EXECUTION COPY
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE Agreement (this "AGREEMENT") is dated as of January 1,
1996 among TeleTech Holdings, Inc., a corporation organized under the laws of
the State of Delaware, U.S.A. ("PURCHASER"), Access 24 Holdings Pty Limited, a
corporation organized under the laws of Victoria, Australia (ACN 062 325 759)
("ACCESS"), Bevero Pty Limited, a corporation organized under the laws of New
South Wales, Australia (ACN 003 978 809) ("BEVERO" and, collectively with
Access, "SELLERS"), and Access 24 Service Corporation Pty Limited, a corporation
organized under the laws of New South Wales, Australia (ACN 061 711 804) (the
"COMPANY").
W I T N E S S E T H :
WHEREAS, Purchaser is engaged in the business of, among other things,
providing information-communications solutions, on an outsourcing basis, using
integrated voice and data communications technology, including, without
limitation, technical product support, marketing and database generation and
customer service programs;
WHEREAS, the Company and its subsidiaries, all of which are listed on
SCHEDULE A hereto (collectively, the "SUBSIDIARIES"), are engaged in the
business of, among other things, arranging medical treatment, travel and
accommodation and trade assistance via telephone in Australia, New Zealand and
the United Kingdom, and providing specialized information, customer loyalty and
other programs on an outsourcing basis using integrated voice and data
communications technology (together with any similar or related activities in
which the Company and the Subsidiaries are engaged, the "BUSINESS");
WHEREAS, Access is the record and beneficial owner of 106 ordinary shares,
A$1.00 per share, of the Company ("ORDINARY SHARES") and Bevero is the record
and beneficial owner of 106 Ordinary Shares, which 212 shares constitute all of
the issued and outstanding Ordinary Shares; and
WHEREAS, Purchaser desires to purchase from Sellers, and Sellers desire to
sell to Purchaser, all of the 212 Ordinary Shares currently issued and
outstanding (the "SHARES"), on the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual agreements
and covenants hereinafter set forth and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"ACCOUNTING STANDARDS" means accounting standards required under the
Corporations Law and/or issued by the Australian Accounting Standards Review
Board (or other joint accounting bodies) and other generally accepted Australian
accounting principles, each as in effect during the relevant period and applied
consistently throughout the periods involved.
"ADDITIONAL AGREEMENTS" means those agreements, instruments and other
documents necessary to effect the Concurrent Transactions.
"AFFILIATE" means, with respect to any specified Person, any other Person
that directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such specified Person.
"CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON CONTROL WITH"),
with respect to the relationship between two or more Persons, means the
possession, directly or indirectly or as trustee or executor, of the power to
direct or cause the direction of the affairs or management of a Person, whether
through the ownership of voting securities, as trustee or executor, by contract
or otherwise, including, without limitation, the ownership, directly or
indirectly, of securities having the power to elect a majority of the board of
directors or similar body governing the affairs of such Person.
"ASSETS" means all of the properties and assets (including without
limitation rights in and under contracts) used, intended to be used, required in
or relating to the conduct of the Business and, with respect to contract rights,
all contracts to which the Company or any Subsidiary is a party.
"BANKRUPTCY" shall mean (a) an adjudication of bankruptcy under the U.S.
Bankruptcy Reform Act of 1978, as amended, or any successor statute, (b) the
specified Person stops payment of, is deemed unable or otherwise admits
inability to pay its debts or becomes or is deemed to be insolvent, (c) the
making of a winding up or administration order in respect of the specified
Person, (d) an assignment for the benefit of creditors, (e) the specified Person
either does, resolves to do or commences negotiations with a view to doing any
of the following: (i) makes a general or special arrangement or composition
(whether voluntary or compulsory) with its creditors or any class of creditors,
(ii) declares or agrees to a moratorium, or (iii) issues a notice convening a
meeting to resolve to do any of the foregoing (other than for the purpose of a
solvent amalgamation or reconstruction), (f) the filing of a voluntary petition
in bankruptcy or reorganization or the passing of a resolution for voluntary
liquidation, reconstruction or winding up (other than for the purpose of a
solvent amalgamation or reconstruction), or (g) the failure to vacate the
appointment of a receiver, trustee, controller, provisional liquidator or
administrative receiver for any part or all of the assets or property of a party
within 60 days from the date of such appointment.
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"BUSINESS DAY" means any day that is not a Saturday or a Sunday and on
which banks are open for the conduct of normal banking business in all of the
cities of Denver, Colorado, Sydney, Australia, London, England and Auckland, New
Zealand.
"CONCURRENT TRANSACTIONS" means, collectively, the transactions
contemplated by this Agreement and described or referred to in Section 6.01.
"ENCUMBRANCE" means any security interest, pledge, mortgage, lien
(including, without limitation, environmental and Tax liens), charge,
encumbrance, adverse claim, option, preferential arrangement or restriction of
any kind, including, without limitation, any restriction on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership.
"GOVERNMENTAL AUTHORITY" means any federal, state, local or foreign
government, governmental, regulatory or administrative authority (or subdivision
thereof) and any agency or commission or any court, tribunal or judicial or
arbitral body that has jurisdiction over the Business, the Company, the Assets
or any Subsidiary, including, without limitation, the governments of the United
States, Australia, the United Kingdom and New Zealand.
"GOVERNMENTAL ORDER" means any order, writ, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
"INTELLECTUAL PROPERTY" means any and all (a) inventions, ideas and
conceptions of potentially patentable subject matter, including, without
limitation, any patent disclosures whether or not patentable, whether or not
reduced to practice, and whether or not yet made the subject of a pending patent
application or applications, (b) national (including the United States) and
multinational statutory invention registrations, patents, patent registrations
and patent applications (including all reissues, divisions, continuations,
continuations-in-part, extensions and reexaminations) and all rights therein
provided by international treaties or conventions and all improvements to the
inventions disclosed in each such registration, patent or application,
(c) trademarks, service marks, trade dress, logos, trade names and corporate and
partnership names, whether or not registered, including all common law rights,
and registrations and applications for registration thereof and all rights
therein provided by international treaties or conventions, (d) copyrights
(registered or otherwise) and registrations and applications for registration
thereof, and all rights therein provided by international treaties or
conventions, (e) moral rights (including, without limitation, rights of
paternity and integrity), and waivers of such rights by others, (f) computer
software, including, without limitation, source code, operating systems and
specifications, data, data bases, files, documentation and other materials
related thereto, (g) trade secrets and confidential, technical and business
information (including ideas, flow charts, logic diagrams, formulas,
compositions, patterns, devices, methods, techniques, processes, inventions, and
conceptions of inventions whether patentable or unpatentable and whether or not
reduced to practice), (h) whether or not confidential, technology (including
know-how and show-how), manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data,
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copyrightable works, financial, marketing and business data, selling, pricing
and cost information or procedures, business and marketing plans and customer
and supplier lists and information, (i) copies and tangible embodiments of all
the foregoing, in whatever form or medium, (j) all rights to obtain and rights
to apply for patents, and to register trademarks and copyrights, and (k) all
rights to sue or recover and retain damages and costs and attorneys' fees for
present and past infringement of any of the foregoing.
"KNOWLEDGE" or "TO THE KNOWLEDGE OF" a specified Person, and similar
references, means the actual knowledge of the officers, directors and key
employees of such Person as well as constructive knowledge of any facts or
events which such officers, directors and key employees, including without
limitation any Person acting as a non-executive director of the Company, should
have been aware had they exercised the degree of diligence that would have been
exercised by a reasonable person in their respective positions.
"LAW" means any federal, state, local or foreign statute, law, ordinance,
regulation, rule, code, order, other requirement or rule of law issued by any
Governmental Authority.
"MATERIAL ADVERSE EFFECT" means any event, circumstance, change in or
effect on the operations or business of any specified party (including, without
limitation, in the case of the Company, the Business) that: (a) is, or could
reasonably be expected to be, materially adverse to the business, operations,
assets or liabilities (including, without limitation, in the case of the
Company, the Assets), results of operations or the financial condition of such
party, or (b) could reasonably be expected to materially adversely affect the
ability of such party to operate or conduct its business in the manner in which
it is currently, or is currently anticipated to be, operated or conducted or to
perform its obligations under this Agreement or any Additional Agreement to
which such party is a party.
"PERSON" means any individual, partnership, firm, corporation, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
"RECEIVABLES" means any and all accounts, notes and other receivables of
the Company or any Subsidiary from third parties, including, without limitation,
customers, arising before the Closing from the conduct of the Business or
otherwise, whether or not in the ordinary course, together with all unpaid
financing charges accrued thereon.
"STOCK TRANSFER AGREEMENT" means that certain Stock Transfer and
Registration Rights Agreement to be dated and executed on the Closing Date among
Purchaser and Sellers, substantially in the form attached hereto as EXHIBIT A.
"TAX" or "TAXES" means any and all taxes, stamp duties, fees, levies,
duties, tariffs, imposts and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority or taxing authority,
including, without limitation: taxes or other charges on or with
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respect to income, franchises, windfall or other profits, gross receipts,
property, sales, use, capital stock, payroll, employment, social security,
workers' compensation, unemployment compensation, or net worth; taxes or other
charges in the nature of excise, withholding, ad valorem, stamp, transfer, value
added, or gains taxes; license, registration and documentation fees; and
customs duties, tariffs and similar charges.
ARTICLE II
PURCHASE AND SALE
Section 2.01 CLOSING. The closing of the purchase and sale of the Shares
and the Concurrent Transactions (the "CLOSING") shall take place at the offices
of the Company in Sydney, Australia, at 9:00 a.m. local time on February 9, 1996
(the "CLOSING DATE").
Section 2.02. PURCHASE AND SALE. Sellers hereby agree to sell, and
Purchaser (or its assignee pursuant to Section 9.10) hereby agrees to purchase,
the Shares on the terms and subject to the conditions set forth in this
Agreement.
Section 2.03. PURCHASE PRICE. The aggregate purchase price for the Shares
(the "PURCHASE PRICE") is A$11.0 million and will be payable at the Closing as
follows:
(a) U.S.$2.27 million will be paid to Access by bank cheque;
(b) Purchaser will issue and deliver to Access 51,544 shares of
Purchaser common stock, par value U.S.$.01 per share ("COMMON STOCK");
(c) Purchaser will issue and deliver to Bevero 142,504 shares of
Common Stock; and
(d) Purchaser will not require Sellers as a condition to Closing to
repay, and will cause the Company following the Closing to repay, the Company's
outstanding indebtedness (the "RETAINED LIABILITY") under the Company's existing
credit facility with WestPac Banking Corporation ("WESTPAC"); PROVIDED THAT such
indebtedness does not exceed A$1.6 million (a description of the credit facility
and the amount of the Company's indebtedness thereunder that will be outstanding
as of the Closing is set forth on SCHEDULE 2.03 hereto).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO SELLERS
As an inducement to Purchaser to enter into this Agreement, each Seller,
severally and not jointly, hereby represents and warrants to Purchaser, as of
the date hereof and as of the Closing, as follows:
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Section 3.01. ORGANIZATION, QUALIFICATION, ETC. OF SELLER. Seller is a
duly organized and validly existing corporation under the Laws of the
jurisdiction of its organization and has all necessary corporate power and
authority to own, operate or lease the properties and assets now owned, operated
or leased by it and to carry on its business as it has been, is currently and is
currently anticipated to be conducted.
Section 3.02. TITLE TO THE SHARES. Seller (a) has good and marketable
title to, and record and beneficial ownership of, the Shares to be sold by
Seller hereunder and (b) has full right, power and authority to sell, assign,
transfer and deliver the Shares hereunder, free and clear of any Encumbrances.
Section 3.03. AUTHORITY OF SELLER. Seller has all necessary corporate
power and authority to execute and deliver this Agreement and each Additional
Agreement to which it is a party and to perform its obligations hereunder and
thereunder. The execution and delivery by Seller of this Agreement and each
Additional Agreement to which it is a party or otherwise is bound and the
performance by Seller of its obligations hereunder and thereunder and thereby
have been duly authorized by all requisite corporate action on the part of
Seller. This Agreement and each Additional Agreement to which Seller is a party
have been duly executed and delivered by Seller and (assuming due authorization,
execution and delivery by the other parties thereto) constitute or will
constitute the legal, valid and binding obligation of Seller, enforceable
against Seller in accordance with its terms, except as such enforcement may be
subject to Bankruptcy or other similar laws now or hereafter in effect relating
to creditors' rights generally.
Section 3.04. NO CONFLICT. Assuming that all filings, notifications,
consents, approvals, authorizations and other actions referred to in Section
3.05 have been made or obtained, the execution, delivery and performance by
Seller of this Agreement and each Additional Agreement to which it is a party
and the consummation of the transactions contemplated hereby and thereby do not
and will not (a) violate, conflict with or result in the breach of any provision
of Seller's Articles of Association or Memorandum of Association, (b) conflict
with or violate any Law or Governmental Order applicable to Seller, which
conflict or violation, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect on Seller or on the Business, or
(c) conflict with, result in any breach of, constitute a default (or an event
which with the giving of notice or lapse of time, or both, would become a
default) under, require any consent under, or give to others any rights of
termination, amendment, acceleration, suspension, revocation or cancellation of,
or result in the creation of any Encumbrance on any of the Shares or the assets
or properties of Seller or the Business pursuant to, any note, bond, mortgage or
indenture, contract, agreement, lease, sublease, license, permit, franchise or
other instrument, agreement or arrangement to which Seller is a party or by
which any of such assets or properties is bound or affected, which conflict or
violation, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on Seller or on the Business.
Section 3.05. CONSENTS AND APPROVALS. Except as set forth on SCHEDULE
3.05 hereto, the execution, delivery and performance by Seller of this Agreement
and each Additional Agreement
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to which it is a party do not and will not require any consent, approval,
authorization or other order of, action by, filing with or notification to any
Governmental Authority or other Person.
Section 3.06. LITIGATION. There are no claims or proceedings pending or,
to the knowledge of Seller, threatened by or against Seller (or, to Seller's
knowledge, any of its directors, officers, employees or agents) that, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect on Seller or could reasonably be expected to affect the legality,
validity or enforceability of this Agreement or any Additional Agreement to
which it is a party.
Section 3.07. INDEBTEDNESS TO AFFILIATES. Except as set forth on SCHEDULE
3.07, (a) neither the Company nor any Subsidiary is liable or indebted, directly
or indirectly, as a guarantor, surety or otherwise, to Seller or any of its
Affiliates and (b) Seller is not liable or indebted, directly or indirectly, as
a guarantor, surety or otherwise, to the Company, any Subsidiary or any of their
respective Affiliates.
Section 3.08. BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or any Additional Agreement to which
Seller is a party based upon arrangements made by or on behalf of Seller.
Section 3.09. FULL DISCLOSURE. No representation or warranty of Seller
contained in this Agreement or in any Additional Agreement to which Seller is a
party, and no written statement contained in any certificate furnished or to be
furnished to Seller pursuant to this Agreement or any Additional Agreement to
which Seller is a party or in connection with the transactions contemplated
hereby or thereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact, necessary to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
WITH RESPECT TO THE COMPANY
As an inducement to Purchaser to enter into this Agreement, Access and
Bevero, jointly and not severally, hereby represent and warrant to Purchaser, as
of the date hereof and as of the Closing (PROVIDED, HOWEVER, that the
representations and warranties contained in Sections 4.05 through 4.08,
inclusive, 4.10 through 4.16, inclusive, and 4.18 are limited, with respect to
Access, to Access's knowledge), as follows:
Section 4.01. ORGANIZATION. The Company and each Subsidiary is a duly
incorporated and validly existing corporation under the Laws of the jurisdiction
of its incorporation and has all necessary corporate power and authority to own,
operate or lease the Assets now owned, operated or leased by it and to carry on
its business as it has been, is currently and is currently
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anticipated to be conducted. The Company and each Subsidiary is duly licensed
or qualified to do business and is in good standing in each jurisdiction in
which the properties owned or leased by it or the operation of the Business
makes such licensing or qualification necessary, except where the failure to be
so licensed, qualified or in good standing does not have, or could not
reasonably be expected to have, a Material Adverse Effect on the Company or such
Subsidiary; PROVIDED that the foregoing representation and warranty is
qualified, with respect to Access only, to Access's knowledge. Seller has
heretofore delivered to Purchaser accurate and complete copies of (a) the
Company's and each Subsidiary's Articles of Association and Memorandum of
Association (or the equivalent), each as amended through the date hereof, and
(b) resolutions adopted prior to the date hereof of the members and of the
Boards of Directors of the Company and each Subsidiary, all of which resolutions
remain in full force and effect in the form delivered to Purchaser.
Section 4.02. CAPITALIZATION; TITLE. The authorized capital stock of the
Company consists only of 10,000,000 Ordinary Shares, of which 212 Ordinary
Shares are issued and outstanding and owned beneficially and of record by
Sellers; no other class or series of capital stock is authorized or outstanding.
All of the issued and outstanding Ordinary Shares are duly authorized, validly
issued, fully paid and nonassessable. At the Closing, Purchaser will receive
good, valid and marketable title to the Shares, free and clear of all
Encumbrances. There are no statutory or contractual preemptive rights or
outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, convertible securities or other agreements or arrangements of any
nature whatsoever under which the Company or either Seller is or may become
obligated to issue, assign or transfer any Ordinary Shares, or purchase or make
payment in respect of any Ordinary Shares now or heretofore outstanding.
Section 4.03. SUBSIDIARIES. SCHEDULE 4.03 hereto, sets forth an accurate
and complete list of all Subsidiaries of the Company, whether active or dormant,
the number of issued and outstanding shares of capital stock of each Subsidiary
and the number of shares of capital stock of each Subsidiary owned beneficially
and of record by the Company or another Subsidiary. All of the issued and
outstanding shares of capital stock of each Subsidiary that are owned, directly
or indirectly, by the Company or another Subsidiary are free and clear of all
Encumbrances and are duly authorized, validly issued, fully paid and
nonassessable. There are no outstanding subscriptions, options, warrants,
calls, contracts, demands, commitments, convertible securities or other
agreements or arrangements of any nature whatsoever under which the Company or
any Subsidiary is or may become obligated to grant, assign or transfer any
capital stock of any Subsidiary or purchase or make payment in respect of any
capital stock of any Subsidiary now or heretofore outstanding. Other than the
Subsidiaries, the Company has no ownership of or other investment interest,
whether of record, beneficially or equitably, in any Person.
Section 4.04. AUTHORITY. The Company has all necessary power and
authority to execute and deliver this Agreement and all Additional Agreements to
which it is a party and to perform its obligations hereunder and thereunder.
The execution and delivery by the Company of this Agreement and each Additional
Agreements to which it is a party and the performance by the
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Company of its obligations hereunder and thereunder have been duly authorized by
all requisite corporate action on the part of the Company. This Agreement and
each Additional Agreement to which the Company is a party have been, or at
Closing will be, duly executed and delivered by the Company and (assuming due
authorization, execution and delivery by the other parties thereto) constitute
or will constitute the legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its respective terms, except
as such enforcement may be subject to Bankruptcy or other similar laws now or
hereafter in effect relating to creditors' rights generally.
Section 4.05. NO CONFLICT. Assuming that all filings, notifications,
consents, approvals, authorizations and other actions referred to in Section
4.06 have been made or obtained, the execution, delivery and performance by the
Company of this Agreement and each Additional Agreement to which it is a party
and the consummation of the transactions contemplated hereby and thereby do not
and will not (a) violate, conflict with or result in the breach of any provision
of the Company's Articles of Association or Memorandum of Association,
(b) conflict with or violate any Law or Governmental Order applicable to the
Company, any Subsidiary, the Business or the Assets, which conflict or
violation, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on the Company or any Subsidiary or (c) conflict
with, result in any breach of, constitute a default (or an event which with the
giving of notice or lapse of time, or both, would become a default) under,
require any consent under, or give to others any rights of termination,
amendment, acceleration, suspension, revocation or cancellation of, or result in
the creation of any Encumbrance on any of the Assets pursuant to any note, bond,
mortgage or indenture, contract, agreement, lease, sublease, license, permit,
franchise or other instrument, agreement or arrangement to which the Company or
any Subsidiary is a party or by which any of the Assets is bound or affected,
which conflict or violation, individually or in the aggregate, could reasonably
be expected to have a Material Adverse Effect on the Company or any Subsidiary.
Section 4.06. CONSENTS AND APPROVALS. Except as set forth on SCHEDULE
4.06 hereto, the execution, delivery and performance by the Company of this
Agreement and each Additional Agreement to which it is a party do not and will
not require any consent, approval, authorization or other order of, action by,
filing with or notification to any Governmental Authority or other Person.
Section 4.07. LITIGATION. There are no actions, disputes or claims
pending or, to Seller's knowledge, threatened by or against the Company or any
Subsidiary (or, to the knowledge of Seller, any of the Company's or any
Subsidiary's directors, officers, employees or agents), or affecting any of the
Assets, that, if adversely determined, could reasonably be expected to have a
Material Adverse Effect on the Company or any Subsidiary. None of the Company,
the Business, any of the Assets or any Subsidiary is subject to any Law or
Governmental Order (and, to the knowledge of Seller, there are no such
Governmental Orders threatened to be imposed by any Governmental Authority)
which has had or could reasonably be expected to have a Material Adverse Effect
on the Company or the Subsidiary.
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Section 4.08. BOOKS AND RECORDS. The books of account and other financial
records of the Company and each Subsidiary: (a) reflect all items of income and
expense and all assets and liabilities required to be reflected therein, except
to the extent that the omission to reflect such items, individually or in the
aggregate, could not have a Material Adverse Effect on the Company or such
Subsidiary, (b) are accurate and complete, not misleading and do not contain or
reflect any inaccuracies or discrepancies, except inaccuracies or discrepancies
that, individually or in the aggregate, could not reasonably be expected to have
a Material Adverse Effect on the Company or such Subsidiary, and (c) have been
maintained in accordance with good business and accounting practices.
Section 4.09. FINANCIAL INFORMATION.
(a) All of (i) the audited consolidated balance sheet of the Company
as of February 28, 1995 and the related audited profit and loss account and
statement of cash flows for the fiscal year then ended, together with all notes
and schedules thereto and accompanied by an unqualified report thereon by a firm
of independent public accountants of international reputation (the "YEAR END
FINANCIAL STATEMENTS") and (ii) the audited consolidated balance sheet of the
Company at December 31, 1995 and the related audited profit and loss account and
statement of cash flows for the period then ended, accompanied by an unqualified
report thereon by a firm of independent public accountants of international
reputation (the "INTERIM FINANCIAL STATEMENTS"), have been derived from the
books of account and other financial records of the Company and each Subsidiary
and prepared in accordance with applicable Accounting Standards, consistently
applied throughout the periods involved (except as disclosed therein), and give
a true and fair view of the state of affairs of the Company as at the dates
therefor and the results of their operations for the periods then ended.
(b) The annual operating budget of the Company for fiscal year 1996
set out in SCHEDULE 4.09(b) hereto (the "BUDGET") has been prepared in good
faith, on the basis of honestly held views of management of the Company in light
of past operations, using Accounting Standards consistent with those used in
preparing the Year End and Interim Financial Statements, except that the Budget
omits (i) certain footnote disclosures and financial statement presentation
items required by applicable Accounting Standards and (ii) certain year end
adjustments consisting only of normal recurring accruals usually included in the
preparation of year end financial statements. The Budget is based on
assumptions, which heretofore have been disclosed to Purchaser, that are
reasonable in light of the Company's current business plan, the Company's
current business prospects and current economic conditions. Bevero has no
knowledge of any reason why the Company should not be able to achieve the
performance levels set forth in the Budget. Access has no knowledge of any
reason why the Company should not be able to achieve the summary performance
levels as set forth in SCHEDULE 4.09(b). Purchaser acknowledges that some of
the assumptions upon which the Budget has been based may not materialize. The
representations and warranties contained in this Section 4.09(b) are qualified,
with respect to Access only, to Access's knowledge.
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(c) Except as set forth on SCHEDULE 4.09(c) hereto, since February
28, 1995 the Company has not paid or declared any dividend or distribution on or
with respect to its outstanding Ordinary Shares.
Section 4.10. ABSENCE OF UNDISCLOSED LIABILITIES. Neither the Company nor
any Subsidiary has any obligation or liability (whether accrued, absolute,
contingent or otherwise, whether currently known or not known and whether due or
to become due), including without limitation for Taxes, long-term leases or
commitments relating to employee benefits, accruing or arising out of
transactions entered into at or prior to the Closing other than: (a) liabilities
fully provided for in the balance sheet included in the Interim Financial
Statements (whether or not required to be so fully provided for as of the date
thereof), (b) liabilities or obligations arising after the date of the Interim
Financial Statements in the ordinary course of business (none of which exceeds
A$50,000 individually or results from breach of contract, warranty, tort,
infringement, claim or lawsuit) or (c) any such liability or obligation that,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect on the Company or any Subsidiary.
Section 4.11. RECEIVABLES. Except to the extent, if any, provided for on
the balance sheet included in the Interim Financial Statements, all Receivables
reflected on the balance sheet included in the Interim Financial Statements
arose from, and the Receivables existing as of the Closing Date will have arisen
from, the sale of services provided by the Company in the ordinary course of its
business consistent with past practice, such Receivables to be separately
classified for Persons not Affiliated and those Persons Affiliated with the
Company, and, except as fully provided for in the balance sheet included in the
Interim Financial Statements (whether or not required to be so fully provided
for as of the date thereof) or as set forth on SCHEDULE 4.11 hereto, constitute
or will constitute, as the case may be, only valid, undisputed claims of the
Company or any Subsidiary not subject to valid claims of set-off, off-set or
other defenses or counterclaims. The Interim Financial Statements make full
provision for all doubtful debts and all bad debts have been written off, except
for doubtful debts and bad debts that, individually or in the aggregate, could
not reasonably be expected to have a Material Adverse Effect on the Company.
Section 4.12. REAL PROPERTY. There is no violation of any Law (including,
without limitation, any building, planning, zoning or environmental law)
relating to any of the real property owned, leased or otherwise used by the
Company or any Subsidiary and the Company and each Subsidiary is in peaceful and
undisturbed possession of each such parcel of real property, except to the
extent failure to be in such possession could not reasonably be expected to have
a Material Adverse Effect on the Company or such Subsidiary. There are no
contractual or legal restrictions that preclude or restrict in any material
manner the ability to use such premises in the manner in which they are
currently being used. None of the Subsidiaries or the Company is leasing or
subleasing any parcel or any portion of any parcel of real property to any other
Person or has assigned its interest under any lease or sublease for any leased
real property to any Person.
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Section 4.13. ASSETS. The Company and each Subsidiary owns, leases or has
the legal right to use all of the Assets (and, with respect to contract rights,
is a party to and enjoys the benefits of all material contracts and agreements,
subject to the terms thereof and, with respect to Intellectual Property, subject
to the terms on which the Company and/or such Subsidiary owns or uses the
Intellectual Property) that are material to, used or intended to be used by the
Company or such Subsidiary in, required in or relating to, the conduct of its
business, free and clear of all Encumbrances. All of the Company's and each
Subsidiary's buildings, equipment and other tangible assets are in good
operating condition and repair, ordinary wear and tear excepted, and are
suitable for use in the ordinary course of business.
Section 4.14. ACQUIRED ASSETS. Each Asset (including, without limitation,
the benefit of any licenses, leases or other agreements or arrangements)
acquired from any Affiliate of the Company or of any Subsidiary since the date
of the Interim Financial Statements has been acquired for consideration and on
terms no less favorable to the Company than otherwise would have been available
in a comparable arms' length transaction on the date of such acquisition.
Section 4.15. CONDUCT OF BUSINESS IN THE ORDINARY COURSE. Since the date
of the Interim Financial Statements, the Company and each Subsidiary has
conducted business only in the ordinary course and consistent with past
practice.
Section 4.16. COMPLIANCE WITH LAWS. The Company and each Subsidiary has
conducted and continues to conduct its business in accordance with all
applicable Laws and Governmental Orders and the Company and each Subsidiary is
in compliance with all such Laws or Governmental Orders, except to the extent
that the failure to so conduct its business or comply therewith could not
reasonably be expected, in the aggregate, to have a Material Adverse Effect on
the Company or such Subsidiary.
Section 4.17. MATERIAL CONTRACTS.
(a) Seller has, or has caused to be, made available to Purchaser for
review and duplication, accurate and complete copies (or in the case of oral
contracts, summaries thereof), together with all amendments, waivers or changes
thereto, of all of the following contracts and agreements to which the Company
or any Subsidiary is a party (such material contracts and agreements, which are
listed on SCHEDULE 4.17(a) hereto under the appropriate subsection reference,
collectively the "MATERIAL CONTRACTS"):
(i) each contract or agreement for the purchase of inventory or
personal property by, or for the furnishing of services to, the Company or
any Subsidiary, or otherwise related to the Business or the Assets under
the terms of which the Company or any Subsidiary (A) is reasonably
anticipated to pay or otherwise give consideration of more than A$50,000 in
the aggregate in any 12-month period or (B) cannot cancel without penalty
or further payment or without more than 30 days' prior notice;
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(ii) each contract or agreement for the sale of inventory or
other personal property or for the furnishing of services by the Company or
any Subsidiary which: (A) is reasonably anticipated to involve
consideration of more than A$50,000 in the aggregate during the fiscal year
ending February 29, 1996 or in any fiscal year thereafter, (B) is
reasonably anticipated to involve consideration of more than A$50,000 in
the aggregate in any 12-month period, or (C) cannot be cancelled by the
Company or any Subsidiary without penalty or further payment or without
more than 30 days' prior notice;
(iii) all material broker, distributor, dealer, manufacturer's
representative, franchise, agency, sales promotion, market research,
marketing, consulting and advertising contracts and agreements;
(iv) all management contracts, agreements or similar arrangements
with independent contractors, consultants or other Persons (including
Affiliates) that involve exclusive rights or require payments in excess of
A$50,000 in the aggregate in any 12-month period and which are not
cancelable without penalty or further payment or on 30 days' or less prior
notice;
(v) all warranty agreements with respect to services rendered or
products sold or leased by the Company or any Subsidiary, other than
warranties created by operation of Law;
(vi) all joint venture or partnership agreements;
(vii) all contracts or agreements relating to indebtedness of the
Company or any Subsidiary in excess of A$50,000 individually or in the
aggregate;
(viii) all contracts or agreements with any Governmental Authority
to which the Company or any Subsidiary is a party;
(ix) all contracts and agreements that limit or purport to limit
the ability of the Company or any Subsidiary to compete (A) in any line of
business, (B) with any Person, (C) in any geographic area or (D) during any
period of time;
(x) all contracts, agreements or arrangements (whether written,
oral or otherwise) between or among the Company or any Subsidiary, on the
one hand, and any Subsidiary, the Company, any director, officer, employee
or any Affiliate of any of the foregoing, on the other hand;
(xi) all leases and subleases for tangible personal property
having a value individually in excess of A$50,000 (for purposes of this
Agreement, the term
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"LEASE" shall include any and all leases, subleases, sale/leaseback
agreements or similar arrangements);
(xii) all contracts and agreements relating to Intellectual
Property that the Company or any Subsidiary owns or has rights to use;
(xiii) all contracts, leases, subleases or other agreements
relating to the management, ownership or operation of real property owned,
leased or used by the Company or any Subsidiary; and
(xiv) all other contracts and agreements, whether or not made in
the ordinary course of business, which are material to the Company, any
Subsidiary or the conduct of the Business.
(b) Each Material Contract (i) is valid and binding on the Company or
the Subsidiary that is a party thereto and, to the knowledge of Seller, on the
other parties thereto and is in full force and effect in the form provided to
Purchaser and (ii) assuming that all consents, approvals and authorizations set
forth on SCHEDULE 4.06 have been obtained, will not be subject to termination or
cancellation by the other parties thereto solely as a result of the consummation
of the transactions contemplated hereby. The Company or the Subsidiary that is
a party thereto has performed all material obligations required to be performed
by it and is not in breach of or default under, nor in receipt of any claim of
breach of or default under, any Material Contract, which breach or default could
reasonably be expected to have a Material Adverse Effect on the Company or such
Subsidiary. Seller has no knowledge of any breach or default, or any
anticipated breach or default, of any Material Contract by any other party
thereto.
(c) There is no contract, agreement or other arrangement granting any
person any preferential right to purchase, other than in the ordinary course of
Business consistent with past practice, any of the Assets or any services of the
Company or any Subsidiary.
(d) Neither the Company nor any Subsidiary is a party to or otherwise
is bound by any contract, agreement or arrangement (whether oral, written,
arising by course of dealings or otherwise) with any director, officer, employee
(or any Affiliate of any of the foregoing) or Affiliate of the Company or any
Subsidiary, other than any Material Contract.
(e) The Material Contracts listed on SCHEDULE 4.17(e) hereto
constitute the only contracts, agreements or arrangements to which the Company
or any Subsidiary is a party or otherwise is bound that either (i) expressly
requires (or could require in the future) performance of services by John
Kendall, or such other Person as may be selected or approved by John Kendall, or
(ii) is terminable by the other Person(s) party thereto in the event John
Kendall ceases to be a director, involved in the management or otherwise
involved in the operations, of the Company.
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(f) The oral Material Contracts summarized on SCHEDULE 4.17(a) hereto
constitute the only oral contracts, agreements or arrangements relating to the
Business or to which the Company or any Subsidiary is a party, is bound or
otherwise is performing services.
(g) There is not now outstanding any guarantee or agreement for
indemnity or for suretyship either given by or for the benefit of the Company or
any Subsidiary.
(h) The representations and warranties contained in this Section 4.17
with respect to Material Contracts, other than those Material Contracts to which
the Royal Automobile Club of Victoria (RACV) Limited ("RACV"), or any of RACV's
Affiliates is a party or otherwise is bound, are qualified, with respect to
Access only, to Access's knowledge.
Section 4.18. INTELLECTUAL PROPERTY.
(a) SCHEDULE 4.18(a) hereto constitutes an accurate and complete list
and/or summary description of all Intellectual Property that the Company or any
Subsidiary owns or uses that is necessary for the ongoing delivery of any
service or services provided by the Company or any Subsidiary, the revenue from
which equalled more than five-percent (5%) of the aggregate revenue of the
Company or such Subsidiary for fiscal year 1995 or is reasonably expected to
equal more than five-percent (5%) of the aggregate revenue of the Company or
such Subsidiary for fiscal year 1996 (the "SIGNIFICANT SERVICES"); other than
any such non-proprietary Intellectual Property available for purchase or for
non-exclusive license by members of the general public. The Company or such
Subsidiary has full ownership of, or the right to use all Intellectual Property
listed on SCHEDULE 4.18(a) in the manner in which it is currently used, and
neither Seller nor the Company or such Subsidiary has any knowledge that the
conduct of the Business as now operated conflicts with or infringes, or has been
alleged to infringe, any rights or franchises of any Person in any manner.
Except as described on SCHEDULE 4.18(a), no current or former consultant,
employee or Affiliate of the Company, any Subsidiary or Seller, or any of their
respective shareholders, members, partners, officers or directors has any right,
title or interest in any of the Intellectual Property set forth thereon. The
Company heretofore has delivered to Purchaser accurate and complete copies of
all material correspondence, memoranda and other written advice from the
Company's patent counsel or from any Governmental Authority describing or
discussing the Intellectual Property that the Company or any Subsidiary owns or
has rights to use or the availability of patent protection for the Company's or
any Subsidiary's products, services and/or business.
(b) Except for those Material Contracts listed on SCHEDULE 4.18(b)
hereto, there are no licenses, contracts or other agreements pursuant to which
the Company or any Subsidiary has agreed to grant or has granted rights with
respect to the Intellectual Property that the Company or any Subsidiary owns or
has rights to use, or pursuant to which the Company or any Subsidiary enjoys
rights in any Intellectual Property owned by any other Person. To Seller's
knowledge, none of the Intellectual Property that the Company or any Subsidiary
owns or has rights to use is being infringed by any Person.
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(c) To Seller's knowledge, SCHEDULE 4.18(a) describes all of the
Intellectual Property required to enable the Company and each Subsidiary to
lawfully perform its respective Significant Services as currently, and as
currently anticipated to be, conducted.
(d) The "Technology," as defined in, and that the Company, the
Subsidiaries and their respective Affiliates are prohibited from using for a
specified period of time pursuant to, those certain termination agreements
listed on SCHEDULE 4.18(d) hereto (collectively, the "TERMINATION AGREEMENTS")
(i) does not constitute or contain any Intellectual Property that is owned or
used by the Company or any Subsidiary and (ii) is not otherwise necessary for
the Company or any Subsidiary to lawfully carry on the Business as currently, or
as currently anticipated to be, conducted.
Section 4.19. TAXES.
(a) Except as set forth on SCHEDULE 4.19(a) hereto, (i) all returns
and reports in respect of all Taxes that are required to be filed with respect
to the Company, the Subsidiaries or the Business have been timely filed;
(ii) all Taxes required to be shown on such returns and reports or otherwise due
have been timely paid and neither the Company nor any Subsidiary is obligated to
pay any penalty or interest in connection therewith; (iii) all such returns and
reports are true, accurate and complete; (iv) no adjustment relating to such
returns or reports has been proposed by any taxing authority and, to the
knowledge of Seller, no basis exists for any such adjustment; (v) there are no
pending or, to the knowledge of Seller, threatened actions or proceedings for
the assessment or collection of Taxes against the Company or any Subsidiary;
(vi) there are no Encumbrances relating to Taxes on any of the Assets;
(vii) neither the Company nor any Subsidiary has been at any time a member of
any partnership or joint venture or the holder of a beneficial interest in any
trust for any period for which the statute of limitations for any Tax has not
expired; and (viii) all Taxes required to be withheld, collected or deposited by
or with respect to the Company, any Subsidiary or the Business (including
without limitation with respect to payments made for interest, royalties,
remuneration payable to employees or independent contractors and payments made
to non-residents of Australia) have been timely withheld, collected or
deposited, as the case may be, and, to the extent required, have been paid to
the relevant taxing authority.
(b) There are no outstanding waivers or agreements extending the
statute of limitations for any period with respect to any Tax to which the
Company or any Subsidiary may be subject. No power of attorney has been granted
and is currently in force with respect to any matter relating to Taxes that
could affect the Company or any Subsidiary.
(c) Neither the Company nor any Subsidiary (i) has lodged a private
ruling request, (ii) is or has been the subject of any Tax audit or is a party
to any action or proceeding for the assessment or collection of any Tax and, to
Seller's knowledge, no basis exists that may give rise to any such audit, action
or proceeding or (iii) is the subject of any dispute or
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disagreement with any Governmental Authority relating to any Tax and, to
Seller's knowledge, no basis exists that may give rise to any such dispute or
disagreement.
(d) The Company has delivered to Purchaser accurate and complete
copies of all federal, state and foreign income, franchise and similar tax
returns filed by the Company or any Subsidiary since December 1993, all of which
are listed on SCHEDULE 4.19(d) hereto, and accurate and complete summaries of
all examinations, reports and statements of deficiencies assessed against or
agreed to by the Company or any Subsidiary since December 1993.
(e) On the balance sheet included in the Interim Financial
Statements, adequate reserves and allowances have been provided to satisfy all
liabilities for Taxes relating to the Company or any Subsidiary for periods
through the date thereof. Since the date of the balance sheet included in the
Interim Financial Statements, neither the Company nor any Subsidiary has
incurred any additional liability for Taxes other than as a result of trading
activities in the ordinary course of its business.
(f) The Company is not a "controlled foreign corporation" as defined
in Section 957(a) of the United States Internal Revenue Code of 1986, as amended
(the "CODE").
(g) The Company and each Subsidiary has complied with the provisions
of part IIIAA of the Income Tax Assessment Act 1936 (Cth) and, in accordance
with such Act, has maintained sufficient records of franking debits and franking
credits.
(h) Other than New Zealand and the United Kingdom, the Company does
not have any "permanent establishment" (as that term is defined in any relevant
double taxation agreement in effect as of the date hereof) outside Australia.
(i) All documents to which the Company or any Subsidiary is a party
or in the enforcement of which the Company or any Subsidiary may be interested
have been duly and sufficiently stamped in accordance with applicable stamp duty
Laws. All stamp duty payable upon any transfer of any issued Ordinary Shares of
the Company (other than as contemplated in this Agreement) has been duly paid.
Any relief from stamp duty obtained by the Company or any Subsidiary has been
properly obtained and no event has occurred as a result of which any such stamp
duty from which the Company or any Subsidiary has obtained relief has become
payable.
Section 4.20. INVESTMENT REPRESENTATIONS.
(a) Seller hereby represents that it is acquiring the Common Stock to
be issued to it hereunder for its own account and not for the account or benefit
of any U.S. Person (as defined in APPENDIX A hereto), for investment and not
with a view to the resale or distribution thereof in the United States, and
Seller will be the sole party in interest of such Common Stock.
-17-
(b) Seller represents that it or its Purchaser Representative (as
such term is defined in Rule 501 of Regulation D, promulgated under the
Securities Act of 1933, as amended (the "SECURITIES ACT")) has such knowledge
and experience in financial and business matters that it is capable of
evaluating the merits and risks associated with ownership of Common Stock and
protecting its interests in connection with the transactions contemplated in
this Agreement. Seller is able to bear the substantial economic risks
associated with ownership of Common Stock, including the risk of losing its
entire investment, and can afford to hold the Common Stock to be acquired by it
hereunder for an indefinite period of time.
(c) Seller acknowledges receipt of Purchaser's audited balance sheet
as of December 31, 1994 and the related audited profit and loss statement and
statement of cash flows for the fiscal year then ended and Purchaser's unaudited
balance sheet as of September 30, 1995 and related unaudited profit and loss
statement and statement of cash flows for the fiscal quarter then ended. Seller
represents that it and/or its Purchaser Representative (i) has reviewed such
reports and statements and (ii) has been afforded the opportunity to ask
questions and receive answers from personnel of Purchaser or of others acting on
its behalf concerning Purchaser and the Purchaser Stock and to obtain any
additional information that Purchaser possesses or can acquire without
unreasonable effort or expense that is necessary to verify any of the
information contained in any such reports and statements.
(d) Seller understands that (i) the Common Stock to be issued
hereunder has not been registered under the Securities Act or any applicable
securities laws and will be issued under Regulation S promulgated under the
Securities Act ("REGULATION S") in reliance upon the representations and
warranties of Sellers contained herein, (ii) the Common Stock to be issued
hereunder may not be sold, transferred or otherwise disposed of (A) other than
in accordance with Regulation S, (B) unless subsequently registered under the
Securities Act and applicable securities laws or unless an exemption from such
registration is available, and (C) except pursuant to the terms and conditions
of the Stock Transfer Agreement and (iii) each certificate representing the
Common Stock to be acquired by him hereunder will be imprinted with a legend in
substantially the following form:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE LAWS OF ANY
JURISDICTION. NO SALE, OFFER TO SELL, ASSIGNMENT, PLEDGE, HYPOTHECATION,
GIFT, TRANSFER OR OTHER DISPOSITION OF THE SHARES REPRESENTED BY THIS
CERTIFICATE MAY BE MADE UNLESS A REGISTRATION STATEMENT UNDER THE FEDERAL
SECURITIES ACT OF 1933, AS AMENDED, WITH RESPECT TO SUCH SHARES IS THEN IN
EFFECT OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SAID ACT IS
AVAILABLE WITH RESPECT TO SAID TRANSFER AND THE REQUIREMENTS OF APPLICABLE
STATE LAWS ARE SATISFIED.
-18-
THE SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION, GIFT, TRANSFER OR OTHER
DISPOSITION OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
CERTAIN RESTRICTIONS PURSUANT TO A STOCK TRANSFER AND REGISTRATION RIGHTS
AGREEMENT BY AND AMONG THE CERTIFICATE HOLDER, TELETECH HOLDINGS, INC. AND
CERTAIN OTHER STOCKHOLDERS OF TELETECH HOLDINGS, INC., COPIES OF WHICH MAY
BE OBTAINED FROM THE CORPORATION UPON REQUEST.
(e) Seller is not a U.S. Person (as defined in APPENDIX A hereto).
Seller represents that the offer to acquire the Purchaser Stock to be acquired
by Seller was not communicated to Seller while Seller was in the United States
and that this Agreement was executed by Seller outside the United States.
Section 4.21. BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or any Additional Agreement based
upon arrangements made by or on behalf of the Company.
Section 4.22. FULL DISCLOSURE. No representation or warranty with respect
to the Company or any Subsidiary contained in this Agreement and no written
statement contained in any certificate furnished to Purchaser pursuant to this
Agreement or any Additional Agreement, or in connection with the transactions
contemplated herein or therein, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements
contained herein or therein, in light of the circumstances in which they were
made, not misleading.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF PURCHASER
As an inducement to Sellers to enter into this Agreement, Purchaser hereby
represents and warrants, as of the date hereof and as of the Closing, to Sellers
as follows:
Section 5.01. ORGANIZATION, QUALIFICATION, ETC. OF PURCHASER. Purchaser
is a duly incorporated and validly existing corporation under the Laws of the
State of Delaware and has all necessary corporate power and authority to own,
operate or lease the properties and assets now owned, operated or leased by it
and to carry on its business as it has been, is currently and is currently
anticipated to be conducted.
Section 5.02. CAPITALIZATION; TITLE. As of the Closing, the authorized
capital of Purchaser will consist only of (a) 50,000,000 shares of Common Stock,
of which 8,140,000 shares are
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issued and outstanding and 2,860,000 shares are reserved for issuance upon
conversion of convertible preferred stock or stock options of Purchaser,
(b) 1,860,000 shares of convertible preferred stock, par value U.S.$6.45 per
share ("PREFERRED STOCK"), all of which are issued and outstanding and, as of
the date hereof, are convertible into 1,860,000 shares of Common Stock. All of
the issued and outstanding shares of Common Stock and Preferred Stock are duly
authorized, validly issued, fully paid and nonassessable. The Common Stock to
be issued to the Sellers hereunder (the "PURCHASER STOCK"), when issued and
delivered in accordance with the terms of this Agreement, will be validly
issued, fully paid, and nonassessable. At the Closing, Sellers will receive
good title to the Purchaser Stock, free and clear of all Encumbrances, other
than as created by the Stock Transfer Agreement. Except as set forth on
SCHEDULE 5.02 hereto, there are no statutory or contractual preemptive rights or
outstanding subscriptions, options, warrants, calls, contracts, demands,
commitments, convertible securities or other agreements or arrangements of any
nature whatsoever under which Purchaser is or may become obligated to issue,
assign or transfer any Common Stock, or purchase or make payment in respect of
any shares of Common Stock now or heretofore outstanding.
Section 5.03. AUTHORITY OF PURCHASER. Purchaser has all necessary
corporate power and authority to execute and deliver this Agreement and each
Additional Agreement to which it is a party and to perform its obligations
hereunder and thereunder. The execution and delivery by Purchaser of this
Agreement and each Additional Agreement to which it is a party and the
performance by Purchaser of its obligations hereunder and thereunder have been
duly authorized by all requisite corporate action on the part of Purchaser.
This Agreement and each Additional Agreement to which Purchaser is a party have
been duly executed and delivered by Purchaser and (assuming due authorization,
execution and delivery by the other parties thereto) constitute or will
constitute the legal, valid and binding obligation of Purchaser, enforceable
against Purchaser in accordance with its terms, except as such enforcement may
be subject to Bankruptcy or other similar laws now or hereafter in effect
relating to creditors' rights generally.
Section 5.04. NO CONFLICT. Assuming that all filings, notifications,
consents, approvals, authorizations and other actions referred to in Section
5.05, have been made or obtained, the execution, delivery and performance by
Purchaser of this Agreement and each Additional Agreement to which it is a party
and the consummation of the transactions contemplated hereby and thereby do not
and will not (a) violate, conflict with or result in the breach of any provision
of Purchaser's Certificate of Incorporation or By-laws, (b) conflict with or
violate any Law or Governmental Order applicable to Purchaser, which violation
or conflict, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect on Purchaser, or (c) conflict with, or result in
any breach of, constitute a default (or any event which with the giving of
notice or lapse or time, or both, would become a default) under, require any
consent under, or give to others any rights of termination, amendment,
acceleration, suspension, revocation, or cancellation of, or result in the
creation of any Encumbrance on any of the assets or properties of Purchaser
pursuant to, any note, bond, mortgage or indenture, contract, agreement, lease,
sublease, license, permit, franchise or other instrument, agreement or
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arrangement to which Purchaser is a party or by which any of such assets or
properties are bound or affected which could reasonably be expected to have a
Material Adverse Effect on Purchaser.
Section 5.05. CONSENTS AND APPROVALS. Except as set forth on SCHEDULE
5.05 hereto, the execution, delivery and performance by Purchaser of this
Agreement and each Additional Agreement to which Purchaser is a party do not and
will not require any consent, approval, authorization or other order of, action
by, filing with, or notification to, any Governmental Authority or other Person.
Section 5.06. LITIGATION. No claims or proceedings are pending or, to the
knowledge of Purchaser, threatened by or against Purchaser (or, to Purchaser's
knowledge, any of its directors, officers, employees or agents) that, if
adversely determined, could reasonably be expected to have a Material Adverse
Effect on Purchaser or could reasonably be expected to affect the legality,
validity or enforceability of this Agreement or any Additional Agreement to
which it is a party.
Section 5.07. FINANCIAL INFORMATION. The unaudited consolidated balance
sheet of Purchaser as of September 30, 1995 and the related unaudited profit and
loss account and statement of cash flows for the fiscal quarter then ended (the
"PURCHASER FINANCIAL STATEMENTS") have been derived from the books of account
and other financial records of Purchaser and have been prepared in accordance
with United States generally accepted accounting principles, consistently
applied throughout the period involved (except that the Purchaser Financial
Statements do not contain footnotes), subject to year-end adjustments consisting
only of normal, recurring accruals, and give a true and fair view of the state
of affairs of Purchaser as at such date and the results of its operations for
the period then ended.
Section 5.08. CONDUCT OF BUSINESS IN THE ORDINARY COURSE. Since the date
of the Purchaser Financial Statements, Purchaser has conducted business only in
the ordinary course and consistent with past practice.
Section 5.09. MATERIAL CONTRACTS. Purchaser has, or has caused to be,
made available to Sellers for review and duplication, accurate and complete
copies (or, in the case of oral contracts, summaries thereof) of all of the
following contracts and agreements, together with all amendments, waivers or
changes thereto, to which Purchaser or any wholly-owned subsidiary of Purchaser
(each, a "PURCHASER SUBSIDIARY") is a party (such material contracts and
agreements, which are listed on SCHEDULE 5.09 hereto under the appropriate
subsection reference, collectively the "PURCHASER CONTRACTS"):
(a) each contract or agreement for the furnishing of services by
Purchaser or any Purchaser Subsidiary, under the terms of which Purchaser or
such Purchaser Subsidiary is reasonably anticipated to receive fees or other
consideration in excess of U.S.$500,000 in the aggregate in any 12-month period;
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(b) all management contracts, agreements or similar arrangements
between Purchaser or any Purchaser Subsidiary and any independent contractor,
consultant or other Person (including an Affiliate), under the terms of which
Purchaser or such Purchaser Subsidiary is reasonably anticipated to pay fees or
give other consideration in excess of U.S.$250,000 in the aggregate in any
12-month period;
(c) all contracts and agreements that limit or purport to limit the
ability of Purchaser or any Purchaser Subsidiary to compete (i) in any line of
business, (ii) with any Person, (iii) in any geographic area, or (iv) during any
period of time; and
(d) all contracts, agreements or arrangements (whether written, oral
or otherwise) between or among Purchaser or any Purchaser Subsidiary, on the one
hand, and any Purchaser Subsidiary, Purchaser, any director, officer, employee
or any Affiliate of any of the foregoing, on the other hand.
Section 5.10. INTELLECTUAL PROPERTY.
(a) SCHEDULE 5.10(a) hereto constitutes an accurate and complete list
and/or summary description of all (i) trademarks, service marks and trade names,
whether or not registered or registrable, that are necessary to the ongoing
delivery of Primary Services (as defined herein) and (ii) computer software,
including, without limitation, source code, operating systems and
specifications, data, data bases, files, documentation and other materials
related thereto that are necessary to the ongoing delivery of Primary Services;
other than any such non-proprietary intellectual property available for purchase
or for non-exclusive license by members of the general public (collectively,
"PURCHASER INTELLECTUAL PROPERTY"). For purposes of this Section 5.10, "PRIMARY
SERVICES" means those services provided by Purchaser or any Purchaser
Subsidiary, the revenues from which equalled more than five-percent (5%) of the
consolidated revenues of Purchaser and the Purchaser Subsidiaries for fiscal
year 1995, or are reasonably expected to equal more than five-percent (5%) of
the consolidated revenues of Purchaser and the Purchaser Subsidiaries for fiscal
year 1996. Purchaser or such Purchaser Subsidiary has full ownership of, or the
right to use, all material Purchaser Intellectual Property in the manner in
which it is currently used and neither Purchaser nor such Purchaser Subsidiary
has any knowledge that the conduct of Purchaser's business as now operated
conflicts with or infringes, or has been alleged to infringe, any rights or
franchises of any Person in any manner. Except as set forth on SCHEDULE
5.10(a), no current or former consultant, employee or Affiliate of Purchaser,
any Purchaser Subsidiary or any of their respective shareholders, members,
partners, officers or directors has any right, title or interest in any of the
Purchaser Intellectual Property. Purchaser heretofore has delivered to Sellers
accurate and complete copies of all material correspondence, memoranda and other
written advice from Purchaser's patent counsel or from any Governmental
Authority describing or discussing the Purchaser Intellectual Property or the
availability of patent protection for Purchaser's or any Purchaser Subsidiary's
products, services and/or business.
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(b) Except as indicated on SCHEDULE 5.10(a) hereto, there are no
licenses, contracts or other agreements pursuant to which Purchaser or any
Purchaser Subsidiary has agreed to grant or has granted rights with respect to
the Purchaser Intellectual Property or pursuant to which Purchaser or any
Purchaser Subsidiary enjoys rights in any Intellectual Property owned by any
other Person. To Purchaser's knowledge, none of the Purchaser Intellectual
Property is being infringed by any Person.
Section 5.11. BROKERS. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement or any Additional Agreement to which
Purchaser is a party based upon arrangements made by or on behalf of Purchaser.
Section 5.12. FULL DISCLOSURE. No representation or warranty of Purchaser
contained in this Agreement or any Additional Agreement to which Purchaser is a
party and no written statement contained in any certificate furnished or to be
furnished to Seller or the Company pursuant to this Agreement or any Additional
Agreement to which Purchaser is a party, or in connection with the transactions
contemplated herein or therein, contains or will contain any untrue statement of
a material fact, or omits or will omit to state a material fact, necessary to
make the statements contained herein or therein, in light of the circumstances
under which they were made, not misleading.
ARTICLE VI
CONCURRENT TRANSACTIONS; DELIVERIES; CONDITIONS
Section 6.01. CONCURRENT TRANSACTIONS.
(a) Each party hereto acknowledges that each of the other parties
hereto has relied upon the accuracy, validity and effectiveness of its
representations, warranties, covenants and agreements in deciding to enter into
this Agreement and that the following Concurrent Transactions will occur
concurrently with the Closing:
(i) Purchaser and each Seller will execute the Stock Transfer
Agreement;
(ii) the Company will assign to Access 24 Limited, on terms
satisfactory to Purchaser, that certain Agreement for the Provision of
Information Services dated July 24, 1995; PROVIDED that neither the Company
nor any Subsidiary suffers significant adverse tax consequences, including
without limitation any loss of tax deductions, as a result of such
assignment;
(iii) Purchaser, the Company and RACV Insurance Limited, an Affiliate
of Access, will execute a strategic protection agreement, in the form of
EXHIBIT B hereto (the "STRATEGIC PROTECTION AGREEMENT"); and
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(iv) RACV and Bevero will execute an agreement, in the form of EXHIBIT
C hereto, pursuant to which Bevero will transfer its ownership interest in
Auto 24 Pty Ltd., an Australian corporation jointly owned by Bevero and
RACV, to RACV (or its designee) and, in connection therewith, (A) all
outstanding indebtedness of Auto 24 Pty Ltd. to the Company, as set forth
on SCHEDULE 3.07, will be repaid in full and (B) certain of the employees
of Auto 24 Pty Ltd. (determined by Purchaser in its discretion) will be
transferred to the Company and RACV will pay or will deliver funds to the
Company to pay all employee entitlement liability, including without
limitation, liability for long service leave and annual leave, resulting
from such transfer .
(b) The parties hereto agree that all of the documents to be executed
and delivered pursuant to this Section 6.01 shall be deemed to be executed and
delivered concurrently with this Agreement and none of such documents shall
become effective until all such documents have been fully executed and
delivered.
Section 6.02. CONDITIONS PRECEDENT TO PURCHASER'S OBLIGATION TO CLOSE.
The obligations of Purchaser to consummate the transactions contemplated hereby
are subject to the satisfaction or, in Purchaser's sole discretion, waiver on or
before the Closing of each of the following conditions:
(a) DELIVERIES BY SELLERS. On or prior to the Closing, each Seller
shall execute or cause to be executed (where necessary) and deliver or cause to
be delivered to Purchaser the following documents, certificates and agreements:
(i) certificates representing all of the Shares owned by Seller,
together with stock transfer forms duly executed to effect transfer of such
Shares to Purchaser on the books and records of the Company;
(ii) a certificate executed by a duly authorized officer, or other
Person with valid power of attorney to act on behalf, of Seller certifying
that the representations and warranties made herein by such Seller are
accurate and complete in all material respects as of the Closing, except
for any representations or warranties that relate solely to an earlier date
(in which case such representations and warranties were accurate and
complete as of such earlier date);
(iii) fully executed copies of all consents, approvals, authorizations
and other instruments listed on SCHEDULES 3.05 and 4.06 (including written
consents and/or waivers from RACV with respect to any Material Contract to
which it is a party (as the same may be extended or otherwise amended by
the parties thereto immediately prior to or simultaneously with the
Closing) agreeing not to exercise any right it may have to terminate such
Material Contract solely as a result of the transactions contemplated
hereby);
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(iv) such agreements, contracts, instruments and/or other documents,
in form and substance satisfactory to Purchaser, necessary and sufficient
to (A) terminate all agreements pursuant to which the Company uses software
owned and/or leased by Dataview Solutions and (B) transfer and assign to
the Company title to, or to grant to the Company a perpetual, royalty-free,
exclusive license to use and reproduce, anywhere in the world, the computer
software, including without limitation, any source code, operating systems,
system specifications and other trade secrets related thereto owned or
licensed by Dataview Solutions that currently are used by the Company, any
Subsidiary or in connection with the Business;
(v) with respect to each of the agreements listed on SCHEDULE
6.02(a)(v) hereto, a fully executed novation deed, assignment and/or other
documents and instruments necessary to substitute the Company for any
predecessor or Affiliate of the Company that currently is a party thereto,
executed by the Persons party to each such agreement;
(vi) with respect to those certain agreements listed on SCHEDULE
4.18(d), nomination deeds or other documents, instruments or deeds (A)
necessary and sufficient to irrevocably assign to the Company (or its
designee) the fees to be paid thereunder to Bevero by World Travel
Protection Canada Inc., U.S.A. Multiservices, Inc. and/or Multiservices
Canada Inc. and (B) pursuant to which Bevero, John Kendall and Louis
Carroll agree not to take, or cause or allow to be taken, any action that
would cause or trigger termination of payment of the Termination Fee
thereunder;
(vii) (A) a license agreement in form and substance satisfactory to
Purchaser pursuant to which Medical Benefits Funds Australia Limited
("MBF") grants to the Company and its Affiliates a license to use the "fact
sheets" developed by the Company in connection with its agreement with MBF
or (B) an amendment to the Company's existing agreement with MBF, which
allows the Company to use such fact sheets outside Australia;
(viii) to the extent not provided for in any Additional Agreement to
which the Company is a party, such agreements, contracts, instruments
and/or other documents necessary and sufficient to transfer and assign to
the Company title to, or to grant to the Company a perpetual, royalty-free,
exclusive license to use and reproduce, anywhere in the world, the computer
software, including, without limitation, any source code, operating
systems, system specifications and other trade secrets related thereto,
owned or licensed by Auto 24 Pty Ltd. that currently are used by the
Company, any Subsidiary or in connection with the Business;
(ix) fully executed amendments, waivers and/or letters of comfort with
respect to each of the Material Contracts listed on SCHEDULE 6.02(a)(ix)
hereto, satisfactory in form and substance to Purchaser, clarifying
ambiguous terms and conditions thereof;
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(x) an accurate and complete copy, certified by the Secretary of
Seller, of the resolutions duly and validly adopted by the board of
directors of Seller evidencing its authorization of the execution and
delivery of this Agreement and the Additional Agreements to which Seller is
a party, and the consummation of the transactions contemplated hereby and
thereby;
(xi) evidence that every independent contractor of the Company or any
Subsidiary who does not earn more than 90% of his or her total annual
income from the Company or such Subsidiary (each, an "INDEPENDENT
CONTRACTOR") is covered by professional liability insurance, in an amount
satisfactory to Purchaser, with respect to such Independent Contractor's
performance of services on behalf of the Company or such Subsidiary;
(xii) certificates of the Secretaries of Seller and the Company
certifying the names and signatures of the officers, directors or other
Persons with valid power of attorney to act on behalf, of Seller and the
Company, respectively, authorized to sign this Agreement, the Additional
Agreements to which it is a party and the other documents to be delivered
hereunder and thereunder on behalf of Seller or the Company, respectively;
(xiii) resignations, effective as of the Closing Date, of those
directors and officers of the Company and/or the Subsidiaries set forth on
SCHEDULE 6.02(a)(xiii) hereto;
(xiv) employment agreements or, at Purchaser's option, confidentiality
and non-competition agreements, executed by the Company and each of the key
employees and officers of the Company whose names are listed on SCHEDULE
6.02(a)(xiv) hereto;
(xv) (A) an estoppel certificate from Westpac, in form and substance
satisfactory to Purchaser, with respect to all agreements, documents and/or
instruments governing the Retained Liability, confirming (among other
things) that the indebtedness outstanding thereunder does not exceed A$1.6
million and (B) the written agreement of Westpac to (1) waive any and all
rights it may have to accelerate repayment of the Retained Liability as a
result of the transactions contemplated hereby and (2) continue the
Retained Liability on the terms in effect as of the date hereof or on terms
satisfactory to Purchaser, in its sole discretion;
(xvi) an opinion of Seller's counsel, in substantially the form of
EXHIBIT D hereto;
(xvii) a copy of each Additional Agreement to which Seller or the
Company is a party, executed by Seller or the Company, respectively; and
(xviii) the Interim Financial Statements.
(b) NO ADVERSE CHANGE. No circumstance, event or change shall have
occurred that has or could reasonably be expected to have a Material Adverse
Effect on the Company.
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(c) WRITTEN CONTRACTS. All of the Material Contracts described in
Section 4.17(f) shall have been reduced to writing, in form and substance
reasonably satisfactory to Purchaser, and executed by the parties thereto.
(d) TRANSFER OF INTELLECTUAL PROPERTY. Access 24 Pty Ltd. shall
have transferred, conveyed or assigned to the Company (or its designee), free
and clear of all Encumbrances, all of Access 24 Pty Ltd.'s right, title and
interest in and to any and all Intellectual Property, whether registered,
subject to pending applications for registration or otherwise, that Access 24
Pty Ltd. owns, licenses or has rights to use.
(e) SALE OF FORMER SUBSIDIARY. The Company shall have consummated
the sale, effective on or before December 31, 1995, of all of its right, title
and interest in and to Support 24 Pty Ltd. (f/k/a Software Sanctuary Pty
Limited), an Australian company ("SUPPORT 24"), and Sellers shall have provided
evidence of the discharge and release of any and all guarantees or agreements
for indemnity, suretyship or accommodation given by the Company or any
Subsidiary to any Person with respect to Support 24.
(f) CONDUCT OF BUSINESS. From November 15, 1995 until the Closing,
the Company shall not have taken, and shall not have entered into any
arrangement or agreement to take, any action to: (i) declare, pay or make any
dividend or any other distribution of any kind (including without limitation
distributions of cash, stock or assets of the Company), on or with respect to
any of Ordinary Shares or any other capital stock of the Company or any
Subsidiary, or any obligations convertible or exchangeable into Ordinary Shares
or any other capital stock of the Company or any Subsidiary, (ii) except as
otherwise may be expressly permitted hereunder, incur any indebtedness for
borrowed money or assume, guarantee, endorse or otherwise as an accommodation
become responsible for the obligations of any Person (other than indebtedness in
respect of current accounts payable or accrued expenses incurred in the ordinary
course of the Business), or (iii) increase in any manner the compensation or
fringe benefits of any of employee, officer or director of the Company or any
Subsidiary, including without limitation through the granting or acceleration of
vesting of stock options or employee benefits; PROVIDED, HOWEVER, that the
Company or any Subsidiary may have undertaken routine annual performance and
salary reviews of non-officer employees and, in connection therewith, may have
increased the compensation of such employees by an amount not in excess of 5%
over such employees' prior level of compensation.
(g) NO PROCEEDING OR LITIGATION. No action, proceeding or litigation
shall have been commenced or threatened by any Governmental Authority seeking to
restrain or materially alter the transactions contemplated in this Agreement or
in any of the Additional Agreements which, in the reasonable good faith
determination of the parties hereto, is likely to render it commercially
impracticable, impossible or unlawful, or otherwise render inadvisable the
parties' intent, to consummate the transactions contemplated hereby or in any of
the Additional Agreements.
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(h) INDEBTEDNESS TO AFFILIATES. All intracompany indebtedness listed
on SCHEDULE 3.07 shall have been satisfied and paid in full, other than any such
indebtedness to or from any Subsidiary that as of and immediately after the
Closing will be wholly-owned by the Company or Purchaser.
Section 1.063. CONDITIONS PRECEDENT TO EACH SELLER'S OBLIGATION TO CLOSE.
The obligations of each Seller to consummate the transactions contemplated
hereby are subject to the satisfaction or, in each Seller's sole discretion,
waiver on or before the Closing of each of the following conditions:
(a) DELIVERIES BY PURCHASER. On or prior to the Closing, Purchaser
shall execute (where necessary) and deliver or cause to be delivered to Sellers
and the Company the following documents, certificates and agreements:
(i) a certificate executed by a duly authorized officer, or other
Person with valid power of attorney to act on behalf, of Purchaser
certifying that the representations and warranties of Purchaser contained
in this Agreement are accurate and complete in all material respects as of
the Closing, except for any representations or warranties that relate
solely to an earlier date (in which case such representations and
warranties were accurate and complete as of such earlier date);
(ii) fully executed copies of all consents, approvals, authorizations
and other instruments listed on SCHEDULE 5.05;
(iii) an accurate and complete copy, certified by the Secretary of
Purchaser, of the resolutions duly and validly adopted by the board of
directors of Purchaser evidencing its authorization of the execution and
delivery of this Agreement and each Additional Agreement to which Purchaser
is a party, and the consummation of the transactions contemplated hereby
and thereby;
(iv) a certificate of the Secretary of Purchaser certifying the names
and signatures of the officers, or other Persons with valid power of
attorney to act on behalf, of Purchaser authorized to sign this Agreement,
the Additional Agreements to which Purchaser is a party and the other
documents to be delivered by Purchaser hereunder;
(v) an opinion of Purchaser's counsel, in substantially the form of
EXHIBIT E hereto; and
(vi) a copy of each of the Additional Agreements to which Purchaser is
a party, each executed by Purchaser.
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(b) PAYMENT OF THE PURCHASE PRICE. Purchaser shall pay to Sellers
the cash portion of the Purchase Price and shall issue and deliver certificates
representing the Common Stock, in the manner and in the amounts set forth in
Section 2.02.
(c) RELEASE OF GUARANTEES. Each Seller will obtain a release of any
guarantee, endorsement or other accommodation, if any, granted by it to Westpac
on behalf and for the benefit of the Company with respect to the Retained
Liability.
(d) NO ADVERSE CHANGE. No circumstance, event or change shall have
occurred that has or could reasonably be expected to have a Material Adverse
Effect on Purchaser.
(e) NO PROCEEDING OR LITIGATION. No action, proceeding or litigation
shall have been commenced or threatened by any Governmental Authority seeking to
restrain or materially alter the transactions contemplated in this Agreement or
in any of the Additional Agreements which, in the reasonable good faith
determination of the parties hereto, is likely to render it commercially
impracticable, impossible or unlawful, or otherwise render inadvisable the
parties' intent, to consummate the transactions contemplated hereby or in any of
the Additional Agreements.
ARTICLE VII
INDEMNIFICATION
Section 7.01. SURVIVAL. All representations and warranties contained
herein and made in writing by or on behalf of the parties hereto in connection
with the transactions contemplated hereby shall survive the execution and
delivery of this Agreement and the Closing, regardless of any investigation made
at any time with respect to any of the foregoing or any information the parties
may have in respect thereto, until 60 days after the Company's receipt from its
independent public accountants of the final audited consolidated balance sheet
of the Company as of December 31, 1996 and the related audited profit and loss
account and statement of cash flows for the fiscal year then ended, together
with such independent public accountants' report thereon, but in no event later
than May 31, 1997; PROVIDED, HOWEVER that all of the agreements contained herein
(including, without limitation, those contained in Articles VII, VIII and IX)
and the representations and warranties contained in Sections 3.02, 4.02, 4.03,
4.19, 4.20 and 5.02 shall survive without limitation as to time.
Section 7.02. PURCHASER'S RIGHT TO INDEMNIFICATION.
(a) Subject to the provisions of this Article VII and in addition to
any other rights and remedies available to Purchaser under applicable Law,
Sellers, jointly and severally (unless the representation and warranty, covenant
or agreement under which indemnification is sought expressly provides
otherwise), on behalf of themselves and their successors and assigns, hereby
agree to indemnify Purchaser and all of Purchaser's Affiliates, members,
shareholders,
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directors, partners, officers, employees, agents and representatives, and all
successors, permitted assigns and fiduciaries thereof (the "PURCHASER
INDEMNIFIED PARTIES") and save and hold each of them harmless from and against,
and pay on behalf of or reimburse any such Purchaser Indemnified Party as and
when incurred for, any and all liabilities, demands, claims, actions, causes of
action, assessments, losses, costs, damages, deficiencies, fines or expenses
(whether or not arising out of third party claims), including, without
limitation, interest, penalties, reasonable attorneys' fees and all amounts paid
in investigation, defense or settlement of any of the foregoing (collectively,
"LOSSES") that any Purchaser Indemnified Party may suffer, sustain or become
subject to, in connection with, incident to, resulting from or arising out of or
in any way relating to or by virtue of:
(i) any misrepresentation or breach of warranty on the part of
either Seller or the Company under this Agreement, or any misrepresentation
in any of the statements, schedules and exhibits, certificates or other
instruments furnished to Purchaser by or on behalf of either Seller or the
Company pursuant to this Agreement;
(ii) any nonfulfillment or breach of any covenant or agreement on
the part of either Seller or the Company under this Agreement;
(iii) any action, demand, proceeding, investigation or claim by
any Person (including Governmental Authorities) against or affecting any
Purchaser Indemnified Party in connection with or relating in any way to
Support 24; or
(iv) any action, demand, proceeding, investigation or claim by
any Person (including Governmental Authorities) against or affecting any
Purchaser Indemnified Party that, if successful, could reasonably be
expected to give rise to or evidence the existence of or relate to a
misrepresentation, breach or nonfulfillment of any of the representations,
warranties, covenants or agreements of either Seller or the Company.
(b) To the extent any Losses sustained by a Purchaser Indemnified
Party are recoverable under the Company's or any Subsidiary's insurance, the
amount recovered under such insurance shall reduce, dollar-for-dollar, Sellers'
indemnification obligations under this Section 7.02 for such Losses. Purchaser
agrees to use its reasonable best efforts to pursue such insurance claims, to
the extent the same are available, with respect to all Losses; PROVIDED,
HOWEVER, that nothing contained herein shall prohibit Purchaser from
simultaneously pursuing indemnification from Sellers (or either of them) to
preserve Purchaser's right to indemnification hereunder or in the event such
Losses ultimately are determined to not be covered by insurance.
(c) Purchaser acknowledges that, with respect only to those
representations and warranties for which written disclosures are set forth on
the Schedules attached to this Agreement, Purchaser has had the opportunity to
conduct due diligence and is not aware of any misrepresentation or breach of
such representations and warranties as of the date hereof.
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Section 7.03. SELLERS' RIGHT TO INDEMNIFICATION. Subject to the
provisions of this Article VII and in addition to any other rights and remedies
that may be available to Sellers under applicable Law, Purchaser, on behalf of
itself and its successors and assigns, hereby agrees to indemnify Sellers and
all of Sellers' Affiliates, members, shareholders, directors, partners,
officers, employees, agents and representatives, and all successors, permitted
assigns and fiduciaries thereof (the "SELLER INDEMNIFIED PARTIES") and save and
hold each of them harmless from and against, and pay on behalf of or reimburse
any such Seller Indemnified Party as and when incurred for, any and all Losses
that any Seller Indemnified Party may suffer, sustain or become subject to, in
connection with, incident to, resulting from or arising out of or in any way
relating to or by virtue of:
(a) any misrepresentation or breach of warranty on the part of
Purchaser under this Agreement, or any misrepresentation in any of the
statements, schedules and exhibits, certificates or other instruments furnished
to Sellers by or on behalf of Purchaser pursuant to this Agreement;
(b) any nonfulfillment or breach of any covenant or agreement on the
part of Purchaser under this Agreement; or
(c) any action, demand, proceeding, investigation or claim by any
Person (including Governmental Authorities) against or affecting any Seller
Indemnified Party that, if successful, could reasonably be expected to give rise
to or evidence the existence of or relate to a misrepresentation, breach or
nonfulfillment of any of the representations, warranties, covenants or
agreements of Purchaser.
Section 7.04. LIMITATION ON INDEMNIFICATION OBLIGATIONS. Neither Sellers
nor Purchaser shall be entitled to indemnification from Purchaser or Sellers,
respectively, for Losses unless such Losses exceed U.S.$50,000 individually
("EXCLUDED LOSSES"). At such time as Sellers or Purchaser, as the case may be,
incur cumulative Losses (including Excluded Losses) in excess of U.S.$200,000 in
the aggregate, then Purchaser or Sellers, respectively, shall be liable for
indemnification of all such Losses. In no event shall the liability hereunder
(a) of any Seller exceed the value of the shares of Common Stock received by
such Seller, determined at the time a claim for indemnification is made, or
(b) of Purchaser exceed the Purchase Price.
Section 7.05. INDEMNIFICATION PROCEDURE FOR THIRD PARTY CLAIMS.
(a) Within 10 days after obtaining written notice of any claim or
demand which has given rise, or could reasonably be expected to give rise, to a
claim for indemnification hereunder, the party seeking indemnification shall
give written notice of such claim (a "NOTICE OF CLAIM") to the other party.
Failure to timely give a Notice of Claim within such 10-day period shall not
relieve the indemnifying party of its obligations hereunder, unless the failure
to so notify actually results in damage or prejudice to such indemnifying party.
Each Notice of Claim shall set forth a brief description of the facts giving
rise to such claim and the amount (or a
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reasonable estimate) of the loss, damage or expense suffered, or which may be
suffered, by the party seeking indemnification.
(b) Upon receiving a Notice of Claim, the indemnifying party shall
resist, settle or otherwise dispose of the claim described therein in such
manner as it shall deem appropriate, including the employment of counsel, and
shall be responsible for the payment of all expenses, including the reasonable
fees and expenses of such counsel. The indemnified party shall have the right
to employ separate counsel in any such action and to participate in or assume
the defense thereof, but the fees and expenses of such counsel shall be at the
indemnified party's expense unless (i) the employment has been specifically
authorized by the indemnifying party in writing, (ii) the indemnifying party has
failed in a timely manner to assume the defense and employ counsel, or (iii) the
named parties to any action (including any impleaded parties) include Purchaser
and any of Sellers or the Company, and the indemnified party has been advised by
such counsel that representation of Purchaser and any of Sellers or the Company
by the same counsel would be inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between them
(in which case, if the indemnified party notifies the indemnifying party in
writing that the indemnified party elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall have neither the
right nor the obligation to assume the defense of such action on behalf of the
indemnified party).
Section 7.06. NO RESCISSION. Neither Purchaser nor Seller shall be
entitled to rescind this Agreement as a result or on account of any
misrepresentation or any breach of or nonfulfillment by Sellers or Purchaser,
respectively, of any warranty, covenant or agreement contained herein.
Section 7.07. CONTRIBUTION BETWEEN SELLERS. Sellers hereby agree that
where a representation or warranty contained herein is made by Sellers jointly
and severally and Purchaser recovers from Sellers (or either of them), in
circumstances where both Sellers are liable, damages or other remedies for
breach of any such representation or warranty in a proportion that is not equal
as between Access and Bevero, the Seller from which a proportion of greater than
50% is recovered (the "OVERPAYING SELLER") may separately recover from the other
Seller the amount in excess of 50% of such damages or other remedies paid by the
Overpaying Seller. Notwithstanding the foregoing, nothing contained in this
Section 7.07 shall preclude or prohibit Purchaser from seeking or collecting
amounts in respect of indemnification, or otherwise enforcing any rights to
which Purchaser may be entitled under this Article VII, from either or both
Sellers.
ARTICLE VIII
CONFIDENTIALITY; NON-COMPETITION
Section 8.01. CONFIDENTIAL INFORMATION. Each Seller recognizes and
acknowledges that all confidential and proprietary information of the Company or
any Subsidiary, including without limitation business and marketing plans,
financial information, pricing, cost and sales information, contractual
arrangements, market research data and other information about the Company's and
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the Subsidiaries' actual and prospective employees, customers and suppliers and
information concerning Intellectual Property that the Company or any Subsidiary
owns or has rights to use (collectively, the "CONFIDENTIAL INFORMATION") is a
valuable, special and unique asset of the Company. At no time shall either
Seller or any of its directors, officers, employees, attorneys, accountants, and
other agents or representatives (collectively, "REPRESENTATIVES" of such Seller)
disclose any Confidential Information or any part thereof, to any Person for any
reason or purpose whatsoever except in accordance with the terms of Section
8.02. Each Seller agrees that money damages alone would not be an adequate
remedy for breach of Section 8.01 or 8.02 and, accordingly, in the event of a
breach or threatened breach by a Seller or its Representative of the provisions
of Section 8.01 or 8.02, the Company shall be entitled, without being required
to post a bond, to an injunction restraining such Seller or its Representative
from disclosing, in whole or in part, the Confidential Information, or from
rendering any services to any Person to whom the Confidential Information, in
whole or in part, has been disclosed or is threatened to be disclosed. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedies available to it for such breach or threatened breach, including
recovery of damages from the breaching Seller. In any action or proceeding to
enforce the provisions of Section 8.01 or 8.02, the prevailing party shall pay,
and shall be reimbursed by the non-prevailing party for, all costs incurred in
such action or proceeding including, without limitation, all court costs and
filing fees, and all reasonable attorneys' fees, incurred either at the trial
level or at the appellate level. Each Seller shall be severally, not jointly,
liable for any breach of this Section 8.01 by its Representatives. Sections
8.01 and 8.02 shall survive the termination of this Agreement.
Section 8.02. PERMITTED DISCLOSURES. Notwithstanding the provisions of
Section 8.01, disclosure of Confidential Information may be made by a Seller or
its Representatives to the extent that either (a) in the opinion of such
Seller's outside legal counsel, such disclosure is required pursuant to the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or the rules and regulations under either such Act, or any other
applicable law, rule or regulation, or (b) such disclosure is legally compelled
by judicial or administrative order, deposition, interrogatory, request for
documents, subpoena, investigative demand or other process or otherwise is
necessary in connection with any claim or litigation arising under or with
respect to this Agreement. In the event that a Seller or its Representative
becomes subject to a demand for discovery or other request for disclosure of
Confidential Information pursuant to applicable law or regulation or legal
process, such Seller, on its own or on its Representative's behalf, shall give
prompt notice to the Company of such demand or request and shall cooperate, as
reasonably requested, in seeking a protective order or other appropriate remedy
and/or, to the extent permitted by law, with respect to the form of such
required disclosure. The Confidentiality provisions of this Article VIII do not
apply to, and the term "Confidential Information" does not include, any
information which (A) at the time of disclosure or thereafter is generally
available to the public (other than as a result of a disclosure directly or
indirectly by the Seller or its Representatives in violation of this Section),
or (B) was or becomes available to the Seller or its Representatives on a
nonconfidential basis from a source other than the Company; PROVIDED that
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such source is not known by the Seller or any of its Representatives (after
reasonable inquiry) to be bound by a confidentiality agreement with the Seller
or its Representatives.
Section 8.03. NON-COMPETITION. Each Seller covenants and agrees that
neither it nor any of its Affiliates, either on its own account or jointly with,
on behalf of or for any Person, whether as principal, agent, partner,
shareholder, director, consultant, employee or otherwise and whether directly or
indirectly, shall:
(a) at any time during the Relevant Period (as defined herein), other
than on behalf of the Company, work for, carry on, assist or have an interest
in, directly or indirectly, any business that is directly or substantially in
competition with the Relevant Business (as defined herein);
(b) at any time during the Relevant Period, solicit any business that
would be in direct or substantial competition with the Relevant Business from
any Person who, at any time during the Relevant Period, was a customer or client
of the Company (or who at any time during such period was in the course of
negotiating with to become a customer or client);
(c) unreasonably interfere with the performance of any agreement
relating to the Relevant Business to which the Company or any Subsidiary is
party; or
(d) use or permit the Company's or any Subsidiary's name to be used
so as to suggest an inappropriate connection between such Seller's business and
the Company or such Subsidiary;
PROVIDED THAT nothing in this Section 8.03 shall preclude a Seller or its
Affiliates from holding or acquiring, directly or indirectly, not more than 5%
in the aggregate, of the issued shares or other securities of any other Person,
which securities are listed or dealt in on any recognized stock exchange or
other organized trading market or limit or otherwise prevent Access from
providing Services as defined in the Strategic Protection Agreement to RACV and
its Affiliates upon termination of the Strategic Protection Agreement. For
purposes of this Section 8.03, the "RELEVANT PERIOD" shall mean the period
commencing on the Closing Date and ending 24 months after the Closing Date.
"RELEVANT BUSINESS" shall mean the business of using integrated voice and data
communications technology to arrange medical treatment, travel and accommodation
and trade assistance, and/or to provide specialized information, customer
loyalty and other programs, in Australia, New Zealand or the United Kingdom to
any Person or to members or policy holders of any Person (other than an
Affiliate of such Seller) pursuant to a contract, agreement or other arrangement
to which Purchaser, the Company, any Subsidiary or any of their respective
Affiliates is a party; PROVIDED, HOWEVER, that "Relevant Business" shall not
include any business conducted by RACV or its Affiliates as of the Closing Date
and the business to be conducted by Auto 24 Pty Ltd. following the Closing as
contemplated by and/or pursuant to that certain Management Agreement between
Auto 24 Pty Ltd. and the Company. The provisions of this Section 8.03 shall
survive the Closing.
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ARTICLE IX
GENERAL PROVISIONS
Section 9.01. CANCELLATION OF OPTIONS. In connection with, and as a
inducement for Purchaser to enter into this Agreement, each Seller hereby
acknowledges and agrees that any and all options, warrants and other rights of
Seller to acquire capital stock of the Company or any Subsidiary will be
terminated and cancelled as of the Closing. The Company hereby terminates and
cancels, effective as of the Closing, any and all options, warrants and other
rights of each Seller, if any, to acquire capital stock of the Company or any
Subsidiary
Section 9.02. EXPENSES. Except as otherwise specified in this Agreement,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses.
Section 9.03. STAMP DUTIES. As soon as possible following the Closing,
Purchaser will pay all stamp duties of any kind applicable to or as a result of
the transfer of the Shares to Purchaser. This Section 9.02 shall survive the
Closing.
Section 9.04. SECTION 338 ELECTION. Purchaser shall have the
unconditional right to make an election under Section 338(g) of the Code or
similar state statutes with respect to the purchase of the Shares. The deemed
sale price of the assets of the Company for Tax purposes shall be determined by
Purchaser according to the ADSP formula described in Temporary Treasury
Regulation Section 1.338-3. No party to this Agreement makes any warranties to
any other party hereto of the Tax treatment of the transactions contemplated by
this Agreement under the provisions of any Sections of the Code or other
applicable Law. If Purchaser makes an election under 338(g) of the Code,
Purchaser shall be solely responsible for, and shall hold Sellers harmless from,
any increase in Tax that may become due or may be claimed to be due as a result
of Purchaser's election.
Section 9.05. NOTICES. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made) upon the earliest to occur of
(a) receipt, if made by personal service, (b) five days after delivery, if made
by reputable overnight courier service, (c) upon the delivering party's receipt
of a written confirmation of a transmission made by cable, by telecopy, by
telegram, or by telex or (d) ten days after being mailed by registered or
certified air mail (postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address for a party as
shall be specified in a notice given in accordance with this Section 9.04):
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(a) if to Purchaser:
TeleTech Holdings, Inc.
1700 Lincoln Street, Suite 1400
Denver, Colorado 80203
Attention: President
Telecopy: (303) 894-4203
with a copy to:
Neal, Gerber & Eisenberg
Two North LaSalle Street, Suite 2200
Chicago, Illinois 60602
Attention: Charles Evans Gerber
Telecopy: (312) 269-1747
(b) if to Sellers:
Access 24 Holdings Pty Limited
c/o Royal Automobile Club of Victoria (RACV) Ltd.
422 Little Collins Street
Melbourne Victoria 3000
Australia
Attention: Pearl Dreier
Telecopy: (61-2) 9670-3780
and
Bevero Pty Limited
c/o Access 24 Service Corporation Pty Ltd
Level 3, 154 Pacific Highway
St. Leonards, New South Wales 2065
Australia
Attention: Chief Executive Officer
Telecopy: (61-2) 9930-1132
with a copy to:
Gardner, Carton & Douglas
Suite 3400 - Quaker Tower
321 North Clark Street
Chicago, IL 60610
Attention: Stephen M. Gatlin
Telecopy: (312) 644-3381
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Section 9.06. PUBLIC ANNOUNCEMENTS. Except as required by law, no party
to this Agreement shall make, or cause to be made, any press release or public
announcement in respect of this Agreement or the transactions contemplated
hereby or otherwise communicate with any news media without the prior written
consent of the other party. Except to the extent prohibited by applicable law,
the parties shall cooperate as to the timing and contents of any such press
release or public announcement.
Section 9.07. HEADINGS. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 9.08. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any Law or
public policy, all other terms and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.
Section 9.09. ENTIRE AGREEMENT. This Agreement, including all of the
Exhibits and Schedules hereto which are incorporated herein by this reference,
constitutes the entire agreement of the parties hereto (including the Company,
with respect to Article VIII) with respect to the subject matter hereof and
thereof and supersedes all prior agreements and undertakings, both written and
oral, between Sellers and Purchaser with respect to the subject matter hereof
and thereof.
Section 9.10. ASSIGNMENT. This Agreement and the rights and duties
hereunder may not be assigned or assumed by operation of law or otherwise
without the express prior written consent of the other parties hereto, except
that the rights and obligations of Purchaser hereunder may be assigned to and
assumed by any Affiliate of Purchaser.
Section 9.11. AMENDMENT; WAIVER. This Agreement may not be amended or
modified except by an instrument in writing signed by, or on behalf of, each
party hereto. Each party to this Agreement may (a) extend the time for the
performance of any of the obligations or other acts of the other parties, (b)
waive any inaccuracies in the representations and warranties of the other
parties contained herein or in any document delivered by the other party
pursuant hereto or (c) waive compliance with any of the agreements or conditions
of the other parties contained herein. Any such extension or waiver shall be
valid only if set forth in an instrument in writing signed by all of the other
parties to be bound thereby. Any waiver of any term or condition shall not be
construed as a waiver of any subsequent breach or a subsequent waiver of the
same term or condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights hereunder shall
not constitute a waiver of any of such rights.
Section 9.12. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware that are
applicable to contracts executed in
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and to be performed entirely within that jurisdiction (without regard to its
principals regarding conflicts of law).
Section 9.13. JURISDICTION; SERVICE OF PROCESS. Each of the parties
hereto agrees that all actions or proceedings initiated by any party hereto and
arising directly or indirectly out of this Agreement which are brought to
judicial proceedings shall be litigated in the United States District Court
covering Wilmington, Delaware or, in the event such court cannot or will not
exercise jurisdiction, in the state courts of the State of Delaware (the
"DELAWARE COURTS"). Each Seller agrees that any order or judgment rendered by
the Delaware Courts may be enforced against such Seller in any federal or state
court sitting in Australia. Each Seller agrees that it will not oppose in any
way any application to enforce in Australia a judgment rendered by the Delaware
Courts including, without limitation, an application to register a judgment at
common law. This Agreement may be pleaded as a bar to any opposition to any
application to enforce a judgment in Australia rendered by the Delaware Courts
on any grounds whatsoever including, without limitation, service permitted by
the Delaware Courts but not permitted by any federal or state court sitting in
Australia or a lack of jurisdiction of the Delaware Courts based on a failure to
appear. Each of the parties hereto expressly submits to the jurisdiction of the
Delaware Courts and consents to process being served in any suit, action or
proceeding of the nature referred to above either (a) by the mailing of a copy
thereof by registered or certified mail, postage prepaid, return receipt
requested, to its address as set forth herein or (b) by serving a copy thereof
upon such party's authorized agent for service of process (to the extent
permitted by applicable law, regardless whether the appointment of such agent
for service of process for any reason shall prove to be ineffective or such
agent for service of process shall accept or acknowledge such service); PROVIDED
that, to the extent lawful and practicable, written notice of said service upon
said agent shall be mailed by registered or certified mail, postage prepaid,
return receipt requested, to the party at its address as set forth herein. Each
party hereto agrees that such service, to the fullest extent permitted by law,
(i) shall be deemed in every respect effective service of process upon it in any
such suit, action or proceeding and (ii) shall be taken and held to be valid
personal service upon and personal delivery to it. Each party hereto waives any
claim that any Delaware Court is an inconvenient forum or an improper forum
based on lack of venue or jurisdiction.
Section 9.14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
Section 9.15. PAYMENT OF FEES AND EXPENSES. If any legal action or other
proceeding is brought for the enforcement of this Agreement, or because of an
alleged dispute, breach, default or misrepresentation in connection with any of
the provisions of this Agreement, the prevailing party shall be entitled to
recover reasonable attorneys' fees and other costs incurred in that action or
proceeding (including, without limitation, all reasonable transportation and
lodging expenses), in addition to any other relief to which it may be entitled.
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Section 9.16. FURTHER ACTION. Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things reasonably necessary, proper or advisable under
applicable Law, and execute and deliver such documents and other papers, as may
be required to carry out the provisions of this Agreement and consummate and
make effective the transactions contemplated by this Agreement.
*
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IN WITNESS WHEREOF, Sellers and Purchaser have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
TELETECH HOLDINGS, INC.
By: /s/ Steven B. Coburn
-----------------------------------------------
Name:
Title:
ACCESS 24 HOLDINGS PTY LIMITED
By: /s/ Ted Johnson
-----------------------------------------------
Name:
Title:
BEVERO PTY LIMITED
By: /s/ Louis Carroll
-----------------------------------------------
Name:
Title:
ACCESS 24 SERVICE CORPORATION PTY LIMITED
By: /s/ Louis Carroll
-----------------------------------------------
Name:
Title:
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APPENDIX A
DEFINITION OF U.S. PERSON
(1) "U.S. person" means:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or incorporated
under the laws of the United States;
(iii) any estate of which any executor or administrator is a U.S.
person;
(iv) any trust of which any trustee is a U.S. person;
(v) any agency or branch of a foreign entity located in the
United States;
(vi) any non-discretionary account or similar account (other than
an estate or trust) held by a dealer or other fiduciary for the benefit or
account of a U.S. person;
(vii) any discretionary account or similar account (other than an
estate or trust) held by a dealer or other fiduciary organized,
incorporated, or (if an individual) resident in the United States; and
(viii) any partnership or corporation if:
(A) organized or incorporated under the laws of any foreign
jurisdiction; and
(B) formed by a U.S. person principally for the purpose of
investing in securities not registered under the Act, unless it is
organized or incorporated, and owned, by accredited investors (as
defined in Rule 501(a) under the Act) who are not natural persons,
estates or trusts.
(2) Notwithstanding the foregoing paragraph (1), any discretionary account
or similar account (other than an estate or trust) held for the benefit or
account of a non-U.S. person by a dealer or other professional fiduciary
organized, incorporated, or (if an individual) resident in the United States
shall not be deemed a "U.S. person."
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(3) Notwithstanding the foregoing paragraph (1), any estate of which any
professional fiduciary acting as executor or administrator is a U.S. person
shall not be deemed a U.S. person if:
(i) an executor or administrator of the estate who is not a U.S.
person has sole or shared investment discretion with respect to the assets
of the estate; and
(ii) the estate is governed by foreign law.
(4) Notwithstanding the foregoing paragraph (1), any trust of which any
professional fiduciary acting as trustee is a U.S. person shall not be deemed a
U.S. person if a trustee who is not a U.S. person has sole or shared investment
discretion with respect to the trust assets, and no beneficiary of the trust
(and no settlor if the trust is revocable) is a U.S. person.
(5) Notwithstanding the foregoing paragraph (1), an employee benefit plan
established and administered in accordance with the law of a country other than
the United States and customary practices and documentation of such country
shall not be deemed a U.S. person.
(6) Notwithstanding the foregoing paragraph (1), any agency or branch of a
U.S. person located outside the United States shall not be deemed a "U.S.
person" if:
(i) the agency or branch operates for valid business reasons; and
(ii) the agency or branch is engaged in the business of insurance or
banking and is subject to substantive insurance or banking regulation,
respectively, in the jurisdiction where located.
(7) The International Monetary Fund, the International Bank for
Reconstruction and Development, the Inter-American Development Bank, the Asian
Development Bank, the African Development Bank, the United Nations, and their
agencies, affiliates and pension plans, and any other similar international
organizations, their agencies, affiliates and pension plans shall not be deemed
"U.S. persons."
SUMMARIZED FROM RULE 902(o), GENERAL
RULES AND REGULATIONS UNDER THE
SECURITIES ACT OF 1933