MALLESONS STEPHEN JAQUES EXHIBIT 10(a)
Sale and Purchase
Agreement
Dated 29 July 2004
CMS International Ventures L.L.C. ("VENDOR")
CMS Enterprises Company ("VENDOR GUARANTOR")
APT Pipelines Investments (WA) Pty Ltd ("BUYER")
APT Pipelines Limited ("BUYER GUARANTOR")
MALLESONS STEPHEN JAQUES
Level 60
Governor Phillip Tower
1 Farrer Place
Sydney NSW 2000
Australia
T +61 2 9296 2000
F +61 2 9296 3999
DX 113 Sydney
www.mallesons.com
DRBB:CS
SALE AND PURCHASE AGREEMENT
Contents
DETAILS 1
GENERAL TERMS 3
1 SALE AND PURCHASE OF SALE ASSETS 3
1.1 Agreement to sell and purchase 3
1.2 No Security Interest 3
2 CONDITIONS PRECEDENT 3
2.1 Vendor's conditions precedent 3
2.2 Buyer's conditions precedent 4
2.3 Prohibition 4
2.4 Reasonable endeavours 5
2.5 Continuing Parent Guarantees 6
2.6 Termination by Vendor 6
2.7 Termination by Buyer 6
2.8 No fault termination 6
2.9 Effect of termination 7
2.10 Waiver of conditions 7
2.11 Access to Records 7
3 COMPLETION 8
3.1 Time and place of Completion 8
3.2 Items to be delivered by the Vendor on Completion 8
3.3 Items to be delivered by Buyer on Completion 9
3.4 Payment on Completion 9
3.5 Simultaneous actions at Completion 9
4 PAYMENT OF PURCHASE PRICE 9
4.1 Deposit 9
4.2 Balance Amount 10
4.3 Adjustment Statement 10
4.4 Access 10
4.5 Contents of Adjustment Statement 11
4.6 Preparation of Adjustment Statement 12
4.7 Payment of Adjustment Amount 12
4.8 Disputes 12
4.9 Method of payment 13
4.10 Distributions 13
4.11 Further adjustment 14
4.12 HISmelt adjustment 14
5 DEALINGS BEFORE COMPLETION 14
5.1 General covenants 14
5.2 Negative covenants 15
5.3 Release of SEMP 17
5.4 Retention Bonus Agreements 17
5.5 Material Adverse Event - Parmelia 17
5.6 Pre-Sale Restructure 18
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6 CONDUCT AFTER COMPLETION 18
6.1 Prohibition on use of a Vendor's name 18
6.2 Exclusion of directors from liability 18
6.3 Access to information 19
6.4 Information held by Vendor 19
6.5 Preservation of Information 19
6.6 Accounting assistance 20
6.7 Connection to CMS server 20
7 EMPLOYEES 20
8 SUPERANNUATION 20
8.1 Superannuation 20
8.2 Records 20
9 WARRANTIES AND REPRESENTATIONS 21
9.1 Warranties by all parties 21
9.2 Warranties by Buyer 22
9.3 Warranties by the Vendor 22
9.4 Warranties correct and not misleading 22
9.5 Disclosure 22
9.6 Separate warranties 23
9.7 Buyer's acknowledgements 23
9.8 Breach of Vendor Warranties prior to Completion 24
9.9 Claims procedure 25
9.10 Restrictions on liability 26
9.11 Time limit for Vendor Warranty claims 28
9.12 Threshold for Vendor Warranty claims 28
9.13 Effect of payment 28
9.14 Limit of Vendor liability 28
9.15 Third party claims 28
9.16 Insurance 29
9.17 Act or omission after Completion 30
9.18 Later recoveries - tax 30
9.19 Later recoveries - other 30
9.20 Limit on liability 30
9.21 Exception 31
9.22 Tax indemnity 31
10 COSTS AND STAMP DUTY 31
10.1 Legal costs 31
10.2 Stamp duty 32
11 GOODS AND SERVICES TAX (GST) 32
11.1 GST gross up 32
11.2 Reimbursements 32
11.3 Tax invoice 32
12 NOTICES 32
12.1 Form 32
12.2 Delivery 32
12.3 When effective 33
12.4 Deemed receipt - postal 33
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12.5 Deemed receipt - fax 33
12.6 Deemed receipt - general 33
13 CONFIDENTIAL INFORMATION 33
13.1 Parties to keep information confidential 33
13.2 Disclosure to other potential buyers 34
13.3 This transaction 34
13.4 Survival 34
14 MISCELLANEOUS 34
14.1 Assignment or novation 34
14.2 Exercise of rights 34
14.3 Waiver and variation 35
14.4 Approvals and consents 35
14.5 Remedies cumulative 35
14.6 No merger 35
14.7 Survival of indemnities 35
14.8 Enforcement of indemnities 35
14.9 Further assurances 35
14.10 Severability 35
14.11 Construction 36
14.12 Time of the essence 36
14.13 Entire agreement 36
14.14 Counterparts 36
14.15 Supervening legislation 36
15 GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS 36
15.1 Governing law 36
15.2 Jurisdiction 36
15.3 Service of process 36
15.4 Service of process on an appointed process agent 37
16 GUARANTEE 37
16.1 Consideration 37
16.2 Guarantee 37
16.3 Nature of guarantee 38
16.4 Indemnity 38
16.5 Reinstatement of rights 38
16.6 Rights are protected 38
16.7 No merger 40
16.8 Guarantor's rights are suspended 40
16.9 Guarantor's right of proof limited 40
16.10 No set-off against assignees 41
16.11 Suspense account 41
16.12 Right to prove 41
17 INTERPRETATION 41
17.1 Definitions 41
17.2 References to certain general terms 53
17.3 Headings 55
SCHEDULE 1 - VERIFICATION CERTIFICATE 56
SCHEDULE 2 - WARRANTIES BY VENDOR 58
SCHEDULE 3 - RETIRING OFFICERS AND INCOMING OFFICERS 65
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SCHEDULE 4 - EMPLOYEES 68
SCHEDULE 5 - CORPORATE STRUCTURE DIAGRAM 69
PART A - STRUCTURE AT SIGNING 69
PART B - STRUCTURE AT COMPLETION 70
SCHEDULE 6 - LAST ACCOUNTS 71
PART 1 - LAST ACCOUNTS FOR PARMELIA 71
PART 2 - LAST ACCOUNTS FOR SCP 74
SCHEDULE 7 - ADJUSTMENT AMOUNT 77
PART 1 - ADJUSTMENT AMOUNT - PARMELIA 77
PART 2 - ADJUSTMENT AMOUNT - SCP 79
SCHEDULE 8 - PRE-SALE RESTRUCTURE 82
SIGNING PAGE 85
ANNEXURE A (CLAUSE 3.2) - DELIVERABLES 87
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SALE AND PURCHASE AGREEMENT
Details
INTERPRETATION - definitions are at the end of the General terms
PARTIES VENDOR, VENDOR GUARANTOR, BUYER and BUYER GUARANTOR
VENDOR Name CMS INTERNATIONAL VENTURES L.L.C.
Formed in Michigan, USA, as a limited liability company
Address One Energy Plaza, Jackson, Michigan, USA 49201
Fax +1 517 788 6911
Attention General Counsel
VENDOR GUARANTOR Name CMS ENTERPRISES COMPANY
Formed in Michigan, USA, as a corporation
Address One Energy Plaza, Jackson, Michigan, USA 49201
Fax +1 517 788 6911
Attention General Counsel
BUYER Name APT PIPELINES INVESTMENTS (WA) PTY LTD
ABN 43 081 638 244
Incorporated in New South Wales
Address Level 5, Airport Central Tower, 241
O'Riordan Street, Mascot, NSW 2020
Fax +61 2 8339 0005
Attention Company Secretary
BUYER GUARANTOR Name APT PIPELINES LIMITED
ABN 89 009 666 700
Incorporated in New South Wales
Address Level 5, Airport Central Tower, 241
O'Riordan Street, Mascot, NSW 2020
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Fax +61 2 8339 0005
Attention Company Secretary
RECITALS A At the request of the Buyer Guarantor and the Vendor
Guarantor, the Vendor has agreed to sell and the Buyer
has agreed to buy the Sale Assets held by the Vendor on
the terms of this agreement.
B The Buyer Guarantor is a party to this agreement to
guarantee the obligations of the Buyer, and to give
certain undertakings to the Vendor.
C The Vendor Guarantor is a party to this agreement to
guarantee the obligations of the Vendor.
DATE OF
AGREEMENT See Signing page
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SALE AND PURCHASE AGREEMENT
General terms
1 SALE AND PURCHASE OF SALE ASSETS
1.1 AGREEMENT TO SELL AND PURCHASE
On Completion, the Vendor agrees to sell the Sale Assets to the Buyer and
the Buyer agrees to buy the Sale Assets from the Vendor, on the terms of
this agreement.
1.2 NO SECURITY INTEREST
The Sale Assets must be transferred free from any Security Interest and
with all rights, including voting rights and dividend rights attached or
accruing to them after the Completion Date.
2 CONDITIONS PRECEDENT
2.1 VENDOR'S CONDITIONS PRECEDENT
The conditions precedent to the Vendor's obligations to proceed to
Completion are:
(a) (PERFORMANCE OF COVENANTS) each of the Buyer and the Buyer Guarantor
has performed and complied in all material respects with all its
covenants under this agreement;
(b) (ADVERSE NOTICE) neither the Commissioner of Taxation nor any other
Government Agency having the power to do so has given a notice or
direction ("NOTICE") under section 218 or section 255 of the Income
Tax Assessment Act 1936 (Cth), section 260-5 in schedule 1 of the
Taxation Administration Act 1953 (Cth) or any analogous provision
under another Commonwealth statute, requiring the Buyer or any of
its Related Bodies Corporate (or any person on their behalf) to
deduct any taxes or other charges or which will or may become
payable or which are alleged to be payable then or thereafter by the
Vendor from sums owing or which may later become owing (within the
meaning of the relevant provision) by it to, or who has the receipt,
control or disposal of money belonging (within the meaning of the
relevant provision) to, the Vendor under this agreement and that
notice or direction has not been withdrawn; and
(c) (REPRESENTATIONS AND WARRANTIES) each of the representations and
warranties by the Buyer and the Buyer Guarantor under clause 9.1
("Warranties by all parties") and the Buyer under clause 9.2
("Warranties by Buyer") are correct and not misleading as of the
Completion Date, except if a failure of such a representation or
warranty to be correct and not misleading would not, individually or
in the aggregate, reasonably be expected to have a material adverse
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effect on the ability of the Buyer or the Buyer Guarantor to perform
all of its obligations under this agreement.
2.2 BUYER'S CONDITIONS PRECEDENT
The conditions precedent to the Buyer's obligations to proceed to
Completion are:
(a) (PERFORMANCE OF COVENANTS) the Vendor has performed and complied in
all material respects with all its covenants under this agreement;
(b) (DIRECTORS' RESOLUTION - WAG) the parties receive a certified copy
of a resolution of directors of WAG resolving that subject to the
payment of stamp duty (if any) by the Buyer:
(i) the transfer of the Shares is to be registered; and
(ii) the share certificate held by the Vendor in respect of the
Shares is cancelled and that a new share certificate for the
Shares be issued in the name of the Buyer;
(c) (DIRECTORS' RESOLUTION - CONTROLLED ENTITIES) the parties receive a
certified copy of a resolution of directors of each Controlled
Entity resolving that, subject to the constituent documents of that
Controlled Entity and subject to them consenting to act, each of the
Incoming Officers be appointed to the board of directors of that
Controlled Entity, and the resignation of the Retiring Officers from
the board of that Controlled Entity be accepted, all with effect
from Completion, so that a properly constituted board of directors
is in existence at all times for each Controlled Entity;
(d) (OFFICERS' RESIGNATIONS) the parties receive evidence that the
Retiring Officers have resigned from the board of each
Non-controlled Entity, with effect from Completion;
(e) (PRE-SALE RESTRUCTURE) the Pre-Sale Restructure has occurred in
accordance with schedule 8 ("Pre-Sale Restructure") in accordance
with the documentation in the form approved by the Buyer (such
approval not to be withheld if the documentation reflects and gives
effect to the transaction steps contemplated in that schedule and
otherwise not to be unreasonably withheld); and
(f) (CONSENT) the consent of Australia and New Zealand Banking Group
Limited (as agent acting on the instructions of the "Participants")
for the purposes of clause 24.1(h) ("Control of Borrowers") of the
Facility Agreement to the transactions contemplated in this
agreement shall have been obtained or effected.
2.3 PROHIBITION
(a) Completion is conditional on there being no judgment, order, decree,
stipulation or Security Interest which has the effect of preventing
the consummation of the transactions contemplated by this agreement.
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(b) If Completion does not occur on the Completion Date due to any
action being taken against the Buyer by any Government Agency to
prevent the occurrence of Completion, then unless that preventative
act has been remedied within 10 Business Days of the Completion
Date, then either party may terminate this agreement by 5 Business
Days' notice to the other party.
(c) If termination occurs under paragraph (b), then the Deposit and all
interest earned on it must be paid to the Vendor and the parties
must immediately direct the Stakeholder accordingly.
(d) If Completion does not occur on the Completion Date due to any
action being taken against the Vendor by any Government Agency to
prevent the occurrence of Completion, then unless that preventative
act has been remedied within 10 Business Days of the Completion
Date, then either party may terminate this agreement by 5 Business
Days' notice to the other party.
(e) If termination occurs under paragraph (d), then the Deposit and all
interest earned on it must be paid to the Buyer and the parties must
immediately direct the Stakeholder accordingly.
2.4 REASONABLE ENDEAVOURS
(a) The Vendor must:
(i) use its reasonable endeavours to obtain the fulfilment of each
of the conditions in clause 2.1 ("Vendor's conditions
precedent") (other than clause 2.1(a) ("performance of
covenants"); and
(ii) procure the fulfilment of the conditions precedent set out in
clause 2.2(b) ("directors' resolution - WAG"), (c)
("directors' resolution - Controlled Entities), (d)
("officers' resignations") and (e) ("Pre-Sale Restructure"),
prior to Completion.
(b) The parties must keep each other informed of any circumstances which
may result in any condition in any of the conditions precedent
mentioned above not being satisfied in accordance with its terms.
(c) Without limiting paragraph (a), in relation to the condition
precedent in clause 2.2(f) ("consent") and in relation to the
release of the Continuing Parent Guarantees under clause 2.5
("Continuing Parent Guarantees"), each party must use reasonable
endeavours to satisfy that condition and procure those releases as
soon as possible, including:
(i) assisting and co-operating with the other party and any
relevant third party to obtain the fulfilment of the condition
precedent; and
(ii) executing any novation or substitution agreements or deeds or
other further documentation that may reasonably be required
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by the relevant third party as a condition of that third
party's consent or release.
2.5 CONTINUING PARENT GUARANTEES
In relation to each Continuing Parent Guarantee:
(a) from Completion until such time as the Vendor has been released from
all of its obligations under the Continuing Parent Guarantee, the
Buyer Guarantor shall indemnify and will keep indemnified the Vendor
and its Affiliates against any action, claim, damage, loss, demand,
cost, expense or penalty as a result of any breach after the
Completion Date of any obligation which is guaranteed by, or in
respect of which an indemnity has been given by, the Parent under
that Continuing Parent Guarantee ("CPG OBLIGATIONS"); and
(b) if required by the Vendor or the relevant beneficiary of the
Continuing Parent Guarantee, the Buyer Guarantor shall execute a
deed of guarantee in a form reasonably required by the Vendor under
which the Buyer Guarantor gives a guarantee in favour of the same
person as the beneficiary of that Continuing Parent Guarantee of the
due performance of the CPG Obligations.
2.6 TERMINATION BY VENDOR
If Completion does not occur on the Completion Date due to a default by
the Buyer, then unless that default has been remedied within 10 Business
Days of the Completion Date, the Vendor may terminate this agreement by 5
Business Days' notice to the Buyer, and the Deposit and all interest
earned on it must be paid to the Vendor and the parties must immediately
direct the Stakeholder accordingly.
2.7 TERMINATION BY BUYER
If Completion does not occur on the Completion Date due to a default by
the Vendor or because a condition precedent in clause 2.2(b) ("directors'
resolution - WAG"), clause 2.2(c) ("directors' resolution - Controlled
Entities"), clause 2.2(d) ("officers' resignations") or clause 2.2(e)
("Pre-Sale Restructure") not having been satisfied or waived, then unless
that default has been remedied within 10 Business Days of the Completion
Date, the Buyer may terminate this agreement by 5 Business Days' notice to
the Vendor. If termination occurs under this clause 2.7 ("Termination by
Buyer"), then the Deposit and all interest earned on it must be paid to
the Buyer and the parties must immediately direct the Stakeholder
accordingly.
2.8 NO FAULT TERMINATION
If Completion does not occur on the Completion Date for any reason (other
than where clause 2.1(b) ("adverse notice"), clause 2.2(f) ("consent"),
clause 2.3 ("Prohibition"), clause 2.6 ("Termination by Vendor") or clause
2.7 ("Termination by Buyer") applies), then unless that reason has ceased
to exist within 10 Business Days of the Completion Date, either party may
terminate this agreement by 5 Business Days' notice to the other party. In
that event, the Deposit and all interest earned on it must be paid to the
Buyer and the parties must immediately direct the Stakeholder accordingly.
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2.9 EFFECT OF TERMINATION
If this agreement is terminated under clause 2.3 ("Prohibition"), clause
2.6 ("Termination by Vendor"), clause 2.7 ("Termination by Buyer") or
clause 2.8 ("No fault termination"), then:
(a) each party is released from its obligations to further perform the
agreement other than in relation to clause 10.1 ("Legal costs") and
those imposing on it obligations of confidentiality;
(b) a party has no rights against any other party except its rights in
respect of the Deposit and any accrued interest thereon as specified
in clause 2.3 ("Prohibition"), clause 2.6 ("Termination by Vendor"),
clause 2.7 ("Termination by Buyer") or clause 2.8 ("No fault
termination"), respectively and waives its rights to make any other
Claim against a party; and
(c) the Buyer must return to the Vendor all documents and other
materials in any medium in its possession, power or control which
contain information relating to the Controlled Entities, Valandrid,
CMS Financial and CMS Luxembourg, including the Records.
2.10 WAIVER OF CONDITIONS
(a) Subject to paragraph (c), the conditions precedent in clause 2.1
("Vendor's conditions precedent") may only be waived with the
written agreement of the Vendor.
(b) Subject to paragraph (d), the conditions precedent in clause 2.2
("Buyer's conditions precedent") may only be waived with the written
agreement of the Buyer.
(c) The condition precedent set out in clause 2.1(b) ("adverse notice")
will be taken to have been waived by the Vendor on 1 December 2004
if that condition precedent has not been satisfied or waived by 1
December 2004 and provided that all other conditions precedent have
been satisfied or waived, the parties must proceed to Completion
within 5 Business Days of that date.
(d) The condition precedent set out in clause 2.2(f) ("consent") will be
taken to have been waived by the Buyer on 1 December 2004 if that
condition precedent has not been satisfied or waived by 1 December
2004 and provided that all other conditions precedent have been
satisfied or waived, the parties must proceed to Completion within 5
Business Days of that date.
2.11 ACCESS TO RECORDS
The Vendor agrees to allow the Buyer and its Representatives full and free
access to the business premises and the Records and the Controlled
Entities, on reasonable notice and at all reasonable times before the
Completion Date. The Buyer agrees not to copy or remove any of the Records
without the Vendor's consent before Completion.
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3 COMPLETION
3.1 TIME AND PLACE OF COMPLETION
Completion will take place at the offices of Mallesons Stephen Jaques at
10.00 am on the Completion Date at Level 60, Governor Phillip Tower, 1
Farrer Place, Sydney, New South Wales, or such other time and place as the
Vendor and the Buyer agree.
3.2 ITEMS TO BE DELIVERED BY THE VENDOR ON COMPLETION
(a) At Completion, the Vendor will give to the Buyer:
(i) (VERIFICATION CERTIFICATE) a Verification Certificate from the
Vendor duly executed on its behalf by an Authorised Officer of
the Vendor;
(ii) (COUNSEL'S OPINION) a legal opinion from internal counsel of
the Vendor as to the validity of execution of this agreement
by the Vendor and as to the binding and enforceable nature of
the obligations of the Vendor under this agreement (subject to
usual qualifications and assumptions as to enforceability);
(iii) (TRANSFERS OF SHARES) an executed transfer in favour of the
Buyer (or as it may direct) of the Shares, together with the
share certificates for the Shares and any consents which the
Buyer reasonably requires to obtain registration of those
transfers;
(iv) (RESIGNATIONS) a duly signed resignation of each of the
Retiring Officers;
(v) (CONDITIONS PRECEDENT) evidence that the condition in clause
2.1(b) ("adverse notice") has been satisfied or waived;
(vi) (BANK AUTHORITY) duly completed bank authorities directed to
the bankers of each Controlled Entity authorising the
operation of each of its bank accounts by nominees of the
Buyer and terminating the authority of each of the present
signatories; and
(vii) (RESOLUTIONS) each of the resolutions referred to in clause
2.2 ("Buyer's conditions precedent").
(b) Where any of the items listed below are in the possession of the
Vendor, the Vendor will give to the Buyer or otherwise make
available to the Buyer at Completion:
(i) (RECORDS AND COMMON SEAL) the records and the common seal (if
any) of each Controlled Entity;
(ii) (CHEQUE BOOKS) all cheque books of each Controlled Entity and
a list of all bank accounts maintained by each Controlled
Entity in its name; and
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(iii) (TITLE DOCUMENTS) all documents of title relating to the
ownership of a Controlled Entity or its assets.
(c) The parties shall deliver at Completion the items required to be
delivered by them under Annexure A ("Deliverables").
3.3 ITEMS TO BE DELIVERED BY BUYER ON COMPLETION
At Completion, the Buyer will give to the Vendor:
(a) (VERIFICATION CERTIFICATE) a Verification Certificate from the Buyer
duly executed on its behalf by an Authorised Officer of the Buyer;
(b) (CONSENTS TO ACT) executed consents to act by the Incoming Officers;
and
(c) (CONDITIONS PRECEDENT) evidence that the conditions in clause 2.2
("Buyer's conditions precedent") (other than clause 2.2(a)
("performance of covenants")) have been satisfied or waived.
3.4 PAYMENT ON COMPLETION
At Completion the Buyer must make the payments to the Vendor in accordance
with clause 4 ("Payment of Purchase Price") if the Vendor complies with
clause 3.2 ("Items to be delivered by the Vendor on Completion").
3.5 SIMULTANEOUS ACTIONS AT COMPLETION
In respect of Completion:
(a) the obligations of the parties under this agreement are
interdependent; and
(b) all actions required to be performed and which are performed will be
taken to have occurred simultaneously on the Completion Date.
Completion does not occur unless all such actions required to be performed
are so performed and the conditions precedent in clause 2.1 ("Vendor's
conditions precedent") and clause 2.2(a) ("performance of covenants")
continue to be satisfied or waived.
4 PAYMENT OF PURCHASE PRICE
4.1 DEPOSIT
(a) On execution of this agreement, the Buyer agrees to pay to
Commonwealth Bank of Australia as stakeholder ("STAKEHOLDER")
A$11,000,000 as a deposit and part payment of the Purchase Price.
Pending Completion, the Stakeholder will invest the Deposit at 24
hour call. On Completion, the Deposit and interest accruing on the
Deposit is to be paid to the Vendor.
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(b) If Completion occurs, then the Deposit will be credited against the
Purchase Price. Any interest paid to the Vendor is not part of the
Purchase Price.
4.2 BALANCE AMOUNT
(a) At Completion, the Buyer agrees to pay to the Vendor in New York (or
as the Vendor directs) the US Dollar equivalent of the Balance
Amount in immediately available funds without any set off, deduction
or withholding unless:
(i) required by a Government Agency; or
(ii) on account of a cost payable by the Vendor under paragraph
(d).
(b) At Completion the parties will unconditionally direct the
Stakeholder to pay to the Vendor the Deposit, together with its
entitlement to interest, determined in accordance with clause 4.1
("Deposit").
(c) The US Dollar equivalent of the Balance Amount shall be the average
of the rates at which Citibank NA and JP Morgan Chase quote the
Buyer as being the rate they would each convert 50% of the Balance
Amount from Australian Dollars into US Dollars on the Completion
Date.
(d) The Vendor shall pay the Buyer, or the Buyer is entitled to set off
or deduct prior to payment, the actual costs incurred by the Buyer
of converting the Balance Amount from Australian Dollars into US
Dollars.
4.3 ADJUSTMENT STATEMENT
(a) As soon as possible but in any event within 60 days of Completion,
the Buyer must prepare, or direct the preparation of, an Adjustment
Statement, and deliver it to the Vendor.
(b) The Vendor may make enquiries of the representatives of the Buyer in
relation to the Adjustment Statement.
(c) The Adjustment Statement will be final and binding on the parties,
unless, and to the extent that, the Vendor notifies the Buyer of a
dispute in relation to any one or more items within 60 days of
receiving the Adjustment Statement.
4.4 ACCESS
The Buyer must ensure that each Controlled Entity provides the Vendor, the
Independent Expert, or any of their officers, employees, agents or
advisors, with such reasonable access, assistance and facilities as the
Vendor or the Independent Expert requires to review the Adjustment
Statement. Each party will bear its own costs of preparing and reviewing
the Adjustment Statement.
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4.5 CONTENTS OF ADJUSTMENT STATEMENT
(a) The Adjustment Statement will show the change in each of the items
particularised in schedule 7 ("Adjustment Amount") between the
amount shown in the Last Accounts and the amount as at the close of
business on the Completion Date ("ADJUSTMENT AMOUNT").
(b) As shown in that schedule, in respect of the following items:
(i) the working capital calculations under part 1 of schedule 7
("Adjustment Amount") shall exclude any adjustment on account
of the HISmelt deferred revenue liability and any provisions
for income tax, retention bonuses under any 2002 Retention
Bonus Agreement and obligations under the SEMP, which are
payable in connection with the occurrence of Completion; and
(ii) the working capital calculations under part 2 of schedule 7
("Adjustment Amount") shall exclude any adjustment on account
of any provisions for income tax, WMC Deferred Revenue and
current liabilities under the Facility Agreement but shall
include any change in the outstanding balance of the loan
under the Facility Agreement; and
(iii) both of the working capital calculations under schedule 7
("Adjustment Amount") shall exclude any costs or liabilities
associated with the Pre-Sale Restructure; and
(iv) both of the working capital calculations under schedule 7
("Adjustment Amount") shall include the amount of the estimate
of any Income Tax payments for SCP1, CMS GGT and the
Australian Branch of the Trust which is agreed under clause
4.5(c) ("Contents of Adjustment Statement"); and
(v) the working capital calculation under part 2 of schedule 7
("Adjustment Amount") shall include an amount of $162,000 as
an estimate of the liability of CMS GGT or CMS GTA referred to
in clause 4.11(a) ("Further Adjustment"). To avoid doubt, that
amount shall not be double counted in the Adjustment Amount
(including by way of the making of a provision for an unpaid
amount of such GST); and
(vi) if Completion does not occur by 30 September 2004 due to the
non-satisfaction of the condition precedent in clause 2.1(b)
("adverse notice"), then in respect of any period after 1
October 2004 until the date on which Completion occurs, the
Vendor shall not benefit from 45% of the difference between
the amount actually payable from WMC Resources Limited under
that agreement in respect of that period and the amount which
WMC Resources Limited would have been required to pay under
that agreement had the tariffs payable by WMC Resources
Limited been the A4 Tariff.
(c) The agreed estimate in clause 4.5(b)(iv) shall be calculated in the
following manner:
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(i) PricewaterhouseCoopers will first calculate an estimate of all
of the Income Tax payable by CMS GGT and the Australian Branch
of the Trust and the 45% of the Income Tax payable by SCP1 at
the Last Balance Date and pro-rated to the Completion Date;
and
(ii) the calculation by PricewaterhouseCoopers in clause 4.5(c)(i)
must be approved by the parties,
prior to Completion.
To avoid doubt, the calculation approved by the parties under this
paragraph (c) shall be conclusive and binding and is not subject to
dispute resolution under clause 4.8 ("Disputes").
4.6 PREPARATION OF ADJUSTMENT STATEMENT
The Adjustment Statement will be prepared:
(a) in the same format (to the extent applicable) as the Last Accounts
and on a basis consistent with the Last Accounts; and
(b) in accordance with the same accounting policies, principles and
practices as were applied in the preparation of the Last Accounts,
applied on a consistent basis and on the presumption that each
Target Entity continues as a going concern under the ownership of
the Vendor; and
(c) to show, in accordance with the sample calculations set out in
schedule 7 ("Adjustment Amount") (which are for the period between
March 2004 and June 2004), the Adjustment Amount.
4.7 PAYMENT OF ADJUSTMENT AMOUNT
Subject to clause 4.8 ("Disputes"), the difference between the Adjustment
Amount and the Estimated WCA Amount will be paid by the Buyer to the
Vendor (if the Adjustment Amount less the Estimated WCA Amount is a
positive amount) or by the Vendor to the Buyer (if the Adjustment Amount
less the Estimated WCA Amount is a negative amount) within 60 days of
receipt of the Adjustment Statement unless disputed in accordance with
clause 4.3(c) ("Adjustment Statement").
An amount payable under this clause 4.7 ("Payment of Adjustment Amount")
shall bear interest at the Interest Rate, which accrues daily on the
amount of the payment for each day commencing on the Completion Date and
ending on the date on which that amount is paid.
4.8 DISPUTES
(a) If the Vendor and the Buyer do not agree on all (or part of) an item
referred to in the Adjustment Statement within 30 days (or such
longer period as they may mutually agree) of the Vendor notifying
the Buyer under clause 4.3(c) ("Adjustment Statement") that it
disputes that item, then either of them may within a further 14 days
refer the disagreement to the Independent Expert with the request
that
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the Independent Expert make a decision on the disagreement as soon
as practical after receiving any submissions from the Vendor and the
Buyer. Those submissions must be made in writing within 30 days (or
such other time as may be agreed) after the Independent Expert is
appointed. A copy must be made available to each party.
(b) The decision of the Independent Expert is, in the absence of
manifest error, conclusive and binding on the parties for the
purposes of determining the amount payable in respect of the
relevant item (or part of it) in determining the Adjustment Amount
payable under this agreement.
(c) If this clause 4.8 ("Disputes") applies in respect of all or part of
any item referred to in the Adjustment Statement, then the amount to
be paid under clause 4.7 ("Payment of Adjustment Amount') shall
exclude the item (or the relevant part of it) in dispute. Payment in
respect of that item (or the relevant part of it) together with
interest on that payment shall be made within 7 days after the
Independent Expert's report under this clause 4.8 ("Disputes") has
been delivered.
(d) A payment under paragraph (c) shall bear interest at the Interest
Rate, which accrues daily on the amount of the payment for each day
commencing on the Completion Date and ending on the date on which
that amount is paid.
(e) The Vendor and the Buyer agree to share the fees, costs and expenses
of the Independent Expert in inverse proportion to the extent to
which their respective positions are sustained (for example, if the
Vendor's position is 100% sustained, it shall bear none of the fees,
costs and expenses of the Independent Expert).
(f) The Independent Expert will be appointed as an expert and not as an
arbitrator. The procedures for determination are to be decided by
the Independent Expert in its discretion.
4.9 METHOD OF PAYMENT
Each payment (other than the Deposit) referred to above in this
clause 4 ("Payment of Purchase Price") must be made by telegraphic
transfer to a bank account or bank accounts notified by the Vendor
to the Buyer at least 3 days prior to Completion or by such other
method agreed by the parties.
4.10 DISTRIBUTIONS
The Vendor may cause the board of directors of any one or more of
the Controlled Entities (other than the Australian branch of the
Trust), on a day not later than the day before the Completion Date,
to pay a dividend or return of principal, income or capital to their
respective shareholders or beneficiaries or to make principal or
interest payments on any outstanding loan. Those Controlled Entities
may pay that dividend, return or principal, income or interest
payment immediately before Completion.
Except if that payment is made in order to implement the Pre-Sale
Restructure, the Vendor agrees to give the Buyer at least 2 Business
Days'
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prior notice specifying its intention to make each such payment and
the details of the payor, payee, the amount and nature of the
payment.
4.11 FURTHER ADJUSTMENT
(a) If the amount of GST (net of any corresponding input tax credit)
payable by CMS GGT or CMS GTA to the Australian Taxation Office in
respect of services provided under the commercial services agreement
between CMS GGT and the GGT Joint Venture prior to Completion and
any penalties or interest in respect of that liability:
(i) exceeds A$162,000, then the Vendor shall pay the Buyer the
amount of the excess; and
(ii) is less than A$162,000, then the Buyer shall pay the Vendor
the difference between A$162,000 and the amount which is
payable to the Australian Taxation Office.
(b) If the amount is due to the Australian Taxation Office on or prior
to the date on which the Adjustment Amount is payable, then a
payment required under this clause 4.11 ("Further adjustment") shall
be off-set against or added to (as the case may be) the payment of
the Adjustment Amount under clause 4.7 ("Payment of Adjustment
Amount").
(c) If the amount is due to the Australian Taxation Office after the
date on which the Adjustment Amount is payable, then the party
required to make the payment under this clause 4.11 ("Further
adjustment") shall make that payment within 10 Business Days of the
date on which the amount is payable to the Australian Taxation
Office.
(d) The Buyer agrees to notify the Vendor of the date on which such an
amount is payable to the Australian Taxation Office, and of the
amount of that payment.
4.12 HISMELT ADJUSTMENT
(a) The Vendor agrees to reimburse the Buyer for any costs (other than
internal labour costs or internal project management fees) incurred
by CMS GTA in constructing and commissioning the HISmelt lateral in
excess of A$1,500,000 (excluding GST).
(b) Any amount payable by the Vendor under paragraph (a) shall be taken
into account in the determination of the Adjustment Amount under
clause 4.7 ("Payment of Adjustment Amount").
5 DEALINGS BEFORE COMPLETION
5.1 GENERAL COVENANTS
Until the Completion Date, the Vendor shall ensure that each Controlled
Entity:
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(a) (BUSINESS) operates its business in accordance with is usual
business practices and so as to comply materially with all
applicable laws and codes;
(b) (ADVERSE EVENTS) promptly notifies the Buyer of any action or
materially adverse event which may occur, be threatened in writing,
brought, asserted or commenced in writing against it, its officers
or directors, involving its business or assets (including the Shares
or the Trust Interests), for an amount exceeding A$100,000;
(c) (BUSINESS RELATIONSHIPS) uses its commercially reasonable efforts to
preserve intact its current business relationships;
(d) (INSURANCES) maintains (and where necessary uses reasonable efforts
to renew) each of the insurance polices referred to in the Disclosed
Information and promptly notifies the Buyer if any renewal proposal
is not accepted by the relevant insurer;
(e) (TAX, FEES AND CHARGES) pays when due all Taxes (excluding, to avoid
doubt, any Taxes which become due in relation to the Pre-Sale
Restructure), fees and charges; and
(f) (CONSTITUTIONS) does not breach its constituent documents.
5.2 NEGATIVE COVENANTS
Until the Completion Date, the Vendor shall ensure that each Controlled
Entity does not, without the prior written consent of the Buyer (which
consent shall not be unreasonably withheld or delayed):
(a) (ASSET ACQUISITION AND DISPOSAL) acquire or dispose of any assets
other than in the normal course of its business and arm's-length
terms (other than, in the case of WAG, to the extent necessary to
transfer the Non-Sale Assets of WAG to the Vendor or a Related Body
Corporate of the Vendor);
(b) (SECURITY INTERESTS) grant Security Interests over any assets;
(c) (MATERIAL CONTRACTS) enter into, or amend in a material respect, or
terminate, any Material Contract including any agreement relating to
the Shares or the Trust Interests, or enter into (or make any
binding offer to enter into) any other obligation which is not in
the ordinary course of business;
(d) (EMPLOYMENT CONTRACTS) enter into any material employment contract,
or renew or amend any existing material employment contract
(including superannuation benefits) which is inconsistent with the
information provided to the Buyer in the Disclosed Information or
offer any redundancy or terminate or encourage the resignation of
any employee, except in accordance with current personnel practices
or for good cause;
(e) (TAX) settle or compromise any disputed or contested Tax liability;
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(f) (ACCOUNTING PRACTICES) make any change in accounting methods,
principles or practices used by it except if required by a change in
the Accounting Standards;
(g) (FORGIVENESS OF DEBT) cancel any indebtedness for money owed to it,
or waive any claim or right having a value in excess of A$100,000
(other than, in the case of WAG, in connection with the transfer of
the Non-Sale Assets of WAG to the Vendor or a Related Body Corporate
of the Vendor);
(h) (LEASES) lease, licence or otherwise dispose of any of its assets,
except in the ordinary course of business consistent with past
practices and at fair value;
(i) (SETTLEMENT OF CLAIMS) settle any claim, action or proceeding for an
amount in excess of A$100,000;
(j) (CAPITAL EXPENDITURE) make any capital expenditure in excess of
A$100,000 in the aggregate, other than:
(i) in accordance with proposed capital expenditure which has been
disclosed to the Buyer in the Disclosed Information;
(ii) as required by law; or
(iii) in the case of any emergency;
(k) (DEBT) raise any new financial accommodation (but this does not
prevent the use of existing facilities, in the ordinary course of
business);
(l) (INSURANCE) materially modify any existing insurance policy in a
manner which adversely affects the level of coverage of a Controlled
Entity, its business or assets; and
(m) (CORPORATE ACTIONS) does not:
(i) increase, reduce or otherwise alter its share capital or grant
any options for the issue of shares or other securities;
(ii) declare or pay a dividend, other than a cash dividend which is
permitted under clause 4.10 ("Distributions") (other than, in
the case of WAG, in connection with the transfer of the
Non-Sale Assets of WAG to the Vendor or a Related Body
Corporate of the Vendor);
(iii) make a distribution or revaluation of assets (other than, in
the case of WAG, in connection with the transfer of the
Non-Sale Assets of WAG to the Vendor or a Related Body
Corporate of the Vendor);
(iv) buy back shares in its own capital; or
(v) alter its constitution or the Trust Deed as that document is
in force and effect as at the date of this agreement,
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except, in each case, to the extent contemplated by, or required to give
effect to a provision of, this agreement.
5.3 RELEASE OF SEMP
On or prior to the Completion Date, the Vendor undertakes to procure that
CMS GTA is discharged from all of its obligations under the SEMP which
have accrued in the period up to and including the Completion Date.
5.4 RETENTION BONUS AGREEMENTS
On or prior to the Completion Date, the Vendor undertakes to procure that
CMS GTA is discharged from all of its obligations under the Retention
Bonus Agreements which have accrued in the period up to and including the
Completion Date.
5.5 MATERIAL ADVERSE EVENT - PARMELIA
(a) If a Material Adverse Event occurs prior to Completion, then the
Buyer will not be excused from its obligation to Complete, but may,
not later than 5 Business Days' after the occurrence of that event
give the Vendor a notice requiring the Vendor to make one of the
elections set out in paragraph (b).
(b) If the Buyer gives a notice in accordance with paragraph (a), then
after consultation with the Buyer, the Vendor must, by notice given
not later than 5 Business Days' after receiving the notice from the
Buyer under paragraph (a), make one of the following elections in
its sole discretion:
(i) the Vendor, may at its own cost, reinstate the Parmelia
pipeline (including the Dongara gas plant) to overcome the
effects of the Material Adverse Event within a reasonable
period having regard to the nature of the Material Adverse
Event after that notice and indemnify the Buyer and CMS GTA,
for an amount up to A$5,000,000 (or such lesser amount agreed
by the Buyer and the Seller) for any actual costs of the Buyer
or CMS GTA associated with complying with any public inquiry
or defending any departmental prosecution or criminal
proceeding against CMS GTA or any of its officers, employees
or consultants as a result of the Material Adverse Event; or
(ii) the Vendor may elect to indemnify the Buyer and CMS GTA, for
an amount up to A$5 million (or such lesser amount agreed by
the Buyer and the Seller), for:
(A) the actual costs incurred by the Buyer or CMS GTA (net
of insurance proceeds received by the Buyer or CMS GTA)
in reinstating the Parmelia pipeline (including the
Dongara gas plant) to overcome the effects of the
Material Adverse Event; and
(B) any actual costs of the Buyer or CMS GTA associated with
complying with any public inquiry or defending
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any departmental prosecution or criminal proceeding
against CMS GTA or any of its officers, employees or
consultants as a result of the Material Adverse Event.
(c) The Vendor may at any time by reasonable notice to the Buyer require
the verification and independent audit of the amounts payable by the
Vendor under that paragraph. The Vendor shall bear the cost of that
verification and audit unless the verification or audit demonstrates
that the amounts claimed by the Buyer under that paragraph were
materially incorrect.
5.6 PRE-SALE RESTRUCTURE
The Vendor agrees to keep the Buyer regularly informed on the progress of
the Vendor's application to the Foreign Investment Review Board in
relation to the Pre-Sale Restructure.
6 CONDUCT AFTER COMPLETION
6.1 PROHIBITION ON USE OF A VENDOR'S NAME
The Buyer acknowledges that it and, from Completion, the Target Entities,
will have no right in or to, or to use, the name "CMS" except for the sole
purpose of representing that the Buyer and the Target Entities are
successors to the Vendor. The Buyer must:
(a) from Completion, not use any trading name, business name, company
name, logo, mark or domain name containing or consisting of the name
CMS in any document;
(b) subject to paragraph (c) as soon as practical, and no later than 30
days after Completion, ensure that none of the trading names,
business names, company names, logos, marks or domain names used in
connection with the business of any Target Entity consist of or
contain the name CMS; and
(c) no later than 90 days after Completion, ensure that no sign on or
related to any of the premises used in connection with the business
of any Target Entity displays or contains the name CMS.
6.2 EXCLUSION OF DIRECTORS FROM LIABILITY
From Completion the Buyer will ensure that each Target Entity does not
take any action or proceeding or make any claim, demand, suit, proceeding,
action or cause of action against any of the present or former directors,
officers or employees of a Target Entity, the Vendor or any of its Related
Bodies Corporate in respect of any act or omission on the part of such
director, officer or employee before Completion or relating to any
financial or other information approved or provided by the director,
officer or employee before Completion, other than any matter arising from
the wilful misconduct or dishonesty of that director, officer or employee
or a breach of duties by that director, officer or employee. The Buyer
acknowledges that this clause 6.2
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("Exclusion of directors from liability") is for the benefit of those
directors, officers and employees, and is held on trust for them by the
Vendor.
6.3 ACCESS TO INFORMATION
If, at any time following the Completion Date, the Vendor requires access
to the Information, any executives, officers or employees of any Target
Entity in connection with:
(a) the preparation of any annual or financial report;
(b) the preparation of Tax or Relevant Tax returns for each Target
Entity, the Vendor and its Related Bodies Corporate;
(c) any Tax or Relevant Tax audit of a Target Entity, the Vendor or its
Related Bodies Corporate;
(d) any Claim referred to in clause 6.4 ("Retained Potential Claims");
or
(e) any Claim made under the Vendor Warranties,
then on reasonable notice from the Vendor, the Buyer must, and must
procure that the Target Entities will:
(f) supply to the Vendor, or its nominated representative, copies of
such Information (at the cost of the Vendor); and
(g) provide the Vendor or its nominated representative with full and
free access to such Information and executives, officers and
employees and allow copies to be taken of that Information as the
Vendor or its representative considers appropriate.
6.4 INFORMATION HELD BY VENDOR
If, at any time following the Completion Date, the Buyer requires access
to any Information held by the Vendor or its Related Bodies Corporate in
relation to any Target Entity for the purposes of the tax affairs of the
Buyer or any of the Target Entities or for any other purpose associated
with the proper administration or the business activities of the
Controlled Entities, the Vendor will:
(a) supply to the Buyer, or its nominated representative, copies of such
Information (at the cost of the Buyer); and
(b) provide the Buyer or its nominated representative with full and free
access to such Information and allow copies to be taken of that
Information as the Buyer or its representative considers
appropriate.
6.5 PRESERVATION OF INFORMATION
Each party shall take reasonable and customary steps to preserve the
Information of the Target Entities held by it after Completion.
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6.6 ACCOUNTING ASSISTANCE
Following Completion, and by not later than 31 October 2004, the Buyer
will provide Vendor with a copy of the Australian GAAP audited
consolidated financial statements of SCP1 for the period ended June 30
2004. These financial statements shall be audited in accordance with US
GAAS and will be accompanied by a narrative description of the differences
between Australian GAAP and US GAAP for SCP1. The actual cost (as
evidenced by bill of payment) of the US GAAS audit and the preparation of
the narrative description of the differences between Australian GAAP and
US GAAP for SCP1 will be reimbursed by the Vendor to the Buyer. The Buyer
also agrees that the Vendor may use any financial information, including
the audited financial statements for the period ended 30 June 2004 during
the time that SCP1 was owned by the Vendor, for inclusion in the filings
which the Vendor makes to the US Securities Exchange Commission.
6.7 CONNECTION TO CMS SERVER
The Buyer acknowledges that the Vendor and its Related Bodies Corporate
may, with effect from Completion, disconnect the address book server
connection which currently links the electronic address books of CMS GTA
to the electronic address books of the Vendor and its Related Bodies
Corporate.
7 EMPLOYEES
Schedule 4 ("Employees") contains a list of all employees of each of the
Controlled Entities as at the date of this agreement.
8 SUPERANNUATION
8.1 SUPERANNUATION
The Vendor agrees to do everything reasonably required by the Buyer to put
the Buyer or its nominee in the same position at Completion as regards
control of or influence over the administration of each Fund as the Vendor
is in on the date of this agreement.
8.2 RECORDS
The Vendor agrees to ensure that both before and after the Completion Date
the Buyer and any actuary appointed by it are provided with all records
and information within the possession or control of the Vendor which they
may require (including detailed information about each of the members and
their participation in each Fund) in order to verify the correctness of
any calculations or values to be ascertained for the purposes of this
agreement, and to enable the Buyer to take over responsibility for and
administer superannuation arrangements for members. This obligation
extends to any records, information or systems which are recorded,
maintained or otherwise dependent on any computerised or similar system or
service.
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9 WARRANTIES AND REPRESENTATIONS
9.1 WARRANTIES BY ALL PARTIES
Each party represents and warrants to each other party that:
(a) (INCORPORATION AND EXISTENCE) it has been incorporated in accordance
with the laws of its place of incorporation, is validly existing
under those laws and has power and authority to carry on its
business as it is now being conducted; and
(b) (POWER) it has power to enter into this agreement and comply with
its obligations under it; and
(c) (NO CONTRAVENTION OR EXCEEDING POWER) this agreement and the
transactions under it which involve it do not:
(i) contravene its constituent documents (if any); or
(ii) contravene any law or obligation by which it is bound or to
which any of its assets are subject; or
(iii) cause a limitation on its powers or the powers of its
directors to be exceeded; and
(d) (VALIDITY OF OBLIGATIONS) its obligations under this agreement are
valid and binding and are enforceable against it in accordance with
their terms; and
(e) (NOT A TRUSTEE) unless noted as a trustee or responsible entity in
the Details, it does not enter into this agreement as trustee; and
(f) (AUTHORISATIONS) it has full force and effect any authorisations,
approvals or consents necessary for it to enter into this agreement,
to comply with its obligations and exercise its rights under it and
to allow them to be enforced; and
(g) (SOLVENCY) after giving effect to the transactions contemplated
under this agreement, there are no reasonable grounds to suspect
that it is unable to pay its debts as and when they become due and
payable; and
(h) (LITIGATION) except for the proceedings commenced by Integrum Energy
in Michigan, USA on 17 July 2003, there is no current, pending or
threatened proceeding affecting it or any of its assets before a
court, authority, commission or arbitrator which would have a
material adverse effect on its ability to perform its obligations
under this agreement; and
(i) (NO INSOLVENCY EVENT) no Insolvency Event has occurred or has been
threatened against it and it is able to pay its debts when they are
due to be paid.
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9.2 WARRANTIES BY BUYER
The Buyer represents and warrants to the Vendor that:
(a) (ACQUISITION IS AN INVESTMENT) it is acquiring the Sale Assets as an
investment for its own benefit and not with a view to any on sale or
transfer of the Sale Assets to a third party; and
(b) (GOVERNMENT AGENCY AUTHORISATIONS) it has in full force and effect
any consents, approvals or authorisations required from a Government
Agency to enter into this agreement, to comply with its obligations
and exercise its rights under it and to allow them to be enforced;
and
(c) (NO CONTRAVENTION) this agreement and the transactions under it
which involve it do not contravene any security or document to which
the Buyer or the Buyer Guarantor is a party, authorisation, licence
or any other restriction; and
(d) (FINANCIAL CAPABILITY) it has the financial capability to purchase
the Sale Assets on the terms and conditions set out in this
agreement and will have such capability on the Completion Date.
9.3 WARRANTIES BY THE VENDOR
The Vendor gives the representations and warranties to the Buyer set out
in schedule 2 ("Warranties by Vendor") as at the date of this agreement
and the Vendor acknowledges that in entering into this agreement, the
Buyer is relying on the Vendor Warranties.
9.4 WARRANTIES CORRECT AND NOT MISLEADING
(a) The Vendor represents and warrants to the Buyer; and
(b) the Buyer represents and warrants to the Vendor,
that, subject to this agreement, each of the warranties given by it is
correct and not misleading in any material respect on the date of this
agreement and will be correct and not misleading in any material respect
at the Completion Date, as if made on and as at each of those dates.
9.5 DISCLOSURE
The Vendor Warranties are qualified by:
(a) the matters disclosed in this agreement, the Disclosed Information,
any information available on a public register in Australia or the
Cayman Islands on the date of this agreement and the Disclosure
Letter; and
(b) any fact, matter or circumstance which was known to the Buyer as at
the date of this agreement; and
(c) any fact, matter or circumstance which was generally known in the
gas industry as at the date of this agreement and as a result any
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purchaser of the Sale Assets would know that fact, matter or
circumstance,
and the Buyer cannot claim that any fact, matter or circumstance causes:
(a) any damage or loss to the Buyer or a Target Entity; or
(b) the Vendor Warranties to be false or misleading; or
(c) the Vendor Warranties to be breached,
if the fact, matter or circumstance is disclosed in this agreement, the
Disclosed Information, any information available on a public register in
Australia or the Cayman Islands on the date of this agreement or the
Disclosure Letter provided that in relation to any fact, matter or
circumstance disclosed in the Disclosed Information, the Disclosed
Information fairly discloses that fact, matter or circumstance having
regard to the context in which the information is disclosed.
9.6 SEPARATE WARRANTIES
Each Vendor Warranty is to be treated as a separate and independent
representation and warranty. The interpretation of any statement made may
not be restricted by reference to or inference from any other statement or
provision of this agreement, except to the extent expressly provided to
the contrary in this agreement.
9.7 BUYER'S ACKNOWLEDGEMENTS
The Buyer acknowledges and agrees that:
(a) (NO OTHER REPRESENTATIONS) in entering into this agreement and in
proceeding to Completion, the Buyer (or any person acting on its
behalf) relies on the Vendor Warranties and does not rely on any
other representation, warranty, inducement, statement, disclosure,
condition (whether express or implied) or other conduct which may
have been made by or on behalf of the Vendor or a Target Entity, or
by or on behalf of any other person, whether in relation to the sale
of the Sale Assets or otherwise;
(b) (EXCLUSION OF OTHER TERMS) except as provided in the Vendor
Warranties or expressly under this agreement, all terms, conditions,
warranties and statements, whether express, implied, written, oral,
collateral, statutory or otherwise, are excluded, and the Vendor
disclaims all liability in relation to them, to the maximum extent
permitted by law;
(c) (BUYER HAS RELIED ON ITS OWN ENQUIRIES) subject to the requirements
of the Vendor in relation to confidentiality and to the protocols
(as amended) for the operation of the Data Room which were binding
on the Buyer, the tender sale process leading to the execution of
this agreement was conducted on the basis that the participants,
including the Buyer, were required to rely on their own enquiries
and investigations during that process, and it has had the
opportunity to make and has made reasonable enquiries and
investigations in
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relation to all matters material to it and has, having regard to the
Vendor Warranties, satisfied itself in relation to the matters
arising from those enquiries and investigations;
(d) (CLAIMS) it agrees not to make and waives any right it may have to
make any claim against the Vendor, a Target Entity or any of their
respective officers, employees, agents or advisors under section 52
of the Trade Practices Act 1974 (Cth), or any corresponding or
similar provision of any state or territory legislation or any
similar provision of any legislation in any relevant jurisdiction or
any other applicable laws, unless it is based solely on and limited
to the regime contemplated by this agreement;
(e) (RELEASE FROM CLAIMS) except for the Vendor's obligations under the
Vendor Warranties, by this agreement the Buyer releases and shall
procure that the Buyer's Affiliates release, the Vendor, each Target
Entity and their respective officers, employees, agents and
advisors, from all claims, demands, obligations or liabilities
whether in tort (including negligence), statute, contract or
otherwise which it has or may have after the date of this agreement
which arise out of the negotiations for and subject matter of this
agreement or agreements entered into by the Vendor, the Target
Entities and the Buyer under or pursuant to this agreement, other
than as may be provided for in this agreement or agreements entered
into by the Vendor, the Target Entities and the Buyer under or
pursuant to this agreement;
(f) (KNOWLEDGE AND EXPERIENCE) it has such knowledge and experience in
financial and business matters as to be capable of evaluating the
merits and risks of purchasing the Sale Assets;
(g) (FORWARD LOOKING FORECASTS) the Vendor Warranties do not apply to
any forward looking statements, financial forecasts, projections,
opinions of future performance or statements relating to prospects
of the Target Entities or the pipeline industry that have been
provided by a Vendor, any Target Entity or any of their respective
representatives. No warranty is given or representation that any
such financial forecast, projection, opinion or statement will be
met or achieved. Any such information that has been provided to the
Buyer was provided for information purposes only.
9.8 BREACH OF VENDOR WARRANTIES PRIOR TO COMPLETION
(a) If prior to Completion, the Buyer or any Affiliate of the Buyer
becomes aware of any fact, matter or circumstance which in the
Buyer's reasonable opinion might give rise to a Claim under the
Vendor Warranties, then the Buyer must give notice to the Vendor of
such breach or inaccuracy ("NOTICE OF BREACH") promptly upon
becoming aware of that fact, matter or circumstance.
(b) To avoid doubt, the Buyer may not take action in respect of a Claim
under the Vendor Warranties unless it has given a Notice of Breach
in accordance with paragraph (a).
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(c) The Buyer and the Vendor agree and acknowledge that neither party is
entitled to rescind or terminate this agreement for a breach of any
of the Vendor Warranties.
9.9 CLAIMS PROCEDURE
If, at any time after Completion, the Buyer becomes aware of any fact,
matter or circumstance in which the Buyer may seek to make a claim against
the Vendor for any breach of a Vendor Warranty, then:
(a) (NOTICE TO VENDOR) the Buyer will give notice in writing to the
Vendor, including details of the fact, matter or circumstance giving
rise to the breach, the nature of the breach and the Buyer's
calculation of the loss suffered and any other further related
information of which the Buyer, any Related Body Corporate of the
Buyer or Agility Management Pty Ltd becomes aware, as soon as
reasonably practical but in any event within 75 days of the date on
which it, that Related Body Corporate or Agility Management Pty Ltd
became aware of that fact, matter or circumstance;
(b) (MITIGATION) the Buyer must take reasonable steps to mitigate any
loss that may give rise to a claim against the Vendor for breach of
a Vendor Warranty;
(c) (FAILURE BY BUYER TO GIVE NOTICE) if the Buyer does not give notice
of a fact, matter or circumstance when required under paragraph (a),
then the Buyer waives its rights in respect of any Loss suffered by
the Buyer as a result of a Vendor Warranty being incorrect;
(d) (WHERE VENDOR MAY DEFEND) if the alleged breach of warranty arises
in respect of a claim made against a Target Entity, then the Buyer
shall ensure that the Vendor may at its option and at its cost (and
at no cost to the Target Entity or the Buyer), in the name of the
Target Entity, prosecute or defend any proceedings relating to the
claim. The Vendor shall conduct the proceedings in consultation at
all times with the Buyer, and so that the reputation of the Target
Entity is not harmed in any material way;
(e) (NO PAYMENT OR ADMISSION BY BUYER) if the alleged breach of warranty
arises in respect of a claim made against a Target Entity and the
Vendor has elected under paragraph (d) to prosecute or defend any
proceedings relating to the claim, then the Buyer will ensure that
neither it, nor a Target Entity, nor any Affiliate of the Buyer,
without the prior written consent of the Vendor, makes any payment
(unless the last date for making a payment required by law has
occurred) or admission to a third party, or takes any other step
which may in any way prejudice the defence of any claim made against
a Target Entity or the reduction of the liability of a Target Entity
under such a claim, or prejudice the prosecution of any claim by a
Target Entity.
Except in the case of a payment, the Vendor will not unreasonably
withhold its consent, unless the Vendor has assumed that prosecution
or defence of the proceedings relating to the claim under clause
9.9(d) ("where Vendor may defend").
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In the case of a payment, the Vendor may not withhold its consent if
each of the following conditions is satisfied:
(i) the Buyer has notified the Vendor of the proposed payment; and
(ii) the payment is required to enable the Buyer to comply with its
obligations under paragraph (b) ("mitigation"); and
(iii) the Vendor reasonably considers that its interests will not be
prejudiced if the payment is made;
(f) (BUYER TO TAKE ACTION) at the expense and direction of the Vendor,
and subject to the Vendor indemnifying the Buyer in respect of
taking such action, the Buyer must procure that the Target Entities
take such action (including legal proceedings) as the Vendor may
require to avoid, dispute, defend, appeal or compromise the claim
and any adjudication of it;
(g) (ACCESS) if the Vendor elects to defend a claim under clause 9.9(d)
("Where the Vendor may defend"), without limiting clause 6.3
("Access to information"), give the Vendor and their professional
advisors reasonable access to the Target Entities' personnel,
premises, relevant chattels, accounts, documents, correspondence,
information and records within the power, possession or control of
the Controlled Entities, and use all reasonable endeavours to do the
same in respect of the Non-controlled Entities, to enable the Vendor
and its professional advisors to examine those items and to take
copies or photographs of them at the Vendor's expense; and
(h) (WHERE BUYER MAY DEFEND) paragraphs (a) and (d) of this clause do
not apply if the amount of a Loss in respect of which the Buyer
makes or may seek to make a claim is below the level at which the
Vendor must bear the Loss under clause 9.12 ("Threshold for Vendor
Warranty claims"). In that case, the Buyer may control the defence
or prosecution of the claim, but will consult with the Vendor in
doing so.
9.10 RESTRICTIONS ON LIABILITY
Despite anything to the contrary contained in this agreement, the Vendor
will not be liable for any Claims:
(a) (INSURANCE) to the extent that the Buyer Group is entitled to claim
an indemnity against any loss or damage suffered arising out of the
breach or claim under the terms of any insurance policy of or
applicable to the Buyer Group (or would have been so entitled if the
Buyer Group had maintained to force policies that existed at
Completion). Nothing in this paragraph limits the Buyer's
entitlement to make a claim for any breach of any Vendor Warranty or
to commence legal proceedings in respect of the claim;
(b) (BUYER'S AWARENESS) if the Buyer, any of its Affiliates or Agility
Management Pty Ltd (in its capacity as agent for the Buyer in the
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conduct of due diligence) are, prior to Completion, aware of the
matter giving rise to the Claim. For this purpose, the Buyer will be
deemed to have knowledge of those matters disclosed in the Disclosed
Information and any information available on a public register in
Australia or the Cayman Islands on the date of this agreement;
(c) (BUYER CEASES TO OWN SALE ASSETS) if the Buyer or any wholly-owned
subsidiary of the Buyer ceases at any time after Completion to own
the Sale Assets to which the Claim relates;
(d) (BUYER'S OWN ACTIONS) to the extent that the Claim is as a direct
result or consequence of any voluntary act, omission, transaction or
arrangement of or on behalf of the Buyer after Completion;
(e) (LOSS ONLY COMPENSATED ONCE) to the extent that the Buyer has
recovered the same loss under any provision of this agreement or any
other document referred to in this agreement or the Disclosed
Information;
(f) (BUYER OTHERWISE COMPENSATED) to the extent that the subject of the
Claim has been or is made good or is otherwise compensated for
without cost to the Buyer;
(g) (LAST ACCOUNTS) to the extent that the matter in respect of which
the Claim is made is accurately accrued, provided for or otherwise
reflected in the Last Accounts;
(h) (LEGISLATION) to the extent that the Claim is as a result of or in
respect of, or where the Claim arises from any act, matter,
omission, transaction or circumstance which would not have occurred
but for any legislation not in force at the date of this agreement
or any change of any law or administrative practice of any
governmental agency, including any such legislation or changes which
take effect retrospectively or any increase in the rates of Taxes
liable to be paid or any imposition of Tax not in effect at the date
of this agreement;
(i) (LABOUR DISPUTES) to the extent that any labour dispute, strike or
work stoppage arises from or is connected with the sale or proposed
sale of the Sale Assets, or the Buyer not offering employment or
engagement (as required by this agreement) or terminating the
employment or engagement of one or more employees;
(j) (COMPANY RESTRUCTURE) to the extent that the breach, or the damage
(if any) flowing from the breach, would not have arisen but for any
restructure or change in ownership of WAG after Completion or any
change in the accounting or Tax policies of WAG after Completion.
However, this does not apply to a change in the Tax policy of WAG
where the Buyer is able to satisfy the Vendor, or failing that, an
Independent Expert, that the Tax policy adopted by WAG prior to
Completion was incorrect.
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9.11 TIME LIMIT FOR VENDOR WARRANTY CLAIMS
The Vendor is not liable for, and the Buyer may not claim for, any Loss
suffered by the Buyer resulting from, a Vendor Warranty being incorrect
unless reasonable details of the claim have been given to the Vendor in
writing within:
(a) in respect of the Vendor Warranties listed in schedule 2
("Warranties by Vendor") (except those Vendor Warranties referred to
in paragraph (b) of this clause 9.11 ("Time limit for Vendor
Warranty claims"), 14 months after the Completion Date; and
(b) in respect of the Vendor Warranties listed in part L ("Taxation") of
schedule 2 ("Warranties by Vendor"), 5 years after the Completion
Date.
9.12 THRESHOLD FOR VENDOR WARRANTY CLAIMS
The Vendor is not liable for, and the Buyer may not claim for, any Loss
suffered by the Buyer resulting from a breach of the Vendor Warranties
unless the amount of the Loss (before the application of clause 9.18
("Later recoveries - tax"):
(a) exceeds A$250,000 in respect of a particular matter; and
(b) exceeds A$1,000,000 in aggregate in respect of all matters referred
to in paragraph (a).
9.13 EFFECT OF PAYMENT
If a payment is made for a breach of any Vendor Warranty, the payment is
to be treated as an equal (that is, dollar for dollar) reduction in the
Purchase Price of the Sale Assets to the extent that the claim is directly
attributable to the Sale Assets.
9.14 LIMIT OF VENDOR LIABILITY
The maximum aggregate liability of the Vendor for all Loss (including in
respect of the Vendor Warranties, but excluding, to avoid doubt, all Loss
in respect of the indemnities given in clause 9.22 ("Tax indemnity")) is
A$20,000,000.
9.15 THIRD PARTY CLAIMS
(a) If, pursuant to clause 9.9(d) ("where Vendor may defend"), the
Vendor advises the Buyer that it does not wish to assume the conduct
of the defence of a third party claim, the Buyer will:
(i) liaise with the Vendor in relation to the defence of that
claim; and
(ii) provide the Vendor with reasonable access to a copy of any
notice, correspondence or other document relating to that
claim; and
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(iii) ensure that it does not or does not cause to be done anything
in relation to the claim which compromises or prejudices the
Vendor's rights under this clause 9.15(a) ("Third party
claims").
(b) Nothing in this clause 9.15 ("Third party claims") shall require the
Buyer, acting reasonably, to allow the Vendor to have access to
anything which:
(i) is the subject of legal privilege if the Buyer's counsel is of
the legal opinion that such access would deprive it of that
privilege; or
(ii) has been prepared for the purpose of, or in contemplation of,
Buyer making a claim against the Vendor under this agreement.
9.16 INSURANCE
(a) From the Completion Date until the date which is 14 months after the
Completion Date, the Buyer must ensure that each Target Entity
maintains in respect of the Sale Assets the same classes of
insurance and the same levels of insurance, as maintained by all
Target Entities in respect of the Sale Assets or the assets or
business of a Controlled Entity immediately prior to Completion. The
Buyer indemnifies and will keep indemnified the Vendor against any
liability incurred by the Vendor in connection with or in
consequence of or arising out of any breach or default by the Buyer
of its obligation under this clause.
(b) If and to the extent that a Target Entity is covered by an insurance
policy held by the Vendor or any Affiliate of the Vendor (other than
an Affiliate who is also a Target Entity) at any time prior to the
Completion Date and that Target Entity has made a claim under that
policy prior to the Completion Date, or is entitled to make a claim
under that policy in respect of an insured event which occurred
prior to the Completion Date, and in each case, that claim is still
outstanding as at the Completion Date, then the following procedure
shall apply in respect of that claim and that policy:
(i) subject to paragraph (ii), the Vendor and its Affiliates shall
continue to administer, adjust, settle and pay that claim, on
behalf of that Target Entity (including all costs necessary to
settle that claim, including compensatory, medical, legal and
other allocated expenses, net of insurance proceeds);
(ii) the Vendor shall obtain the consent of the Buyer before
adjusting, settling or paying any claim of an amount greater
than US$100,000 (or its equivalent in another currency);
(iii) the Vendor shall permit the Buyer to join the Vendor in any
settlement negotiations with claimants, insurers or insurance
adjusters in relation to that claim; and
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(iv) if that claim exceeds a deductible or self-insured retention
under that policy and the Vendor has made a payment under
sub-paragraph (ii), the Vendor shall be entitled to the
benefit of any insurance proceeds which may be available to
discharge any portion of that claim.
9.17 ACT OR OMISSION AFTER COMPLETION
The liability of the Vendor in respect of any claim under the Vendor
Warranties shall be reduced to the extent that the claim arises as a
result of or in connection with any act or omission after Completion by
the Buyer or a Target Entity.
9.18 LATER RECOVERIES - TAX
(a) At the time of the Vendor making a payment to the Buyer pursuant to
a claim under the Vendor Warranties, the Buyer must notify the
Vendor of whether the fact, matter or circumstance to which the
Vendor Warranty claim related would result in a reduction in Tax
payable by the Buyer or its Related Bodies Corporate and the date on
which the Buyer expects the benefit will be received ("TAX DEDUCTION
DATE").
(b) Together with the notice under paragraph (a), the Buyer shall
provide the Vendor with a certificate from the Buyer's auditor which
confirms that:
(i) the Buyer's expectation in paragraph (a) is reasonable, based
on the Buyer's and its Related Bodies Corporate's forecast
taxable income and ability to claim tax deductions; and
(ii) the Buyer's expectations reflect the usage of tax benefits in
accordance with the time order in which they accrue to the
Buyer and its Related Bodies Corporate.
(c) The Buyer must pay the amount of the Tax benefit within 30 Days
after the Tax Deduction Date to the Vendor.
9.19 LATER RECOVERIES - OTHER
Subject to clause 9.18 ("Later recoveries - tax"), if, after the Vendor
has made a payment to the Buyer pursuant to a claim under the Vendor
Warranties, the Buyer or a Target Entity receives a payment or benefit in
relation to the fact, matter or circumstance to which the Vendor Warranty
claim related (including by reason of a recovery under an insurance
policy), then the Buyer must repay to the Vendor the amount received from
the Vendor or, if less, the amount of the payment or benefit which was
received by the Buyer or Target Entity (as the case may be).
9.20 LIMIT ON LIABILITY
A party is not liable for any indirect or consequential loss (including
without limitation any actual or prospective loss of revenue or profit,
any other economic loss, loss of opportunity or loss of profit) or any
special, exemplary, punitive, incidental or extraordinary loss or damages.
If the cap on liability in
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this clause 9.20 ("Limit on liability") is not effective for any reason or
there is any other Claim against the Vendor, the Vendor is not liable for
any amount greater than the aggregate amount paid by the Buyer under
clause 3 ("Completion") less all cash paid in respect of the Sale Assets
to the Buyer by the Target Entities after Completion.
9.21 EXCEPTION
Clauses 9.5 ("Disclosure"), 9.12 ("Threshold for Vendor Warranty claims"),
9.11 ("Time limit for Vendor Warranty claims") and 9.14 ("Limit of Vendor
liability") do not apply in respect of the Vendor Warranty set out in item
B4 ("Non-Sale Assets") of schedule 2 ("Warranties by Vendor").
9.22 TAX INDEMNITY
The Vendor indemnifies and defends the Buyer and each Controlled Entity
against, and must pay the Buyer or the Controlled Entity the amount of,
any:
(a) Relevant Tax payable by a Controlled Entity to the extent that
Relevant Tax:
(i) arises out of any act, transaction, event or circumstance
which occurred prior to Completion (including the Pre-Sale
Restructure); or
(ii) arises as a result of entry into this agreement or Completion
(other than, to avoid doubt, any Duty to be paid by the Buyer
under clause 10.2 ("Stamp duty"); and
(b) Tax Costs incurred by or on behalf of a Controlled Entity to the
extent that those Tax Costs are incurred at the request of the
Vendor or arise from or relate to the Buyer performing its
obligations under Clauses 9.9 ("Claims procedure") and 9.15 ("Third
party claims") this in relation to a claim made under paragraph (a);
and
(c) costs (including Tax Costs but excluding Taxes) incurred by or on
behalf of a Controlled Entity in connection with the Pre-Sale
Restructure.
Clauses 9.9 ("Claims procedure") and 9.15 ("Third party claims") apply to
a claim by the Buyer under this clause 9.22 ("Tax indemnity") as though
that claim was a claim for a breach of warranty by the Vendor.
10 COSTS AND STAMP DUTY
10.1 LEGAL COSTS
Each party agrees to bear its own legal and other costs and expenses in
connection with the preparation, execution and completion of this
agreement and of other related documentation except for stamp duty.
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10.2 STAMP DUTY
The Buyer agrees to bear all stamp duty (including fines and penalties)
chargeable, payable or assessed in connection with:
(a) this agreement; and
(b) the transfer of the Sale Assets to the Buyer.
11 GOODS AND SERVICES TAX (GST)
11.1 GST GROSS UP
If any party to this agreement makes a supply under or in connection with
this agreement in respect of which GST is payable, the consideration for
the supply but for the application of this clause 11.1 ("GST EXCLUSIVE
CONSIDERATION") is increased by an amount equal to the GST exclusive
consideration multiplied by the rate of GST prevailing at the time the
supply is made.
11.2 REIMBURSEMENTS
If a party must reimburse or indemnify another party for a loss, cost or
expense, the amount to be reimbursed or indemnified is first reduced by an
input tax credit the other party is entitled to for the loss, cost or
expense, and then increased in accordance with clause 11.1 ("GST gross
up").
11.3 TAX INVOICE
A party need not make a payment for a taxable supply made under or in
connection with this agreement until it receives a tax invoice for the
supply to which the payment relates.
12 NOTICES
12.1 FORM
Unless expressly stated otherwise in this agreement, all notices,
approvals, consents or other communications in connection with this
agreement must be in writing signed by an Authorised Officer and must be
marked for the attention of the person specified in the Details or, if the
recipient has notified otherwise, then marked for attention in the last
way notified.
12.2 DELIVERY
Notices must be:
(a) left at the address set out or referred to in the Details; or
(b) sent by prepaid ordinary post (airmail if appropriate) to the
address set out or referred to in the Details; or
(c) sent by fax to the fax number set out or referred to in the Details.
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However, if the intended recipient has notified a changed postal address
or changed fax number, then the communication must be to that address or
number.
12.3 WHEN EFFECTIVE
A notice, approval, consent or other communication takes effect from the
time it is received.
12.4 DEEMED RECEIPT - POSTAL
If sent by post, it is taken to have been received three days after
posting or seven days after posting if posted to or from a place outside
Australia.
12.5 DEEMED RECEIPT - FAX
If sent by fax, it is taken to have been received at the time shown in the
transmission report.
12.6 DEEMED RECEIPT - GENERAL
Despite clauses 12.4 ("Deemed receipt - postal") and 12.5 ("Deemed receipt
- fax") if notices are received after 5.00 pm in the place of receipt or
on a non-Business Day in that place, they are taken to be received at
9.00 am on the next working day in that place and if they are received
before 9.00 am on a Business Day in the place of receipt, then they are
taken to be received at 9.00 am on that Business Day in that place.
13 CONFIDENTIAL INFORMATION
13.1 PARTIES TO KEEP INFORMATION CONFIDENTIAL
Each party undertakes to the other that it will keep confidential and will
not make use or permit any person to make use of and will not disclose or
permit to be disclosed or communicated to any third person, this
agreement, any Confidential Information or information of any nature in
respect of the business or affairs of a party or a Target Entity. This
clause will not apply to any information which:
(a) at the relevant date was a matter of public knowledge or which
becomes publicly known at a later date without breach by the
disclosing party of this clause; or
(b) is lawfully obtained from a third party under circumstances
permitting its disclosure; or
(c) the disclosing party has agreed in writing is excluded from this
clause; or
(d) the disclosing party is required by law or by any stock exchange or
regulatory authority to disclose; or
(e) is disclosed to any advisor for the purpose of advising the
disclosing party, on the condition that the restrictions in this
clause 13
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("Confidential Information") apply to the use of that information by
the advisor; or
(f) is disclosed to a director, officer or employee of the disclosing
party or a Target Entity, whose function requires him to have the
information; or
(g) in respect of information about the Target Entities, is reasonably
used or disclosed by the Buyer as a shareholder in the Target
Entities after the Completion Date; or
(h) is Disclosed Information; or
(i) to any lending or financial institution which has made, or is
considering making, financial accommodation available to a party; or
(j) is disclosed with the non-disclosing party's consent.
13.2 DISCLOSURE TO OTHER POTENTIAL BUYERS
The Buyer acknowledges that the Vendor has disclosed to other potential
buyers of the Sale Assets information which may be of a confidential
nature and that clause 13.1 ("Parties to keep information confidential")
does not apply to any such disclosure prior to the date of this agreement.
13.3 THIS TRANSACTION
Except and to the extent as required by law, by a stock exchange or in
order to permit the Buyer to sell its interests in the Sale Assets, no
party shall disclose the existence or contents of this document or the
transactions contemplated under it or make press or other announcements or
releases without the consent of the other party. If disclosure is
permitted under this clause 13.3, the parties shall co-operate as to the
form and manner of the disclosure, announcement or release.
13.4 SURVIVAL
This clause 13 ("Confidentiality") will survive for 5 years after
termination of this agreement.
14 MISCELLANEOUS
14.1 ASSIGNMENT OR NOVATION
A party may not assign or otherwise deal with its rights under this
agreement or allow any interest in them to arise without the consent of
the other party.
14.2 EXERCISE OF RIGHTS
A party may exercise a right, power or remedy at its discretion, and
separately or concurrently with another right, power or remedy. A single
or partial exercise of a right, power or remedy by a party does not
prevent a further exercise of that right, power or remedy or an exercise
of any other right, power or remedy. Failure by a party to exercise or
delay in exercising a right,
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power or remedy does not prevent its exercise. A party is not liable for
any loss caused by the exercise or attempted exercise of, failure to
exercise, or delay in exercising the right, power or remedy.
14.3 WAIVER AND VARIATION
A provision of or a right created under this agreement may not be waived
or varied except in writing, signed by the party or parties to be bound.
14.4 APPROVALS AND CONSENTS
A party may give conditionally or unconditionally or withhold its approval
or consent in its absolute discretion unless this agreement expressly
provides otherwise. By giving its approval or consent a party does not,
and is not to be taken to, make or give any warranty or representation as
to any circumstance relating to the subject matter of the consent or
approval.
14.5 REMEDIES CUMULATIVE
The rights, powers and remedies provided in this agreement are in addition
to other powers or remedies given by law independently of this agreement.
14.6 NO MERGER
The warranties, undertakings and indemnities in this agreement do not
merge on the Completion Date.
14.7 SURVIVAL OF INDEMNITIES
Each indemnity in this agreement is a continuing obligation, independent
from the other obligations of the parties and survives termination of this
agreement.
14.8 ENFORCEMENT OF INDEMNITIES
It is not necessary for a party to incur expense or make payment before
enforcing a right of indemnity under this agreement.
14.9 FURTHER ASSURANCES
Each party agrees, at the expense of the party which requests such action
to be taken, to:
(a) execute and cause its successors to execute documents and do
everything else necessary or appropriate to bind the parties and
their successors under this agreement; and
(b) use its best endeavours to cause relevant third parties to do
likewise to bind every party intended to be bound under this
agreement.
14.10 SEVERABILITY
If the whole or any part of a provision of this agreement is void,
unenforceable or illegal in a jurisdiction it is severed for that
jurisdiction. The remainder of this agreement has full force and effect
and the validity or enforceability of that provision in any other
jurisdiction is not affected. This
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clause has no effect if the severance alters the basic nature of this
agreement or is contrary to public policy.
14.11 CONSTRUCTION
No rule of construction applies to the disadvantage of a party because
that party was responsible for the preparation of, or seeks to rely on,
this agreement or any part of it.
14.12 TIME OF THE ESSENCE
Time is of the essence of this agreement in respect of any date or period
determined under this agreement.
14.13 ENTIRE AGREEMENT
This agreement constitutes the entire agreement of the parties about its
subject matter and any previous agreements, understandings and
negotiations on that subject matter cease to have any effect.
14.14 COUNTERPARTS
This agreement may consist of a number of copies of this agreement each
signed by one or more parties to the agreement. When taken together, the
signed copies are treated as making up the one document.
14.15 SUPERVENING LEGISLATION
Any present or future legislation which operates to vary the obligations
of a party in connection with this agreement with the result that another
party's rights, powers or remedies are adversely affected (including, by
way of delay or postponement) is excluded except to the extent that its
exclusion is prohibited or rendered ineffective by law.
15 GOVERNING LAW, JURISDICTION AND SERVICE OF PROCESS
15.1 GOVERNING LAW
This agreement and the transactions contemplated by this agreement are
governed by the law in force in Western Australia.
15.2 JURISDICTION
Each party irrevocably and unconditionally submits to the non-exclusive
jurisdiction of the courts of Western Australia and courts of appeal from
them. Each party waives any right it has to object to an action being
brought in those courts, including, without limitation by claiming that
the action has been brought in an inconvenient forum or that those courts
do not have jurisdiction.
15.3 SERVICE OF PROCESS
Without preventing any other mode of service, any document in an action
(including, without limitation, any writ of summons or other originating
process or any third or other party notice) may be served on any party by
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being delivered to or left for that party either at its address for
service of notices under clause 12.2 ("Delivery") or with its process
agent referred to in clause 15.4 ("Service of process on an appointed
process agent") at its address for services of notices under clause 15.4
("Service of process on an appointed process agent").
15.4 SERVICE OF PROCESS ON AN APPOINTED PROCESS AGENT
The Vendor irrevocably:
(a) nominates and appoints the Partner in Charge, Mallesons Stephen
Jaques, Level 60, Governor Phillip Tower, 1 Farrer Place, Sydney,
New South Wales, Australia as its agent to receive service of
process or other documents in Australia in relation to any dispute
or any other matter in connection with this agreement in Australia;
(b) agrees that the service of process of documents on the agent or any
other person appointed under paragraph (c) will be sufficient
service on it; and
(c) undertakes to ensure that the process agent remains authorised to
accept services on its behalf. If any process agent ceases to have
an office in the place specified, it will ensure that at all times
there is another person in Australia to receive process on its
behalf. It will promptly and in any event within 3 Business Days
from the date on which the process agent nominated under this clause
15.4 ("Service of process on an appointed process agent") ceases to
have an office in the place specified notify the Buyer of the
appointment of that other person.
16 GUARANTEE
16.1 CONSIDERATION
The Buyer Guarantor acknowledges that the Vendor is acting in reliance on
the Buyer Guarantor incurring obligations and giving rights under this
agreement.
The Vendor Guarantor acknowledges that the Buyer is acting in reliance on
the Vendor Guarantor incurring obligations and giving rights under this
agreement.
16.2 GUARANTEE
Each Guarantor unconditionally and irrevocably guarantees the obligations
of its Relevant Obligor under this agreement. If that Relevant Obligor
does not satisfy its obligations under this agreement on time and in
accordance with this agreement, then that Guarantor agrees to satisfy
those obligations, on demand from the Relevant Counterparty. A demand may
be made at any time and from time to time and whether or not the Relevant
Counterparty has made demand on the Relevant Obligor.
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16.3 NATURE OF GUARANTEE
The guarantee in clause 16.2 ("Guarantee") is a continuing obligation
despite any intervening payment, settlement or other thing and extends to
all of the Relevant Obligor's obligations under this agreement.
16.4 INDEMNITY
Each Guarantor indemnifies the Relevant Counterparty against any liability
or loss arising, and any Loss they suffer or incur:
(a) if the Relevant Obligor does not, or is unable to, satisfy its
obligations in accordance with this agreement; or
(b) if an obligation the Relevant Obligor would otherwise have to pay
the Guaranteed Money is found to be unenforceable; or
(c) if an obligation that Guarantor would otherwise have under clause
16.2 ("Guarantee") is found to be unenforceable; or
(d) if the Relevant Counterparty is obliged, or agrees, to pay an amount
to a trustee in bankruptcy or liquidator (of an Insolvent person) in
connection with a payment by that Guarantor or the Relevant Obligor.
(For example, the Relevant Counterparty may have to, or may agree
to, pay interest on the amount.); or
(e) if that Guarantor defaults under this agreement; or
(f) in connection with any person exercising, or not exercising, rights
under this agreement.
Each Guarantor agrees to pay amounts due under this indemnity on demand
from the Relevant Counterparty.
16.5 REINSTATEMENT OF RIGHTS
Under law relating to insolvency, a person may claim that a transaction
(including a payment) in connection with this agreement or the Guaranteed
Money is void or voidable. If a claim is made and upheld, conceded or
comprised in relation to a Relevant Obligor, then:
(a) the Relevant Counterparty is immediately entitled as against the
Guarantor in respect of that Relevant Counterparty to the rights in
respect of the Guaranteed Money to which it was entitled immediately
before the transaction; and
(b) on request from the Relevant Counterparty, that Guarantor agrees to
do anything (including signing any document) to restore to the
Relevant Counterparty any rights (including this agreement) held by
it from that Guarantor immediately before the transaction.
16.6 RIGHTS ARE PROTECTED
Rights given to a Relevant Counterparty under this agreement, and a
Guarantor's liabilities under it, are not affected by any act or omission
of the
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Relevant Counterparty or any other person. For example, those rights and
liabilities are not affected by:
(a) any act or omission:
(i) varying or replacing this agreement or any arrangement under
which the Guaranteed Money is expressed to be owing, such as
by changing the Relevant Counterparty;
(ii) releasing the Relevant Obligor or giving the Relevant Obligor
a concession (such as more time to pay);
(iii) releasing any person who gives a guarantee or indemnity in
connection with any of the Relevant Obligor's obligations;
(iv) releasing, losing the benefit of, or not obtaining any
Security Interest or negotiable instrument;
(v) by which a person becomes a Guarantor after the date of this
agreement;
(vi) by which the obligations of any person who guarantees any of
the Relevant Obligor's obligations (including under this
agreement) may not be enforceable;
(vii) by which any person who was intended to guarantee any of the
Relevant Obligor's obligations does not do so, or does not do
so effectively;
(viii) by which a person who is a co-surety or co-indemnifier for
payment of the Guaranteed Money is discharged under an
agreement or by operation of law;
(ix) by which any Security Interest which could be registered is
not registered;
(b) a person dealing in any way with an Security Interest, guarantee,
indemnity, judgment or negotiable instrument;
(c) the death, mental or physical disability or insolvency of any person
including that Guarantor or the Relevant Obligor;
(d) changes in the membership, name or business of any person;
(e) the Relevant Obligor opening an account with them;
(f) acquiescence or delay by the Relevant Counterparty or any other
person; or
(g) an assignment of rights in connection with the Guaranteed Money.
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16.7 NO MERGER
The guarantee and indemnity given by a Guarantor under this agreement do
not merge with or adversely affect, and is not adversely affected by, any
of the following:
(a) any other guarantee, indemnity, or Security Interest, or other right
or remedy to which the Relevant Guarantor in respect of that
guarantee and indemnity is entitled; or
(b) a judgment which the Relevant Counterparty obtains against that
Guarantor, the Relevant Obligor or any other person in connection
with the Guaranteed Money.
The Relevant Counterparty may still exercise its rights under this clause
16 ("Guarantee") as well as under the judgment, Security Interest or right
or remedy.
16.8 GUARANTOR'S RIGHTS ARE SUSPENDED
As long as any of the Guaranteed Money remains unpaid, a Guarantor may
not, without the Relevant Counterparty's consent:
(a) reduce its liability under this agreement by claiming that it or the
Relevant Obligor or any other person has a right of set-off or
counterclaim against the Relevant Counterparty; or
(b) exercise any legal right to claim to be entitled to the benefit of
another guarantee, indemnity, or Security Interest given in
connection with the Guaranteed Money or any other amount payable
under this agreement. (For example, a Guarantor may not try to
enforce or require the enforcement of any Security Interest the
Relevant Counterparty has taken to ensure repayment of the
Guaranteed Money.); or
(c) claim an amount from the Relevant Obligor, or another guarantor of
the Guaranteed Money in respect of that Relevant Obligor (including
a person who has signed this agreement as a "Guarantor"), under a
right of indemnity; or
(d) claim an amount in the insolvency of the Relevant Obligor or of
another guarantor of the Guaranteed Money in respect of that
Relevant Obligor (including a person who has signed this agreement
as a "Guarantor").
16.9 GUARANTOR'S RIGHT OF PROOF LIMITED
Each Guarantor agrees not to exercise a right of proof after an event
occurs relating to the occurrence of an Insolvency Event in relation to
the Relevant Obligor or another guarantor of the Guaranteed Money in
respect of that Relevant Obligor (including a person who has signed this
agreement as a "Guarantor") independently of an attorney appointed under
clause 16.12 ("Right to prove").
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16.10 NO SET-OFF AGAINST ASSIGNEES
If a Relevant Counterparty assigns or otherwise deals with its rights
under this Guarantee, the Guarantor in respect of that Relevant
Counterparty may not claim against any assignee (or any other person who
has an interest in this Guarantee) any right of set-off or other right
that Guarantor has against that Relevant Counterparty.
16.11 SUSPENSE ACCOUNT
The Relevant Counterparty may place in a suspense account any payment it
receive from a Guarantor for as long as it thinks prudent and need not
apply it towards satisfying the Guaranteed Money in respect of that
Relevant Counterparty.
16.12 RIGHT TO PROVE
Each Guarantor irrevocably appoints the Relevant Counterparty and each of
its Authorised Officers individually as its attorney and agrees to
formally approve all action taken by an attorney under this clause.
Each attorney may:
(a) do anything which that Guarantor may lawfully do to exercise its
right of proof after an Insolvency Event occurs in respect of the
Relevant Obligor or any other guarantor of the Relevant Obligor's
obligations in connection with a matter not connected with that
Guarantor's rights as "Guarantor" under this agreement. (These
things may be done in that Guarantor's name or the attorney's name
and they include signing and delivering documents, taking part in
legal proceedings and receiving any dividend arising out of the
right of proof); and
(b) delegate its powers (including this power) and may revoke a
delegation; and
(c) exercise its powers even if this involves a conflict of duty and
even if it has a personal interest in doing so.
The attorney need not account to that Guarantor for any dividend received
on exercising the right of proof under paragraph (a) except to the extent
that any dividend remains after that Relevant Counterparty has received
all of the Guaranteed Money in respect of that Relevant Counterparty and
all other amounts payable under this agreement.
17 INTERPRETATION
17.1 DEFINITIONS
These meanings apply unless the contrary intention appears.
A4 TARIFF means the 16 to 20 year contract tariff for firm services
contained in "Tariff Schedule A, Firm Services - Normal Services, Table 2:
1 January 2000 on, of the GGT Statement of Tariffs and Charges Rev. 2
contained in
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the Alternate Applicable Terms and Order Forms of the GGT Alternate
General Terms and Conditions for Gas Pipeline Services".
ACCOUNTING STANDARDS means in relation to a Target Entity:
(a) accounting standards as that term is defined in the Corporations
Act;
(b) the requirements of the Corporations Act in relation to the
preparation and content of financial reports; and
(c) if and to the extent that any matter is not covered by the
accounting standards or requirements referred to in paragraphs (a)
or (b), other relevant accounting standards and generally accepted
accounting principles applied from time to time in Australia for a
business similar to that Target Entity.
ACTION means an action, dispute, claim, demand, investigation, inquiry,
prosecution, litigation, proceeding, arbitration, mediation or dispute
resolution.
ADJUSTMENT AMOUNT has the meaning given in clause 4.6 ("Preparation of
Adjustment Statement").
ADJUSTMENT STATEMENT means the statement referred to in clause 4.5
("Contents of Adjustment Statement").
AFFILIATE means each Related Body Corporate of a party and the directors,
officers, employees, agents and advisors of that party and its Related
Body Corporate.
AUSTRALIAN GAAP means:
(a) the accounting standards from time to time approved under the
Corporations Act;
(b) the requirements of the Corporations Act in relation to the
preparation and content of the accounts; and
(c) if and to the extent that any matter is not covered by the
accounting standards or requirements referred to in paragraphs (a)
or (b), other relevant accounting standards and generally accepted
accounting principles applied from time to time in Australia for a
business similar to the relevant Controlled Entity.
AUTHORISED OFFICER means a person appointed by a party to act as an
Authorised Officer for the purposes of this agreement.
BALANCE AMOUNT means an amount (in Australian Dollars) which is equal to:
(a) the Purchase Price less the Deposit; plus
(b) the Estimated WCA Amount.
BASE RATE means the average bid rate for bills of exchange which have a
tenor of 30 days, which average bid rate is displayed on the page of the
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Reuters Monitor System designated "BBSY" on the first day of that 30 day
period, or if there is a manifest error in the calculation of that average
rate or that average rate is not displayed by 10.30 am on that date, the
rate of discount expressed as a percentage yield to maturity per annum
determined by the Vendor to be the average (rounded up to four decimal
places) of the rates at which two banks chosen by the Vendor are prepared
to purchase bills of exchange accepted by the Vendor at 11.00 am on that
day, which have tenor of 30 days.
BUSINESS means in respect of a Target Entity, the business that company is
carrying on as at the date of this agreement.
BUSINESS DAY means a day other than a Saturday, Sunday or public holiday
in Perth and Sydney.
BUYER means the person described as such in the Details.
BUYER GROUP means the Buyer and each of its Affiliates.
CLAIM means any claim, demand, action, proceeding or judgment or
liability.
CMS FINANCIAL means CMS International Financial Services Company, a
company organised and existing under the laws of the Cayman Islands.
CMS GAS means CMS Gas Transmission of Australia Holdings, a company
organised and existing under the laws of the Cayman Islands.
CMS GGT means CMS Goldfields Gas Transmission Pty Limited (ABN 44 084 545
344).
CMS GTA means CMS Gas Transmission of Australia, a company organised and
existing under the laws of the Cayman Islands having a registered branch
office in Western Australia.
CMS LUXEMBOURG means CMS Luxembourg S.A.R.L., a company organised and
existing under the laws of Luxembourg.
CMS PARMELIA means CMS Parmelia Gas Transmission Pty Limited (ACN 098 386
317).
COMPLETION means completion of the sale and purchase of the Shares in
accordance with clause 3 ("Completion") and COMPLETE has a corresponding
meaning.
COMPLETION DATE means the earliest of:
(a) 5 Business Days after the first date after the last of the
conditions precedent in clause 2.2(b) ("directors' resolution -
WAG"), clause 2.2(c) ("directors' resolution - Controlled
Entities"), clause 2.2(d) ("officers' resignations"), clause 2.2(e)
("Pre-Sale Restructure") and clause 2.2(f) ("consent") has been
satisfied or waived by the Buyer or, in the case of the condition
precedent in clause 2.2(f) ("consent"), taken to have been waived by
the Buyer and no Notice contemplated by clause 2.1(b) has been
given; or
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(b) if a Notice contemplated by clause 2.1(b) ("adverse notice") has
been given, 5 Business Days after that Notice is withdrawn or the
condition precedent in clause 2.1(b) ("adverse notice") is waived or
taken to be waived by the Vendor provided that the date in paragraph
(a) has occurred; or
(c) 15 December 2004.
CONFIDENTIAL INFORMATION means all confidential, non-public or proprietary
information including without limitation trade secrets, all financial,
marketing and technical information, ideas, concepts, know-how,
technology, processes and knowledge.
CONTINUING PARENT GUARANTEES means:
(a) each guarantee and/or indemnity given by the Parent under the State
Agreement;
(b) the Joint Venture Guarantee; and
(c) the Infrastructure Borrowing Guarantee.
CONTROLLED ENTITY means each of:
(a) WAG;
(b) CMS GGT;
(c) CMS Parmelia;
(d) CMS Gas;
(e) CMS GTA; and
(f) the Trust.
CORPORATIONS ACT means the Corporations Act 2001 (Cth).
CPG OBLIGATIONS has the meaning given in clause 2.5 ("Continuing Parent
Guarantees").
DATA ROOM means the data room established by the Vendor for the purposes
of the Buyer and other persons conducting due diligence in respect of the
Sale Assets.
DEPOSIT means any amount paid by the Buyer under clause 4.1 ("Deposit").
DETAILS means the section of this agreement headed "Details".
DISCLOSED INFORMATION means information, documents and other material
relating to the Target Entities and the Sale Assets:
(a) contained in the Data Room; and
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(b) otherwise provided to the Vendor to the Buyer in writing (including
by fax or email), including the Information Memorandum dated
November 2003 and the Information Memorandum dated June 2004; and
(c) provided by the Vendor to the Buyer during the formal written
question and answer process undertaken as part of the Buyer's due
diligence; and
(d) provided by the Vendor and its representatives to the Buyer during
any of the following meetings or telephone conferences:
(i) the management presentation conducted by the Vendor on 14
January 2004;
(ii) the management presentations and discussions held on 2 July
2004 with David King, Rudi Petrig and Alan Rew;
(iii) the structure meeting to initially discuss restructure at
Macquarie Bank's offices held on 1 July 2004;
(iv) the conference call with representatives of the Buyer, Gary
Grande and Ernst & Young to discuss Tax and Relevant Tax
issues on 14 July 2004;
(v) the conference call with representatives of the Buyer, Gary
Grande, Ernst & Young and Freehills on 16 July 2004 to
discuss Duty issues;
(vi) the conference call with representatives of the Buyer, David
King and Greg Reudavey to discuss issues relating to the
Midland Brick dispute on 20 July 2004;
(vii) the conference call with representatives of the Buyer, Ernst
& Young, PricewaterhouseCoopers, Gary Grande and Freehills on
22 July 2004 to discuss warranties relating to Tax and
Relevant Tax;
(viii) the conference call with representatives of the Buyer,
PricewaterhouseCoopers (Perth) and Greg Reudavey in relation
to GST;
(ix) the conference call with representatives of the Buyer,
PricewaterhouseCoopers (Sydney), Ernst & Young and Greg
representatives of the Vendor in relation to Tax; and
(x) the meeting with representatives of the Buyer, Ernst & Young
and Freehills on 22 July 2004 to discuss issues relating to
the previous transfer of an interest in the Trust and Duty.
DISCLOSURE LETTER means the letter in agreed form from the Vendor to the
Buyer dated on or prior to the date of this agreement relating to the
Vendor Warranties.
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DUTY means any stamp, transaction or registration duty or similar charge
imposed by any Governmental Agency and includes, but is not limited to,
any interest, fine, penalty, charge or other amount imposed in respect of
the above, but excludes any other Tax.
EMPLOYEES means the employees listed in schedule 4 ("Employees").
ENVIRONMENTAL NOTICE means a notice issued by a Government Agency to a
Controlled Entity alleging breach of an environmental requirement.
ESTIMATED WCA AMOUNT means A$3,838,000.00 less the amount agreed under
clause 4.5(c) ("Contents of Adjustment Statement"), being the parties'
estimate as at the date of this agreement of the amount of the Adjustment
Amount.
FACILITY AGREEMENT means the document of that name dated 24 June 1999
between SCPA, SCPN and Australia and New Zealand Banking Group Limited.
FUND means each of the defined benefits fund, the accumulation fund and
the superannuation guarantee fund established by the Superannuation Trust
Deed.
GGT JOINT VENTURE means the Goldfields Gas Transmission Joint Venture
established under the JVA.
GST EXCLUSIVE consideration has the meaning given in clause 11.1 ("GST
gross up").
GOVERNMENT AGENCY means any governmental, semi-governmental,
administrative, fiscal or judicial body, department, commission,
authority, tribunal, agency or entity.
GST has the same meaning as in the GST Law.
GST LAW has the meaning given to that term in A NEW TAX SYSTEM (GOODS AND
SERVICES TAX) ACT 1999 (Cth) and any other act or regulation relating to
the imposition or administration of GST.
GUARANTEED MONEY means
(a) where the Guarantor is the Buyer Guarantor, all of the obligations
of the Buyer under this agreement, including obligations to pay
money; and
(b) where the Guarantor is the Vendor Guarantor, all of the obligations
of the Vendor under this agreement, including the obligation to pay
money.
INCOME TAX means tax imposed in Australia and assessed under the Income
Tax Assessment Act 1936 (Cth) and/or the Income Tax Assessment Act 1997
(Cth).
INCOME YEAR has the meaning given to it in the Tax Act.
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INCOMING OFFICERS means, in respect of a Target Entity, the persons,
nominated by the Buyer at least 5 days prior to Completion as Incoming
Officers of that Target Entity.
INCOMING REPRESENTATIVE means any person nominated by the Buyer to be a
representative of the GGT Joint Venture at least 5 days prior to
Completion.
INDEPENDENT EXPERT means a person appointed as expert jointly by the
Vendor and the Buyer or if they do not agree on the person to be appointed
within seven days of one party requesting appointment, the accountant
appointed by the President of the Australian Institute of Chartered
Accountants of Western Australia at the request of either the Vendor or
the Buyer.
INFORMATION means originals or copies, in machine readable or printed
form, of all books, files, reports, records, correspondence, documents and
other material of or relating to or used in connection with any Target
Entity.
INFRASTRUCTURE BORROWING GUARANTEE means each of:
(a) the guarantee and indemnity undertakings provided by the Parent
under the DAA Deed dated 1 February 1999 between Normandy Pipelines
Pty Ltd, Normandy Mining Holdings Pty Limited, SCPN; APT Pipelines
Limited, the Parent and TransAlta Energy Corporation; and
(b) the guarantee and indemnity undertakings provided by the Parent
under the DAA Deed Duty stamped on or about 30 September 1998
between WMC Limited, Wesminco Oil Pty Limited, SCPA, AGL Pipelines
Limited, TransAlta Energy Corporation and the Parent.
INSOLVENCY EVENT means the happening of any of the following events:
(a) an application is made to a court for an order (and is not stayed,
withdrawn or dismissed within seven days) or an order is made that a
body corporate be wound up; or
(b) an application is made to a court for an order appointing a
liquidator or provisional liquidator in respect of a body corporate,
(and is not stayed, withdrawn or dismissed within seven days) or one
of them is appointed, whether or not under an order; or
(c) except to reconstruct or amalgamate while solvent, a body corporate
enters into, or resolves to enter into, a scheme of arrangement,
deed of company arrangement or composition with, or assignment for
the benefit of, all or any class of its creditors, or it proposes a
reorganisation, moratorium or other administration involving any of
them; or
(d) a body corporate resolves to wind itself up, or otherwise dissolve
itself, or gives notice of intention to do so, except to reconstruct
or amalgamate while solvent, or is otherwise wound up or dissolved;
or
(e) a body corporate is or states that it is insolvent; or
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(f) as a result of the operation of section 459F(1) of the Corporations
Act, a body corporate is taken to have failed to comply with a
statutory demand; or
(g) a body corporate is or makes a statement from which it may be
reasonably deduced that the body corporate is, the subject of an
event described in section 459(2)(b) or section 585 of the
Corporations Act; or
(h) a body corporate takes any step to obtain protection or is granted
protection from its creditors, under any applicable legislation or
an administrator is appointed to a body corporate; or
(i) a person becomes insolvent under administration as defined in
section 9 of the Corporations Act or action is taken which could
result in that event; or
(j) anything analogous or having a substantially similar effect to any
of the events specified above happens under the law of any
applicable jurisdiction.
INTEREST RATE means the Base Rate plus 2.00% per annum.
JOINT VENTURE GUARANTEE means each guarantee and indemnity granted by the
Parent to support the obligations of SCPA and/or SCPN under the JVA.
JVA means the Joint Venture Agreement dated 29 June 1994 between Wesminco
Oil Pty Limited, Normandy Pipelines Pty Limited, BHP Minerals Pty Limited
(as participants), Goldfields Gas Transmission Pty Limited (as manager)
and Western Mining Corporation Holdings Limited and Normandy Poseidon
Limited (as guarantors) as amended by amending deeds dated 1 December
1995, 22 September 1998, 23 December 1998 and an undated deed effective
from 4 February 1999 and as joined by the Parent, SCPA and SCPN under the
assumption deeds dated 23 December 1998 and 26 March 1999 respectively.
LAST ACCOUNTS means the unaudited consolidated balance sheet of the
Australian branch of the Trust and the unaudited consolidated balance
sheet of SCP Investment No.1 Pty Ltd as at the Last Balance Date, a copy
of which is set out in parts 1 and 2 (respectively) of schedule 6 ("Last
Accounts").
LAST BALANCE DATE means 30 June 2004.
LAW includes:
(a) any law, regulation, authorisation, ruling, judgment, order or
decree of any Government Agency; and
(b) any statute, regulation, proclamation, ordinance or by-law in
Australia or any other jurisdiction.
LOSS includes any damage, loss, cost, Claim, liability or expense
(including legal costs and expenses) but excludes any consequential or
indirect losses economic losses, or loss of profits.
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MATERIAL ADVERSE EVENT means any event such as a fire or explosion
occurring in connection with the Parmelia pipeline (including the Dongara
gas plant) which has or will materially reduce CMS GTA's ability to meet
its obligations to its customers as a whole over a sustained period of
time.
MATERIAL CONTRACT means a contract requiring payments by or to a Target
Entity over the term of the contract in excess of A$300,000 or for a term
of more than one year.
MINISTER means the Minister for State Development (Western Australia).
NON-CONTROLLED ENTITIES means:
(a) SCP1;
(b) SCP Investments No.2 Pty Limited;
(c) SCP Investments No.3 Pty Limited;
(d) Goldfields Gas Transmission Pty Limited;
(e) SCPA;
(f) SCPN; and
(g) GGT Joint Venture.
NOTICE OF BREACH has the meaning given in clause 9.8(a) ("Breach of Vendor
Warranties prior to Completion").
NON-SALE ASSETS means the following assets owned by WAG and liabilities of
WAG as at the date of this agreement:
(a) shares in CMS Luxembourg; and
(b) shares in CMS Financial; and
(c) a note receivable from CMS Luxembourg to WAG; and
(d) shares in CMS Gas Transmission del Sur Company; and
(e) the note receivable from Atacama Finance Company; and
(f) any cash in any of the Controlled Entities, other than the
Australian branch of the Trust.
PARENT means CMS Gas Transmission Company, previously known as CMS Gas
Transmission and Storage Company.
PRE-SALE RESTRUCTURE means the transactions described in schedule 8
("Pre-Sale Restructure").
PURCHASE PRICE means A$204,084,977.00.
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RECORDS means copies of all books, files, reports, records,
correspondence, documents and other material of or relating to or used in
connection with a Target Entity including:
(a) minute books, statutory books and registers, books of account and
copies of all banking statements and Tax returns and filings;
(b) sales literature, market research reports, brochures and other
promotional material (including printing blocks, negatives, sound
tracks and associated material);
(c) all sales and purchasing records;
(d) all trading and financial records; and
(e) lists of all regular suppliers and customers,
which are available in the Data Room.
RELATED BODY CORPORATE has the meaning it has in the Corporations Act.
RELEVANT COUNTERPARTY means:
(a) where the Guarantor is the Buyer Guarantor, the Vendor; and
(b) where the Guarantor is the Vendor Guarantor, the Buyer.
RELEVANT OBLIGOR means:
(a) where the Guarantor is the Buyer Guarantor, the Buyer; and
(b) where the Guarantor is the Vendor Guarantor, the Vendor.
RELEVANT TAX means any income tax, goods and services tax, other taxes,
levies, imposts, deductions, charges, withholdings and duties, together
with any related additional tax, interest, penalties, fines or other
statutory charges, but does not include a Tax.
REPRESENTATIVE of a party includes an employee, agent, officer, director,
advisor, partner, joint venturer or sub-contractor of that party or of a
Related Body Corporate of that party.
RETENTION BONUS AGREEMENT means each of the 2000 Retention Bonus
Agreements and each of the 2002 Retention Bonus Agreements.
2000 RETENTION BONUS AGREEMENTS means the agreement between an Employee
and CMS GTA constituted by a letter to each such Employee dated on or
about 7 September 2000.
2002 RETENTION BONUS AGREEMENTS means each agreement of that name between
D A King, R J Joyce, R Petrig, A G Pugh, S Tasnady and A B Yelverton and
CMS GTA dated on or about 28 February 2002.
RETIRING OFFICERS means, in respect of a Target Entity, the persons named
in schedule 3 ("Retiring Officers") as Retiring Officers of that Target
Entity.
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RETIRING REPRESENTATIVE means any person to retire and be replaced as a
representative of the GGT Joint Venture.
SALE ASSETS means the Shares.
SCP means each of SCPA and SCPN.
SCP1 means SCP Investments No.l Pty Ltd.
SECURITY INTEREST means an interest, right or power:
(a) reserved in or over any interest in any asset, including, without
limitation, any retention of title; or
(b) created or otherwise arising in or over any interest in any asset
under a bill of sale, mortgage, charge, lien, pledge, trust or
power,
by way of security for the payment of debt or any other monetary
obligation or the performance of any other obligation and any interest,
right or power arising from any option, equity, preferential interest,
encumbrance, assignment, hypothecation, preferential right, contractual
right of set-off, adverse interest or third party claim or right of any
kind and whether existing or agreed to be granted or created.
SEMP means the CMS Gas Salaried Employees Merit Program for 2003 and 2004.
SHAREHOLDERS AGREEMENT means the SCP Investments (No 1) Pty Limited
Shareholders Agreement between CMS GGT and APT Pipelines Investments (WA)
Pty Ltd, as amended and restated in 1999.
SHARES means all of the shares which the Vendor holds in WAG and SHARE
means any one of those shares.
SCPA means Southern Cross Pipelines Australia Pty Ltd (ACN 084 521 997).
SCPN means Southern Cross Pipelines (NPL) Australia Pty Ltd (ACN 085 991
948).
STAKEHOLDER means the person referred to in clause 4.1 ("Deposit").
STATE AGREEMENT means the agreement dated 23 March 1994 which was ratified
by and is scheduled to the Goldfields Gas Pipeline Agreement Act 1994
(WA), the current parties to which are:
(a) the State of Western Australia;
(b) SCPA and SCPN (and their respective guarantors: The Australian Gas
Light Company, the Parent and the Buyer Guarantor); and
(c) Alinta DEWAP Pty Ltd (and its guarantors: Alinta EH Pty Ltd and
Alinta DEWAH Pty Ltd).
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SUPERANNUATION TRUST DEED means the trust deed dated June 1995
establishing Mercer Investment Nominees Ltd as trustee of various trusts.
TARGET ENTITY means each Controlled Entity and each Non-Controlled Entity.
TAX means any Income Tax, GST, other taxes, levies, imposts, deductions,
charges, withholdings and Duties, together with any related additional
tax, interest, penalties, fines and other statutory charges imposed in
Australia by any Australian government or Taxation Authority.
TAX ACT means:
(a) as the context requires, any one or more of the Income Tax
Assessment Act 1936 (Cth), the Income Tax Assessment Act 1997 (Cth),
the Taxation Administration Act 1953 (Cth), the International Tax
Agreements Act 1953 (Cth), Commonwealth tax rates Acts, GST Law and
Stamp Act 1921 (WA) together with all regulations and subordinate
legislation made under or relating to those Acts; and
(b) includes Tax legislation in force from time to time relating to the
assessment, imposition and collection of Taxes, the administration
of that Tax legislation, and all subordinate legislation,
regulations and instruments made under or relating to such
legislation.
TAXATION AUTHORITY means any person or agency authorised by law to impose,
collect or otherwise administer any Tax.
TAX COST means all costs, and expenses properly incurred in:
(a) managing an inquiry;
(b) disputing or contesting a written notice of, demand for or
assessment from a Government Agency requiring the payment of any
Relevant Tax for which the Vendor may be liable under this
agreement; or
(c) conducting any litigation, dispute, process or similar action,
in relation to Relevant Tax, but does not include a Relevant Tax.
TAX INVOICE has the meaning given to it in A NEW TAX SYSTEM (GOODS AND
SERVICES TAX) ACT 1999.
THIRD PARTY CLAIM has the meaning given in clause 9.15(a) ("Third party
claims").
TRUST means the CMS Gas Transmission of Australia Trust.
TRUSTEE means CMS GTA, as trustee of the CMS Gas Transmission of Australia
Trust.
TRUST DEED means the Trust Deed establishing the CMS Gas Transmission of
Australia Trust.
TRUST INTERESTS means the interests held by WAG and CMS Gas in the income
and corpus of the Trust.
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UMBRELLA INSURANCE means any insurance held by the Vendor or any Related
Body Corporate of the Vendor (other than a Target Entity) under which a
Target Entity is named as an insured party.
US GAAP means generally accepted accounting principles as in effect from
time to time in the United States of America.
US GAAS means generally accepted auditing standards as in effect from time
to time in the United States of America.
VALANDRID means Valandrid B.V., a company organised and existing under the
laws of the Netherlands.
VENDOR means the person described as such in the Details.
VENDOR WARRANTIES means each of the representations and warranties given
by the Vendor in this agreement including, without limitation, in clause 9
("Warranties and representations").
VERIFICATION CERTIFICATE means a certificate in the form of schedule 1
("Verification Certificate").
WAG means Western Australia Gas Transmission Company I, a company
organised and existing under the laws of the Cayman Islands.
WMC DEFERRED REVENUE means any liability which is recognised on the
balance sheet of SCP1 relating to any dispute or potential dispute with
WMC Resources Limited over charged amounts under the gas transmission
agreement dated 29 September 1998 between WMC Resources Limited and SCPA.
17.2 REFERENCES TO CERTAIN GENERAL TERMS
Unless the contrary intention appears a reference in this agreement to:
(a) (REFERENCE TO CLAUSE) a clause, schedule, annexure or appendix is a
reference to a clause of or schedule, annexure or appendix to this
agreement and references to this agreement include any recital,
schedule, annexure or appendix;
(b) (VARIATIONS OR REPLACEMENTS) a document (including this agreement)
includes any variation or replacement of it;
(c) (REFERENCE TO STATUTES) a statute, ordinance, code or other law
includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of
them;
(d) (SINGULAR INCLUDES PLURAL) the singular includes the plural and vice
versa;
(e) (PERSON) the word "person" includes an individual, a firm, a body
corporate, a partnership, joint venture, an unincorporated body or
association, or any Government Agency;
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(f) (TWO OR MORE PERSONS) an agreement, representation or warranty in
favour of two or more persons is for the benefit of them jointly and
severally;
(g) (JOINTLY AND SEVERALLY) an agreement, representation or warranty on
the part of two or more persons binds them jointly and severally;
(h) (EXECUTORS, ADMINISTRATORS, SUCCESSORS) person includes a reference
to the person's executors, administrators, successors, substitutes
(including persons taking by novation) and assigns;
(i) (CALCULATION OF TIME) if a period of time dates from a given day or
the day of an act or event, it is to be calculated exclusive of that
day;
(j) (REFERENCE TO A DAY) a day is to be interpreted as the period of
time commencing at midnight and ending 24 hours later;
(k) (ACCOUNTING TERMS) an accounting term is to be interpreted in
accordance with accounting standards under the Corporations Act and,
if not inconsistent with those accounting standards, generally
accepted principles and practices in Australia consistently applied
by a body corporate or as between bodies corporate over time.
(l) (REFERENCE TO A GROUP OF PERSONS) a group of persons is a reference
to all of them collectively, to any two or more of them collectively
and to each of them individually;
(m) (INCLUDE) the verb "include" (in all its parts, tenses and variants)
is not used as, nor is it to be interpreted as, a word of
limitation;
(n) (MEANING NOT LIMITED) the words "including", "for example" or "such
as" when introducing an example do not limit the meaning of the
words to which the example relates to that example or examples of a
similar kind;
(o) (SCHEDULES) a schedule is a reference to a schedule to this
agreement;
(p) (NEXT DAY) if an act prescribed under this agreement to be done by a
party on or by a given day is done after 5.30 pm on that day, it is
taken to be done on the next day;
(q) (NEXT BUSINESS DAY) if an event must occur on a stipulated day which
is not a Business Day then the stipulated day will be taken to be
the next Business Day;
(r) (TIME OF DAY) a reference to time is a reference to Perth time;
(s) (REFERENCE TO ANYTHING) anything (including any amount) is a
reference to the whole and each part of it;
(t) (AUSTRALIAN DOLLARS) a reference to "Australian Dollars", "AUD",
"A$" or "$" is a reference to the lawful currency of Australia;
(u) (US DOLLARS) a reference to "US Dollars", "USD" or "US$" is a
reference to the lawful currency of the United States of America;
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(v) (AWARENESS) a reference in a Vendor Warranty to awareness, knowledge
or expectation, is taken to consist only of the actual knowledge
(after making due enquiry) of the officers and directors of the
Vendor and each of the following management staff of the Controlled
Entities:
(i) David King;
(ii) Alan Rew;
(iii) Raymond Joyce;
(iv) Alan Pugh; and
(v) Rudi Petrig.
17.3 HEADINGS
Headings are for convenience and do not affect the interpretation of this
agreement.
EXECUTED in Michigan, USA as an agreement
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SALE AND PURCHASE AGREEMENT
Schedule 1 - Verification certificate
To: [Insert details of addressee]
[address]
VERIFICATION CERTIFICATE
[NAME OF COMPANY] (ABN ** *** *** ***) ("COMPANY")
I, , am a Director/the Secretary/an Authorised Officer of
the Company.
I refer to the CMS Sale and Purchase Agreement dated [ ] 2004 ("SALE
AGREEMENT") between [ ].
Definitions in the Sale Agreement apply in this certificate.
In relation to the Company, I certify as follows:
1 CERTIFICATE OF REGISTRATION AND CONSTITUTION
A copy of:
(a) the certificate of registration of the Company is attached and
marked A; and
(b) the constitution of the Company is attached and marked B; [and
(c) the trust deed of the [ ] Trust is attached and marked C].
Each copy is true, complete and up-to-date and there have been no
amendments or variations since the date of that copy.
2 POWER OF ATTORNEY
An original Power of Attorney of the Company dated 2004 appointing
attorneys in respect of the Sale Agreement is attached and marked D. This
Power of Attorney remains in full force and effect and has not been
revoked.
3 SPECIMEN SIGNATURES
The following are the signatures of the persons appointed as Authorised
Officers of the Company for the purposes of the Sale Agreement or who are
otherwise authorised to sign a Sale Agreement on behalf of the Company.
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AUTHORISED OFFICERS
- ------------------------------- ------------------------------- -------------------------------
Signature of Authorised Officer Signature of Authorised Officer Signature of Authorised Officer
Name: Name: Name:
Title: Title: Title:
ATTORNEYS
- ------------------------------- ------------------------------- -------------------------------
Signature of Attorney Signature of Attorney Signature of Attorney
Name: Name: Name:
Title: Title: Title:
DATED 2004
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SALE AND PURCHASE AGREEMENT
Schedule 2 - Warranties by Vendor
Note: All Vendor Warranties are subject to the qualifications in clause 9.5
("Disclosure").
A. POWER AND AUTHORITY
1 (CORPORATE POWER) Each Controlled Entity has full corporate power to own
its properties, assets and business and to carry on its business as now
conducted.
2 (POWERS OF ATTORNEY) There will be no powers of attorney given by any
Controlled Entity in force at Completion.
3 (EXISTENCE) Each Controlled Entity is validly formed, organised and
subsisting in accordance with all applicable laws.
4 (INSOLVENCY EVENTS) No Insolvency Event has occurred, is subsisting or
threatened in writing in respect of a Controlled Entity and each
Controlled Entity is able to pay its debts as and when they become due and
payable.
B. SHARES
1 (TRANSFER OF SHARES) There is no restriction on the transfer of the Shares
to the Buyer on the terms of this agreement.
2 (OWNERSHIP OF SHARES)
(a) The Vendor is the registered holder and beneficial owner of the
Shares.
(b) As at Completion, WAG is the registered holder and beneficial owner
of all of the issued shares, free of Security Interests, in CMS
Parmelia and CMS GGT.
(c) WAG holds the sole membership interest in CMS Gas.
(d) CMS Gas is the registered holder and beneficial owner of all of the
shares, free of Security Interests, in CMS GTA.
(e) CMS GGT is the registered holder and beneficial owner of 45% of the
issued shares, free of Security Interests, in SCP Investments No.1
Pty Ltd.
3 (STRUCTURE DIAGRAM)
(a) The corporate structure diagram shown in part A of schedule 5
("Corporate structure diagram") is a correct reflection of the
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ownership structure of the Target Entities as at the date of this
agreement.
(b) The corporate structure diagram shown in part B of schedule 5
("Corporate structure diagram") is a correct reflection of the
ownership structure of the Target Entities at Completion.
4 (NON-SALE ASSETS) As at Completion:
(a) WAG does not own any Non-Sale Assets.
(b) the only non-consolidated assets of WAG are the shares in CMS
Parmelia, CMS Gas and CMS GGT and its interest as beneficiary of the
Trust and WAG owes no non-consolidated liabilities whatsoever to any
person;
(c) the only non-consolidated assets of CMS Gas are the shares in CMS
GGT and its interest as beneficiary of the Trust and CMS Gas owes no
non-consolidated liabilities whatsoever to any person;
(d) CMS Parmelia has no assets and owes no liabilities whatsoever to any
person; and
(e) the only material assets of CMS GGT are the shares in SCP1 and the
rights it holds pursuant to the Commercial Services Agreement and it
has no material liabilities whatsoever to any person other than
arising by virtue of its performance of its obligations under the
Commercial Services Agreement.
5 (INTERESTS IN TRUST) WAG and CMS Gas are the sole beneficiaries of the
Trust.
6 (PROPORTION OF SHARES) The Sale Assets comprise of all of the issued
shares in the capital of WAG and all shares in the capital of each
Controlled Entity are fully paid up.
7 (NO SECURITY INTERESTS) There are no Security Interests over the Sale
Assets.
8 (CONSENT) The Vendor has obtained all consents necessary to enable it to
transfer the Sale Assets to the Buyer except for consent of the directors
of WAG to the registration of the transfer of the Sale Assets and any
consents, decisions and releases contemplated by clause 2.2(f) ("consent")
of this agreement.
9 (NO BREACH) The transfer of the Sale Assets does not breach any material
obligation or agreement binding on Vendor or any of the Controlled
Entities except in relation the gas sale agreements entered into by CMS
GTA with the following parties:
(a) CSR Limited;
(b) Readymix Roads Group Pty Ltd and Vacuum Road Services Pty Ltd in a
partnership known as Emoleum - Geraldton;
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(c) Readymix Roads Group Pty Ltd and Vacuum Road Services Pty Ltd in a
partnership known as Emoleum - Gosnells; and
(d) Minister for Health.
10 (FUTURE SHARES) There are no commitments in place under which a Controlled
Entity is obliged at any time to issue any shares or other securities of
that Controlled Entity.
11 (ALLOTMENT OF SHARES) All of the issued shares in the capital of each
Controlled Entity are validly allotted and issued and were not allotted or
issued in breach of any contract which is binding on the relevant
Controlled Entity.
C. LITIGATION
1 (ACTIONS) No Controlled Entity is:
(a) a party to or the subject of any Action; or
(b) the subject of any ruling, judgment, order or decree by any
Government Agency or any other person,
which may have a material adverse effect upon that Controlled Entity, its
business or any of its assets.
2 (ENVIRONMENTAL ACTIONS) No Controlled Entity is a party to any material
Action in respect of any act, matter or thing done or omitted to be done
to or in connection with the environment, and so far as the Vendor is
aware no such material Action is pending or threatened.
D. ASSETS
1 (SECURITY INTERESTS) There are no Security Interests over any Controlled
Entity or any of their respective properties, assets or undertakings.
2 (ASSETS) The material assets of the Controlled Entities are:
(a) legally and beneficially owned by the relevant Controlled Entity and
fully paid for;
(b) not the subject of any lease or hire purchase agreement or contract
for purchase on deferred terms.
3 (LAND) None of the Controlled Entities own any land in Western Australia
other than that held in relation to the Parmelia Pipeline and the
Goldfields Gas Transmission Pipeline.
In this item D3 ("Land"):
(a) "Parmelia Pipeline" means the mainline and all laterals of the
Parmelia natural gas pipeline, the Dongara processing facility and
the
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Mondarra gas storage facility, together with all compressors,
metering and other equipment associated with each of them; and
(b) "Goldfields Gas Transmission Pipeline" means the mainline and all
laterals of the Goldfields Gas Transmission natural gas pipeline,
together with all compressors, metering and other equipment
associated with that pipeline and those laterals.
E. BUSINESS AFFAIRS
1 (BUSINESS) The Business and affairs of each Controlled Entity have at all
times been and continue to be conducted in accordance with its
Constitution in all material respects.
2 (MATERIAL CONTRACTS) So far as the Vendor is aware, no person is in
material breach or default under any Material Contract with a Controlled
Entity, nor has anything occurred or been omitted which would be a
material breach or default but for the requirements of notice or lapse of
time or both under any Material Contract to which a Controlled Entity is a
party.
F. COMPLIANCE WITH LAWS
1 (ENVIRONMENT) So far as the Vendor is aware:
(a) no valid Environmental Notice has been issued in respect of any
business of a Controlled Entity or on a Controlled Entity which
would result in the expenditure of a material amount and which would
be materially prejudicial to the business of that company; and
(b) there is no threat in writing to issue such a notice referred to in
paragraph (a) above.
2 (LAWS) Each Controlled Entity has conducted its Business in all material
respects in accordance with applicable laws. So far as the Vendor is
aware, no allegation has been made of any material breach of any
applicable law.
3 (LICENCES) All material licences which are necessary for the conduct of
the business of a Controlled Entity have been obtained and are valid and
subsisting. All conditions which apply to any such licence have been
complied with in all material respects. None of such licences has been
breached in any material respect by any Controlled Entity or, so far as
the Vendor is aware, is likely to be suspended, cancelled, refused,
materially altered, not renewed or revoked in a manner which has or could
have a material adverse effect on that Controlled Entity.
4 (FILINGS) Each material document or filing which is required by law to be
delivered or made to any governmental agency by a Controlled Entity has
been duly delivered or made.
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G. INFORMATION
1 (RELEVANT INFORMATION) The Data Room and the answers provided by the
Vendor to the Buyer during the question and answer process undertaken as
part of the Buyer's due diligence (together "RELEVANT INFORMATION") and
the management presentations and discussions held on 14 January 2004 and 2
July 2004 were prepared with reasonable care and skill based on
information in the possession of, or obtained from, the Controlled
Entities by the Vendor for the purposes of informing prospective
purchasers of the Sale Assets and the Target Entities.
2 In relation to the Relevant Information, other than forecasts and
projections, so far as the Vendor is aware, the Vendor has not:
(a) omitted or withheld anything material from the Relevant Information;
or
(b) included anything materially misleading in the Relevant Information.
H. TRUST
1 (TRUSTEE) CMS GTA is the sole Trustee of the Trust and it has power under
the terms of the Trust or at law to enter into and observe its obligations
under this agreement.
2 (TRUST)
(a) The Trust has been duly constituted, is valid and subsisting and no
action has been taken to terminate the Trust.
(b) The Trustee is not in default under the terms of the Trust Deed.
(c) The Trust Deed discloses all the terms of the Trust.
I. ACCOUNTS
1 (LIABILITY) At Completion, there will be no liabilities whatsoever
outstanding by CMS GTA to the Vendor and its Related Bodies Corporate
(other than Target Entities).
2 (NO CHANGE) Since the Last Balance Date, each Controlled Entity has
conducted its business in the ordinary course except to the extent
necessary to carry out the Pre-Sale Restructure or to give effect to the
actions permitted under clause 4.10 ("Distributions").
3 (LAST ACCOUNTS) The Last Accounts set out in part 1 of schedule 6 ("Last
Accounts") were prepared in accordance with the accounting policies
adopted by CMS GTA and the requirements of the Accounting Standards and
the Corporations Act on the presumption that company continues as a going
concern under ownership of the Vendor in the ordinary course.
4 (CHANGES) Since the Last Balance Date:
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(a) CMS GTA has conducted its business in the ordinary course of its
business; and
(b) to the best of the knowledge of the Vendor, there has been no change
in the financial position of CMS GTA from that set out in the Last
Accounts except changes none of which individually or in aggregate
has had a material adverse effect on CMS GTA; and
(c) nothing has come to the attention of the Vendor which causes the
Vendor to believe that the financial information in the statement of
financial position of CMS GTA as at the Last Balance Date, and in
the statement of income, expenses and results of operations of CMS
GTA for the period commencing on 30 June 2003 and ending on the Last
Balance Date, in the Last Accounts is unfairly presented.
J. SUPERANNUATION
1 (SUPERANNUATION) Each Controlled Entity has made all superannuation
contributions which it is either:
(a) obliged to make in respect of the Employees; or
(b) which the actuary of the Fund has recommended that it make in
respect of any Employees entitled to defined benefits under the
Fund.
K. INSURANCE
1 (INSURANCES) The Disclosed Information contains complete and accurate
particulars of all current insurances and cover notes taken out in respect
of a Controlled Entity as at the date of this agreement, other than
Umbrella Insurances.
2 (CURRENCY) Each insurance policy (other than policies held in respect of
Umbrella Insurances) held by a Controlled Entity is in full force and
effect and all applicable premiums have been paid.
3 (NO VOIDING) So far as the Vendor is aware, nothing has been done or
omitted to be done which would make any policy of insurance held (other
than policies held in respect of Umbrella Insurances) by a Controlled
Entity void or voidable or which would permit an insurer to cancel the
policy or refuse or materially reduce a claim or materially increase the
premiums payable under the policy.
4 (NO CLAIMS)
(a) There are no material outstanding claims made by a Controlled Entity
or any person on its behalf under an insurance policy held or
previously held by the Controlled Entity.
(b) So far as the Vendor is aware, no event (other than one which has
given rise to a claim which is not outstanding or one relating to
the occurrence of a Material Adverse Event) has arisen which may
give
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rise to a material claim by Controlled Entity under any insurance
policy.
(c) So far as the Vendor is aware, as at the date of this agreement, no
event has arisen which may give rise to a Material Adverse Event.
L. TAXATION
1 (TAXES) As far as the Vendor is aware, all returns in relation to Tax
required to be filed or lodged by a Controlled Entity with the relevant
Government Agency before Completion have been properly filed on a timely
basis or will be filed on or before Completion and are materially correct.
2 (WITHHOLDING TAX) As far as the Vendor is aware, any obligation on a
Controlled Entity under any Tax Act to withhold amounts at source on
account of Tax has been complied with.
3 (NO CAPITAL GAINS TAX RELIEF) No Controlled Entity has sought capital
gains tax relief under sub division 126B of the Income Tax Assessment Act
1997 (Cth) or section 160ZZO of the Income Tax Assessment Act 1936 (Cth)
in respect of any asset acquired by any Controlled Entity and which is
still owned by any Controlled Entity immediately after Completion.
4 (NO DISPUTES) There are no disputes between a Controlled Entity and any
Governmental Agency in respect of any Relevant Tax.
5 (STAMPING) As far as the Vendor is aware, other than in relation to the
Pre-Sale Restructure, all documents and transactions entered into by a
Controlled Entity, in its own capacity, or as manager, trustee,
responsible entity or custodian of any trust, which are required to be
stamped and if stamped would be liable to ad valorem duty have been duly
stamped.
6 (CONSOLIDATION) No Controlled Entity has been consolidated within the
Vendor's consolidatable group for the purposes of Part 3-90 of the Tax Act
and no election will be filed after the Completion Date that has the
effect of including any of the Controlled Entities in the Vendor's
consolidated tax group.
7 (GST) As far as the Vendor is aware, each Controlled Entity has complied
in all material respects with all laws, contracts, agreements or
arrangements binding on it relating to GST.
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SALE AND PURCHASE AGREEMENT
Schedule 3 - Retiring Officers
TARGET ENTITY RETIRING OFFICERS
- ------------- -----------------
WAG DIRECTORS:
David W. Joos
Thomas W. Elward
OTHER OFFICERS:
DAVID W. JOOS - CHAIRMAN AND CEO
THOMAS W. ELWARD - PRESIDENT
JOHN F. DRAKE - SENIOR VICE PRESIDENT
CAROL A. ISLES - VICE PRESIDENT AND CONTROLLER
SHARON A. MCILNAY - VICE PRESIDENT AND GENERAL COUNSEL
THOMAS L. MILLER - VICE PRESIDENT
LAURA L. MOUNTCASTLE - VICE PRESIDENT AND TREASURER
WILLIAM H. STEPHENS, III - VICE PRESIDENT
JOSEPH P. TOMASIK - VICE PRESIDENT
MICHAEL D. VANHEMERT - VICE PRESIDENT AND SECRETARY
THEODORE J. VOGEL - VICE PRESIDENT AND CHIEF TAX COUNSEL
JAMES L. LOEWEN - ASSISTANT TREASURER
BEVERLY S. BURGER - ASSISTANT TREASURER
JANE M. KRAMER - ASSISTANT SECRETARY
JOYCE H. NORKEY - ASSISTANT SECRETARY
CMS Parmelia DIRECTORS:
David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
OTHER OFFICERS:
Alan Rew
CMS GGT DIRECTORS:
David W. Joos
Thomas W. Elward
Kenneth Whipple
SECRETARY:
Gordon Hough
OTHER OFFICERS:
Andrew Thompson
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SCP Investments No.1 Pty Limited DIRECTORS:
David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
PUBLIC OFFICER:
Alan Rew
SCP Investments No.2 Pty Limited DIRECTORS:
David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
PUBLIC OFFICER:
Alan Rew
SCP Investments No.3 Pty Limited DIRECTORS:
David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
PUBLIC OFFICER:
Alan Rew
Goldfields Gas Transmission Pty DIRECTORS:
Limited
David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
PUBLIC OFFICER:
Alan Rew
SCPA DIRECTORS:
David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
PUBLIC OFFICER:
Alan Rew
SCPN DIRECTORS:
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David Arthur King
Thomas L. Miller
SECRETARY:
Alan Rew
PUBLIC OFFICER:
Alan Rew
CMS Gas DIRECTORS:
David W. Joos
Thomas W. Elward
OTHER OFFICERS:
DAVID W. JOOS - CHAIRMAN AND CEO
THOMAS W. ELWARD - PRESIDENT
JOHN F. DRAKE - SENIOR VICE PRESIDENT
SHARON A. MCILNAY - VICE PRESIDENT AND GENERAL COUNSEL
CAROL A. ISLES - VICE PRESIDENT AND CONTROLLER
THOMAS L. MILLER - VICE PRESIDENT
LAURA L. MOUNTCASTLE - VICE PRESIDENT AND TREASURER
WILLIAM H. STEPHENS, III - VICE PRESIDENT
JOSEPH P. TOMASIK - VICE PRESIDENT
MICHAEL D. VANHEMERT - VICE PRESIDENT AND SECRETARY
THEODORE J. VOGEL - VICE PRESIDENT AND CHIEF TAX COUNSEL
JAMES L. LOEWEN - ASSISTANT TREASURER
BEVERLY S. BURGER - ASSISTANT TREASURER
JANE M. KRAMER - ASSISTANT SECRETARY
JOYCE H. NORKEY - ASSISTANT SECRETARY
CMS GTA DIRECTORS:
David W. Joos
Thomas W. Elward
OTHER OFFICERS:
DAVID W. JOOS - CHAIRMAN AND CEO
THOMAS W. ELWARD - PRESIDENT
JOHN F. DRAKE - SENIOR VICE PRESIDENT
SHARON A. MCILNAY - VICE PRESIDENT AND GENERAL COUNSEL
CAROL A. ISLES - VICE PRESIDENT AND CONTROLLER
THOMAS L. MILLER - VICE PRESIDENT
LAURA L. MOUNTCASTLE - VICE PRESIDENT AND TREASURER
WILLIAM H. STEPHENS, III - VICE PRESIDENT
JOSEPH P. TOMASIK - VICE PRESIDENT
MICHAEL D. VANHEMERT - VICE PRESIDENT AND SECRETARY
THEODORE J. VOGEL - VICE PRESIDENT AND CHIEF TAX COUNSEL
JAMES L. LOEWEN - ASSISTANT TREASURER
BEVERLY S. BURGER - ASSISTANT TREASURER
JANE M. KRAMER - ASSISTANT SECRETARY
JOYCE H. NORKEY - ASSISTANT SECRETARY
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SALE AND PURCHASE AGREEMENT
Schedule 4 - Employees
EMPLOYEE
ADMINISTRATION
BAVOILLOT, Mandy E (Part time)
GIUMELLI, Joan
PALMER, Kate
LYON, Thomas E
MORGAN, Maxine A
REW, Alan J
HOUGH, Gordon (Fixed Term Contract Employee)
CLIFF, Helen (Part time)
CLAYDON, Joanne (Part time Contract)
KVSEICH, Nicole (Fixed Term Contract Employee)
YEN, Ian (Fixed Term Contract Employee)
CARLIN, Graeme (Fixed Term Contract Employee)
MANAGEMENT
KING, David
REUDAVEY, Greg (Fixed Term Contract)
TASNADY, Suzy
JOYCE, Raymond J
PETRIG, Rudolf
MAINTENANCE
CALDWELL, Wayne A
CONNELL, Gerard F
FERGUSON, Lennard D
HUNT, Ron
LEESON, Peter J
LOGAN, Bruce M
MELSOM, Jeffrey P
PUGH, Alan G
REDWAY, Michael T
WARE, Nicholas
YELVERTON, Anthony B
OPERATIONS
BAILEY, David (Part time)
GRBAS, Murray
GREGSON, Donald H
GUTHRIE, Warren D
PEREDI, Stephen
RAFFERTY, David
SMITH, Grahame A R
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SALE AND PURCHASE AGREEMENT
Schedule 5 - Corporate structure diagram
Part A - Structure at signing
[FLOW CHART]
(C) Mallesons Stephen Jaques Sale and Purchase Agreement
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Part B - Structure at Completion
[FLOW CHART]
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SALE AND PURCHASE AGREEMENT
Schedule 6 - Last Accounts
Part 1 - Last Accounts for Parmelia
CMS GAS TRANS OF AUSTRALIA
STATEMENT OF FINANCIAL POSITION
PERIOD: 06-04 AS AT 30 JUNE 2004
ASSETS A$
CURRENT ASSETS
CASH AND EQUIVALENTS
Cash US$ - Canadian a/c 127,593.00
Cash On Hand 200.00
Cash 10,933,852.45
Total Cash & Equivalents 11,061,645.45
DEBTORS (RECEIVABLES)
Provn for Bad & Doubtful Debts (147,426.23)
Trade Debtors (Gas Sales) 1,696,547.44
Sundry Other Austn Debtors 1,994,405.35
GST Tax Receivable from ATO 161,795.80
Total Debtors 3,705,322.36
PREPAYMENTS
Prepayments - Lease Pmt-Escrow 56,335.90
Prepayments - Major Subscripts 3,738.45
Prepayments - Pipeline Licence 19,340.91
Prepayments - Westrail Licence 12,955.21
Prepayments - Product Lic (2,150.00)
Prepayments - Insurance 231,391.48
Prepayments - Software 117.49
Prepayments - General 2,452.66
Total Prepayments 324,182.10
STORES & SPARES
Stores & Spares - Dongara 255,103.96
Stores & Spares - Kewdale 259,629.17
STOCKS
Gas Stock in Pipeline 270,534.00
Gas Stored Mondarra (Org. etc] (69,133.97)
Gas Stored Mondarra (CMS Gas) 3,036,715.78
Total Stocks 3,752,848.94
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TOTAL CURRENT ASSETS 18,843,998.85
================
NON-CURRENT ASSETS
SUNDRY DEBTORS
Deferred Income Tax 68,619.54
Total Sundry Debtors 68,619.54
DEVELOPMENT & FIELD PROJECTS
Mine, Properties & Develop 5,221,160.37
Provn for Depletion (Amort) (1,958,351.70)
Development & Field Projects 3,262,808.67
LAND/BUILDINGS/EQUIPMENT
Provn for Amortisation P&E (3,071.40)
Construction in Progress 1,286,105.90
Provn for Deprn Plant & Equip (18,454,694.85)
Plant & Equipment 71,307,434.25
Buildings & Fixtures 4,597.00
Office Equipment - Finance Lee 9,984.32
Office Equipment 399,248.73
Total Land/Buildings/Equipment 54,549,603.95
INVESTMENTS
TOTAL INVESTMENTS 0.00
TOTAL NON-CURRENT ASSETS 57,881,032.16
TOTAL ASSETS 76,725,031.01
================
LIABILITIES & OWNERS EQUITY
CURRENT LIABILITIES
TRADE CREDITORS
GST Tax Payable to ATO 264,549.02
Deferred Revenue - Hismelt 868,848.07
Trade Creditors Control Acct 1,354,376.43
OTHER CREDITORS
Pay Dedns - PAYE Tax 64,220.00
Lease Liabilities - General 5,435.21
Other Creditors - General 411,309.14
Total Other Creditors 2,968,737.87
PROVISIONS
Provision for Income Tax 392,078.00
Provision for Incentive Bonus 23,344.00
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Provn LSL - Current 42,765.43
Provn for Annual Leave 236,868.12
Total Provisions 695,055.55
OTHER CURR. LIABILITIES
TOTAL OTHER CURR. LIABILITIES 0.00
TOTAL CURRENT LIABILITIES 3,663,793.42
NON CURRENT LIABILITIES
Deferred Income Tax 6,519,218.10
Provn for LSL Non Current 131,000.00
TOTAL NON CURRENT LIABILITIES 6,650,218.10
TOTAL LIABILITIES 10,314,011.52
================
NET ASSETS & LIABILITIES 66,411,019.49
================
EQUITY
CMS - USA 88,743,457.40
Retained Profit / (Loss) -2004 915,733.22
Retained Profits (1997-03) 15,851,828.87
Trust Distrib to Benefic 9/99 (8,900,000.00)
Trust Distrib to Benefic 6/02 (4,000,000.00)
Return of S/H Equity 07/00 (26,200,000.00)
Cumulative Translation Adjust
----------------
TOTAL EQUITY 66,411,019.49
================
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Part 2 - Last Accounts for SCP
SCP INVESTMENTS (NO.1) PTY LIMITED (FINANCIAL YEAR)
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2004
$
-------------
CURRENT ASSETS
CASH AND EQUIVALENTS
Cash On Hand 411
Cash at Bank - GGT JV a/c 530,038
Proceeds Account - ANZ 40,959,886
Short Term M.Mkt Deposits/Bank Bills 50,990,297
-------------
Total Cash & Equivalents 92,480,632
RECEIVABLES
Trade Debtors 9,455,380
Provision for Doubtful Debts (542,570)
Sundry Other Austn Debtors 489,338
Provision for Doubtful Debts (7,221)
Warranty & Insurance Claims 0
GGT JV Mobilisation Fee in Advance to Agility 784,597
GST Receivable from ATO 337,390
-------------
Total Debtors 10,516,915
INVENTORIES
Stores & Spares 1,355,913
Gas Stock in Pipeline 944,837
-------------
Total Stocks, Stores & Spares 2,300,750
OTHER
Prepayments - General 213,832
Prepayments - Loan Finance fees 690,240
Prepayments - Insurance 13,799
Prepayments - Agility 0
-------------
Total Other 917,870
-------------
TOTAL CURRENT ASSETS 106,216,168
-------------
NON-CURRENT ASSETS
OTHER
Prepayments - Loan Finance fees 690,239
-------------
Total Other 690,239
PROPERTY PLANT & EQUIPMENT
Construction in Progress 452,295
CIP - Direct Capital (0)
Plant & Equipment 386,391,042
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Provn for Deprn Plant & Equip (41,140,957)
Pipeline Laterals - Purch cost 32,044,383
Less Accumulated Depreciation (4,543,353)
Office Equipment 530,062
Less Accumulated Depreciation (424,705)
Buildings & Fixtures 34,634,606
Less Accumulated Depreciation (6,120,723)
Valuation of Lic (acq of GGT) 119,836,557
Less Accumulated Depreciation (16,135,287)
-------------
Total Land/Buildings/Equipment 505,523,919
-------------
TOTAL NON-CURRENT ASSETS 506,214,158
-------------
-------------
TOTAL ASSETS 612,430,327
=============
CURRENT LIABILITIES
PAYABLES
Trade Creditors Control Acct 1,813,139
GST Payable to ATO 1,755,246
Other Creditors - General 138,011
Purchase Accruals 1,723,971
Interest Payable 459,218
-------------
Total Trade & Other Creditors 5,889,586
INTEREST BEARING LIABILITIES
Loan from ANZ - current 25,415,600
-------------
Total Interest bearing Liabilities 25,415,600
OTHER LIABILITIES
Deferred Revenue 0
-------------
Total Other Liabilities 0
-------------
TOTAL CURRENT LIABILITIES 31,305,186
-------------
NON CURRENT LIABILITIES
Deferred Tax Liabilities 70,746,828
ANZ Loan 224,984,400
-------------
-------------
TOTAL NON CURRENT LIABILITIES 295,731,228
-------------
-------------
TOTAL LIABILITIES 327,036,414
-------------
-------------
NET ASSETS & LIABILITIES 285,393,913
=============
EQUITY
Retained Profit / (Loss) - Financial year 51,331,602
Retained Profit 1999,2000,2001,2002 94,850,407
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Dividends - APT (47,706,677)
Dividends - CMS (45,652,683)
Dividends - TA (8,091,047)
-------------
Total Profit / (Loss) 44,731,602
Issued Capital 240,662,211
Share Capital 100
Cash Calls & Elimination (1)
-------------
TOTAL EQUITY 285,393,913
=============
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SALE AND PURCHASE AGREEMENT
Schedule 7 - Adjustment Amount
Part 1 - Adjustment Amount - Parmelia
Note: Completion Date actuals will replace Jun-04 numbers below and Jun-04
actuals will replace the March-04 numbers below in the final calculations of the
Adjustment Amount.
JUN-04 MAR-04
---------- ---------
March Proforma
Statement
CURRENT ASSETS
CASH AND EQUIVALENTS
Cash US$ - Canadian a/c 127,593 127,593
Cash On Hand 200 200
Cash 10,933,852 9,261,180
---------- ----------
Total Cash & Equivalents 11,061,645 9,388,973
DEBTORS (RECEIVABLES)
Provn for Bad & Doubtful Debts (147,426) (147,426)
Trade Debtors (Gas Sales) 1,696,547 1,446,593
Sundry Other Austn Debtors 1,994,405 1,877,690
GST Tax Receivable from ATO 161,796 142,536
---------- ----------
Total Debtors 3,705,322 3,010,961
PREPAYMENTS
Prepayments - Lease Pmt-Escrow 56,336 56,336
Prepayments - Major Subscripts 3,738 8,574
Prepayments - Pipeline Licence 19,341 30,945
Prepayments - Westrail Licence 12,955 20,728
Prepayments - Product Lic (2,150) 4,300
Prepayments - Insurance 231,391 74,153
Prepayments - Software 117 2,257
Prepayments - General 2,453 3,116
---------- ----------
Total Prepayments 324,182 200,409
STORES & SPARES
Stores & Spares - Dongara 255,104 244,962
Stores & Spares - Kewdale 259,629 259,249
STOCKS
Gas Stock in Pipeline 270,534 270,534
Gas Stored Mondarra (Org. etc] (69,134) (71,743)
Gas Stored Mondarra (CMS Gas) 3,036,716 4,100,927
---------- ----------
Total Stocks 3,752,849 4,803,928
---------- ----------
TOTAL CURRENT ASSETS 18,843,999 17,712,703
========== ==========
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CURRENT LIABILITIES
TRADE CREDITORS
GST Tax Payable to ATO 264,549 232,037
Deferred Revenue - Hismelt 868,848 308,432
Trade Creditors Control Acct 1,354,376 1,293,628
OTHER CREDITORS
Pay Dedns - PAYE Tax 64,220 55,717
Lease Liabilities - General 5,435 5,694
Other Creditors - General 411,309 504,932
----------- ----------
Total Other Creditors 2,968,738 2,400,439
PROVISIONS
Provision for Income Tax 392,078 176,764
Provision for Incentive Bonus 23,344 5,695
Provn LSL - Current 42,765 22,363
Provn for Annual Leave 236,868 227,013
----------- ----------
Total Provisions 695,056 431,835
OTHER CURR. LIABILITIES
TOTAL OTHER CURR. LIABILITIES 0 0
----------- ----------
TOTAL CURRENT LIABILITIES 3,663,793 2,832,275
----------- ----------
Net Working Capital (CA-CL) 15,180,205 14,880,429
Exclusions: Current Assets
0 0
0 0
----------- ----------
Total 0 0
Exclusions: Current Liabilities
Provision for Income Tax 392,078 176,764
Deferred Revenue - Hismelt 868,848 308,432
Liability related 2002 Retention Bonus Agreements 0 0
Liability related to Estimated GST Penalty/Interest
Payment by CMSGGT 0 0
----------- ----------
Total 1,260,926 485,196
Net Working Capital Exclusions (1,260,926) (485,196)
Net Working Capital after Exclusions 16,441,132 15,365,625
Net Working Capital Adjutment Parmelia 1,075,507 Difference between
----------- June & March
NWC after exclusions
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Part 2 - Adjustment Amount - SCP
Note: Completion Date actuals will replace Jun-04 numbers below and Jun-04
actuals will replace the March-04 numbers below in the final calculations of the
Adjustment Amount.
JUN-04 MAR-04
----------- -----------
CURRENT ASSETS
CASH AND EQUIVALENTS
Cash On Hand 411 441
Cash at Bank - GGT JV a/c 530,038 372,526
Proceeds Account - ANZ 40,959,886 27,509,504
Short Term M.Mkt Deposits/Bank Bills 50,990,297 50,305,950
----------- -----------
Total Cash & Equivalents 92,480,632 78,188,421
DEBTORS (RECEIVABLES)
Trade Debtors 9,455,380 9,408,837
Provision for Doubtful Debts (542,570) (542,570)
Sundry Other Austn Debtors 489,338 109,418
Provision for Doubtful Debts (7,221) (7,221)
Warranty & Insurance Claims 0 0
GGT JV Mobilisation Fee in Advance - Agility 784,597 595,060
GST Receivable from ATO 337,390 219,124
----------- -----------
Total Debtors 10,516,915 9,782,647
PREPAYMENTS
Prepayments - General 213,832 237,043
Prepayments - Loan Establishment Fees 690,240 690,240
Prepayments - Insurance 13,799 27,597
Prepayments - Agility 0 5,487
----------- -----------
Total Prepayments 917,870 960,367
STOCKS STORES & SPARES
Stores & Spares 1,355,913 1,282,290
Gas Stock in Pipeline 944,837 986,437
----------- -----------
Total Stocks 2,300,750 2,268,727
TOTAL CURRENT ASSETS 106,216,168 91,200,162
=========== ==========
CURRENT LIABILITIES
TRADE & OTHER CREDITORS
Trade Creditors Control Acct 1,813,139 534,077
GST Payable to ATO 1,755,246 1,618,549
Other Creditors - General 138,011 50,870
Purchase Accruals 1,723,971 1,660,589
Interest Payable 459,218 444,850
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Deferred Revenue (WMC) 0 0
----------- ----------
Total Trade & Other Creditors 5,889,586 4,308,935
OTHER CURR. LIABILITIES
Loan from ANZ - current 25,415,600 22,942,900
----------- ----------
TOTAL OTHER CURR. LIABILITIES 25,415,600 22,942,900
TOTAL CURRENT LIABILITIES 31,305,186 27,251,835
=========== ==========
Net Working Capital (CA-CL) 74,910,983 63,948,327
Exclusions: Current Assets
Deferred Revenue WMC 0 0
Exclusions: Current Liabilities
Loan from ANZ - current 25,415,600 22,942,900
Provision for Income Tax 0 0
Liability Estimated GST Penalty/Interest
Payment by CMSGGT 0 0
----------- ----------
Total 25,415,600 22,942,900
Net Working Capital Exclusions (25,415,600) (22,942,900)
Net Working Capital after Exclusions 100,326,583 86,891,227
Outstanding Loan Balance 250,400,000 254,281,200
This is difference
Change in Outstanding Balance (3,881,200) between June & March
Balance of Difference
Net Working Capital Adjustment for SCP 7,792,45045% between June & March
----------- NWC after exclusions
Minus 45% of Change in
Outstanding Loan Balance
TOTAL WORKING CAPITAL ADJUSTMENT
Net Working Capital Adjustment for SCP 7,792,450
(refer Parmelia Sample
Working Capital
Net Working Capital Adjutment Parmelia 1,075,507 Calculations)
-----------
TOTAL WORKING CAPITAL ADJUSTMENT 8,867,957 -------X
ADDITIONAL TAX RELATED ADJUSTMENTS
45% of Estimated Tax Payments at SCP1 upto Completion 0
Estimated Tax Payments at CMSGGT upto Completion 0
Estimated GST Penalty/Interest Payment 162,000
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by CMSGGT
Estimated Tax Payments at Parmelia upto Completion 0
---------
Sub-total 162,000 -------Y
ADJUSTMENT AMOUNT 8,705,957= X minus Y
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SALE AND PURCHASE AGREEMENT
Schedule 8 - Pre-Sale Restructure
NOTE: ALL STEPS TO OCCUR PRE-COMPLETION IN THE ORDER SHOWN BELOW. THE VENDOR
SHALL OBTAIN CLEARANCE FROM THE FOREIGN INVESTMENT REVIEW BOARD FOR THE TRANSFER
OF SHARES IN CMS GGT FROM VALANDRID TO WAG PRIOR TO THE PRE-SALE RESTRUCTURE.
1 STEP 1 - SALE BY WAG
All the outstanding shares held by WAG in CMS Gas Transmission Del Sur
Company are sold by WAG to the Vendor for a promissory note F.
2 STEP 2 - SALE BY VALANDRID
All the outstanding shares held by Valandrid in CMS GGT are sold by
Valandrid to WAG for fair market value for 3 promissory notes A, B & C in
the amounts specified below in item 15 ("Additional information").
3 STEP 3 - CGT RELIEF
An election for Australian capital gains tax roll-over relief is made.
4 STEP 4 - SALE BY WAG - CMS LUXEMBOURG
All the outstanding shares held by WAG in CMS Luxembourg are sold by WAG
to the Vendor for a promissory note D in the amount specified below in
item 15 ("Additional information").
5 STEP 5 - SALE BY WAG - CMS FINANCIAL
All the outstanding shares held by WAG in CMS Financial are sold by WAG to
the Vendor for a promissory note E in the amount specified below in item
15 ("Additional information").
6 STEP 7 - CANCELLATION OF VALANDRID NOTE
Valandrid repays/cancels the existing Valandrid note (and any accrued
interest) held by CMS Finance using promissory note B.
7 STEP 8 - DISTRIBUTION BY CMS FINANCIAL
CMS Financial pays a dividend to the Vendor. The dividend is paid in the
form of the transfer of promissory note B to the Vendor.
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8 STEP 11 - DISTRIBUTION BY VALANDRID
Valandrid distributes up the two notes A and C to CMS Luxembourg.
9 STEP 9 - CANCELLATION OF CMS LUXEMBOURG NOTE
CMS Luxembourg uses note C to cancel/repay the existing Luxembourg Note
(and any accrued interest) held by WAG.
10 STEP 10 - DISTRIBUTION BY CMS LUXEMBOURG CMS
Luxembourg distributes up note A to Vendor.
11 STEP 11 - OFF-SET OF NOTES
The Vendor uses notes A and B to offset notes D and E and all such notes
are cancelled.
12 STEP 12 - DISTRIBUTION BY WAG
WAG distributes note F to the Vendor.
13 STEP 13 - TRANSFER OF ATACAMA PROMISSORY NOTE
WAG distributes the Atacama Note (and any accrued interest) to the Vendor.
14 STEP 14 - CASH DISTRIBUTION
WAG distributes to the Vendor the amount of any cash held by WAG.
15 ADDITIONAL INFORMATION
The value of note A plus value of note B plus the value of note C is equal
to the market value of the shares in CMS GGT.
The value of note B is equal to the outstanding amount of the existing
Valandrid Note and any accrued interest.
The value of note C is equal to the outstanding amount of the existing
Luxembourg Note and any accrued interest.
The value of note D is equal to the value of note A.
The value of note E is equal to the value of note B.
The value of note F is equal to the market value of the shares of CMS Gas
Transmission del Sur Company.
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The Valandrid Note is the existing promissory note held by CMS Financial
and payable by Valandrid to CMS Financial.
The Luxembourg Note is the existing promissory note held by WAG and
payable by CMS Luxembourg to WAG.
The Atacama Note is the existing promissory note held by WAG and payable
by Atacama Finance Company to WAG.
To the extent that WAG has retained earnings in its accounts after
completion of step 11 (above), the distributions referred to in steps 12,
13 and 14 will be debited against those retained earnings. The balance of
those distributions will be debited to WAG's share premium account.
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SALE AND PURCHASE AGREEMENT
Signing page
DATED:______________________ 2004
VENDOR
SIGNED by )
)
as authorised signatory for CMS )
INTERNATIONAL VENTURES )
L.L.C. in the presence of: )
)
)
/s/ S D Thomas ) /s/ Joseph P. Tomasik
Signature of witness ) Name:
)
SCOTT D. THOMAS ) Title:
Name of witness (block letters) )
) By executing this agreement the
) signatory states that the
signatory signatory has
received no notice of
revocation of the authority to
sign
VENDOR GUARANTOR
SIGNED by )
)
as authorised signatory for CMS )
ENTERPRISES COMPANY in the )
presence of: )
)
/s/ S D Thomas ) /s/ T W Elward
- ------------------------------- ) -------------------------------
Signature of witness ) Name:
)
SCOTT D. THOMAS ) Title:
- ------------------------------- )
Name of witness (block letters) )
) By executing this agreement the
) signatory states that the
signatory signatory has
received no notice of
revocation of the authority to
sign
(C) Mallesons Stephen Jaques Sale and Purchase Agreement
sale and purchase 29 July 2004
85
BUYER
SIGNED by )
/s/ Stephen Wasinger )
as attorney for APT PIPELINES )
INVESTMENTS (WA) PTY LTD )
under power of attorney dated )
7-29-04 )
in the presence of: )
)
)
)
/s/ Dorothy Kotcher Wasinger ) /s/ illegible
- ------------------------------- ) By executing this agreement the
Signature of witness ) attorney states that the
) attorney has received no notice
Dorothy Kotcher Wasinger ) of revocation of the power of
- ------------------------------- ) attorney
Name of witness (block letters) )
BUYER GUARANTOR
SIGNED by )
/s/ Stephen Wasinger )
as attorney for APT PIPELINES )
LIMITED under power of attorney )
dated )
7-29-04 )
in the presence of: )
)
)
)
/s/ Dorothy Kotcher Wasinger
- ------------------------------- )
Signature of witness )
) /s/ illegible
Dorothy Kotcher Wasinger ) By executing this agreement the
- ------------------------------- ) attorney states that the
Name of witness (block letters) ) attorney has received no notice
) of revocation of the power of
) attorney
(C) Mallesons Stephen Jaques SALE AND PURCHASE Agreement
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SALE AND PURCHASE AGREEMENT
Annexure A (clause 3.2) - Deliverables
PARTY RESPONSIBLE FOR
DESCRIPTION DELIVERY
- ------------------------------------------------------------------------------------------
1. Evidence of payment of SEMP and Vendor
confirmation that CMS GTA is discharged
from all of obligations under it.
2. Evidence of payment of 2000 Retention Bonus Vendor
and confirmation that CMS GTA is discharged
from all of obligations under it.
3. Evidence of payment of 2002 Retention Bonus Vendor
and confirmation that CMS GTA is discharged
from all of obligations under it.
4. Each document that gives effect to the Pre-Sale Vendor
Restructure (fully executed and stamped
or registered if necessary).
These include:
Share certificates and transfers;
directors resolutions;
receipts/discharges of liabilities in respect of any
payment/distributions etc being made; evidence of roll-over
exemption being granted.
5. ANZ change of control waiver Buyer
6. FIRB approval Vendor
7. Direction to the Stakeholder in relation to the Buyer and Vendor
Deposit to be executed
8. List of all payments (including details) made Vendor
under clause 4.10
9. Any consents received from CSR, Readymix Vendor
and Minister for Health
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