the three-month period ended May
31, 1992, a true and correct copy of which has been provided to Buyer by
Seller. All such financial statements have been audited by the Auditors
whose report thereon is included with such financial statements. Such
statements of operations and cash flow present fairly, in all material
respects, the results of operations and cash flows of the Business for the
respective periods covered, and the balance sheets present fairly, in all
material respects, the financial condition of the Business as of their
respective dates, in all cases in conformity with GAAP applied on a
consistent basis (except for changes, if any, required by GAAP and
disclosed therein).
(b) Seller has delivered to Buyer a consolidating balance sheet for
the Business at February 28, 1995 (the "Balance Sheet"), and the related
consolidating statements of operations for the nine-month periods ended
February 28, 1995 and 1994; a true and correct copy of each of which has
been provided to Buyer by Seller. Such statements of operations and the
Balance Sheet have been compiled in accordance with Statements on Standards
for Accounting and Review Services issued by the American Institute of
Certified Public Accountants and, except as set forth in the Independent
Accountants' Compilation Report, dated April 3, 1995, included therewith,
are in conformity with GAAP applied on a consistent basis.
(c) Except as described in Section 2.3 of the Disclosure Schedule,
from February 28, 1995 to the date of the Disclosure Schedule, whether or
not in the ordinary course of business, there has not been, occurred or
arisen:
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(i) any change in or event or a series of connected events
affecting the Business that has had or is reasonably expected to have
an impact of $100,000 individually or $500,000 in the aggregate with
all other such changes, events or series of events or otherwise has
had or is reasonably expected to have a Material Adverse Effect,
except for changes reflected in the financial statements referred to
in this Section 2.3 and changes affecting generally the Australian
health care industry as a whole (it being understood that Buyer
assumes the risks of changes of such type);
(ii) any casualty, loss, damage or destruction of any property
of the Company or AME or that has involved a loss to the Company or
AME in excess of applicable insurance coverage, that has had or is
reasonably expected to have an impact in excess of $100,000
individually or $500,000 in the aggregate with all other such
casualties, losses, damage or destruction, or otherwise has had or is
reasonably expected to have a Material Adverse Effect; or
(iii) any of the events described in Section 4.3 hereof.
(d) Except as set forth in Section 2.3 of the Disclosure Schedule,
neither the Company nor AME has any liability or obligation of any nature
(whether known or unknown, absolute, accrued, contingent or otherwise) or
has engaged in other types of financing transactions that would have or
would reasonably be expected to have an impact of $100,000 individually or
$500,000 in the aggregate with all other such liabilities or obligations or
otherwise has had or is reasonably expected to have a Material Adverse
Effect, other than (i) as disclosed, reflected or reserved against in the
financial statements referred to in this Section 2.3 and the notes thereto
and (ii) liabilities and obligations incurred in the ordinary course of
business consistent with past practices since the date of the Balance Sheet
and not in violation of this Agreement.
2.4 TAX MATTERS.
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(a) Except as set forth in Section 2.4 of the Disclosure Schedule, as
of the Closing Date (i) each of the Company and AME has timely filed (or,
where permitted or required, its respective direct or indirect parents have
timely filed) all material required Tax Returns, (ii) each such Tax Return
sets forth the Tax liability required to be set forth therein in accordance
with the provisions of the Australian Income Tax Assessment Act, 1936, as
amended, or other applicable law (other than Taxes contested in good faith)
and is otherwise true and correct in all material
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respects, (iii) all Taxes shown to be due on the Tax Returns referred to in
clause (i) have been timely paid in full (other than Taxes contested in
good faith), (iv) no material tax liens have been filed with respect to
Taxes of the Company or AME, (v) no Governmental Entity has, during the
past three years, conducted a taxation audit of the Company or AME, and
(vi) no Governmental Entity has proposed in writing any deficiency,
assessment or claim for Taxes of either the Company or AME.
(b) Except as set forth in Section 2.4 of the Disclosure Schedule,
during the period from March 1, 1995 through the Closing Date (the "Interim
Period"), neither the Company nor AME will have (i) engaged in any
transaction, other than in the ordinary course of business, that will cause
the effective Tax rate of the Company and AME for Taxes for the Interim
Period to be materially greater than the effective Tax rate of the Company
and AME for Taxes for the year ended May 31, 1994 as adjusted for changes
in Tax law and other events beyond the control of Seller or (ii) made or
changed any election, changed any annual accounting period, or adopted or
changed any accounting method that would have the effect of increasing the
Tax liability of the Company or AME.
(c) Nothing has occurred in respect of the Company or AME which would
cause the disallowance for Tax purposes of either the carry forward of
losses as of the date of the Balance Sheet or the deduction of losses
incurred since that date other than as a result of the transfer of the
Stock.
2.5 MATERIAL CONTRACTS.
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Except as set forth in Section 2.5 of the Disclosure Schedule, neither
the Company nor AME is a party to or bound by any Contract which is an:
(i) employment agreement, employment contract or consultancy or
other similar service agreement;
(ii) employee collective bargaining agreement or other contract with
any labor union;
(iii) agreement or covenant of the Company or AME not to compete or
other covenant of the Company or AME restricting the development,
manufacture, marketing or distribution of the products and services of the
Business, which in each case is material in respect of any portion of
Australia;
(iv) agreement, contract or other arrangement (including management
agreements) with (A) Seller or any Affiliate of Seller (other than the
Company or AME) or (B) any current or former officer, director or employee
of
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Seller, the Company, AME or any Affiliate of Seller (other than employment
agreements covered by clause (i) above);
(v) lease, sublease or similar agreement with any Person under
which the Company or AME is a lessor or sublessor of, or makes available
for use to any Person a portion of the real property assets of the Company
or AME (other than real property leases with doctors or clinics entered
into in the ordinary course of the Business consistent with past
practices);
(vi) agreement, contract or other instrument under which the
Company or AME has borrowed any money from, or issued any note, bond,
debenture or other evidence of indebtedness to, any Person or any other
note, bond, debenture or other evidence of indebtedness issued to any
Person which individually is in excess of U.S.$100,000 or in the aggregate
are in excess of U.S.$500,000;
(vii) agreement, contract or other instrument (including so-called
keepwell agreements, letters of comfort or letters of moral intent) under
which (A) any Person (including the Company or AME) has directly or
indirectly guaranteed indebtedness, liabilities or obligations of the
Business or the Company or AME or (B) the Company or AME has directly or
indirectly guaranteed indebtedness, liabilities or obligations of any
Person (in each case other than endorsements for the purpose of collection
in the ordinary course of business), which individually, is in excess of
U.S.$100,000 or in the aggregate are in excess of U.S.$500,000;
(viii) agreement, memorandum of understanding, letter of intent,
contract or other instrument under which the Company or AME has made or
will make, directly or indirectly, any advance, loan, extension of credit
or capital contribution to, or other investment in, any Person (other than
to doctors in the ordinary course of business consistent with past
practice), which individually is in excess of U.S.$100,000 or in the
aggregate are in excess of U.S.$500,000;
(ix) material mortgage, pledge, security agreement, deed of trust
or other instrument granting a lien or other Encumbrance upon any of the
Company Real Properties;
(x) powers of attorney (other than powers of attorney given to
officers or other representatives of the Company or AME in the ordinary
course of the Business with respect to routine tax, securities and
shareholder matters);
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(xi) letter of intent, memorandum of understanding or agreement to
acquire or develop any hospital or other medical-related property or
business;
(xii) any agreement or Contract relating to the trading, hedging,
exchange or sale or purchase of securities, indices, currencies, interest
rates, futures or any financial or derivative instruments of any nature
whatsoever; or
(xiii) other agreement, contract, lease, license, commitment or
instrument to which the Company or AME is a party or by or to which it or
any of its assets or business is bound or subject which has an aggregate
future liability to any Person or Persons in excess of U.S.$100,000.
Except as set forth in Section 2.5 of the Disclosure Schedule, each Contract of
the Company or AME listed in the Disclosure Schedule is valid, binding and in
full force and effect and is enforceable, as applicable, by the Company and AME
and, to the knowledge of Seller, each of the other parties to the Contract in
accordance with its terms. Except as set forth in Section 2.5 of the Disclosure
Schedule, each of the Company and AME has performed all obligations required to
be performed by it to date under the Contracts and neither the Company, AME nor,
to the knowledge of Seller, any other parties to any of the Contracts (with or
without the lapse of time or the giving of notice, or both) is in breach or
default thereunder, except where such failure to perform or breach has not and
would not reasonably be expected to have resulted in a liability to the Company
or AME individually in excess of U.S.$100,000 and U.S.$500,000 in the aggregate
together with all other such failures, or has not had and would not otherwise be
expected to have a Material Adverse Effect.
2.6 REAL PROPERTY.
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(a) Section 2.6 of the Disclosure Schedule sets forth a complete and
accurate description of the real immovable property owned in fee simple by
the Company and AME (the "Owned Real Property") and a complete list of all
real property and interests in real property leased by the Company and AME
(the "Leased Real Property").
(b) Each of the Company and AME has (i) good and valid title to all
Owned Real Property and (ii) good and valid title to the leasehold estates
in all Leased Property (an Owned Real Property or Leased Real Property
being sometimes referred to herein, collectively, as "Company Real
Properties"), in each case free and clear of all Encumbrances, leases,
assignments, subleases, easements, covenants, rights-of-way and other
similar restrictions of any nature whatsoever, except (A) such as are set
forth in
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Section 2.6 of the Disclosure Schedule; (B) leases, subleases and similar
agreements set forth in Section 2.5 of the Disclosure Schedule or not
required to be disclosed therein; and (C) Permitted Encumbrances. Except
as set forth in Section 2.6 of the Disclosure Schedule, the Company Real
Properties have been maintained in all material respects in accordance with
the past practices of the Business and consistent with industry practice
and are in good operating condition and repair, ordinary wear and tear
excepted. The current use by the Company and AME of the plants, offices
and other facilities located on Company Real Property does not constitute a
material violation of any material local zoning or similar land use or
government regulations. Each of the Company and AME has all necessary
material Approvals and Permits that are required to be obtained by it as of
the date of the Disclosure Schedule for any development or building
projects currently in process.
2.7 ASSETS OTHER THAN REAL PROPERTY.
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Each of the Company and AME has good and valid title to all (a) its
assets reflected on the Balance Sheet and (b) its assets thereafter acquired,
which in each case are material to the Business, except those sold or otherwise
disposed of since the date of the Balance Sheet in the ordinary course of
business consistent with past practice and not in violation of this Agreement,
in each case free and clear of all Encumbrances except (i) such as are set forth
in Section 2.7 of the Disclosure Schedule and (ii) Permitted Encumbrances.
All the tangible personal property of the Company and AME that is
material to the Business has been maintained in all material respects in
accordance with the past practices of the Business and consistent with industry
practice. The tangible personal property of the Company and AME is in good
operating condition and repair, ordinary wear and tear excepted, consistent with
industry practice. All leased personal property of the Company and AME is in
all material respects in the condition required of such property by the terms of
the lease applicable thereto during the term of the lease and upon the
expiration thereof.
This Section 2.7 does not relate to Company Real Property or interests
therein, such items being the subject of Section 2.6.
2.8 AUTHORIZATION; NO CONFLICTS.
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The execution, delivery and performance of this Agreement by Seller
and International - NME and consummation of the transactions contemplated by
this Agreement have been duly and validly authorized by all necessary corporate
action on the part of Seller and International - NME. Subject to Section 6.1,
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this Agreement constitutes the legally valid and binding obligation of the
Seller, enforceable against Seller in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws and equitable principles relating to or
limiting creditors rights generally. The execution, delivery and, upon receipt
of the Permits and Approvals listed in Sections 2.8 (II) and 6.2 (II) of the
Disclosure Schedule, performance of this Agreement by Seller and International -
NME will not (i) violate, or constitute a breach or default under the charter
documents or by-laws of Seller, International - NME, the Company or AME or (ii)
violate, or constitute a material breach or material default or result in the
acceleration of or permit the acceleration of any material obligation (whether
upon lapse of time and/or the occurrence of any act or event or otherwise)
under, any material Contract of any of such entities, or cause or give rise to a
right of termination of or adverse change in the terms of any material Contract,
or result in the imposition of any material Encumbrance against any asset or
properties of the Company or AME, or violate any Law or any material Permit or
material Approval or cause any material Permit or material Approval to be
revoked, withdrawn or modified. Section 2.8 of the Disclosure Schedule lists
all material Permits and Approvals in connection with the operation of the
Business as presently conducted, and such Permits and Approvals constitute all
the material Permits and Approvals necessary to conduct the Business. Sections
6.2 (II) and 2.8 (II) of the Disclosure Schedule lists all material Permits and
Approvals that are required to be obtained by Seller or the Company or AME, or
filings or registrations with any third party or Governmental Entity required
for Seller or the Company or AME, to consummate the transactions contemplated by
this Agreement.
2.9 LEGAL PROCEEDINGS.
-----------------
Except as set forth in Section 2.9 of the Disclosure Schedule, there
is no Order or Action pending, or, to the best knowledge of Seller, threatened,
against or affecting the Company or AME or any of their respective properties or
assets that has resulted or is reasonably expected to result in a liability in
excess of $100,000 individually or $500,000 in the aggregate together with all
other such Orders or Actions, or that has had or is reasonably expected to have,
individually or in the aggregate together with all other such Orders and
Actions, a Material Adverse Effect.
Section 2.9 of the Disclosure Schedule sets forth a list of all Orders
and Actions pending or, to the best knowledge of Seller, threatened, against the
Company or AME (i) brought by any Government Entity, (ii) in which money damages
in excess of $100,000 individually or $500,000 in the aggregate with all other
such Orders and Actions are sought against the Company or AME or (iii) seeking
injunctive relief against the Company or AME that
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could reasonably be expected to result in a Material Adverse Effect.
2.10 DIVIDENDS AND OTHER DISTRIBUTIONS.
---------------------------------
Except as described in Section 2.10 of the Disclosure Schedule, there
has been no dividend or other distribution of assets, whether consisting of
money, securities, property or any other thing of value, declared, issued, paid,
made or set aside by the Company or AME subsequent to the date of the Balance
Sheet.
2.11 INSURANCE.
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Section 2.11 of the Disclosure Schedule lists all insurance policies
and bonds that are maintained by or for the benefit of the Company or AME in
connection with, and which are material to, the Business. All such policies and
bonds are in full force and effect and, to the best knowledge of Seller, there
is no threat by any of the insurers to terminate or not renew, or materially
increase the premiums payable under, any of such policies or bonds. Except as
set forth in Section 2.11 of the Disclosure Schedule, all insurance policies
maintained for the benefit of the Business, Company or AME or their respective
employees are maintained directly by the Company and/or AME and not by Seller or
any of Seller's other Subsidiaries. Except as set forth in Section 2.11 of the
Disclosure Schedule, all such insurance policies will remain in full force and
effect from and after, and will not be modified or amended as a result of, the
Closing.
2.12 COMPLIANCE WITH LAW.
-------------------
Each of the Company and AME has conducted its respective business in
all material respects in accordance with applicable Laws. The procedures and
practices of the Company and AME are in compliance in all material respects with
all such Laws. To the best knowledge of Seller, no suspension, cancellation or
termination of any Permits or Approvals required by any Governmental Entity to
permit the Business to be conducted as it is currently conducted is threatened
or imminent that could reasonably be expected to be material to the Business.
2.13 ENVIRONMENTAL MATTERS.
---------------------
(a) Each of the Company and AME has obtained and maintained in effect
all material licenses, Permits, Approvals and other authorizations required
under all applicable Laws of all applicable Governmental Entities or regulatory
authorities relating to pollution, the disposition, storage or handling of
medical waste or radioactive material or other materials which are classified
under such Laws as harmful to the environment or to human health ("Hazardous
Substance"), or to the protection of
11
the environment ("Environmental Laws") and, except as set forth in Section 2.13
of the Disclosure Schedule, is in compliance in all material respects with all
Environmental Laws and with all such licenses, Permits, Approvals and
authorizations.
(b) Except as set forth in Section 2.13 of the Disclosure Schedule,
the properties presently or formerly owned or operated by the Company or AME
(including without limitation, soil, groundwater or surface water on, under or
adjacent to the properties, and buildings thereon) (the "Properties") do not
contain any Hazardous Substance other than as permitted under any applicable
Environmental Law (provided, however, that with respect to Properties formerly
owned or operated by the Company or AME, such representation is limited to
actions taken by the Company or AME during the period the Company or AME owned
or operated such Properties).
(c) Except as set forth in Section 2.13 of the Disclosure Schedule,
neither the Company nor AME has incurred, and, to the knowledge of Seller, none
of the Properties are presently subject to, any material liabilities (fixed or
contingent) or clean-up obligations relating to Hazardous Substances or
Environmental Laws.
2.14 INTELLECTUAL PROPERTY.
---------------------
Except as set forth in Section 2.14 of the Disclosure Schedule, each
of the Company and AME has all necessary rights to and in all material patents,
trademarks (registered or unregistered), trade names, service marks and
copyrights ("Intellectual Property") owned, used, filed by or licensed to the
Company or AME in connection with the Business. Section 2.14 of the Disclosure
Schedule sets forth a list of all jurisdictions in which registered trademarks
are registered or applied for and all registration and application numbers.
Except as set forth in Section 2.14 of the Disclosure Schedule, Seller does not
know, and has received no notice, of any conflict with the asserted rights of
others with respect to any Intellectual Property, except where such conflict
would not be material to the Business.
2.15 BENEFIT PLANS.
-------------
(a) Section 2.15 of the Disclosure Schedule contains a list of all
retirement, pension, superannuation profit sharing, trust fund, bonus, stock
option or other equity-based compensation, stock purchase, severance, deferred
compensation plans or arrangements and other employee fringe benefit plans (all
the foregoing being herein called "Benefit Plans") maintained, or contributed
to, by Seller, the Company or AME for the benefit, or on the account, of any
officers or employees of the Company or AME. Seller has delivered to Buyer
true, complete and correct copies of (i) each Benefit Plan (or, in the case of
12
any unwritten Benefit Plans, descriptions thereof), (ii) the most
recent summary plan description for each Benefit Plan for which a summary plan
description is required and (iii) each trust agreement and group annuity
contract relating to any Benefit Plan. Except as set forth in Section 2.15 of
the Disclosure Schedule, none of Seller and its Subsidiaries (other than the
Company or AME) maintains any Benefit Plan with, or for the benefit of, any
officer or employee of the Company or AME, including any employee referred to in
Section 5.6. Except as set forth in Section 2.15 of the Disclosure Schedule,
none of the Benefit Plans are subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). Neither the
Company nor AME has or will have any obligation or liability of any kind with
respect to any of the Benefit Plans which are or may be subject to ERISA set
forth in Section 2.15 of the Disclosure Schedule.
(b) Each Benefit Plan has been administered in all material respects
in accordance with its terms. All the Benefit Plans are in compliance in all
material respects with the applicable provisions of applicable Law.
Furthermore, each of the Company and AME is in compliance in all material
respects with the applicable laws, regulations and provisions contained in each
of its collective bargaining agreements and any applicable award, and is not
required to pay the Superannuation Guarantee Charge under the Superannuation
Guarantee Charge Act (6th) 1992 in respect any of its employees. Except as set
forth in Section 2.15 of the Disclosure Schedule, all payments and deductions
from wages, material reports, returns and similar documents with respect to the
Benefit Plans required to be filed with or paid to any Governmental Entity or
Benefit Plan or distributed to any Benefit Plan participant have been duly and
timely filed, distributed or paid. Except as set forth in Section 2.15 of the
Disclosure Schedule, there is no pending or, to the knowledge of Seller,
threatened litigation by any employee or former employee of the Business
relating to any Benefit Plan, other than routine claims for benefits. Each
defined benefit Benefit Plan is fully funded.
2.16 EMPLOYEE AND LABOR MATTERS.
--------------------------
(a) There is, and during the past two years there has been, no labor
strike, dispute, work stoppage or lockout pending, or, to the knowledge of
Seller, threatened, against or affecting the Company or AME;
(b) To the knowledge of Seller, no union organizational campaign is
in progress with respect to the employees of the Company or AME and no
question concerning representation exists respecting such employees;
(c) There is no unfair labor practice charge or complaint against the
Company or AME pending, or, to the
13
knowledge of Seller, threatened, before any Governmental Entity;
(d) There are no pending, or, to the knowledge of Seller, threatened,
union grievances against the Company or AME which are reasonably likely to
have a Material Adverse Effect; and
(e) None of Seller, the Company or AME has received notice during the
past two years of the intent of any Governmental Entity responsible for the
enforcement of labor or employment laws to conduct an investigation of the
Company or AME and, to the knowledge of Seller, no such investigation is in
progress.
2.17 CERTAIN INTERESTS.
-----------------
(a) Except as set forth in Section 2.17 of the Disclosure Schedule,
after the Closing neither Seller nor any Affiliate thereof, nor any officer
or director of any thereof will have any interest in any property of the
Business; and neither the Company nor AME will be indebted to or otherwise
obligated to any such Person, except for amounts due under normal
arrangements applicable to all employees generally as to salary or
reimbursement of ordinary business expenses not unusual in amount or
significance.
(b) Except as set forth in Section 2.17 of the Disclosure Schedule,
after the Closing none of the agreements, contracts or other arrangements
set forth in Section 2.5 of the Disclosure Schedule between the Company or
AME, on the one hand, and Seller or any of its Affiliates, on the other
hand, will continue in effect, and there will remain thereafter no
outstanding obligation or liability in respect of any such agreement,
contract or other arrangement.
2.18 BANK ACCOUNTS, POWERS, ETC.
---------------------------
Section 2.18 of the Disclosure Schedule lists each bank, trust
company, savings institution, brokerage firm, mutual fund or other financial
institution with which the Company has an account or safe deposit box and the
names of all Persons authorized to draw thereon or to have access thereto.
2.19 NO BROKERS OR FINDERS.
---------------------
Except as set forth in Section 2.19 of the Disclosure Schedule, no
agent, broker, finder, or investment or commercial banker, or other Person or
firm (collectively, "Investment Bankers") engaged by or acting on behalf of
Seller or the Company or any of their respective Affiliates (other than AME) in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement, is
14
or will be entitled to any brokerage or finder's or similar fee or other
commission as a result of this Agreement or such transactions.
2.20 TRUE AND COMPLETE COPIES OF DOCUMENTS.
-------------------------------------
Copies of all leases, insurance policies, agreements, contracts and
other documents and instruments which are listed or referred to on the
Disclosure Schedule and which have been delivered to, or made available for
inspection by, Buyer are true and complete in all respects. Such documents,
together with this Agreement and all certificates, exhibits, schedules and other
instruments furnished by or on behalf of Seller pursuant to this Agreement,
taken as a whole, do not as of the date hereof, and will not as of the Closing
Date, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they are made, not
misleading, except where such misstatements or omissions reflect facts, events
or circumstances, or series of related facts, events of circumstances that would
not have and would not reasonably be expected to have a Material Adverse Effect.
2.21 OVERHEAD EXPENSE.
----------------
The expense of overhead, comprising certain administrative,
logistical, legal and other services, provided by Seller to the Business since
February 28, 1995 that has been paid or accrued by the Company and AME or that
has otherwise been allocated to the Business (the "Overhead Expense") does not
in the aggregate exceed the amounts set forth in Section 2.21 of the Disclosure
Schedule for the Business for the fiscal years ending May 31, 1995 and 1996, as
prorated through the date of the Disclosure Schedule.
2.22 STOCK EXCHANGE INFORMATION.
--------------------------
As of the date of the Disclosure Schedule, AME has complied in all
material respects with the disclosure requirements applicable to AME under
Listing Rule 3A(1) of the Listing Rules of Australian Stock Exchange Limited.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as of the date of the
Disclosure Schedule as follows:
3.1 ORGANIZATION AND RELATED MATTERS.
--------------------------------
Buyer is a corporation duly organized, validly existing and in good
standing under the laws of Singapore. Buyer has all necessary corporate power
and authority to carry on its business as now being conducted. Buyer has the
necessary corporate power
15
and authority to execute, deliver and perform this Agreement and any
transactions contemplated by this Agreement.
3.2 AUTHORIZATION
-------------
The execution, delivery and performance of this Agreement by Buyer,
and the consummation by Buyer of the transactions contemplated under this
Agreement, have been duly and validly authorized by the Board of Directors of
Buyer and by all other necessary corporate action on the part of Buyer. This
Agreement constitutes the legal, valid and binding obligation of Buyer,
enforceable against Buyer in accordance with its terms except as enforceability
may be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws and equitable principles relating to or limiting creditors' rights
generally.
3.3 NO CONFLICTS; CONSENTS AND APPROVALS.
------------------------------------
The execution, delivery and performance of this Agreement by Buyer
will not (a) violate or constitute a breach or default under the charter
documents or by-laws of Buyer or (b) violate or constitute a breach or default
(whether upon lapse of time and/or the occurrence or any act or event or
otherwise) under (i) any Law to which Buyer is subject or (ii) any Contract to
which Buyer is a party, except (in the case of clause (b)) as is not reasonably
be expected to materially and adversely affect the ability of Buyer to
consummate the transactions contemplated by, or perform its obligations under,
this Agreement. Sections 6.1 (II) and 3.3 of the Disclosure Schedule lists all
material Permits and Approvals which are required to be obtained by Buyer, or
filings or registrations with any third party or Governmental Entity required
for Buyer to consummate the transactions contemplated by this Agreement.
3.4 NO BROKERS OR FINDERS.
---------------------
Except as set forth in Section 3.4 of the Disclosure Schedule, no
Investment Banker engaged by or acting on behalf of Buyer or its Affiliates in
connection with the negotiation, execution or performance of this Agreement or
the transactions contemplated by this Agreement, is or will be entitled to any
broker's or finder's or similar fees or other commissions as a result of this
Agreement or such transactions.
3.5 LEGAL PROCEEDINGS.
-----------------
There is no Order or Action pending or, to the best knowledge of
Buyer, threatened, against or affecting Buyer that individually or when
aggregated with one or more other Actions has, or is reasonably expected to,
materially and adversely effect Buyer's ability to consummate the transactions
contemplated by, or perform its obligations under, this Agreement.
16
3.6 INVESTMENT.
----------
Buyer is acquiring the Stock for Buyer's own account, or for the
account of Buyer and one or more of its Affiliates, for investment purposes only
and not with a view to or for sale in connection with the public distribution
thereof.
3.7 FUNDS AVAILABLE.
---------------
Buyer has sufficient cash, lines of credit, commitment letters or
other sources of available funds to enable it to make the payments contemplated
by Section 1.2.
ARTICLE IV
COVENANTS WITH RESPECT TO CONDUCT
PRIOR TO CLOSING
4.1 ACCESS.
------
Subject to applicable laws and fiduciary obligations, and to the terms
of the Letter Agreement, dated March 17, 1995 (the "Letter Agreement"), entered
into between Seller and Buyer, Seller (but only with respect to the Business)
shall, and shall cause the Company and, consistent with and to the extent
authorized by the Deed of Release, dated February 14, 1995, among Seller,
Company and AME, as amended by the Deed, dated April 10, 1995, and the
agreement, dated May 4, 1995 between Buyer and AME, AME and its Subsidiaries to,
authorize and permit Buyer, Buyer's Affiliates (subject to the execution of
customary confidentiality agreements) and their representatives (which term
shall be deemed to include its independent accountants, counsel, financial
advisors and bankers (including, without limitation, potential lenders)) to have
reasonable access during normal business hours, upon reasonable notice and in
such manner as will not unreasonably interfere with the conduct of their
respective businesses, to all of their respective properties, books, records,
board and shareholder minutes (including agenda for meetings), accounts,
ledgers, budgets, operating instructions and procedures, Tax Returns (provided,
however, that to the extent that such Tax Returns are combined or consolidated
returns, Buyer's access will be limited to information pertaining to the Company
and AME and its Subsidiaries only) and all other information with respect to the
Business as Buyer may from time to time request. Without limiting the
foregoing, Seller agrees to provide Buyer and its Affiliates and their
representatives with such access, subject to the terms of this Section 4.1, to
the extent necessary in connection with any proposed financings (including any
public securities offering) by any of Buyer and its Affiliates. Buyer agrees
that it will with reasonable expedition inform Seller prior to the Closing if
Buyer has obtained knowledge that the covenants, representations or warranties
of Seller hereunder have been breached. For purposes of the preceding sentence
only, the knowledge of Buyer shall mean the actual knowledge of Tony Tan Choon
Keat, Managing Director,
17
or Tan Kai Seng, Finance Director, of Buyer or Dr. Lim Cheok Peng, Managing
Director of Gleneagles Hospital.
4.2 MATERIAL ADVERSE CHANGES.
------------------------
Seller will promptly notify Buyer of any event of which Seller obtains
knowledge which has had or might reasonably be expected to have a Material
Adverse Effect or which, if known as of the date hereof, would have been
required to be disclosed to Buyer, or which constitutes a breach of any
representation, warranty, obligation, covenant or undertaking by Seller under
this Agreement. For purposes of the preceding sentence only, the knowledge of
Seller shall mean the actual knowledge of Jeffrey C. Barbakow, Chief Executive
Officer, Maris Andersons, Senior Vice President and Treasurer, or T.P. McMullen,
Vice President of Seller.
4.3 CONDUCT OF BUSINESS.
-------------------
Except as set forth in Section 4.3 of the Disclosure Schedule or
otherwise expressly permitted by the terms of this Agreement, from the date
hereof to the Closing, Seller shall cause the Company, and the representatives
of the Company on the Board of Directors of AME, subject to their fiduciary and
other duties to AME, shall use their reasonable best efforts to cause the
Business to be conducted in the ordinary course of business consistent with past
practice (including with respect to advertising, promotions, capital
expenditures and inventory levels) and shall make all reasonable best efforts
consistent with past practices to preserve the Business's structure and
organization and its relationships with its customers, doctors, employees,
suppliers and others with whom the Company, AME and its Subsidiaries deal.
Seller shall not, and agrees that the Company will not (with respect to the
Company), and the Company and the representatives of the Company on the Board of
Directors of AME, subject to their fiduciary and other duties to AME, shall not
consent to (with respect to AME) take any action that would, or that could
reasonably be expected to, cause Seller to be in breach of any representations,
warranties, covenants or agreements contained in this Agreement or otherwise
result in any of the conditions to Closing not being satisfied.
In addition, between the date of this Agreement and the Closing Date,
except as set forth in Section 4.3 of the Disclosure Schedule or as specifically
contemplated by this Agreement, Seller covenants and agrees that the Company
will not (with respect to the Company) take, and the Company and the
representatives of the Company on the Board of Directors of AME, subject to
their fiduciary and other legal duties to AME, will not consent to (with respect
to AME and its Subsidiaries) the taking of, any of the following actions without
the prior consent in writing of Buyer:
(a) change or amend its memorandum and articles of association or
bylaws;
18
(b) with respect to the Company only, declare, issue, make, pay or
set aside any dividend or other distribution of assets, whether consisting
of money or property, to its shareholders, or split, combine or reclassify
any shares of its Equity Securities;
(c) sell, transfer, mortgage, encumber or otherwise dispose of any
assets, except (i) for property not material in amount, (ii) in the
ordinary course of business consistent with past practice or (iii) as
contemplated by this Agreement;
(d) redeem or otherwise acquire any shares of its Equity Securities
or issue any Equity Securities or any option, warrant or right relating
thereto or any securities convertible into or exchangeable for any shares
of Equity Securities, except, with respect to AME, pursuant to options,
warrants, rights or other securities outstanding on the date of this
Agreement;
(e) adopt or amend in any respect any Benefit Plan or collective
bargaining agreement, except as required by applicable Law and except as
may be required under existing agreements;
(f) grant to any executive officer or employee any increase in
compensation or benefits, including grants of any options, except, in the
case of non-management employees of AME or any of its Subsidiaries, in the
ordinary course of business consistent with past practice, or as may be
required under applicable Law or existing agreements and except for any
increases for which Seller shall be solely obligated;
(g) incur or assume any liabilities, obligations or indebtedness for
borrowed money or guarantee or issue any letters of comfort or letters of
moral intent or enter into any keepwell agreement or similar arrangement
relating to, any such liabilities, obligations or indebtedness, other than
in the ordinary course of business consistent with past practice; provided,
however, in no event shall the Company incur, assume or guarantee any long-
term indebtedness for borrowed money;
(h) permit, allow or suffer any of its assets to become subjected to
any mortgage, lien, security interest, encumbrance, easement, covenant,
right-of-way or other similar restriction of any nature whatsoever, except
items in the ordinary course of business consistent with past practice;
(i) forgive any indebtedness or waive any claims or rights of value
other than in the ordinary course of business consistent with past practice
and in amounts that are not material in the aggregate;
19
(j) pay, loan or advance any amount to, or sell, transfer or lease
any of its assets to, or enter into any agreement or arrangement with,
Seller or any of its Affiliates (other than the Company or AME), except
cash management activities in the ordinary course of business consistent
with past practice;
(k) make any change in any method of accounting or accounting
practice or policy other than those required by GAAP;
(l) change any tax accounting method, principle or practice;
(m) acquire by merging or consolidating with, or by purchasing the
assets of, or by any other manner, any business or any corporation,
partnership, association or other business organization or division thereof
or otherwise acquire any assets (other than inventory in the ordinary
course of business consistent with past practice) which are material,
individually or in the aggregate, to the Business; or
(n) terminate or materially change any of the insurance policies
(other than insurance policies of Seller) as they existed on the date of
this Agreement;
(o) enter into any new service or employment agreement, or any
renewals thereof, with any employee except for agreements for which Seller
will be solely obligated and which will not result in any obligation or
liability of any kind whatsoever to the Company or AME;
(p) allow or cause to lapse any right under any material Contract or
Intellectual Property or cause to expire any Approvals or Permits relating
to the Business;
(q) enter into any transaction other than on arm's length terms in
the ordinary course of business consistent with past practice, between any
of the Company or AME, on the one hand, and any director, officer,
stockholder or Affiliate thereof, on the other hand;
(r) otherwise enter into a transaction or a series of connected
transactions which would have, or is reasonably expected to have, in the
case of the Company, a value in excess of $100,000 or, in the case of the
Company, AME or any of its Subsidiaries, a Material Adverse Effect;
(s) pay Overhead Expense in the aggregate exceeding the amounts set
forth in Section 2.21 of the Disclosure Schedule for the Business for the
fiscal years ending May 31, 1995 and 1996, as prorated through the date of
the Closing; or
20
(t) agree, whether in writing or otherwise, to do any of the
foregoing.
4.4 PERMITS AND APPROVALS.
---------------------
Seller and Buyer each agrees to, and to cause its Subsidiaries and
Affiliates to, cooperate and use its reasonable best efforts to obtain or
transfer, and will promptly prepare all registrations, filings and applications,
requests and notices preliminary to, all Approvals and Permits that may be
necessary to consummate the transactions contemplated by this Agreement
including, without limitation, confirmation issued by or on behalf of the
Treasurer of the Commonwealth of Australia that the Government of Australia does
not object to the purchase of the Stock by Buyer by virtue of the Foreign
Acquisitions and Takeovers Act 1975; provided, however, that with respect to any
approval of a meeting of the disinterested shareholders of AME of the purchase
of the Stock under section 623 of the Australian Corporations Law, Seller's
obligation shall be limited to using its best efforts to procure that the Board
of Directors of AME (i) commissions an expert to provide a report to
shareholders in accordance with Australian Securities Commission Policy
Statement 74 in relation to the acquisition by Buyer of the Stock and (ii)
convenes a general meeting to consider the approval under Section 623 of the
Australian Corporations Law of the acquisition by Buyer of the Stock. Without
limiting the generality of the foregoing, Seller and Buyer shall consult with
each other in advance regarding how to obtain or transfer, and shall cooperate
in obtaining or transferring, the Approvals and Permits referred to in Sections
2.8, 3.3 and 6.2 of the Disclosure Schedule. Seller and Buyer shall permit each
other to review and comment upon all such registrations, filings, applications,
requests and notices prior to submitting any of the foregoing.
4.5 CONFIDENTIALITY.
---------------
In the event that the Closing occurs, Seller shall, and shall cause
its subsidiaries, Affiliates, directors, officers and representatives to, keep
confidential all information, documents and other materials relating to the
Business (whether or not any such information remains in their possession),
except to the extent that disclosure is required by applicable Law or stock
exchange rules. From and after the Closing, the Letter Agreement (solely as it
relates to the Business) shall terminate and shall thereafter be null and void,
and no party shall have any liability or obligation thereunder. Unless and
until the Closing occurs, the terms of the Letter Agreement shall apply to the
transaction contemplated by, and all discussions and negotiations in connection
with, this Agreement.
4.6 INSURANCE PROCEEDS.
------------------
If prior to the Closing Date the Business shall suffer any loss that
is covered by insurance carried by any Seller or any of its Affiliates (other
than the Company or AME or any of
21
its Subsidiaries), Seller shall, or shall cause such Affiliate to, make a claim
under its insurance policy for recovery in respect of such loss and to pursue
such claim actively. If Seller or such Affiliate, as the case may be, receives
insurance proceeds in respect of such loss, Seller shall, or cause such
Affiliate to, remit promptly such proceeds to the Company or AME or any of its
Subsidiaries, as the case may be.
4.7 AMOUNTS DUE TO SELLER.
---------------------
The Company and AME shall repay to Seller and its Affiliates at the
Closing the liability as set forth in Section 4.7 of the Disclosure Schedule.
4.8 PROPRIETARY INFORMATION.
-----------------------
Prior to the Closing, Seller shall request the recovery, or shall
request the destruction (and request written notice of such destruction), of all
Proprietary Information (as defined in the Letter Agreement) made available to
or otherwise in possession of any potential acquirors or bidders relating to the
Proposed Acquisition (as defined in the Letter Agreement but only as it relates
to the Business).
ARTICLE V
ADDITIONAL CONTINUING COVENANTS AND INDEMNITIES
5.1 COOPERATION IN AUDITS.
---------------------
Subject to execution of customary confidentiality agreement, Buyer
will cause the Company and AME to cooperate in all reasonable respects during
normal business hours and in such manner as will not unreasonably interfere with
the conduct of their respective businesses, in an audit, at Seller's cost, by
Seller's independent accountants of the financial statements of the Company and
AME through periods ending on or prior to the fiscal year of Seller first ending
on or after the Closing Date (and, if desired, as of the Closing Date). Without
limiting the foregoing, such cooperation shall include providing access to
records and personnel, cooperating in verification of accounts receivable and
such access to the premises of the Company and AME, in each case as is
reasonable and customary in an audit.
5.2 TAX MATTERS.
-----------
(a) Seller agrees to indemnify, defend and hold harmless Buyer and
the Company and AME against (i) any Tax payable by or on behalf of Seller
or any of its Affiliates or the Company or AME for the Pre-Closing Tax
Period, except to the extent adequate provision for such Tax has been made
in the financial statements referred to in Section 2.3 hereof; (ii) any
deficiencies in any Tax payable by or on behalf of Seller or any of its
Affiliates or the Company or AME arising from any audit by a Governmental
Entity with
22
respect to the Pre-Closing Tax Period, except to the extent adequate
provision for such Tax has been made in the financial statements referred
to in Section 2.3 hereof; (iii) Taxes of any member of a consolidated,
combined or unitary tax group of which Seller or any of its Affiliates or
the Company is or was at any time, part, of which the Company or AME is
jointly or severally liable as a result of its inclusion in such group at
any time on or prior to the Closing Date, except to the extent adequate
provision for such Taxes has been made in the financial statements referred
to in Section 2.3 hereof; and (iv) any Tax liability of the Company arising
from, relating to or otherwise in respect of any breach of the
representations and warranties contained in Section 2.4 of this Agreement
which, notwithstanding Section 7.4, will survive the Closing for purposes
of this Section 5.2 only.
(b) Buyer agrees to indemnify, defend and hold harmless Seller and
its Affiliates against (i) any Tax payable by or on behalf of Buyer or any
of its Affiliates or the Company for any taxable period other than the Pre-
Closing Tax Period; (ii) any deficiencies in any Tax payable by or on
behalf of Buyer or any of its Affiliates or the Company arising from any
audit by a Governmental Entity with respect to any taxable period other
than the Pre-Closing Tax Period; (iii) Taxes of any member of a
consolidated, combined or unitary tax group of which Buyer or any of its
Affiliates or the Company is or was at any time, part, of which the Company
is jointly or severally liable as a result of its inclusion in such group
at any time after the Closing Date; and (iv) if the Closing Date occurs
after June 29, 1995, Seller's Transition Tax Exposure Amount. Any refund of
Tax received after Closing by Buyer, any of its Affiliates, the Company or
any Subsidiary which is attributable to the Pre-Closing Tax Period shall
immediately be remitted to Seller. Buyer may retain any refund which is
attributable to carryback losses, credits and other tax items arising in a
period other than the Pre-Closing Tax Period and carried back to the Pre-
Closing Tax Period.
(c) Seller and Buyer will each provide the other, and subsequent to
the Closing Buyer will cause the Company and AME to provide Seller (at
Seller's sole cost and expense), with such assistance as may reasonably be
requested in connection with the preparation of any matter relating to Tax,
including any Tax Return, any audit or other examination by a Governmental
Entity, or any judicial or administrative proceedings relating to liability
for Taxes, and each will retain and provide the requesting party with any
records or information that may be reasonably relevant to such return,
audit or examination, proceedings or determination for a period not to
exceed ten years after the Closing Date. Prior to disposing of any records
or information, the party retaining such records or information shall
notify the other party and provide it with the
23
opportunity to obtain or duplicate (at its own expense) such records or
information for its own purposes. The party requesting assistance shall
reimburse the other party for reasonable out-of-pocket expenses (other than
salaries or wages of any employees of the parties) incurred in providing
such assistance. In the event AME is the party from which assistance under
this Section 5.2(c) is requested or is the party in possession of records
or information subject to this Section 5.2(c), Buyer shall use its
reasonable efforts to, and shall cause the Company to use its reasonable
efforts to cause, AME to comply with the provisions hereof. Any information
obtained pursuant to this Section 5.2(c) or pursuant to any other Section
hereof providing for the sharing of information or the review of any Tax
Return or other schedule relating to Tax shall be subject to Section 4.5.
(d) Subject to the provisions of the foregoing clause (c), Seller
shall (i) have the responsibility for, and the right to control, at
Seller's expense, the audit (and disposition thereof) of any Tax Return
relating to periods ended on or prior to the Closing Date; and (ii) have
the right to participate in and approve the disposition of the audit of any
Tax Return relating to the periods ended after the Closing Date if, as a
result of such audit or disposition, Buyer makes or intends to make a claim
for indemnification under Section 5.2(a). Buyer shall have the right,
directly or through its designated representatives, to participate in and
review in advance and comment upon all submissions made in the course of
audits or appeals thereof to a Governmental Entity relating to periods
ending (or treated by this Agreement as ending) on or prior to the Closing
Date and to approve the disposition of any audit adjustment or filing of
any amended Tax Returns with respect to such periods if such disposition
will result in an increase in the Tax liability of Buyer or the Company for
any period beginning after (or treated by the Agreement as beginning after)
February 28, 1995. Seller and Buyer shall each promptly notify the other
party of any audit of any Tax Return which may result in claims for
indemnification under this Agreement.
(e) In the event that Buyer makes an election under section 338(a) or
section 338(g) of the Code in connection with its purchase of the Company
or AME:
(i) Section 5.2(f) hereof and clause (iv) of Section 5.2(b)
hereof shall not apply with respect to the Company or AME, as the case
may be; and
(ii) Buyer shall indemnify and hold harmless Seller and its
Affiliates against the difference between (A) all U.S. Federal, state
and local income tax liability incurred by Seller and its Affiliates
as a result of such election and (B) all U.S. Federal,
24
state and local income tax liability determined without regard to such
election. For this purpose, U.S. Federal, state and local income tax
liability shall be calculated by taking into account any foreign tax
credits available to Seller and its Affiliates and by taking into
account the effect of an increase in an overall foreign loss or
increase in separate limitation loss (each as defined in section
904(f) of the Code) or the ability of Seller and its Affiliates to
utilize foreign tax credits for U.S. Federal income tax purposes.
(f) Buyer and each of its Affiliates shall, with respect to the
occurrence of any of the following events with respect to the Company or
AME on or before May 31, 1996, (i) notify Seller of the occurrence of any
such event and (ii) cause the Company and AME to furnish to Seller any
records or information reasonably requested by Seller for the purpose of
determining the Seller's Transition Tax Exposure Amount, including any
records or information relating to the occurrence of any such event:
(i) any investment in "United States property" (as that term
is defined in Section 956 of the Code);
(ii) the acquisition of any "passive asset" (as that term is
defined in Section 956A(c)(2) of the Code);
(iii) the issuance of any Equity Security; any alteration in
corporate, capital or legal structure; any merger, reorganization or
consolidation; any liquidation, winding-up or dissolution; and any
amendment or change in charter documents, by-laws or other governing
documents;
(iv) the declaration, issuance or payment of any dividend or
other distribution of assets; or any split, combination or
reclassification of any Equity Securities;
(v) any sale, assignment, pledge or other encumbrance or
disposition of any Equity Security of any Subsidiary (and any entity
becoming a subsidiary of the Company or AME during the Transition
Period);
(vi) the receipt of any income that is foreign personal holding
company income (as that term is defined in section 954(c) of the
Code); and
(vii) the conduct of any business other than the business
conducted by the Company or AME on the Closing Date.
25
In making a claim for indemnification under clause (iv) of Section 5.2(b)
hereof, Seller shall furnish to Buyer in writing a description of the
manner in which Seller determined the Seller's Transition Tax Exposure
Amount, including a worksheet illustrating the computation of such amount.
(g) Buyer covenants that it will cause the purchasers of any interest
in the Company, which acquisition occurs on or before May 31, 1996, to
comply with the provisions of this Section 5.2 as if such purchasers were
the Buyer.
(h) Buyer shall cooperate, will cause its Affiliates and the Company
to cooperate and shall use its reasonable efforts to cause AME to
cooperate, with Seller and its Affiliates in connection with the filing of
any amended Tax Returns requested by Seller or any of its Affiliates that
related to taxable periods ending on or prior to Closing.
(i) Disputes arising under this Section 5.2 that are not resolved by
mutual agreement shall, unless otherwise provided for, be resolved by an
internationally recognized accounting or law firm (the "Tax Referee")
chosen and mutually acceptable to Buyer and Seller within a reasonable
amount of time from the date on which the dispute arises. The Tax Referee
shall resolve any disputed items within a reasonable amount of time taking
into consideration all relevant facts and circumstances. The costs, fees
and expenses of the Tax Referee shall be borne equally by Buyer and Seller.
(j) Payments made pursuant to this Section 5.2 shall be made no later
than fifteen (15) business days following the later of (i) fifteen (15)
business days prior to the date on which the relevant Tax is due; or (ii)
fifteen (15) business days after the indemnified party gives written notice
to the indemnifying party that such Tax is due. Any payment not made
within such time period shall bear interest at the rate in effect from time
to time on underpayments of U.S. Federal income tax calculated in
accordance with sections 6621 and 6622 of the Code.
5.3 ACCESS.
------
(a) Subject to the execution of customary confidentiality
agreements, Buyer will cause the Company and AME and its Subsidiaries, for
a period of five years after the Closing, to afford promptly to Seller and
its agents reasonable access to the properties, books, records, employees
and auditors of the Company and AME and its Subsidiaries relating to
periods prior to the Closing Date to the extent necessary or desirable to
permit Seller to determine any matter relating to its rights and
obligations hereunder or to any period ending on or before the Closing
Date; provided, however, that Seller recognizes that certain
-------- -------
26
records and other information of Buyer may contain information relating to
the Company or AME or its Subsidiaries as well as information relating to
other activities of Buyer not connected with any of the Company or AME or
its Subsidiaries in which event Buyer shall provide access only to the
relevant portions thereof.
(b) Subject to the execution of customary confidentiality
agreements, Seller will for a period of five years after the Closing, to
afford promptly to Buyer, its Affiliates, and their respective agents,
counsel, financial advisors and auditors reasonable access to the
properties, books and records, employees and auditors of Seller and its
Subsidiaries relating to periods prior to the Closing Date to the extent
necessary or desirable with respect to the Business; provided, however,
-------- -------
that Buyer recognizes that certain records and other information of Seller
may contain information relating to the Company and AME and its
Subsidiaries as well as information relating to other activities of Seller
not connected with the Company or AME or its Subsidiaries, in which event
Seller shall provide access only to the relevant portions thereof.
5.4 USE OF AND RIGHT TO NAMES.
-------------------------
Commencing with the 90th day following the Closing Date, none of Buyer
or the Company or any Affiliates of Buyer or the Company (other than AME and its
Subsidiaries) shall use the names or trademarks "National Medical Enterprises,
Inc.," "NME," "N.M.E.," "Tenet Healthcare Corporation," "Tenet" or any
derivative thereof.
5.5 EMPLOYMENT MATTERS.
------------------
In no event will Buyer, the Company or AME assume, or have any
liability or obligation under, any Benefit Plan or any other employment,
compensation, severance or benefit plan, agreement or arrangement of Seller and
its subsidiaries, other than those of the Company and AME, with or for the
benefit of any officer or employee of the Company or AME.
5.6 RECORDS.
-------
(a) Promptly following the Closing Date, Seller will deliver or cause
to be delivered to Buyer all original agreements, documents, accounts,
ledgers, books, records and files, including records and files stored on
computer disks or tapes or any other storage media (collectively,
"Records"), in the possession of Seller relating to the Business, and the
business and operations of the Company, in each of the foregoing instances,
not then in the possession of the Company or AME or its Subsidiaries,
subject to the following exceptions:
27
(i) Seller may retain all Records prepared in connection with
the sale of the Stock, including bids received from other parties and
analyses relating to the Company and AME and its Subsidiaries; and
(ii) Seller may retain any Tax returns, reports or forms, and
Buyer shall be provided with copies of such returns, reports or forms
to the extent that they relate to the separate returns or separate tax
liability of the Company or AME or its Subsidiaries.
(b) Except as otherwise provided in this Agreement, for a period of
seven (7) years following the Closing Date, Buyer agrees that it will not
destroy any Records in the possession of Buyer relating to the business and
operations of the Company and AME and its Subsidiaries, relating to the
period prior to the Closing Date with respect to the Company or AME or its
Subsidiaries without first offering such Records to Seller.
5.7 AGREEMENT NOT TO COMPETE.
------------------------
(a) Interpretation. This Section shall apply after the Closing and
--------------
this Section and Section 5.8 of the Disclosure Schedule shall have effect
as if they consisted of separate provisions, each being severable from the
other and each separate provision consisting of a covenant set forth in
Section 5.8(b) hereof combined with a separate period listed in Section
5.8(c) hereof and an area listed in Section 5.8(d) hereof. If any of these
separate provisions is invalid or otherwise unenforceable for any reason,
the invalidity or unenforceability shall not affect the validity or
enforceability of any of the other separate provisions.
(b) Undertaking Not to Compete. In consideration of Buyer agreeing,
--------------------------
at its request, to purchase the Stock, Seller in consideration of the
premises covenant with Buyer that, within any of the periods and in any of
the areas specified in Section 5.8(d) hereof, none of:
(i) Seller, whether:
(A) directly or indirectly;
(B) on its own account;
(C) jointly with or on behalf of any other person or
corporation as an officer, employee, independent contractor,
partner, joint venturer or agent; or
(D) as principal, employee, partner, agent, director or
otherwise on any account or pretense; or
28
(ii) any agent, independent contractor or employee employed or
engaged by Seller or by any firm or corporation in which it has a
substantial interest whether that interest is legally enforceable or
not; or
(iii) any firm or corporation in which Seller may be interested
a shareholder, beneficial owner or controller (whether or not that
control can be legally enforced) of shares, or advisor of otherwise,
shall do any of the following:
(iv) canvass or solicit orders for the supply of any goods or
services of the general description of any of those supplied by the
Company or AME or any of its Subsidiaries within one year before the
Closing Date from any person, firm or company who or which has at any
time within that period before the Closing Date transacted business
with the Company or AME or any of its Subsidiaries; or
(v) carry on or be engaged or concerned in:
(A) the Business or any business competitive with the
Business;
(B) any business in which the Company or AME or any of
its Subsidiaries has been engaged in within a year before the
Closing Date; or
(C) any business providing goods or services
substitutable for those of the Company or AME or any of its
Subsidiaries.
(c) Period of Non-Competition. Within any of the following periods:
-------------------------
(i) For a period of one year after the Closing Date.
(ii) For a period of two years after the Closing Date.
(iii) For a period of three years after the Closing Date.
(d) Area of Non-Competition. In any of the following areas:
-----------------------
(i) Within a radius of 50 kilometers from the General Post
Office in each of the following:
(A) Sydney.
(B) Melbourne.
(C) Brisbane.
29
(D) Adelaide.
(E) Perth.
(F) Hobart.
(G) Canberra.
(H) Darwin.
(ii) (A) New South Wales.
(B) Victoria.
(C) Queensland.
(D) South Australia.
(E) Western Australia.
(F) Tasmania.
(G) Australian Capital Territory.
(H) Northern Territory.
(e) Exception. Section 5.8(b) hereof shall not restrict the holding
---------
of less than ten percent (10%) of the issued capital of any company whose
shares are listed on the Australian Stock Exchange Limited.
5.8 THIRD PARTY OFFERS.
------------------
If, between June 20, 1995 and the date the meeting of the shareholders
of AME contemplated by Section 6.1 (the "Meeting") is held (the "Relevant
Period"), an offer to acquire all or any of the Stock or issued shares of AME is
made (other than an offer by Buyer or any of its Affiliates):
(a) under a takeover scheme (as defined in Chapter 6 of the
Australian Corporations Law); or
(b) under a takeover announcement (as defined in Chapter 6 of the
Australian Corporations Law); or
(c) under an agreement with Seller, the Company or AME, as the case
may be, which requires approval by resolution of the shareholders
of AME in a general meeting; or
(d) at an official meeting of the Australian Stock Exchange Limited
in the ordinary course of trading on the market; or
(e) as described in any of the paragraphs (a) to (d) above subsequent
to the Meeting but which is made during the period while any
offer previously made during the Relevant Period is open or
during the period while any such subsequent offer made during
such period is open (for the purposes of this Section 5.8(e),
Relevant Period shall be interpreted to include any such
subsequent period or periods),
and Seller, the Company or AME accepts such offer for all or any of the Stock or
the AME Stock, as the case may be; then Seller
30
shall thereafter pay to Buyer by wire transfer of immediately available funds
within two business days of the date of the receipt of the consideration of such
sale (the "Sale Date") an amount in cash (the "Cash Amount") equal to one-half
of the "Spread" (as hereinafter defined) times the number of shares of the Stock
or the AME Stock, as the case may be, that have been so sold by Seller or the
Company. As used herein "Spread" shall mean the excess, if any, of (i) the U.S.
Dollar equivalent of the per share consideration paid by such Person or Persons
to acquire the Stock or the AME Stock, as the case may be, from Seller or the
Company (the "Per Share Price") over (ii) in the case of the sale of all or part
of the Stock, U.S. $0.8016, or in the case of the sale of all or part of the AME
Stock, U.S.$0.6238 per share. For purposes of this Section 5.8, U.S. Dollar
equivalents shall be calculated on the basis of the average of the Australian
Dollar/U.S. Dollar exchange rates published in the "Currency Rates in New York"
section of The Asian Wall Street Journal for the ten business day period ending
on the second business day prior to the Sale Date. If the consideration paid to
Seller or the Company, as the case may be, includes any property other than
cash, the Per Share Price shall be the sum of (i) the fixed cash amount, if any,
included in the Per Share Price and (ii) the Fair Market Value of such other
property. If such other property consists of securities with an existing public
trading market, the Fair Market Value of such securities shall be deemed to be
the average of the closing prices (or the average of the closing bid and asked
prices) for such securities in their principal public trading market for the
five trading days ending on the Sale Date. If such other property consists of
something other than cash or securities with an existing public trading market,
the Per Share Price shall be deemed to equal the closing price of the shares of
AME on the Australian Stock Exchange on the Sale Date. If the consideration
paid to Seller or the Company, as the case may be, includes any property other
than cash, the Cash Amount shall be paid in combination of cash and such non-
cash consideration in the same proportion as the aggregate amount of cash and
such non-cash consideration paid to Seller and the Company; provided that, if
any such non-cash consideration to be received by Buyer as a part of the Cash
Amount would restrict the ability of Buyer to own such non-cash consideration,
Buyer may request Seller to sell at Buyer's expense and risk such non-cash
consideration in a reasonable manner as Seller and Buyer may agree on and
transmit the proceeds thereof, net of cost to Seller of such sale.
ARTICLE VI
CONDITIONS OF PURCHASE
6.1 CONDITIONS PRECEDENT TO BINDING EFFECT.
--------------------------------------
(a) Except for the provisions of this Section 6.1, Articles IV and
VIII and Section 5.8, the provisions of this Agreement will not be binding
unless and until:
31
(i) the Treasurer of the Commonwealth of Australia shall have
issued written notice to the effect that, subject to the conditions,
if any, specified therein, the Government of the Commonwealth of
Australia does not object to any of the transactions contemplated by
this Agreement, or such official ceases under s.25(2) of the Foreign
Acquisitions and Takeovers Act 1975 to be empowered to make an order
relating to any of the transactions contemplated by this Agreement;
and
(ii) a resolution approving the Buyer's purchase of the Stock
has been agreed to at a meeting of the members of AME held in
compliance with s.623 of the Corporations Law of the Commonwealth of
Australia, as modified by the Australian Securities Commission, and
the terms of Policy Statement 74 of the Australian Securities
Commission within sixty (60) days of the date of this Agreement.
(b) Subject to Section 6.1(d), the parties shall each co-operate with
the other and do all things reasonably necessary to procure that this
Agreement does become binding under this Section 6.1.
(c) Without limiting the generality of Section 6.1(b):
(i) each party shall, and the Seller shall cause the Company
to, take all necessary steps and supply all necessary information for
the purpose of enabling this Agreement to become binding under this
Section 6.1 (it being acknowledged that Buyer will make the necessary
notification to the Treasurer of the Commonwealth of Australia under
the Foreign Acquisitions and Takeovers Act 1975 in relation to Buyer's
purchase of the Stock);
(ii) the Buyer may not withdraw or procure the withdrawal of
any application made or information supplied under paragraph (i) of
this Section 6.1(c);
(iii) no party may take any action that would or would be likely
to prevent or hinder completion of this Agreement if this Agreement
becomes binding; and
(iv) each party shall supply to the other details of steps
taken and copies of all applications made and all information supplied
for the purpose of enabling this Agreement to become binding under
this Section 6.1.
(d) Notwithstanding any other provision of this Agreement, the
parties agree that prior to satisfaction of the condition precedent
contained in Section 6.1(a)(ii) Seller is free to sell, transfer or
otherwise dispose of the Stock and the Company is free to sell, transfer or
otherwise
32
dispose of its shares in AME to any person and the Buyer shall have no
voting power over or with respect to such shares.
(e) Except for this Section 6.1, this Agreement shall be null and
void and of no further effect if the Seller exercises its right under
Section 6.1(d) or if this Agreement does not become binding under this
Section 6.1; provided, however, that the obligations of the parties
contained in Sections 2.19, 3.4, 5.8, 8.4 and 8.13 shall survive any such
termination.
6.2 GENERAL CONDITIONS.
------------------
The obligations of the parties to effect the Closing shall be subject
to the following conditions:
(a) No Orders; Legal Proceedings. No Law or Order shall have been
----------------------------
enacted, entered, issued, promulgated or enforced by any Governmental
Entity and remain so the Closing Date, (i) that prohibits the transactions
contemplated by this Agreement (ii) that imposes or would impose upon the
ownership or operation of, or exercise of control over, the Company, AME
and their respective assets, properties and businesses by Buyer and its
Affiliates, burdens which are material and unreasonable to the Business,
taken as a whole (provided that the condition in this clause (ii) shall be
a condition only to Buyer's obligations hereunder), or (iii) that would
subject either party to this Agreement to any material penalty or liability
if any of the transactions contemplated under this Agreement were
consummated. No Governmental Entity shall have notified any party to this
Agreement that it intends to commence proceedings that, if successful,
would result in the failure to satisfy a condition set forth above in this
Section 6.2(a), unless such Governmental Entity shall have withdrawn such
notice and abandoned any such proceedings prior to the time which otherwise
would have been the Closing Date.
(b) Permits and Approvals. To the extent required by applicable Law
---------------------
and without the imposition of any conditions or provisions that are
material and unreasonably burdensome on Buyer, Buyer's Affiliates, or the
Business, all Permits and Approvals listed in Section 6.2 (I) of the
Disclosure Schedule shall have been received or obtained.
6.3 CONDITIONS TO OBLIGATIONS OF BUYER.
----------------------------------
The obligations of Buyer to effect the Closing shall be subject to the
following conditions except to the extent waived in writing by Buyer:
(a) Representations and Warranties and Covenants of Seller. The
------------------------------------------------------
representations and warranties of Seller herein
33
(as amended by matters consented to by Buyer pursuant to Section 4.3)
contained shall be true and correct as of the date of the Disclosure
Schedule and, except for the representations and warranties contained in
Section 2.3(c), at the Closing Date with the same effect as though made as
of such time; Seller in all material respects shall have performed all
obligations and complied with all covenants and conditions required by this
Agreement or Clause 4.4 of the Wrap-Around Agreement to be performed or
complied with by it at or prior to the Closing Date, and Seller shall have
delivered to Buyer a certificate of Seller, dated the Closing Date and
signed by its chief executive officer, president, chief financial officer
or treasurer, to such effect.
(b) No Material Adverse Change. Since the date of the Disclosure
--------------------------
Schedule, whether or not in the ordinary course of business, there shall
not have been, occurred or arisen:
(i) any change in or event affecting the Business that has had
or is reasonably expected to have a Material Adverse Effect, except
for changes reflected in the financial statements referred to in
Section 2.3 and changes affecting generally the Australian health care
industry as a whole (it being understood that Buyer assumes the risks
of changes of such type); or
(ii) casualties, losses, damage or destruction of any property
of the Company or AME or its Subsidiaries or that has involved a loss
to the Company or AME or its Subsidiaries in excess of applicable
insurance coverage, in each case that has had or is reasonably
expected to have, in the aggregate, an impact in excess of $500,000 or
a Material Adverse Effect.
(c) Consents. Buyer shall have obtained without the imposition of
--------
any conditions or provisions that are material and unreasonably burdensome
on Buyer, Buyer's Affiliates, or the Business all material Approvals and
Permits from third Persons listed in Sections 2.8(II)(A) and 6.2(II) of the
Disclosure Schedule.
(d) Resignation of Directors. Each of the directors of the Company,
------------------------
or any director of AME or any of its Subsidiaries designated by Seller or
the Company, shall have submitted his resignation in writing to the
Company. Such resignations of directors (in such capacity) shall be
effective as of the Closing.
(e) Failure to Obtain Loan. Buyer shall not have received the
----------------------
amounts contemplated by the commitment letter, dated May 17, 1995, from
Schroders Banking & Capital Markets as a result of the failure of Schroders
Banking & Capital Markets to provide such funds solely as a result of,
during the thirty (30) days preceding the date of the Closing,
34
there having occurred or be continuing (i) any suspension of trading on the
Singapore Stock Exchange or material governmental restrictions (not in
force on the date hereof on trading in securities generally), or (ii) any
banking moratorium declared by Singapore governmental authorities, or (iii)
any material adverse change in the financial, banking or capital markets,
or (iv) any outbreak or material escalation of hostilities affecting
Singapore or other calamity, panic or crisis, the affect of which on the
financial markets of Singapore in each case described in clauses (i), (ii),
(iii) or (iv) above, is that lending institutions have generally ceased
providing funding for transactions of the size contemplated by such
commitment letter, provided that the occurrence of any such event shall
operate to delay the Closing only until the tenth (10th) day following the
date upon which lending institutions generally have resumed providing
funding for transactions of the size contemplated by such commitment
letter.
(f) Closing Regarding Core Business. The closing of the acquisition
-------------------------------
by Buyer of the Core Business (as defined in the Asia Stock Purchase
Agreement) pursuant to the Asia Stock Purchase Agreement shall have
occurred.
(g) Facility Agreement. The Lenders named in the Facility Agreement
------------------
referred to in Section 2.5 (VI) (A) of the Disclosure Schedule shall have
consented to the substitution of Buyer or an Affiliate of Buyer in place of
Seller and irrevocably waived the requirement for compliance with Clauses
44.8(a)(ii) and 44.8(b) thereof.
(h) Undertaking to Maintain Shareholding. The Lenders named in the
------------------------------------
Undertaking to Maintain Shareholding referred to in Section 2.5(IV) (E) of
the Disclosure Schedule shall have irrevocably waived the requirement for
compliance with Clauses 1 and 2 thereof.
(i) Manpower and Technical Services Agreement. The Manpower and
-----------------------------------------
Technical Services Agreement, dated as of March 4, 1992, among AME (then
known as Markalinga Limited), the Company and Seller, as amended by the
Manpower and Technical Services Variation Agreement, dated as of October
20, 1993, among AME, the Company and Seller (the "Manpower and Technical
Services Agreement") shall have been terminated as of the Closing Date by
written agreement of the parties thereto reasonably acceptable to Buyer.
Buyer, the Company and AME shall have entered into a new manpower and
technical services agreement at the Closing Date, reasonably acceptable to
all parties thereto.
6.4 CONDITIONS TO OBLIGATIONS OF SELLER.
-----------------------------------
The obligations of Seller to effect the Closing shall be subject to
the following conditions, except to the extent waived in writing by Seller:
35
(a) Representations and Warranties and Covenants of Buyer. The
-----------------------------------------------------
representations and warranties of Buyer herein contained shall be true and
correct as of the date of the Disclosure Schedule and at the Closing Date
with the same effect as though made as of such time; Buyer in all material
respects shall have performed all obligations and complied with all
covenants and conditions required by this Agreement to be performed or
complied with by it at or prior to the Closing Date, and Buyer shall have
delivered to Seller certificates of Buyer, dated the Closing Date and
signed by a director, its chief executive officer, chief financial officer
or treasurer, to such effect.
(b) Consents. Seller shall have obtained without the imposition of
--------
any conditions or provisions that are material and unreasonably burdensome
on Seller or Seller's Affiliates (other than the Company and AME and its
Subsidiaries) all material Approvals and Permits from third Persons listed
in Section 2.8 (II)(A) of the Disclosure Schedule that are required to be
obtained by Seller in connection with the transactions contemplated hereby.
(c) Manpower and Technical Services Agreement. The Manpower and
-----------------------------------------
Technical Services Agreement shall have been terminated as of the Closing
Date by written agreement of the parties thereto reasonably acceptable to
Seller.
ARTICLE VII
TERMINATION OF OBLIGATIONS;
INDEMNIFICATION; SURVIVAL
7.1 TERMINATION OF AGREEMENT.
------------------------
Anything herein to the contrary notwithstanding, this Agreement and
the transactions contemplated by this Agreement may be terminated at any time
before the Closing as follows and in no other manner:
(a) By mutual consent in writing of Buyer and Seller;
(b) By Buyer by written notice to Seller if any event occurs or
condition exists which would render impossible the satisfaction of one or
more conditions to the obligations of Buyer to consummate the transactions
contemplated by this Agreement as set forth in Section 6.1, 6.2 or 6.3;
(c) By Seller by written notice to Buyer if any event occurs or
condition exists which would render impossible the satisfaction of one or
more conditions to the obligation of Seller to consummate the transactions
contemplated by this Agreement as set forth in Section 6.1, 6.2 or 6.4; or
(d) by Seller or Buyer, if the Closing does not occur on or prior to
September 15, 1995.
36
provided, however, that the party seeking termination pursuant to clause (b),
-------- -------
(c), or (d) is not in wilful breach of any of its covenants or agreements
contained in this Agreement.
7.2 EFFECT OF TERMINATION.
---------------------
If this Agreement shall be terminated pursuant to Section 7.1, all
further obligations of the parties under this Agreement shall terminate without
further liability of any party to another; provided that in any event the
obligations of the parties contained in Sections 2.19, 3.4, 5.8, 7.1, 7.2, 8.4
and 8.13 shall survive any such termination.
Nothing in this Section 7.2 shall be deemed to release either party
from any liability for any breach by such party of the terms and provisions of
this Agreement or to impair the right of either party to compel specific
performance by the other party of its obligations under this Agreement;
provided, however, that if a party exercises its right to terminate this
Agreement, such party will be deemed to have waived any claims of breach of
representations or warranties by the other party.
7.3 INDEMNIFICATION.
---------------
(a) Indemnification by Seller. Seller shall indemnify Buyer, its
-------------------------
Affiliates (including the Company and AME and its Subsidiaries) and each of
their respective officers, directors, employees, stockholders, agents and
representatives against, and hold them harmless from, losses, liabilities,
claims, damages or expenses (including reasonable legal fees and expenses)
suffered or incurred by any such indemnified party (other than any relating
to Taxes, for which indemnification provisions are set forth in Section
5.2(a)) arising from, relating to or otherwise in respect of (i) any breach
of any representation or warranty of Seller which survives the Closing
contained in this Agreement or in any certificate delivered pursuant
thereto and (ii) any breach of any covenant or agreement of Seller
contained in this Agreement or in Clause 4.4 of the Wrap-Around Agreement;
provided, however, that Seller shall not have any liability under clause
-------- -------
(i) above unless the aggregate of all losses, liabilities, costs and
expenses relating thereto for which Seller would, but for this proviso, be
liable exceeds on a cumulative basis an amount equal to U.S.$100,000, and
then only to the extent of any such excess; and provided further, however,
-------- ------- -------
that Seller's liability shall in no event exceed U.S.$30,000,000.
Notwithstanding the foregoing, Buyer shall not seek indemnification if such
individual claim or a series of claims under clause (i) above which arises
out of any single breach or a series of breaches or a representation and
warranty of Seller, in each case based on a single event or condition or
series of related events or conditions having a relevant common basis in
fact if such individual claim is, or such series of claims add up to, less
than U.S.$25,000.
37
Buyer acknowledges and agrees that, should the Closing occur, its sole
and exclusive remedy with respect to any and all claims for breaches of
representations and warranties of Seller pursuant to this Agreement shall
be pursuant to the indemnification provisions set forth in this Section
7.3.
Nothing in this Agreement shall be construed to prohibit or restrict
Buyer from pursuing all remedies available to it at law or in equity in
connection with Seller's breach of any provision of this Agreement or
Clause 4.4 of the Wrap-Around Agreement, other than for breaches of
representations and warranties of Seller pursuant to this Agreement, or
from seeking equitable relief in respect of any breach of any covenant or
agreement of Seller contained in this Agreement.
(b) Indemnification by Buyer. Buyer shall indemnify Seller, its
------------------------
Affiliates and each of their respective officers, directors, employees,
stockholders, agents and representatives against, and hold them harmless
from, all losses, liabilities, claims, damages and expenses (including
reasonable legal fees and expenses) suffered or incurred by any such
indemnified party (other than any relating to Taxes, for which
indemnification provisions are set forth in Section 5.2(b)) arising from,
relating to or otherwise in respect of (i) any breach of any representation
or warranty of Buyer which survives the Closing contained in this Agreement
or in any certificate delivered pursuant hereto or thereto, and (ii) any
breach of any covenant or agreement of Buyer contained in this Agreement,
provided, however, Buyer shall not have any liability under clauses (i)
-------- -------
above unless the aggregate of all losses, liabilities, costs and expenses
relating thereto for which the Buyer would, but for this proviso, be liable
exceeds on a cumulative basis an amount equal to U.S.$100,000, and then
only to the extent of such excess; and provided further that the Buyer's
-------- -------
liability shall in no event exceed U.S.$5,000,000. Notwithstanding the
foregoing, Seller shall not seek indemnification for any individual claim
or a series of claims under clause (i) above which arises out of any single
breach or a series of breaches or a representation and warranty of Buyer,
in each case based on a single event or condition or series of related
events or conditions having a relevant common basis in fact if such
individual claim is, or such series of claims add up to, less than
U.S.$25,000.
Seller acknowledges and agrees that, should the Closing occur, its
sole and exclusive remedy with respect to any and all claims for breaches
of representations and warranties of Buyer pursuant to this Agreement shall
be pursuant to the indemnification provisions set forth in this Section
7.3.
Nothing in this Agreement shall be construed to prohibit or restrict
Seller from pursuing all remedies available to it at law or in equity in
connection with
38
Buyer's breach of any provision of this Agreement, other than for breaches
of representations and warranties of Seller pursuant to this Agreement, or
from seeking equitable relief in respect of any breach of any covenant or
agreement of Buyer contained in this Agreement.
(c) Losses Net of Insurance, etc. The amount of any loss, liability,
-----------------------------
claim, damage, expense or Tax for which indemnification is provided under
this Section 7.3 shall be net of any amounts recovered or recoverable by
the indemnified party under insurance policies with respect to such loss,
liability, claim, damage, expense or Tax (collectively, a "Loss") and shall
be (i) increased to take account of any net Tax cost incurred by the
indemnified party arising from the receipt of indemnity payments hereunder
(grossed up for such increase) and (ii) reduced to take account of any net
Tax benefit realized by the indemnified party arising from the incurrence
or payment of any such Loss. In computing the amount of any such Tax cost
or Tax benefit, the indemnified party shall be deemed to recognize all
other items of income, gain, loss, deduction or credit before recognizing
any item arising from the receipt of any indemnity payment hereunder or the
incurrence or payment of any indemnified Loss. Any indemnification payment
hereunder shall initially be made without regard to this paragraph and
shall be increased or reduced to reflect any such net Tax cost (including
gross-up) or net Tax benefit only after the indemnified party has actually
realized such cost or benefit. For purposes of this Agreement, an
indemnified party shall be deemed to have "actually realized" a net Tax
cost or a net Tax benefit to the extent that, and at such time as, the
amount of Taxes payable by such indemnified party is increased above or
reduced below, as the case may be, the amount of Taxes that such
indemnified party would be required to pay but for the receipt of the
indemnity payment or the incurrence or payment of such Loss, as the case
may be. The amount of any increase or reduction hereunder shall be
adjusted to reflect any final determination (which shall include the
execution of Form 870-AD or successor form) with respect to the indemnified
party's liability for Taxes and payments between Seller and Buyer to
reflect such adjustment shall be made if necessary. Any indemnity payment
under this Agreement shall be treated as an adjustment to the Purchase
Price for Tax purposes, unless a final determination (which shall include
the execution of a Form 870-AD or successor form) with respect to the
indemnified party or any of its Affiliates causes any such payment not to
be treated as an adjustment to the Adjusted Purchase Price for United
States federal income tax purposes.
(d) Termination of Indemnification. The obligations to indemnify and
------------------------------
hold harmless a party hereto (i) pursuant to Section 5.2, shall terminate
at the time the applicable statutes of limitations with respect to the Tax
liabilities
39
in question expire (giving effect to any extension thereof), (ii) pursuant
to Sections 7.3(a)(i) and 7.3(b)(i), shall terminate when the applicable
representation or warranty terminates pursuant to Section 7.4 and (iii)
pursuant to Section 7.3(a)(ii) and the other clauses of Section 7.3(b),
shall not terminate; provided, however, that as to clauses (i) and (ii)
-------- -------
above such obligations to indemnify and hold harmless shall not terminate
with respect to any item as to which the person to be indemnified or the
related party thereto shall have, before the expiration of the applicable
period, previously made a claim by delivering a notice of such claim
(stating in reasonable detail the basis of such claim) to the indemnifying
party; provided further, however, that in the case of a claim being made by
-------- ------- -------
reason of a Third Party Claim (as defined in Section 7.3(e) hereof), if the
third party claimant has not asserted its claim in writing, the
requirements of this clause shall nonetheless be deemed to be satisfied
with respect thereto so long as the third party claimant has overtly
threatened or otherwise indicated an intention to bring or pursue a claim,
albeit orally, and the indemnified party, before the expiration of the
applicable period, so notifies the indemnifying party by delivering a
notice of such asserted claim (stating in reasonable detail the basis for
such claim to the extent known to the indemnified party) to the
indemnifying party and such third party claimant subsequently assets its
claim in writing and a copy of the written notice from the third party
claimant is furnished to the indemnifying party in no more than ten (10)
business days after its receipt by the indemnified party.
(e) Procedures Relating to Indemnification. In order for a party
--------------------------------------
(the "indemnified party") to be entitled to any indemnification provided
for under this Section 7.3 in respect of, arising out of or involving a
claim or demand made by any person against the indemnified party (a "Third
Party Claim"), such indemnified party must notify the indemnifying party in
writing, and in reasonable detail, of the Third Party Claim promptly, but
in no event more than ten (10) business days after receipt by such
indemnified party of written notice of the Third Party Claim; provided,
--------
however, that failure to give such notification shall not affect the
-------
indemnification provided hereunder except to the extent the indemnifying
party shall have been actually prejudiced as a result of such failure
(except that the indemnifying party shall not be liable for any expenses of
the indemnified party incurred during the period in which the indemnified
party failed to give such notice). Upon delivering the initial
notification and thereafter, promptly upon the indemnifying party's receipt
thereof, the indemnified party shall deliver to the indemnifying party
copies of all notices and documents (including court papers) received by
the indemnified party relating to the Third Party Claim.
40
If a Third Party Claim is made against an indemnified party, the
indemnifying party shall be entitled to participate in the defense thereof
and, if it so chooses, to assume the defense thereof with counsel selected
by the indemnifying party (in which case the indemnifying party shall not
thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided that such counsel is not reasonably objected to by the indemnified
--------
party. If the indemnifying party assumes such defense, the indemnified
party shall have the right to participate in the defense thereof and to
employ counsel (not reasonably objected to by the indemnifying party), at
its own expense, separate from the counsel employed by the indemnifying
party, it being understood that the indemnifying party shall control such
defense. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local
counsel) (not reasonably objected to by the indemnifying party), and the
indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel (not reasonably objected to by the indemnifying
party) if (i) the use of counsel chosen by the indemnifying party to
represent the indemnified party would present such counsel with a conflict
of interest, (ii) the indemnifying party shall not have employed counsel
reasonably satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after notice of the institution
of such action or (iii) the indemnifying party shall authorize the
indemnified party to employ separate counsel at the expense of the
indemnifying party. The indemnifying party shall be liable for the
reasonable fees and expenses of counsel employed by the indemnified party
following the failure of the indemnifying party to assume the defense
thereof (other than during the period prior to the time the indemnified
party shall have given notice of the Third Party Claim as provided above).
If the indemnifying party so elects to assume the defense of any Third
Party Claim, all of the indemnified parties shall cooperate with the
indemnifying party in the defense or prosecution thereof. Such cooperation
shall include the retention and (upon the indemnifying party's request) the
provision to the indemnifying party of records and information which are
reasonably relevant to such Third Party Claim, and making employees
available on a mutually convenient basis to provide additional information
and explanation of any material provided hereunder. Whether or not the
indemnifying party shall have assumed the defense of a Third Party Claim,
the indemnified party shall not admit any liability with respect to, or
settle, compromise or discharge, such Third Party Claim without the
indemnifying party's prior written consent (which consent shall not be
unreasonably withheld). If the indemnifying party shall
41
have assumed the defense of a Third Party Claim, the indemnified party
shall agree to any settlement, compromise or discharge of a Third Party
Claim which the indemnifying party may recommend and which by its terms
obligates the indemnifying party to pay the full amount of the liability in
connection with such Third Party Claim, which releases the indemnifying
party completely in connection with such Third Party Claim and which would
not otherwise materially adversely affect the indemnified party.
The indemnification required by Sections 7.3(a) and 7.3(b) shall
be made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or loss,
liability, claim, damage or expense is incurred. All claims under Sections
7.3(a) or 7.3(b) other than Third Party Claims shall be governed by Section
7.3(f).
(f) Other Claims. In the event any indemnified party should have a
------------
claim against any indemnifying party under Section 7.3(a) or 7.3(b) that
does not involve a Third Party Claim being asserted against or sought to be
collected from such indemnified party, the indemnified party shall deliver
notice of such claim with reasonable promptness to the indemnifying party.
The failure by any indemnified party so to notify the indemnifying party
shall not relieve the indemnifying party from any liability which it may
have to such indemnified party under Sections 7.3(a) or 7.3(b), except to
the extent that the indemnifying party has been actually prejudiced by such
failure. If the indemnifying party does not notify the indemnified party
within thirty (30) business days following its receipt of such notice that
the indemnifying party disputes its liability to the indemnified party
under Sections 7.3(a) or 7.3(b), such claim specified by the indemnified
party in such notice shall be conclusively deemed a liability of the
indemnifying party under Sections 7.3(a) or 7.3(b) and the indemnifying
party shall pay the amount of such liability to the indemnified party on
demand or, in the case of any notice in which the amount of the claim (or
any portion thereof) is estimated, on such later date when the amount of
such claim (or such portion thereof) becomes finally determined. If the
indemnifying party has timely disputed its liability with respect to such
claim, as provided above, the indemnifying party and the indemnified party
shall proceed in good faith to negotiate a resolution of such dispute and,
if not resolved through negotiations, such dispute shall be resolved by
litigation in an appropriate court of competent jurisdiction or by the
method of dispute resolution described in Section 8.4 hereof.
(g) No Contribution from the Company or AME. Neither Seller nor any
---------------------------------------
of its Affiliates shall have any right to seek, and they hereby waive, any
and all claims they may have to, contribution from the Company or AME with
respect
42
to all or any portion of their indemnification obligations under this
Agreement.
7.4 SURVIVAL OF REPRESENTATIONS.
---------------------------
The representations and warranties in Sections 2.1, 2.2, 2.3, 3.1,
3.2, 3.6 and 3.7 of this Agreement shall survive the Closing solely for purposes
of Sections 7.3(a) and (b) and shall terminate at the close of business on the
later of June 30, 1996 and the close of business one year after the Closing
Date. No other representations or warranties of Seller or Buyer shall survive
the Closing.
ARTICLE VIII
GENERAL
8.1 AMENDMENTS; WAIVERS.
-------------------
This Agreement and any schedule or exhibit attached hereto may be
amended only by agreement in writing of all parties. No waiver of any provision
nor consent to any exception to the terms of this Agreement shall be effective
unless in writing and signed by the party to be bound and then only to the
specific purpose, extent and instance so provided.
8.2 SCHEDULES; EXHIBITS; INTEGRATION.
--------------------------------
Each schedule and exhibit delivered pursuant to the terms of this
Agreement shall be in writing and shall constitute a part of this Agreement,
although schedules need not be attached to each copy of this Agreement. This
Agreement, together with such schedules and exhibits, constitute the entire
agreement among the parties pertaining to the subject matter hereof and
supersede all prior agreements and understandings of the parties in connection
therewith, except the Letter Agreement which, subject to Section 4.5 hereof,
shall continue in full force and effect, and the Wrap-Around Agreement. Without
limiting the effect of the foregoing provisions of this Section 8.2, except as
expressly set forth in this Agreement, neither Buyer nor Seller is making or
shall be deemed to have made any representation or warranty of any kind, either
express or implied.
8.3 REASONABLE BEST EFFORTS; FURTHER ASSURANCES.
-------------------------------------------
Each party will use its reasonable best efforts to cause all
conditions to its obligations hereunder to be timely satisfied and to perform
and fulfill all obligations on its part to be performed and fulfilled under this
Agreement, to the end that the transactions contemplated by this Agreement shall
be effected substantially in accordance with its terms as soon as feasible. The
parties shall cooperate with each other in such actions and in securing
requisite Approvals. Each party shall deliver such further documents and take
such other actions as may be necessary or appropriate to consummate or implement
the
43
transactions contemplated hereby or to evidence such events or matters.
8.4 GOVERNING LAW.
-------------
(a) This Agreement and the legal relations between the parties shall
be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and performed in such State and
without regard to conflicts of law doctrines except to the extent that
certain matters are preempted by federal law or are governed by the law of
the jurisdiction of incorporation of the respective parties.
(b) Any dispute arising out of or in connection with this Agreement
or any amendment or modification hereto, other than with respect to matters
covered in Section 5.2 hereof, (i) shall be referred to a single
conciliator to be selected by the parties, or failing their agreement, by
the International Chamber of Commerce, with the mission of attempting to
resolve such dispute during a period of one hundred and twenty (120) days
following the first notification of such dispute given to any party
hereunder and (ii) if such dispute shall otherwise not be so resolved,
shall be finally settled by arbitration conducted in the English language
in London, England under the United Nations Commission on International
Trade Law (UNCITRAL) Arbitration Rules by three arbitrators, one of whom
shall be appointed by each of the parties, and the third by agreement of
the two arbitrators, or failing such agreement by the International Chamber
of Commerce as appointing authority. Either Buyer or Seller may initiate
the procedures in this Section 8.4(b) by giving demand for arbitration to
the other, setting forth the nature of any such dispute. Any written
determination of the arbitrators shall be final and conclusive upon the
parties. Each party hereto shall promptly pay to the prevailing party any
amount determined to be due to it by such arbitration. It is the intention
of each party that, to the maximum extent, actions of the arbitrators shall
not be subject to review in the courts of England.
8.5 NO ASSIGNMENT.
-------------
Neither this Agreement nor any rights or obligations under it are
assignable without the prior written consent of the other party; provided,
--------
however, that Buyer may assign its rights and obligations (including its rights
-------
to purchase the Stock) in whole or in part to one or more of its Affiliates
without the prior written consent of Seller; provided further, however, that no
-------- ------- -------
assignment shall limit or affect the assignor's obligations hereunder. Any
attempted assignment in violation of this Section 8.5 shall be void.
44
8.6 HEADINGS.
--------
The descriptive headings of the Articles, Sections and subsections of
this Agreement are for convenience only and do not constitute a part of this
Agreement.
8.7 COUNTERPARTS.
------------
This Agreement and any amendment hereto or any other agreement (or
document) delivered pursuant hereto may be executed in one or more counterparts
and by different parties in separate counterparts. All of such counterparts
shall constitute one and the same agreement (or other document) and shall become
effective (unless otherwise provided therein) when one or more counterparts have
been signed by each party and delivered to the other party.
8.8 PUBLICITY AND REPORTS.
---------------------
Seller and Buyer shall coordinate all publicity relating to the
transactions contemplated by this Agreement and no party shall issue any press
release, publicity statement or other public notice relating to this Agreement,
or the transactions contemplated by this Agreement, without obtaining the prior
consent of the other party, which shall not be unreasonably withheld, except
(following consultation with the other party to the extent reasonably possible)
to the extent that a particular action is required by applicable Law or stock
exchange rules.
8.9 REMEDIES CUMULATIVE.
-------------------
Except for the limitation on remedies by Buyer and Seller contained in
Section 7.3 of this Agreement, all rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
8.10 PARTIES IN INTEREST.
-------------------
This Agreement shall be binding upon and inure to the benefit of each
party to this Agreement, and nothing in this Agreement, express or implied, is
intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement. Nothing in this Agreement is
intended to relieve or discharge the obligation of any third person to (or to
confer any right of subrogation or action over against) any party to this
Agreement.
8.11 NOTICES.
-------
Any notice or other communication hereunder must be given in writing
and (a) delivered in person, (b) transmitted by telefax or (c) mailed, postage
prepaid, receipt requested as follows:
45
If to Buyer, addressed to:
Parkway Holdings Limited
80 Marine Parade Road
#22-01/99 Parkway Parade
Singapore 1544
Telephone: (65) 345-8822
Telefax: (65) 344-0356
Attention: Company Secretary
With a copy each to:
Allen, Allen & Hemsley
The Chifley Tower
2 Chifley Square
Sydney, Australia
Telephone: (612) 230-4000
Telefax: (612) 233-7022
Attention: John Allen, Esq.
and
Sullivan & Cromwell
28/F, Nine Queen's Road Central
Hong Kong
Telephone: (852) 2826-8688
Telefax: (852) 2522-2280
Attention: John Evangelakos, Esq.
If to Seller, addressed to:
Tenet Healthcare Corporation
2700 Colorado Avenue
Santa Monica, California 90404
Telephone: (310) 998-8000
Telefax: (310) 998-4088
Attention: General Counsel
With a copy to:
O'Melveny & Myers
400 South Hope Street, 15th Floor
Los Angeles, California 90071-2899
Telephone: (213) 669-6000
Telefax: (213) 669-6407
Attention: Richard A. Boehmer, Esq.
or to such other address or to such other person as either party shall have last
designated by such notice to the other party. Each such notice or other
communication shall be effective (i) if given by telecommunication, when
transmitted to the applicable number so specified in (or pursuant to) this
Section 8.11 and an appropriate answerback is received, (ii) if given by mail,
three days after such communication is deposited in the mails with
46
first class postage prepaid, addressed as aforesaid or (iii) if given by any
other means, when actually received at such address.
8.12 STAMP DUTIES.
------------
Buyer shall pay all stamp duties, goods and services taxes, and any
similar charges (except receipts duties, financial institutions duties or bank
account debits taxes, which shall be paid by the party upon which they fall)
assessed on or in relation to this Agreement or any of the matters or
transactions or sales under this Agreement, the share transfer form or under any
related document.
8.13 EXPENSES AND ATTORNEYS FEES.
---------------------------
Seller and Buyer shall each pay their own expenses incident to the
negotiation, preparation and performance of this Agreement and the transactions
contemplated hereby, including but not limited to the fees, expenses and
disbursements of their respective Investment Bankers, accountants and counsel.
In the event of any Action for the breach of this Agreement, indemnification or
misrepresentation by any party, the prevailing party shall be entitled to
reasonable attorney's fees, costs and expenses incurred in connection with
investigating and prosecuting such Action.
8.14 SEVERABILITY.
------------
If any provision of this Agreement is held invalid or unenforceable by
any Governmental Entity, the remaining provisions of this Agreement shall remain
in full force and effect provided that the essential terms and conditions of
this Agreement for both parties remain valid, binding and enforceable.
8.15 DOLLARS.
-------
Unless otherwise specified herein, all references to "$" and "dollars"
shall mean United States Dollars.
ARTICLE IX
DEFINITIONS
9.1 DEFINITIONS.
-----------
For all purposes of this Agreement, except as otherwise expressly
provided:
(a) the terms defined in this Article IX include the plural as well
as the singular;
(b) all accounting terms not otherwise defined herein have the
meanings assigned under GAAP;
47
(c) all references in this Agreement to designated "Articles,"
"Sections" and other subdivisions are to the designated Articles, Sections and
other subdivisions of the body of this Agreement except as otherwise provided in
this Agreement;
(d) pronouns of either gender or neuter shall include, as
appropriate, the other pronoun forms;
(e) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision; and
(f) all references to any Contract shall mean and include such
Contract as it may have been amended, restated, modified, supplemented, renewed
or replaced from time to time.
As used in this Agreement and the Exhibits and Schedules delivered
pursuant to this Agreement, the following definitions shall apply:
"Action" means any action, claim, complaint, petition, investigation, suit
or other proceeding, whether civil or criminal, at law or in equity, or before
any arbitrator or Governmental Entity.
"Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
a specified Person.
"Agreement" means this Agreement by and between Buyer and Seller as amended
or supplemented, together with all Exhibits and Schedules attached or
incorporated by reference therein.
"AME Stock" has the meaning assigned to it in Section 2.2(a).
"Approval" means any approval, authorization, consent, waiver,
qualification or registration, or any waiver of any of the foregoing, required
to be obtained from, or any notice, statement or other communication required to
be filed with or delivered to, any Governmental Entity or any other Person
(including, without limitation, any of the foregoing required to be obtained
from any lender or security holder).
"Asia Stock Purchase Agreement" means the Asia Stock Purchase Agreement,
dated May 24, 1995, between Seller and Buyer relating to the purchase by Buyer
of Seller's healthcare businesses in Asia.
"Auditors" means KPMG Peat Marwick L.L.P., independent public accountants
to Seller.
"Balance Sheet" has the meaning assigned to it in Section 2.3(b).
48
"Benefit Plans" has the meaning assigned to it in Section 2.15.
"Business" has the meaning assigned to it in the Recitals to this
Agreement.
"Closing" means the consummation of the purchase and sale of the Stock
under this Agreement.
"Closing Date" means the date of the Closing.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time, and successor statutes.
"Company Real Properties" has the meaning assigned to it in Section 2.6(b).
"Contract" means any document, agreement, arrangement, bond, commitment,
franchise, indemnity, indenture, instrument, lease, license or understanding,
whether or not in writing.
"Disclosure Schedule" means the Disclosure Schedule dated
June 20, 1995 and delivered by Seller to Buyer, or Buyer to Seller, as the case
may be, pursuant to this Agreement. Any information set forth in any section of
the Disclosure Schedule shall be deemed to be set forth in such other section of
the Disclosure Schedule as contains a cross-reference to the former section.
"Encumbrance" means any claim, charge, easement, encumbrance, security
interest, lien, option, pledge, negative pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, except
for any restrictions on transfer generally arising under any applicable U.S. or
foreign securities law.
"Equity Securities" means any capital stock or other equity interest or any
securities convertible into or exchangeable for such capital stock or other
equity interest or any other rights, warrants or options to acquire any of the
foregoing securities, including the rights to any dividend declared but unpaid
in respect thereof.
"GAAP" means generally accepted accounting principles in the United States
as in effect from time to time, with such specifically disclosed changes, if
any, as may be required by generally accepted accounting principles.
"Governmental Entity" means any government or any agency, district, bureau,
board, statutory board, commission, court, department, official, political
subdivision, tribunal or other instrumentality of any government, whether
federal, state or local, domestic or foreign.
49
"Intellectual Property" has the meaning assigned to it in Section 2.14.
"Interim Period" has the meaning assigned to it in Section 2.4(b).
"International - NME" has the meaning assigned to it in Section 1.1.
"Investment Bankers" has the meaning assigned to it in Section 2.19.
"Law" means any constitutional provision, statute or other law, rule,
regulation, or interpretation of any Governmental Entity and any Order.
"Leased Real Property" has the meaning assigned to it in Section 2.6(a).
"Letter Agreement" has the meaning assigned to it in Section 4.1.
"Manpower and Technical Services Agreement" has the meaning assigned to it
in Section 6.3(i).
"Material Adverse Effect" means a material adverse effect on the business,
assets, condition (financial or otherwise) or results of operations of the
Business, taken as a whole, or on the ability of Seller to consummate the
transactions contemplated in this Agreement.
"Order" means any decree, injunction, judgment, order, ruling, assessment
or writ.
"Overhead Expenses" has the meaning assigned to it in Section 2.21.
"Permit" means any license, permit, franchise, certificate of authority, or
order, or any waiver of the foregoing, required to be issued by any Governmental
Entity.
"Permitted Encumbrances" means, collectively, (i) mechanics', carriers',
workmen's, repairmen's or other like liens arising or incurred in the ordinary
course of business, liens arising under original purchase price conditional
sales contracts and equipment leases with third parties entered into in the
ordinary course of business and liens for Taxes which are not due and payable or
which may thereafter be paid without penalty, (ii) mortgages, liens, security
interests and encumbrances which secure debt that is reflected as a liability on
the financial statements referred to in Section 2.3 and the existence of which
is indicated in the notes thereto and (iii) other imperfections of title or
encumbrances, if any, which do not, individually or in the aggregate, materially
impair the value of or the continued
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use and operation of the assets to which they relate in the Business.
"Person" means an association, a corporation, an individual, a partnership,
a joint venture, a trust or any other entity or organization, including a
Governmental Entity.
"Pre-Closing Tax Period" means all taxable periods ending on or before
February 28, 1995 and the portion ending on February 28, 1995 of any taxable
period that includes (but does not end on) such day.
"Purchase Price" has the meaning set forth in Section 1.2.
"Seller's Transition Tax Exposure Amount" means the difference, if any,
between (i) the U.S. Federal, state and local income tax liability of Seller and
its Affiliates for Seller's taxable year ending on May 31, 1996 computed to take
into account (A) any liability incurred by Seller and its Affiliates under
Section 951(a) of the Code as a result of any income earned by the Company or
AME during the Transition Period or the acquisition of any asset or the
undertaking of any transaction or activity by the Company or AME during the
Transition Period and (B) any reduction in the combined earnings and profits of
the Company and AME (as determined under the Code) to an amount less than the
combined earnings and profits of the Company and AME on the Closing Date that is
attributable to any dividend or other distribution declared, issued, made or
paid during the Transition Period by the Company or AME (or any entity becoming
a subsidiary of the Company of AME during the Transition Period) and (ii) the
U.S. Federal, state and local income tax liability of Seller and its Affiliates
for Seller's taxable year ending on May 31, 1996 computed without regard to the
items described in subclauses (A) and (B) of clause (i) of this sentence. For
this purpose, the Tax liability of Seller and its Affiliates shall be calculated
by taking into account foreign tax credits available to Seller and its
Affiliates and by taking into account the effect of an increase in an overall
foreign loss or increase in a separate limitation loss (each as defined in
section 904(f) of the Code) on the ability of Seller to utilize foreign tax
credits for U.S. Federal income tax purposes.
"Stock" means the capital stock of the Company as described in Section 2.1
of the Disclosure Schedule.
"Subsidiary" means any Person in which the Company has a direct or indirect
equity or ownership interest in excess of fifty percent (50%).
"Tax" or "Taxes" means any foreign, federal, state, county or local income,
sales, turnover, use, excise, franchise, ad valorem, goods and services, real
and personal property, transfer, gross receipt, stamp, premium, profits, customs
and excise, duties, windfall profits, capital stock, capital gains or duty,
production, business and occupation, disability,
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employment, payroll, severance or withholding taxes, fees, assessments or
charges of any kind whatever imposed by any Governmental Entity, all amounts
equal to the Tax cost of any deprivation of any relief, allowance, set-off or
deduction in computing profits or right to repayment of Tax granted by or
pursuant to Law relating to Tax, any interest, charges and penalties (civil or
criminal), additions to tax, payments in lieu of taxes or additional amounts
related thereto or to the nonpayment thereof, and any Loss in connection with
the determination, settlement or litigation of any Tax liability.
"Tax Return" means a declaration, statement, report, return, computation of
tax, invoice, records (accounting or otherwise) or other document or information
required to be filed or supplied with respect to Taxes including, where
permitted or required, combined or consolidated returns for any group of
entities that includes the Company or AME.
"Wrap-Around Agreement" means the Wrap-Around Agreement, dated June 20,
1995, between Buyer and Seller.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed by its duly authorized officers as of the day and year first above
written.
BUYER
PARKWAY HOLDINGS LIMITED,
a Singapore corporation
By: /s/ TAN KAI SENG
---------------------------
Tan Kai Seng
Its: Director
--------------------------
SELLER
NATIONAL MEDICAL ENTERPRISES, INC.,
a Nevada corporation
By: /s/ MARIS ANDERSONS
---------------------------
Maris Andersons
Its:Senior Vice President-Treasurer
-------------------------------
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