EXHIBIT 4.2
SALE OF BUSINESS AGREEMENT
PACIFIC BRANDS - AUSTRALIA
Pacific Dunlop Limited
Textile Industrial Design and Engineering Pty Ltd
Union Knitting Mills Pty Ltd
Boydex International Pty Ltd
Foamlite (Australia) Pty Ltd
Vita Pacific Pty Ltd
PD Licensing Pty Ltd
Niblick Pty Ltd
Cliburn Investments Pty Ltd
and
Pacific Brands Holdings Pty Ltd
Pacific Brands Footwear Pty Ltd
Pacific Brands Sport & Leisure Pty Ltd
Pacific Brands Clothing Pty Ltd
Pacific Brands Household Products Pty Ltd
PB Holdings NV
[LOGO OF FREEHILLS]
101 Collins Street Melbourne Victoria 3000 Australia
Telephone 61 3 9288 1234 Facsimile 61 3 9288 1567
www.freehills.com.au DX240 Melbourne
SYDNEY MELBOURNE PERTH CANBERRA BRISBANE HANOI HO CHI MINH CITY SINGAPORE
Correspondent Offices JAKARTA KUALA LUMPUR
Liability limited by the Solicitors' Limitation of Liability Scheme, approved
under the Professional Standards Act 1994 (NSW)
Reference NJW:BAE
TABLE OF CONTENTS
Clause Page
1 Definitions and interpretation 2
1.1 Definitions 2
1.2 Interpretation 9
1.3 Business Day 10
1.4 The Seller 10
1.5 The Buyer 11
1.6 Conflict 12
2 Sale and purchase 12
2.1 Sale of Business Assets 12
2.2 Excluded Assets 12
3 Purchase Price 12
3.1 Purchase Price 12
3.2 Apportionment 13
3.3 Payments at Completion 13
3.4 Final payment 13
4 Completion 13
4.1 Date for Completion 13
4.2 Delivery of documents executed by Seller 13
4.3 Delivery of documents executed by third parties 15
4.4 Delivery of Business Records and documents of title 15
4.5 Buyer's obligations at Completion 15
4.6 Title 15
4.7 Effective Time 15
4.8 Interdependency 16
4.9 Seller obligations post Completion - Intellectual Property Rights 16
5 Payments in advance and outgoings 17
5.1 Advance payments 17
5.2 Outgoings 17
5.3 Quantification 17
6 Liabilities 17
6.1 Seller's responsibility - Liabilities 17
6.2 Quotations, tenders and orders 17
6.3 Buyer's responsibility - Accepted Liabilities 18
6.4 Reimbursement to Seller 18
6.5 Indemnity 18
6.6 Management of Accepted Claims 18
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7 Receivables 19
7.1 Collection by Buyer 19
7.2 Accounting for Receivables 19
7.3 Payment on account 19
7.4 Buyer to provide information 20
7.5 Other debts owed to Seller 20
8 Contracts, Assets Leases, Property Leases 20
8.1 Transfer of Contracts, Assets Leases and Property Leases 20
8.2 Obligations pending transfer 20
8.3 Use or occupation pending transfer 21
8.4 Failure to transfer 21
8.5 Letters of Credit 22
9 Employees 22
9.1 Offer of employment by Buyer 22
9.2 Employment terms and conditions 22
9.3 Best endeavours 22
9.4 Termination by Seller 22
9.5 Payment and indemnity by Buyer for Employment Benefits 23
9.6 Allowance for Employee Leave Benefits 23
9.7 Restriction 23
9.8 Indemnity by Seller 23
10 Superannuation 24
10.1 Definitions 24
10.2 Buyer as Associated Employer 25
10.3 Membership of Buyer's Fund - Existing Members 26
10.4 Payment of Accrued Benefit Values 27
10.5 Calculation of Accrued Benefit Values 27
10.6 Successor Fund Agreement 28
10.7 Calculation of Superannuation Amount 29
10.8 Acknowledgments 29
10.9 External Funds 29
10.10 Contributions by Associated Employer 30
10.11 Undertakings by Buyer and Seller 30
10.12 Indemnity 31
11 Release of guarantees 31
12 Period before Completion 31
12.1 Carrying on Business 31
12.2 Access 32
13 After Completion 32
13.1 Supply of after-sales service 32
13.2 Reconciliation for returned goods 33
13.3 Supplier's Warranties 33
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13.4 Access by Seller 33
13.5 Access to Excluded Records by Buyer 33
13.6 Tax returns 33
14 Strategic Investment Programme 33
15 Competition 34
15.1 Undertaking 34
15.2 Acquisition of interests in competing businesses 34
15.3 Exclusion from restraint 34
15.4 Related Corporations 35
15.5 Severability 35
16 Warranties 35
17 Limitation of liability 35
17.1 Co-ordination Agreement 35
17.2 Specific exclusions - Freehold Properties 35
17.3 Disclosure statements 37
17.4 Property Covenants 37
17.5 Transfer of Sunnybank Hills Property 37
17.6 Obligations pending transfer - Sunnybank Hills Property 38
17.7 Use or occupation pending transfer/failure to transfer 38
18 GST 39
18.1 Supply of a going concern 39
18.2 GST pass-on 39
19 Guarantee and indemnity - Seller 40
19.1 Guarantee 40
19.2 Indemnity 40
19.3 Extent of guarantee and indemnity 40
19.4 Continuing guarantee and indemnity 40
19.5 Warranties of the Guarantor 40
19.6 Rights 41
20 Guarantee and indemnity - Buyer 41
20.1 Guarantee 41
20.2 Indemnity 41
20.3 Extent of guarantee and indemnity 41
20.4 Continuing guarantee and indemnity 42
20.5 Warranties of the Guarantor 42
20.6 Rights 42
Schedule 1 - Warranties 43
Schedule 2 - Disclosure Schedule 57
Schedule 3 - Employees 58
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Schedule 4 - Intellectual Property Rights 59
Schedule 5 - Contracts and Assets Leases 63
Schedule 6 - Statutory Licences 67
Schedule 7 - Leased Properties 68
Schedule 8 - Plant and Equipment 69
Schedule 9 - Letters of Credit 72
Schedule 10 - Freehold Properties 73
Schedule 11 - Accepted Liabilities 74
Schedule 12 - Guarantees 75
Schedule 13 - External Funds 76
Annexure A - Assignment of Trademarks
Annexure B - Assignment of Contracts and Asset Leases
Annexure C - Assignment of Property Leases
Annexure D - [Not used]
Annexure E - Trade Mark Relationship Agreement
Annexure F - Successor Fund Agreement
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THIS BUSINESS SALE AGREEMENT
is made on 2001 between the following parties:
1. Pacific Dunlop Limited
ABN 89 004 085 330
(Guarantor)
2. Textile Industrial Design and Engineering Pty Ltd
ABN 79 000 283 198
3. Union Knitting Mills Pty Ltd
ABN 38 006 752 021
4. Boydex International Pty Ltd
ABN 81 004 441 758
5. Foamlite (Australia) Pty Ltd
ABN 89 001 595 017
6. Vita Pacific Pty Ltd
ABN 65 004 919 171
7. PD Licensing Pty Ltd
ABN 67 006 599 131
8. Niblick Pty Ltd
ABN 80 006 049 172
9. Cliburn Investments Pty Ltd
ABN 69 006 298 246
all of Level 3, 678 Victoria Street, Richmond, Victoria, 3121
(parties 1 to 9 collectively, Seller)
10. Pacific Brands Holdings Pty Ltd
ACN 098 704 646
11. Pacific Brands Footwear Pty Ltd
ACN 098 742 628
12. Pacific Brands Sport & Leisure Pty Ltd
ACN 098 742 708
13. Pacific Brands Clothing Pty Ltd
ACN 098 742 655
14. Pacific Brands Household Products Pty Ltd
ACN 098 742 584
all c/- Minter Ellision, 88 Phillip Street, Sydney, New South
Wales 2000 (parties 10 to 14 collectively, Buyer)
15. PB Holdings NV
of 1170 Brussels, Terhulpsesteenweg 166
RECITALS
A. The Seller is the owner of the Business Assets.
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B. The Seller has agreed to sell and the Buyer has agreed to buy the
Business Assets.
C. The Guarantor agrees to guarantee the performance by the Seller
of its obligations pursuant to this agreement.
D. The Buyer Guarantor agrees to guarantee the performance by the
Buyer of its obligations pursuant to this agreement.
The parties agree
in consideration of, among other things, the mutual promises contained
in this agreement:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
Accepted Claims has the meaning given in clause 6.3;
Accepted Liabilities means:
(a) those trade and other Liabilities arising in relation to the
ownership of the Business Assets or operation of the Business
before the Effective Time:
(1) and which are provided for in the Completion Statement,
including but not limited to any Intra Group Liability;
(2) which constitute the amount of any payment to a trade
creditor of the Seller the subject of an unpresented cheque
of the Seller as at the Effective Time (not including any
Inter Group Liability), provided that the relevant cheque
account is assumed by the Buyer; and
(b) the Liabilities as described in schedule 11,
but excluding the Liability assumed by the Buyer pursuant to clause
9.6 and any Inter Group Liability;
Accounting Standards has the meaning given to that term in the
Co-ordination Agreement;
Adjustment Note includes any document or record treated by the
Commissioner of Taxation as an adjustment note or as enabling the
claiming of an input tax credit for which an entitlement otherwise
arises;
Apportionment Statement has the meaning given to that term in the
Co-ordination Agreement;
Assets Leases means all leases, hire purchase agreements, conditional
purchase agreements and other hiring arrangements to which the Seller
is party in relation to assets used in the Business including, but not
limited to, those listed in part 2 of schedule 5 and any leases,
agreements or arrangements entered into by the Seller between the date
of this agreement and the Effective Time, but excludes the Property
Leases;
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Authorisation means any consent, registration, agreement, certificate,
licence, approval, permit, authority or exemption from, by or with a
Governmental Agency;
Bid Accounts has the meaning given to that term in the Co-ordination
Agreement;
Business means the business carried on by the Seller in Australia
(excluding the business carried on by Bonds Industries Pty Ltd)
comprising the manufacture, marketing, sale and distribution of:
(a) clothing and related apparel including socks, underwear and
intimate and outerwear garments;
(b) foam, polyester fibre, mattresses and bedding accessories and
products;
(c) footwear; and
(d) sporting and leisure equipment and related apparel and footwear
and workwear;
Business Assets means the following assets:
(a) the Assets Leases;
(b) the Business Records;
(c) the Contracts;
(d) the Freehold Properties;
(e) the Goodwill;
(f) the Included Cash;
(g) the Intellectual Property Rights;
(h) the Plant and Equipment;
(i) the Property Leases;
(j) the SIP Receivable;
(k) the Statutory Licences; and
(l) the Stock,
and any asset, right or future economic benefit used in or relating to
exclusively, the Business, but excludes the Excluded Assets;
Business Day means a day on which banks are open for business in
Melbourne, Sydney and Auckland excluding a Saturday, Sunday or a
public holiday;
Business Records means, to the extent relating to the Business, the
Seller's customer lists and supplier lists, records of the
Intellectual Property Rights, Assets Leases, Contracts, Statutory
Licences and Property Leases, records of Accepted Liabilities and
records of Transferring Employees and of their Employment Benefits;
Buyer Guarantor means Pacific Brands Holdings Pty Ltd and PB Holdings
NV;
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Claim means any claim or cause of action (including, but not limited
to, in contract, in tort or under statute) in respect of this
agreement, the Business or any of the Business Assets;
Clothing Business means that part of the Business relating to clothing
and related apparel including socks, underwear and intimate and
outerwear garments (excluding clothing and related apparel which
relates to the Sport & Leisure Business);
Completion means completion of the sale and purchase of the Business
Assets under clause 4;
Completion Date has the meaning given to that term in the
Co-ordination Agreement;
Completion Statement means the statement to be prepared in relation to
the Business as at the Effective Time pursuant to the Co-ordination
Agreement;
Conditions has the meaning given to that term in the Co-ordination
Agreement;
Contracts means the agreements (including for the avoidance of doubt
Intellectual Property Licences) to which the Seller is a party to the
extent they relate to the Business and which are, wholly or partly,
executory as at the Effective Time, including, but not limited to,
those listed in part 1 of schedule 5, but excludes:
(a) the Assets Leases;
(b) the Property Leases; and
(c) any agreements to the extent they relate to Excluded Assets or
Liabilities which are not Accepted Liabilities or which are not
otherwise assumed by the Buyer under this agreement;
Co-ordination Agreement means the co-ordination agreement executed on
the same day as this agreement by, among others, the Seller and the
Buyer;
Data Room has the meaning given to that term in the Co-ordination
Agreement;
Disclosure Schedule means schedule 2 to this agreement which contains
disclosures in relation to the Seller's Warranties;
Dollars, A$ and $ means Australian dollars, unless otherwise
specified;
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 Tax;
Effective Time has the meaning given to that term in the Co-ordination
Agreement;
Employees means an employee of the Seller listed in schedule 3 who is
still employed in the Business as at the Completion Date and any
person who becomes an employee of the Seller in relation to the
Business between the date of this agreement and Completion;
Employee Leave Benefits means annual leave, leave loading, sick leave
and long service leave;
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Employment Benefits means Employee Leave Benefits and all wages,
salary, remuneration, compensation and other benefits payable to the
Employees by the Seller;
Encumbrance means any mortgage, charge, lien, pledge (other than liens
arising in the ordinary course of business by operation of law and
title retention in respect of stock-in-trade);
Environmental Law has the meaning given to that term in the
Co-ordination Agreement;
Environmental Liability has the meaning given to that term in the
Co-ordination Agreement;
Excluded Assets means the following assets of the Seller used in or
arising out of the Business:
(a) all cash including cash at hand or at bank, except for the
Included Cash;
(b) the Receivables;
(c) any amounts other than Receivables receivable by the Seller at
any time in relation to ownership of the Business Assets before
Completion including, but not limited to, in respect of any
insurance claim;
(d) the amount of any payment received or receivable under the SIP
Scheme relating to any period up to 30 June 2001 to the extent
that the amount of the payment exceeds an amount equal to the SIP
Receivable;
(e) the Speeds Receivable;
(f) the Inter Group Receivables;
(g) the Excluded Records;
(h) rights to the Licensed Trade Marks as defined in the Trade Mark
Relationship Agreement and rights to the name Pacific Dunlop and
any names likely to be confused with that name;
(i) the benefit of any insurances held by the Seller or any Related
Corporation of the Seller;
(j) any shares or other securities in any body corporate;
(k) the Foreign Exchange Contracts; and
(l) goods and service sourcing contracts which apply, as well as to
the Business, to other divisions and subsidiaries of Pacific
Dunlop Limited;
Excluded Records means those Business Records which the Seller is
required by law to retain;
Footwear Business means that part of the Business relating to footwear
(excluding footwear which relates to the Sport & Leisure Business);
Foreign Exchange Contracts means all foreign exchange hedging
contracts entered by the Seller which relate exclusively to the
Business which remain current as at Completion, details of which will
be provided to the Buyer at Completion;
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Freehold Properties means the land more particularly described in
schedule 10 and the Sunnybank Hills Property;
Goodwill means the Seller's goodwill relating exclusively to the
Business;
Governmental Agency means any government or any governmental,
semi-governmental, administrative, fiscal or judicial body,
department, commission, authority, tribunal, agency or entity in any
part of the world;
GST includes any replacement or subsequent similar tax;
GST Act means A New Tax System (Goods and Services Tax) Act 1999
(Cth);
Guarantees means the guarantees and other letters of comfort and
commitments of financial support given by the Seller and its Related
Corporations in relation to the Business which remain in force at the
date of this agreement, including but not limited to those listed in
schedule 12;
Guarantor means Pacific Dunlop Limited ABN 89 004 085 330 of Level 3,
678 Victoria Street, Richmond, Victoria 3121;
Household Products Business means that part of the Business relating
to foam, polyester fibre, mattresses and bedding accessories and
products;
Immediately Available Funds means cash or bank cheque;
Included Cash means any cash of the Seller at the Effective Time,
which is located at the Properties or in bank accounts assumed by the
Buyer, which is identified in the Completion Statement;
Intellectual Property Licences means all agreements under which the
Seller has the right to use, but not ownership of, intellectual
property used in connection with the Business details of which are set
out in part 2 of schedule 4;
Intellectual Property Rights means the rights and interests of the
Seller to the extent they relate to the Business in all patents,
utility models, copyrights, registered or unregistered trade marks or
service marks, trade names, know-how, brand names, registered designs
and any applications for any of the above, including but not limited
to the Intellectual Property Licences and the other rights listed in
schedule 4;
Interest Rate means the average rate displayed on the Reuters Page
BBSW for 90 day bank bills at 10:10 am Melbourne time applicable to
each Business Day on which amounts are outstanding as confirmed by
Westpac Banking Corporation and on the basis that for a day other than
a Business Day the rate applicable to the last preceding Business Day
will apply;
Inter Group Debts means any amount owing (including, but not limited
to, trade accounts payable and receivable):
(a) by a Seller in its capacity as an entity carrying on part of the
Business to a member of the PDL Group (except in that member's
capacity as an entity carrying on any part of the Pacific Brands
Business) (Inter Group Liability);
(b) by a member of the PDL Group (except in its capacity as an entity
carrying on any part of the Pacific Brands Business) to a Seller
in its capacity as an entity carrying on part of the Business
(Inter Group Receivable);
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Inter Group Liability has the meaning given in paragraph (a) of the
definition of Inter Group Debts;
Inter Group Receivable has the meaning given in paragraph (b) of the
definition of Inter Group Debts;
Intra Group Debts means any amount owing (including, but not limited
to, trade accounts payable and receivable):
(a) by a Seller in its capacity as an entity carrying on part of the
Business to a member of the PDL Group in its capacity as an
entity carrying on any part of the Pacific Brands Business)
(Intra Group Liability);
(b) by a member of the PDL Group in its capacity as an entity
carrying on any part of the Pacific Brands Business to a Seller
in its capacity as an entity carrying on part of the Business
(Intra Group Receivable);
Intra Group Liability has the meaning given in paragraph (a) of the
definition of Intra Group Debts;
Intra Group Receivable has the meaning given in paragraph (b) of the
definition of Intra Group Debts;
Leased Properties means the property the subject of the Property
Leases, as described in schedule 7;
Letters of Credit means such letters of credit procured by the Seller
in respect of the purchase of stock-in-trade or plant and equipment in
the Business and which are outstanding as at the Effective Time, as
are listed in schedule 9;
Liabilities means all accrued liabilities of the Seller in respect of
the Business as at the Effective Time;
Linked Transaction Agreements has the meaning given to that term in
the Co-ordination Agreement;
Loss includes any damage, loss, claim, action, liability, cost,
expense, outgoing or payment;
Novated Leases means the leases of motor vehicles used by Employees
listed in part 2 of schedule 8;
Officer means, in relation to a body corporate, a director or
secretary of that body corporate;
Pacific Brands Business has the meaning given to that term in the
Co-ordination Agreement;
Payment Date has the meaning given to that term in the Co-ordination
Agreement;
PDL Group means Pacific Dunlop Limited ABN 89 004 085 330 and its
Related Corporations immediately before Completion;
Plant and Equipment means the plant (including plant under
construction), equipment, machinery, tools, furniture, fittings, spare
parts, leasehold improvements and motor vehicles owned by the Seller
as at the Effective Time and used exclusively in the Business
including, without limitation, those listed in part 1 of schedule 8;
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Power means any right, power, authority, discretion or remedy
conferred on the parties by this agreement or any applicable law;
Properties means the Leased Properties and the Freehold Properties;
Property Leases means the leases of real property listed in schedule
7;
Purchase Price means Purchase Price payable for the Business Assets
calculated under clause 3;
Receivables means the trade debts and any other debts or amounts owing
acquired in carrying on the Business owed to the Seller at the
Effective Time including, but not limited to:
(a) any Intra Group Receivable; and
(b) the amount of any trade or other debt for which a payment has
been received by the Seller but not credited to the Seller's bank
accounts at the Effective Time, provided that the relevant cheque
account is assumed by the Buyer,
but not including the Speeds Receivable, any Inter Group Receivable or
any amount relating to the SIP Scheme;
Related Corporation means a "related body corporate" as that
expression is defined in the Corporations Act;
Residual Provision has the meaning given to that term in the
Co-ordination Agreement;
Restructuring Provision has the meaning given to that term in the
Co-ordination Agreement;
SIP Receivable means the portion of $5,000,000 receivable relating to
the SIP Scheme as described in clause 9.1 (a)(1) of the Co-ordination
Agreement, which relates to the Business;
SIP Registrations means each of the registrations of Pacific Dunlop
Limited and Union Knitting Mills Pty Ltd for the financial years ended
2001 and 2002 and of Boydex International Pty Ltd for the financial
year ended 2001, under the SIP Scheme;
SIP Scheme means the Textile, Clothing and Footwear Strategic
Investment Program Scheme 1999 made under section 8 of the Textile,
Clothing and Footwear Strategic Investment Program Act 1999 (Cwth);
Speeds Receivable means all the Seller's rights in relation to the
Current Speeds Receivable and Non Current Speeds Receivable as defined
in the Co-ordination Agreement;
Sport & Leisure Business means that part of the Business relating to
sporting and leisure equipment and related apparel and footwear and
workwear;
Statutory Licences means all licences, consents, rights, permits and
certificates owned by the Seller relating to any aspect of the
Business issued by any governmental or regulatory authority or
otherwise necessary for the operation of any of the Business Assets
including but not limited to these items described in schedule 6;
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Stock means the stock of the Business owned by the Seller as at the
Effective Time and includes, but is not limited to, any stock in
transit, raw materials, components, work-in-progress, finished goods,
packaging materials, promotional materials and consumables;
Sunnybank Hills Property means the property registered in the name of
Foamlite (Australia) Pty Ltd at 195 Jackson Road, Sunnybank Hills,
Queensland;
Tangible Assets means the assets leased or hired under the Assets
Leases, the Plant and Equipment and the Stock;
Tax means any tax, levy, charge, impost, duty, fee, deduction,
compulsory loan or withholding, which is assessed, levied, imposed or
collected by any Governmental Agency and includes, but is not limited
to any interest, fine, penalty, charge, fee or any other amount
imposed on, or in respect of, any of the above but excludes Duty;
Tax Invoice includes any document or record treated by the
Commissioner of Taxation as a tax invoice or as enabling the claiming
of an input tax credit for which an entitlement otherwise arises;
Tax Law means any law of an Australian parliament relating to Tax;
Trade Mark Relationship Agreement means the agreement annexed as
Annexure E;
Transferring Employee means an Employee who accepts the Buyer's offer
of employment under clause 9.1;
Transfers means the transfers of land to be delivered by the Seller
pursuant to clause 4.2;
Valuer has the meaning given to that term in the Co-ordination
Agreement; and
Warranties means in relation to the Buyer the representations and
warranties in part A of schedule 1 and in relation to the Seller the
representations and warranties in part B of schedule 1.
1.2 INTERPRETATION
In this agreement, headings and boldings are for convenience only and
do not affect the interpretation of this agreement and, unless the
context requires otherwise:
(a) terms defined in the GST Act and not otherwise defined in this
agreement have the same meaning in this agreement unless provided
otherwise;
(b) words importing the singular include the plural and vice versa;
(c) words importing a gender include any gender;
(d) other parts of speech and grammatical forms of a word or phrase
defined in this agreement have a corresponding meaning;
(e) an expression importing a natural person includes any company,
partnership, joint venture, association, corporation or other
body corporate and any Governmental Agency;
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(f) a reference to a clause, party or schedule is a reference to a
clause of, and a party and schedule to, this agreement and a
reference to this agreement includes any schedule;
(g) a reference to a statute, regulation, proclamation, ordinance or
by-law includes all statutes, regulations, proclamations,
ordinances or by-laws amending, consolidating or replacing it,
and a reference to a statute includes all regulations,
proclamations, ordinances and by-laws issued under that statute;
(h) a reference to a document includes all amendments or supplements
to, or replacements or novations of, that document;
(i) a reference to a party to a document includes that party's
successors and permitted assigns;
(j) no provision of this agreement will be construed adversely to a
party solely on the ground that the party was responsible for the
preparation of this agreement or that provision;
(k) if a covenant, undertaking, representation, warranty, indemnity
or agreement is made or given by two or more parties, that
covenant, undertaking, representation, warranty, indemnity or
agreement is made or given and binds those parties jointly and
severally;
(l) if a party comprises two or more persons, a covenant,
undertaking, representation, warranty, indemnity or agreement
made or given by that party binds those persons jointly and
severally; and
(m) a reference to 'best endeavours' is an obligation imposed on a
party but does not require that party to pay any money or enter
into any unreasonably onerous undertaking or obligation.
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done is not a Business
Day, that thing must be done on or by the next Business Day.
1.4 THE SELLER
(a) In this agreement, a reference to the Seller is a separate
reference to each of Pacific Dunlop Limited ABN 89 004 085 330,
Textile Industrial Design and Engineering Pty Ltd ABN 79 000 283
198, Union Knitting Mills Pty Ltd ABN 38 006 752 021, Boydex
International Pty Ltd ABN 81 004 441 758, Foamlite (Australia)
Pty Ltd ABN 89 001 595 017, Vita Pacific Pty Ltd ABN 65 004 919
171, PD Licensing Pty Ltd ABN 67 006 599 131, Niblick Pty Ltd ABN
80 006 049 172 and Cliburn Investments Pty Ltd ABN 69 006 298 246
to the extent that, in the context of the reference, an entity so
named holds rights or obligations in relation to the Business
generally or owns a Business Asset.
(b) In circumstances where a member of the PDL Group owns a Business
Asset but that member is not expressly named as a Seller, the
Guarantor must procure that any such member complies with any
obligation under this agreement relating to that Business Asset.
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1.5 THE BUYER
(a) In this agreement, a reference to the Buyer is a separate
reference to:
(1) Pacific Brands Holdings Pty Ltd ACN 098 704 646, in the
context of a reference to offers of employment to Employees
and all related matters (including but not limited to
superannuation obligations);
(2) Pacific Brands Footwear Pty Ltd ACN 098 742 628, in the
context of a reference to matters relating to the sale of
the Business Assets, the assumption of the Accepted
Liabilities and the collection of the Receivables, which
Business Assets, Accepted Liabilities or Receivables relate
to the Footwear Business;
(3) Pacific Brands Sport & Leisure Pty Ltd ACN 098 742 708, in
the context of a reference to matters relating to the sale
of the Business Assets, the assumption of the Accepted
Liabilities and the collection of the Receivables, which
Business Assets, Accepted Liabilities and Receivables relate
to the Sport and Leisure Business;
(4) Pacific Brands Clothing Pty Ltd ACN 098 742 655, in the
context of a reference to matters relating to the sale of
the Business Assets, the assumption of the Accepted
Liabilities and the collection of the Receivables, which
Business Assets, Accepted Liabilities or Receivables relate
to the Clothing Business; and
(5) Pacific Brands Household Products Pty Ltd ACN 098 742 584,
in the context of a reference to matters relating to the
sale of the Business Assets, the assumption of the Accepted
Liabilities and the collection of the Receivables, which
Business Assets, Accepted Liabilities or Receivables relate
to the Household Products Business.
(b) Each of Pacific Brands Holdings Pty Ltd, Pacific Brands Footwear
Pty Ltd, Pacific Brands Sport & Leisure Pty Ltd, Pacific Brands
Clothing Pty Ltd and Pacific Brands Household Products Pty Ltd
acknowledge:
(1) for the avoidance of doubt, that the Business Assets,
Accepted Liabilities and Receivables relating to each of the
Footwear Business, Sport & Leisure Business, Clothing
Business and Household Products Business constitute all of
the Business Assets, Accepted Liabilities and Receivables;
(2) that in the event of any doubt as to which Business Assets,
Accepted Liabilities or Receivables relate to each of the 4
businesses making up the Business (ie the Footwear Business,
the Sport & Leisure Business, the Clothing Business and the
Household Products Business), the Buyer is responsible for
any consequence; and
(3) that the Seller is not liable for any Loss resulting from
the way in which the Business Assets, Accepted Liabilities
or Receivables are allocated between each of Pacific Brands
Footwear Pty Ltd, Pacific Brands Sport & Leisure Pty Ltd,
Pacific Brands Clothing Pty Ltd
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and Pacific Brands Household Products Pty Ltd as
contemplated by clause 1.5(a).
1.6 CONFLICT
If there is any conflict or inconsistency between anything contained
in this agreement and anything contained in the Co-ordination
Agreement, then the Co-ordination Agreement will prevail.
2 SALE AND PURCHASE
2.1 SALE OF BUSINESS ASSETS
Subject to the satisfaction or waiver of the Conditions in accordance
with the Co-ordination Agreement, on Completion the Seller will sell
and the Buyer will buy the Business Assets free of Encumbrances for
the Purchase Price and the Buyer will assume the Accepted Liabilities.
2.2 EXCLUDED ASSETS
(a) The Excluded Assets are excluded from the sale of the Business.
(b) To the extent that any cash which is an Excluded Asset passes to
the possession of the Buyer at Completion (which for the
avoidance of doubt is not Included Cash), the Buyer will refund
that cash to the Seller immediately it becomes aware of such cash
or on demand by the Seller.
3 PURCHASE PRICE
3.1 PURCHASE PRICE
(a) The Purchase Price is the total value of the Business Assets:
(1) less the total value of the Accepted Liabilities (which for
the avoidance of doubt, does not include the value of the
items described in clauses 3.1(a)(4) and (5));
(2) less the allowance referred to in clause 9.6 (Employee Leave
Benefits);
(3) plus or minus any adjustments under clause 5.1 in respect of
advance payments and outgoings;
(4) less that portion of the Restructuring Provision applicable
to Australia net of future income tax benefit calculated at
the rate of 30%; and
(5) less the Residual Provision net of future income tax benefit
calculated at the rate of 30%,
reflected in the Apportionment Statement derived from the
Completion Statement.
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(b) The Purchase Price is payable in accordance with clauses 3.3 and
3.4.
3.2 APPORTIONMENT
(a) The Purchase Price will be allocated and apportioned between the
Business Assets in the manner described in the Co-ordination
Agreement.
(b) The Accepted Liabilities are valued as per the valuation pursuant
to the Completion Statement.
3.3 PAYMENTS AT COMPLETION
It is acknowledged that under the Co-ordination Agreement, an amount
must be paid at Completion by the Buyer to Pacific Dunlop Limited (or
as otherwise directed by it) on behalf of the Seller.
3.4 FINAL PAYMENT
On the Payment Date, the Buyer or the Seller, as appropriate, must pay
to the other any net amount plus interest on the amount which may be
payable in accordance with the Co-ordination Agreement.
4 COMPLETION
4.1 DATE FOR COMPLETION
Completion must take place on the Completion Date as provided for in
the Co-ordination Agreement.
4.2 DELIVERY OF DOCUMENTS EXECUTED BY SELLER
At Completion the Seller must give the Buyer the following documents
executed by the Seller or its Related Corporations or registered owner
or lessee (as the case requires):
(a) the Trade Mark Relationship Agreement;
(b) assignments or novations of those Assets Leases, Contracts and
Property Leases which have been transferred to the Buyer before
Completion in accordance with clause 8.1;
(c) as many transfer of ownership and registration forms for motor
vehicles leased or hired under the Assets Leases or included in
the Plant and Equipment as have been assembled as at Completion
it being agreed by the parties that any costs associated with
transferring such motor vehicles after Completion including,
without limitation, costs associated with obtaining roadworthy
certificates, will be solely to the account of the Buyer;
(d) evidence of the transfer of as many Statutory Licences as have
been transferred to the Buyer as at Completion and of such
necessary consents to such transfers as have been obtained or of
the lodgement of appropriate transfer documentation with the
relevant authority;
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(e) certificates for those registered trade marks, granted patents
and registered designs included in the Intellectual Property
Rights which are in the Seller's possession as at Completion;
(f) assignments of the trade marks included in the Intellectual
Property Rights which are registered in Australia, China,
Malaysia, Vietnam, United Kingdom, Papua New Guinea, Singapore,
Hong Kong and Indonesia, in the form annexed as Annexure A;
(g) subject to any lease and the provisions of this agreement, vacant
possession of the Freehold Properties;
(h) properly executed transfers of the Freehold Properties in favour
of the Buyer which, subject to clause 17.5, is capable of
registration (after stamping);
(i) a Goods Statutory Declaration required by the Duties Act 2000
(Vic) to be furnished to procure the stamping of a transfer
referred to in clause 4.2(h);
(j) a declaration required by the Stamps Act 1894 (Qld) to be
furnished to procure the stamping of a transfer referred to in
clause 4.2(h);
(k) any instrument of title for the Freehold Properties required to
register a transfer referred to in clause 4.2(h);
(l) any document required to transfer the SIP Registrations in
accordance with clause 14(a) which the Seller is able to provide
at Completion;
(m) the assignment or novation to the relevant Buyer Group Companies
specified by the Principal Buyer of the Property Leases in
respect of the following sites and receipt of all relevant
consents to such assignments and/or novations:
(1) 28-30 Scrivener Street, Warwick Farm, New South Wales;
(2) 1 Dunlop Drive, Dandenong, Victoria;
(3) 72-96 Station Street, Nunawading, Victoria;
(4) 100 Henderson Road, Rowville, Victoria; and
(5) 47-67 Westgate Drive, Altona North, Victoria.
(n) the assignment or novation to the relevant Buyer Group Company of
the technical aid agreement between PDL, Dunlop Slazenger Group
Limited and Dunlop Slazenger International Limited, on the terms
set out in the copy of the agreement that was in the Data Room;
and
(o) the assignment or novation of the relevant licence agreements in
respect of the following brands:
(1) 'Jockey';
(2) 'Simmons';
(3) 'Playtex';
(4) 'Everlast';
(5) 'Clarks'; and
(6) 'Hush Puppies',
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on the terms set out in the copy of the agreement that was in the
Data Room.
4.3 DELIVERY OF DOCUMENTS EXECUTED BY THIRD PARTIES
At Completion the Seller must give the Buyer:
(a) the consents to the transfer of the Contracts, Assets Leases and
Property Leases which have been obtained at or before Completion;
(b) a release of each Encumbrance affecting any of the Business
Assets executed by the holder of that Encumbrance; and
(c) as many certificates of roadworthiness for motor vehicles or
forklifts (if required by law) leased or hired under the Assets
Leases or included in the Plant and Equipment as have been
assembled as at Completion.
4.4 DELIVERY OF BUSINESS RECORDS AND DOCUMENTS OF TITLE
(a) At Completion the Seller and its Related Corporations (as the
case requires) must transfer to the Buyer at the Properties:
(1) all originals in the Seller's possession of the Contracts,
Assets Leases and Property Leases;
(2) all registration certificates and other documents of title
for the Intellectual Property Rights in the Seller's
possession;
(3) all registration papers for all motor vehicles leased or
hired under the Assets Leases or included in the Plant and
Equipment in the Seller's possession;
(4) the Business Records (other than Excluded Records); and
(5) the Tangible Assets, to the extent located at the
Properties.
(b) If any document referred to in clause 4.4(a) is not available
because it is lost or destroyed, the Seller must deliver such
evidence of its title to the Business Assets concerned as is
acceptable to the Buyer, acting reasonably.
4.5 BUYER'S OBLIGATIONS AT COMPLETION
At Completion the Buyer must give the Seller counterparts, executed by
the Buyer, of those documents listed in clauses 4.2 and 4.3 that are
to be executed by the Buyer and the Buyer must comply with its
obligations pursuant to clause 3.3.
4.6 TITLE
Title to the Business Assets passes to the Buyer on Completion
(subject to clause 17.5 relating to the Sunnybank Hills Property).
4.7 EFFECTIVE TIME
Subject to Completion occurring:
(a) risk in the Business Assets;
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(b) the benefit of all income and benefits derived from the Business
Assets; and
(c) the burden of and all liabilities and obligations arising from
the Business Assets,
pass to the Buyer with effect from the Effective Time.
4.8 INTERDEPENDENCY
(a) Notwithstanding any provision of a Linked Transaction Agreement
but subject to clause 4 of the Co-ordination Agreement, the
obligations of the parties to the Linked Transaction Agreements
in respect of completion (as defined in each Linked Transaction
Agreement) are interdependent.
(b) Subject to clause 4 of the Co-ordination Agreement, all actions
at Completion under this agreement and completion under each
other Linked Transaction Agreement will be deemed to take place
simultaneously and no delivery or payment will be deemed to have
been made until all deliveries and payments under the Linked
Transaction Agreements due to be made at or immediately after
completion (as defined in each Linked Transaction Agreement) have
been made.
(c) A material breach of this agreement by any party to this
agreement is deemed to constitute a breach by the defaulting
party of each Linked Transaction Agreement to which the
defaulting party is a party.
4.9 SELLER OBLIGATIONS POST COMPLETION - INTELLECTUAL PROPERTY RIGHTS
After Completion, the Seller will give the Buyer the following
documents executed (to the extent necessary) by the Seller or its
Related Corporations or registered owner (as the case may be):
(a) an assignment of the patent applications and registrations listed
in schedule 4;
(b) an assignment of the design applications and registrations listed
in schedule 4;
(c) an assignment of the .com domain names listed in schedule 4;
(d) a notification of cancellation of the .com.au domain names listed
in schedule 4;
(e) assignments of the trade mark applications and registrations
listed in schedule 4, to the extent that such documents have not
been provided to the Buyer at Completion; and
(f) documents in the possession of the Seller evidencing the chain of
title of trade mark applications and registrations listed in
schedule 4 from the registered owner to the actual owner, where
such documents are necessary for the Buyer to record the
assignment of such trade mark applications from the actual owner
to the Buyer.
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5 PAYMENTS IN ADVANCE AND OUTGOINGS
5.1 ADVANCE PAYMENTS
On the Payment Date:
(a) the Buyer must account to the Seller for:
(1) any payments in advance made by the Seller for goods or
services supplied or to be supplied to the Business after
the Effective Time;
(2) any other payments in advance made by the Seller in respect
of the Business, the benefit of which is received or is to
be received by the Business after the Effective Time; and
(3) any amount of Employment Benefits paid by the Seller to
Transferring Employees in relation to any period after the
Effective Time; and
(b) the Seller must account to the Buyer for any payments in advance
received by the Seller for goods or services supplied or to be
supplied by the Business after the Effective Time.
5.2 OUTGOINGS
Except as otherwise expressly provided in this agreement, at the
Payment Date the Seller will deliver to the Buyer a written statement
setting out all outgoings of a periodical or recurring nature in
respect of any of the Business Assets and otherwise in the conduct of
the Business which will be apportioned as between the Buyer and the
Seller on the basis that they will be borne by the Seller in respect
of the period before the Effective Time and afterwards by the Buyer.
5.3 QUANTIFICATION
For the purpose of clauses 5.1 and 5.2, the quantum of any payment,
amount or outgoing referred to in clauses 5.1 and 5.2 will be as
determined in the Completion Statement. The Buyer acknowledges that
any such adjustments will form part of the Purchase Price and will be
reflected in the Completion Statement.
6 LIABILITIES
6.1 SELLER'S RESPONSIBILITY - LIABILITIES
The Seller must pay or otherwise discharge all Liabilities which are
not expressly assumed by the Buyer under this agreement.
6.2 QUOTATIONS, TENDERS AND ORDERS
(a) Subject to clause 6.2(b), the Buyer must discharge any
obligations which have arisen or may arise in respect of all
quotations given, tenders made or orders taken by the Seller in
the ordinary course of the Business before Completion.
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(b) The Seller has disclosed in writing to the Buyer any tender,
quotation or order in the Business which involves the supply of
goods and services with a value in excess of $1 million.
6.3 BUYER'S RESPONSIBILITY - ACCEPTED LIABILITIES
The Buyer must:
(a) pay all Accepted Liabilities on or before the due date;
(b) pay and discharge all other liabilities and obligations of the
Seller not paid or discharged before the Effective Time relating
to goods or services to be supplied to the Business after the
Effective Time or relating to a benefit received or to be
received by the Business after the Effective Time;
(c) in the case of Accepted Liabilities which are claims relating to
the Business as described in part 1 of schedule 11 (Accepted
Claims), manage those claims in accordance with clause 6.6.
6.4 REIMBURSEMENT TO SELLER
If the Seller, or any person on behalf of the Seller, pays an Accepted
Liability, the Buyer must reimburse the Seller within 10 Business Days
after the Buyer receives evidence of payment.
6.5 INDEMNITY
The Buyer must indemnify the Seller against any Loss suffered, paid or
incurred by the Seller after Completion as a result of any failure by
the Buyer to comply with its obligations under this clause 6 and the
Seller must indemnify the Buyer against any Loss suffered, paid or
incurred by the Buyer after Completion as a result of any failure by
the Seller to comply with its obligations under this clause 6.
6.6 MANAGEMENT OF ACCEPTED CLAIMS
The Buyer will:
(a) manage the Accepted Claims after Completion at its own cost and
expense;
(b) on request of the Guarantor, provide an update of the status of
any Accepted Claim; and
(c) use its reasonable endeavours to protect the name and reputation
of the Guarantor and its Related Corporations in the management
of the Accepted Claims,
provided that the Seller will allow the Buyer access to any records
reasonably required to assist the Buyer in performing its obligations
as described above.
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7 RECEIVABLES
7.1 COLLECTION BY BUYER
(a) The Seller is entitled to the Receivables. Title to the
Receivables will at all times remain with the Seller.
(b) The Buyer must use its reasonable endeavours to expedite
collection of the Receivables on behalf of the Seller. Collection
of the Receivables will occur in the name of the Seller.
(c) The Buyer must not release, agree to delayed payment of or
otherwise compromise the Seller's rights in relation to a
Receivable without the Seller's specific written approval.
7.2 ACCOUNTING FOR RECEIVABLES
For the purpose of clause 7.3(b)(1), the Buyer must account to the
Seller for collection of the Receivables as follows:
(a) any amount received by the Buyer which is stated to be in payment
of, or which is readily reconcilable with, specific Receivables
or debts must be treated as a payment of those Receivables or
debts (as applicable); and
(b) in any other case, the amount received must be applied:
(1) first, in payment of the Receivables owed by the debtor,
with those which have been outstanding the longest to be
paid before the others; and
(2) second, in payment of the debts owed by the debtor to the
Buyer, with those which have been outstanding the longest to
be paid before the others.
7.3 PAYMENT ON ACCOUNT
(a) On account of the Buyer's obligations under clauses 7.1 and 7.2:
(1) on Completion the Buyer must pay to the Seller the estimated
net value of the Receivables in accordance with the
Co-ordination Agreement;
(2) on the Payment Date the Buyer must pay the Seller the
amount, if any, by which the total of the Receivables set
out in the Completion Statement exceeds the amount paid
under clause 7.3(a)(1); and
(3) on the Payment Date the Seller must reimburse to the Buyer
the amount, if any, by which the total of the Receivables
set out in the Completion Statement is less than the amount
paid under clause 7.3(a)(1).
(b) At the end of the period 6 months after the Completion Date
(Collection Period):
(1) the Buyer must give the Seller a detailed account of the
Receivables collected by it in the Collection Period; and
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(2) the Seller if requested in writing by the Buyer must assign
to the Buyer all its right, title and interest to such
Receivables as remain uncollected as at the end of the
Collection Period.
7.4 BUYER TO PROVIDE INFORMATION
The Buyer must give the Seller any information in relation to the
collection of the Receivables that the Seller reasonably requests.
7.5 OTHER DEBTS OWED TO SELLER
If the Buyer receives a payment in respect of a debt owed to the
Seller (other than a Receivable), it must pay the amount received to
the Seller within 2 Business Days after receiving it.
8 CONTRACTS, ASSETS LEASES, PROPERTY LEASES
8.1 TRANSFER OF CONTRACTS, ASSETS LEASES AND PROPERTY LEASES
(a) Subject to clause 4.2, the Seller and Buyer must use their best
endeavours to transfer the Contracts, Assets Leases and Property
Leases to the Buyer on or as soon as possible after Completion.
(b) A transfer under clause 8.1(a) may be made by assignment in the
form of the deed of assignment annexed, in the case of Contracts
and Assets Leases, as Annexure B or, in the case of Property
Leases, as Annexure C or in other terms agreed by the Buyer and
Seller which include indemnities in the terms of clause 8.2(a)(2)
and 8.2(b)(3).
(c) If the consent of a third party is required for a transfer under
clause 8.1(a), then the Buyer and the Seller must use their best
endeavours to obtain that consent, including, in the case of the
Buyer, giving such security for its obligations as may be
reasonably required by the third party.
8.2 OBLIGATIONS PENDING TRANSFER
If an Assets Lease, Contract or Property Lease has not been
transferred to the Buyer by Completion, then after Completion:
(a) the Buyer must:
(1) to the extent it lawfully can, perform all the Seller's
obligations under the relevant Assets Lease, Contract or
Property Lease; and
(2) indemnify the Seller against any Loss suffered, paid or
incurred by the Seller after the Effective Time under the
relevant Assets Lease, Contract or Property Lease other than
one which is attributable to default of the Seller in
discharging the Seller's obligations under the relevant
Assets Lease, Contract or Property Lease before the
Effective Time provided always that this exclusion from the
Buyer's indemnity obligation does not apply to a default or
obligation relating to the physical condition of the Leased
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Properties unless it is the subject of notice from the
relevant lessor received by the Seller before the date of
this agreement; and
(b) the Seller must:
(1) if the Buyer cannot lawfully perform an obligation or
exercise a right of the Seller under the Assets Lease,
Contract or Property Lease, at the request and expense of
and with the full assistance of the Buyer, use its best
endeavours to perform that obligation or exercise that
right;
(2) within 2 Business Days after receipt pay to the Buyer any
amount, or account to the Buyer for the value of any other
benefit, it receives after the Effective Time in respect of
the relevant Assets Lease, Contract or Property Lease; and
(3) indemnify the Buyer against any Loss suffered, paid or
incurred by the Buyer after the Effective Time arising under
an Assets Lease, Contract or Property Lease from a default
by the Seller in discharging its obligations under the
relevant Assets Lease, Contract or Property Lease before the
Effective Time provided always that this indemnity does not
apply to a default or obligation relating to the physical
condition of the Leased Properties unless it is the subject
of a notice from the relevant lessor received by the Seller
before the date of this agreement.
8.3 USE OR OCCUPATION PENDING TRANSFER
(a) If an Assets Lease or a Property Lease has not been transferred
to the Buyer by Completion the Seller must, to the extent it
lawfully can, allow the Buyer to use or occupy the property the
subject of that Assets Lease or Property Lease as licensee from
Completion until the transfer is completed.
(b) If, notwithstanding that the Seller and the Buyer have complied
with clause 8.1, the Seller is not able to allow the Buyer to use
or occupy any property the subject of an Asset Lease as licensee
pursuant to clause 8.3(a), the Buyer must pay to the relevant
lessor all moneys necessary to pay out the Assets Lease and the
Seller will then direct that title to the assets concerned be
transferred to the Buyer provided that it is permitted under the
terms of the relevant Asset Lease.
8.4 FAILURE TO TRANSFER
The Seller will fully co-operate with the Buyer in any reasonable
arrangements designed to provide for the Buyer the benefit and burden
or the relevant Contract, Asset Lease or Property Lease including
enforcement of any and all rights of the Seller against the party to
the relevant Contract, Asset Lease or Property Lease but otherwise the
Seller has no liability to the Buyer in relation to the failure to
transfer any Contract, Assets Lease or Property Lease if the Seller
has met its obligations under this clause 8.
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8.5 LETTERS OF CREDIT
(a) The Seller will use its best endeavours to procure a transfer of
the benefit of all Letters of Credit to the Buyer on Completion
on terms which release the Seller and any Related Corporation of
the Seller from any liability to the issuer of the Letter of
Credit in respect of the Letter of Credit and pending such
release the Buyer must pay to the Seller on demand any amount
drawn-down against such Letter of Credit.
(b) If the transfer and release to the Buyer as referred to in clause
8.5(a) has not been effected within 30 Business Days after
Completion the Seller will, to the extent possible, cancel all
outstanding Letters of Credit and the Buyer must make its own
alternative arrangements to meet the payment obligations
concerned.
(c) The Buyer indemnifies the Seller in respect of any amounts
payable to the Seller by it under this clause 8.5.
9 EMPLOYEES
9.1 OFFER OF EMPLOYMENT BY BUYER
As early as possible before Completion, the Buyer must send each
Employee a letter in a form agreed with the Seller offering, subject
to Completion occurring, to employ the Employee with effect from
Completion.
9.2 EMPLOYMENT TERMS AND CONDITIONS
Each offer must be for employment on terms and conditions which in the
aggregate are no less favourable to the Employee than those under
which the Employee is employed by the Seller immediately before
Completion:
(a) including, but not limited to, those relating to retrenchment and
redundancy (in each case taking into account length of service
with the Seller); and
(b) without loss of continuity of employment for the purpose of all
employee entitlements
excluding, for purposes of this clause 9.2, terms and conditions
relating to superannuation (which is provided for in clause 10).
9.3 BEST ENDEAVOURS
The Buyer and Seller must each use its best endeavours to encourage
all of the Employees to accept the offers so made.
9.4 TERMINATION BY SELLER
On or as soon as practicable after Completion the Seller must:
(a) release the Transferring Employees from employment with the
Seller, that release to take effect at [the Effective Time];
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(b) pay the Transferring Employees all Employment Benefits (other
than Employee Leave Benefits) accrued by them at the Effective
Time;
(c) pay the Transferring Employees any Employee Leave Benefits which
they are entitled to be paid and in fact demand payment of on
termination; and
(d) indemnify the Buyer (to the extent not provided for in the
Completion Statement), against any liability for Employment
Benefits other than Employee Leave Benefits and other
entitlements due to or accrued by a Transferring Employee at the
Effective Time and against all Losses arising out of a breach by
a Seller of its contractual or other legal obligations to a
Transferring Employee prior to the Effective Time.
9.5 PAYMENT AND INDEMNITY BY BUYER FOR EMPLOYMENT BENEFITS
After Completion the Buyer must:
(a) pay the Transferring Employees all Employment Benefits and other
entitlements due to them after the Effective Time as and when
they fall due; and
(b) indemnify the Seller against any liability for Employment
Benefits and other entitlements due to or accrued by a
Transferring Employee after the Effective Time and against all
Loss in any way connected with the Buyer's employment of a
Transferring Employee or termination of that employment.
9.6 ALLOWANCE FOR EMPLOYEE LEAVE BENEFITS
In consideration of the obligations undertaken by the Buyer under
clause 9.5, the Buyer is entitled to an allowance equal to 70% of the
monetary value of the Transferring Employees' accrued annual leave,
leave loading and long service leave as set out in the Completion
Accounts. The Buyer acknowledges that this allowance will be reflected
in the Completion Statement.
9.7 RESTRICTION
The Buyer covenants with the Seller that it will not for a period of
twelve months after Completion directly or indirectly procure the
services, as employee, consultant, contractor or otherwise of any
Employee who does not accept the Buyer's offer of employment under
clause 9.1.
9.8 INDEMNITY BY SELLER
Provided that the Buyer has met its obligations under clauses 9.2 and
9.3, the Seller must indemnify the Buyer against any Claim brought by
an Employee who is not a Transferring Employee arising out of the
termination of employment of that Employee by the Seller.
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10 SUPERANNUATION
10.1 DEFINITIONS
In this clause 10 and paragraph 13 of the Seller's Warranties:
Accrued Benefit Value means, in relation to a Transferring Member, the
total amount accumulated or accrued in respect of the member under the
governing rules of the Seller's Fund as at the Completion Date
calculated in accordance with clause 10.5;
Associated Employer has the same meaning as in the governing rules of
the Seller's Fund, as amended from time to time;
Buyer's Actuary means a qualified actuary nominated by the Buyer;
Buyer's Fund means the fund to be established by the Buyer in order to
comply with its obligations under clause 10.3;
Existing Member means a Transferring Employee who is a member of the
Seller's Fund on the date immediately before the Completion Date but
is not a Transferring Ex-Clarks Member;
External Funds means the funds listed in schedule 13 to which the
Seller is obliged to contribute in respect of certain Employees
pursuant to an industrial award or agreement;
Expert means a person agreed in writing by the Seller's Actuary and
the Buyer's Actuary or, in default of agreement within 2 Business
Days, an independent person appointed by the President of the
Institute of Actuaries of Australia or his nominee;
Factor means:
(a) if the Successor Fund Transfer Date occurs no later than six
months after the Completion Date, 0.66/0.85; or
(b) if the Successor Fund Transfer Date occurs more than six months
after the Completion Date, such fraction as the Seller and the
Buyer may agree, or in default of agreement, as the Expert may
determine.
Principal Employer means Pacific Dunlop Limited as the current
"principal employer" of the Seller's Fund;
Ring-fenced Amount means the amount determined as the Ring-fenced
Amount as at the Successor Fund Transfer Date in accordance with a
successor fund agreement dated 7 September 2000 between Clarks Shoes
Australia Superannuation Pty Ltd and the trustee of the Seller's Fund;
Seller's Actuary means a qualified actuary nominated by the Seller;
Seller's Fund means the Pacific Dunlop Superannuation Fund
(established by a trust deed dated 7 April 1986, as subsequently
amended);
Successor Fund has the same meaning as in the Superannuation Industry
(Supervision) Act 1993;
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Successor Fund Agreement means the deed of agreement to be entered
into between the trustee of the Seller's Fund and the trustee of the
Buyer's Fund substantially in the form of Annexure F;
Successor Fund Transfer means a transfer of the amount specified in
clause 10.6(b) from the Seller's Fund to the Buyer's Fund on the basis
that the Buyer's Fund is a Successor Fund;
Successor Fund Transfer Date means:
(a) the date six months after the Completion Date; or
(b) such earlier or later date as the Buyer and the Seller may agree,
but in any event not before any claims in respect of the Ring-fenced
Amount have been resolved to the Buyer's satisfaction;
Superannuation Amount means:
(a) the value of the Ring-fenced Amount calculated as at the
Successor Fund Transfer Date,
less
(b) the value of the Transferring Ex-Clarks Members' accrued benefits
(calculated in the same manner as is provided in clause 10.5) as
at the Successor Fund Transfer Date,
multiplied by the Factor;
Superannuation Date means the date which is 20 Business Days after the
Successor Fund Transfer Date or such later date as the Buyer and the
Seller may agree;
Termination Benefit means, in relation to an Employee, the benefit due
to the Employee under the governing rules of the Seller's Fund upon
the termination of the Employee's employment with the Seller;
Transfer Date means:
(a) the date three months after the Completion Date; or
(b) such earlier or later date as the Buyer and Seller may agree;
Transferring Ex-Clarks Member means a Transferring Employee who is a
member of the Seller's Fund on the date immediately before the
Completion Date and who was a member of the Clarks Shoes Australia
Limited Staff Superannuation Fund immediately prior to becoming a
member of the Seller's Fund; and
Transferring Member means an Existing Member who gives the
authorisation referred to in clause 10.3(b)(2) to transfer his or her
Accrued Benefit Value to the Buyer's Fund.
10.2 BUYER AS ASSOCIATED EMPLOYER
(a) The Buyer will continue to participate as an Associated Employer
in the Seller's Fund in respect of the Transferring Ex-Clarks
Members until the Successor Fund Transfer Date.
(b) Whilst the Buyer is an Associated Employer in the Seller's Fund:
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Australia Asset Agreement
(1) the Principal Employer undertakes not to exercise any of its
powers in a manner materially adverse to the Buyer's
financial interests or contrary to the intent of this clause
10; and
(2) the Buyer undertakes not to exercise any of its powers in a
manner contrary to the intent of this clause 10.
10.3 MEMBERSHIP OF BUYER'S FUND - EXISTING MEMBERS
(a) Before the Transfer Date, the Buyer will ensure that each
Existing Member becomes a member of the Buyer's Fund with effect
from the Completion Date on terms and conditions which provide:
(1) in respect of each Existing Member (other than a
Transferring Member), benefits in respect of the period
after the Completion Date which in the aggregate are of
amounts and payable on conditions no less favourable than
those that would have been provided in respect of the
Existing Member under the governing rules of the Seller's
Fund as at the Completion Date; and
(2) in the case of a Transferring Member but subject to payment
of the Transferring Member's Accrued Benefit Value under
clause 10.4, benefits which in the aggregate are of amounts
and payable on conditions no less favourable than those
provided in respect of the Transferring Member under the
governing rules of the Seller's Fund as at the Completion
Date, with the Transferring Member's Accrued Benefit Value
to be taken into account in the Buyer's Fund:
(A) by providing a fully vested benefit equal to the
Accrued Benefit Value and adjusted to take account of
the earnings and expenses of the Buyer's Fund after the
date that the Accrued Benefit Value is transferred to
the Buyer's Fund; or
(B) in such other manner as may be agreed with the
Transferring Member.
(b) As part of the process of becoming a member of the Buyer's Fund
pursuant to clauses 10.3(a)(1) and (2), the Seller will use all
reasonable endeavours to ensure that a form that is reasonably
acceptable to the trustee of the Seller's Fund and the trustee of
the Buyer's Fund will be given to each relevant Existing Member
before the Transfer Date under which the Existing Member may
elect either:
(1) that the trustee of the Seller's Fund provides the
Termination Benefit to the Existing Member; or
(2) in lieu of receiving a Termination Benefit, that the trustee
of the Seller's Fund cause the Existing Member's Accrued
Benefit Value to be transferred to the Buyer's Fund.
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10.4 PAYMENT OF ACCRUED BENEFIT VALUES
(a) The Seller will use all reasonable endeavours to ensure that on
or before the day which is 10 Business Days after the later of:
(1) the Transfer Date; and
(2) the date on which the Accrued Benefit Values of the
Transferring Members have been calculated,
the trustee of the Seller's Fund pays the Accrued Benefit Values
of the Transferring Members to the trustee of the Buyer's Fund,
adjusted for interest in respect of the period between the
Completion Date and the date the amount is paid to the Buyer's
Fund at the rate which applies as at the date in clause
10.4(a)(2) under the governing rules of the Seller's Fund for the
purpose of determining relevant benefits which are payable from
the Seller's Fund.
(b) The interest payable under clause 10.4(a) accrues from day to
day.
(c) The Seller and the Buyer agree that the Accrued Benefit Values
and any interest payable under clause 10.4(a) will be paid in
immediately available funds, except to the extent that the
trustee of the Buyer's Fund agrees to accept other assets in
whole or partial satisfaction of those amounts and the Buyer and
the Seller agree that, to the extent that the trustee of the
Buyer's Fund agrees to accept other assets, the calculation of
the relevant amounts under this clause 10.4 shall be based on the
value of those assets as agreed between the trustees of the
Seller's Fund and the Buyer's Fund.
10.5 CALCULATION OF ACCRUED BENEFIT VALUES
(a) The Seller will use all reasonable endeavours to procure that the
Accrued Benefit Values of the Transferring Members will be
calculated by the Seller's Actuary as at the Completion Date in
accordance with this clause 10.5 and the calculations of the
Seller's Actuary shall be conclusive and binding on the parties.
(b) Where the whole of the normal retirement benefit to be provided
from the Seller's Fund in respect of a Transferring Member under
the governing rules of the Seller's Fund is calculated on the
basis of the accumulation of amounts paid or credited in respect
of the Member with interest or other earnings, the Transferring
Member's Accrued Benefit Value shall be the total amount
accumulated in respect of the Transferring Member for that
purpose under those governing rules as at the Completion Date.
(c) Where clause 10.5(b) does not apply to a Transferring Member, the
Transferring Member's Accrued Benefit Value as at the Completion
Date shall be calculated in accordance with the following formula
(subject to a minimum of the benefit which would have become
payable to the Transferring Member from the Seller's Fund had the
Transferring Member voluntarily ceased to be an Employee while in
good health on the Completion Date):
[ABM X FAS X DF] + AC
Where:
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Australia Asset Agreement
"ABM" is the benefit multiple accrued in respect of the
Transferring Member as at the Completion Date in relation
to the period before that Date for the purpose of
calculating the normal retirement benefit to be provided
from the Seller's Fund if the Member ceased to be an
employee on attaining the normal retirement date in terms
of the governing rules of the Seller's Fund, calculated
using the defined benefit accrual rate or rates applicable
in respect of that period under those governing rules and
including any initial retirement benefit multiple granted
in respect of the Transferring Member upon the Transferring
Member transferring into the Seller's Fund from another
fund or benefit arrangement.
"FAS" is the Transferring Member's Final Average Salary (as
defined in the governing rules of the Seller's Fund) as at
the Completion Date.
"DF" is [1 / 1.03] /55-age/, where age denotes the Transferring
Member's age at the Completion Date (and where "DF" is 1 at
age 55 or older).
"AC" is, to the extent that the retirement benefit of the
Transferring Member under the Seller's Fund is not
calculated on a defined benefit basis but on the basis of
the accumulation of amounts paid or credited in respect of
the Member with interest or other earnings, the total
amount accumulated in respect of the Member for that
purpose under the governing rules of the Seller's Fund as
at the Completion Date.
10.6 SUCCESSOR FUND AGREEMENT
The Seller and the Buyer will use their best endeavours to procure
that:
(a) on or before the Successor Fund Transfer Date the trustee of the
Seller's Fund and the trustee of the Buyer's Fund execute the
Successor Fund Agreement in respect of the Transferring Ex-Clarks
Members; and
(b) on the Superannuation Date the trustee of the Seller's Fund and
the trustee of the Buyer's Fund give effect to the Successor Fund
Agreement by transferring from the Seller's Fund to the Buyer's
Fund the Transferring Ex-Clarks Members and the greater of :
(1) the Ring-fenced Amount; and
(2) the aggregate value of the accrued benefits of all
Transferring Ex-Clarks Members (calculated in the same
manner as is provided in clause 10.5) as at the Successor
Fund Transfer Date,
with interest from the Successor Fund Transfer Date to the
Superannuation Date at the rate which applies as at the Successor
Fund Transfer Date under the governing rules of the Seller's Fund
for the purpose of determining relevant benefits which are
payable from the Seller's Fund.
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10.7 CALCULATION OF SUPERANNUATION AMOUNT
(a) Within 10 Business Days after the Successor Fund Transfer Date,
the Seller's Actuary must calculate the Ring-fenced Amount and
the Superannuation Amount and notify the Buyer's Actuary of the
Superannuation Amount and provide all information reasonably
required to review the calculation of the Superannuation Amount.
(b) The Buyer is taken to have accepted the Superannuation Amount
unless the Buyer's Actuary notifies the Seller's Actuary that it
does not accept the Superannuation Amount within 10 Business Days
after the Seller's Actuary provides to the Buyer's Actuary the
information referred to in clause 10.7(a).
(c) The Buyer must pay the Superannuation Amount to the Guarantor on
the Superannuation Date, with interest from the Superannuation
Date to the date of payment at the rate which applies as at the
Superannuation Date under the governing rules of the Seller's
Fund for the purpose of determining relevant benefits which are
payable from the Seller's Fund.
(d) If the Buyer's Actuary disputes the Superannuation Amount, the
parties agree as follows:
(1) the parties must endeavour in good faith to resolve promptly
between themselves the dispute;
(2) if the parties are not able to resolve between themselves
the dispute within 10 Business Days of the date the Buyer's
Actuary serves the Seller's Actuary with written notice
under clause 10.7(b) the matter must be referred to the
Expert for determination; and
(3) the parties must bear the cost of the determination in such
manner as the Expert directs.
(e) Following completion of the Expert's calculation of the
Superannuation Amount (Expert's SA Value):
(1) if the Expert's SA Value exceeds the Superannuation Amount,
then within 5 Business Days after the Expert's determination
is made the Buyer must pay to the Seller the amount of the
excess; or
(2) if the Expert's SA Value is less than the Superannuation
Amount, then within 5 Business Days after the Expert's
determination is made the Seller must pay to the Buyer the
amount of the deficiency.
10.8 ACKNOWLEDGMENTS
The Seller and the Buyer each acknowledge that the transactions
contemplated by this agreement, and in particular the transactions
contemplated by this clause 10, are not intended to cause a
Termination Benefit to become payable from the Seller's Fund to any
Transferring Ex-Clarks Member.
10.9 EXTERNAL FUNDS
Within one month (or any longer period agreed between the Buyer and
the Seller) after the Completion Date, but in any event before the
Transfer Date, the Buyer
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Australia Asset Agreement
must become a participating employer in the External Funds with
respect to the Transferring Employees who are members of the External
Funds and must make contributions to the External Funds at a rate
which is at least equal to the minimum rate prescribed by the
Superannuation Guarantee (Administration) Act 1992.
10.10 CONTRIBUTIONS BY ASSOCIATED EMPLOYER
The Buyer must continue to contribute to the Seller's Fund in respect
of the Transferring Ex-Clarks Members in accordance with its deed of
admission as an Associated Employer until the Successor Fund Transfer
Date.
10.11 UNDERTAKINGS BY BUYER AND SELLER
(a) The Seller will provide, and will use all reasonable endeavours
to ensure that the trustee of the Seller's Fund provides, to the
Buyer and to the trustee of the Buyer's Fund any information
reasonably required by them to give effect to this clause 10.
(b) As from the date of this agreement, the Seller will use all
reasonable endeavours to ensure that no action is taken,
discretion exercised or omission occurs which would:
(1) alter the level of benefits or contributions in respect of
an Existing Member or a Transferring Ex-Clarks Member under
the governing rules of the Seller's Fund from the level
applicable immediately before the date of this agreement; or
(2) alter any Accrued Benefit Value,
except:
(3) to the extent reasonably necessary to secure or better
secure a concession or relief in respect of any duty or Tax
or to avoid a penalty, detriment or disadvantage under a law
affecting the Seller's Fund; or
(4) with the consent of the Buyer.
(c) The Buyer will provide, and will use all reasonable endeavours to
ensure that the trustee of the Buyer's Fund provides, to the
Seller and to the trustee of the Seller's Fund any information
reasonably required by them to give effect to this clause 10.
(d) The Buyer will use all reasonable endeavours to ensure that the
governing rules of the Buyer's Fund contain provisions to the
extent necessary to give effect to this clause 10.
(e) The Buyer will secure in respect of each Existing Member a
benefit on his or her death or total and permanent disablement
while employed by the Buyer between the Completion Date and the
date he or she becomes a member of the Buyer's Fund pursuant to
clause 10.3 of an amount at least equal to:
(1) the value of the benefit which would have been payable from
the Seller's Fund if the Existing Member had died or become
totally and permanently disabled immediately before the
Completion Date,
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Australia Asset Agreement
less:
(2) the amount paid or payable to or in respect of the Existing
Member from the Seller's Fund (whether as a result of the
Existing Member's transfer to the Buyer's Fund or the
Existing Member's death or total and permanent disablement).
(f) The Buyer will use all reasonable endeavours to ensure that the
Buyer's Fund is and remains a "complying superannuation fund" in
terms of Part IX of the Income Tax Assessment Act 1936 (as
amended or replaced from time to time).
10.12 INDEMNITY
The Guarantor indemnifies the Buyer against:
(a) any claim (including legal costs incurred ) in respect of the
Ring-fenced Amount (other than in respect of the Transferring
Ex-Clarks Members' accrued benefits);
(b) any claim (including legal costs incurred) in respect of the
Buyer's participation as an Associated Employer (other than in
respect of the usual obligations of an Associated Employer); and
(c) any loss or liability incurred as a result of a breach of
paragraph 13.5 of the Seller's Warranties.
11 RELEASE OF GUARANTEES
(a) The Buyer must use its reasonable endeavours to secure the
release of the Seller or any Related Corporation of the Seller
from any Guarantee or Encumbrance provided in relation to the
Business, effective from Completion.
(b) If the Buyer is unable to secure the release under clause 11(a),
then the Buyer must pay the Seller an amount equal to any Loss
which the Seller or any Related Corporation of the Seller pays,
suffers, incurs, or is liable for in relation to any Guarantee or
Encumbrance referred to in clause 11(a) which relates to any act
or omission of the Buyer after Completion.
12 PERIOD BEFORE COMPLETION
12.1 CARRYING ON BUSINESS
The Seller must use all reasonable endeavours to ensure that between
the date of this agreement and Completion the Business is conducted in
the ordinary course of business and:
(a) the Seller in carrying on the Business does not acquire or
dispose of any assets other than on arm's length terms in the
ordinary course of business;
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Australia Asset Agreement
(b) the Seller does not in its conduct of the Business make any
material change to its policy and practice as to the payment of
creditors and collection of trade receivables;
(c) the Seller does not engage any new employee to fill a new role in
relation to the Business with an annual remuneration package in
excess of $120,000 or, except in the ordinary course of the
Business, terminate the employment of any of the Employees or
change in any material respect the terms of employment (including
remuneration of any of the Employees);
(d) the Seller does not sell or agree to sell any fixed asset
relating to the Business with a value of more than $250,000 or
buy or commit to buy any fixed asset for use in the Business with
a value of more than $250,000;
(e) neither the Seller nor its Related Corporations create any
Encumbrance over any asset of the Business;
(f) neither the Seller nor its Related Corporations incur any
indebtedness or liability in the nature of borrowings in relation
to the Business other than in the ordinary course of business;
and
(g) the Seller does not enter into any contract or arrangement for
the Business outside the ordinary course of trading or otherwise
than on arm's length terms,
without in each case the prior consent of the Buyer, which must not be
unreasonably withheld or delayed.
12.2 ACCESS
Before Completion the Seller must, after reasonable notice from the
Buyer, allow the Buyer and any person authorised by the Buyer,
reasonable access during normal business hours to Employees (only with
the consent of the Seller, such consent not to be unreasonably
withheld) the Business Assets and the Properties as is necessary to
facilitate the smooth transfer of the Business at Completion.
13 AFTER COMPLETION
13.1 SUPPLY OF AFTER-SALES SERVICE
After Completion the Buyer must:
(a) remedy any defect in the goods or services supplied by the Seller
in the Business before Completion;
(b) supply after-sales service which the Seller undertook to perform
in respect of goods or services supplied by the Seller in the
Business before Completion; and
(c) perform the Seller's obligations under any guarantee or warranty
or otherwise in respect of goods or services supplied by the
Seller in the Business before Completion.
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13.2 RECONCILIATION FOR RETURNED GOODS
If any goods sold in the Business by the Seller before the Completion
Date are returned to the Buyer or repudiated for any reason by a
customer of the Business after the Completion Date, then the Buyer is
entitled to those goods and must meet any claim for credit or
otherwise made by the customer in relation to them.
13.3 SUPPLIER'S WARRANTIES
To assist the Buyer in meeting its obligations pursuant to clauses
13.1 and 13.2, the Seller undertakes to use all reasonable endeavours
to make available to the Buyer the benefit of any supplier or
manufacturer warranty available to the Seller in connection with the
transactions contemplated by clauses 13.1 and 13.2.
13.4 ACCESS BY SELLER
After Completion the Buyer must, after reasonable notice from the
Seller, allow the Seller and its representatives:
(a) access during normal business hours to Transferring Employees;
and
(b) to inspect and take copies of the Business Records (to the extent
that they relate to any period before Completion),
to assist the Seller in relation to any Liability or other obligations
or rights arising in relation to the conduct or ownership of the
Business before Completion, provided that any access under this clause
13.4 is conducted in a manner so as to avoid unreasonable disruption
to the conduct of the Business as operated by the Buyer and the
Transferring Employees.
13.5 ACCESS TO EXCLUDED RECORDS BY BUYER
After Completion the Seller must, after reasonable notice from the
Buyer, allow the Buyer and its representatives access during normal
business hours to inspect and take copies of the Excluded Records (to
the extent they relate to any period before Completion) as necessary
to assist the Buyer in operating the Business.
13.6 TAX RETURNS
After Completion, the Buyer must at the reasonable cost and expense of
the Seller prepare draft income tax returns, fringe benefits tax
returns and any other tax returns required by any Governmental Agency
that imposes Tax in relation to the Business as carried on by the
Seller in respect of the financial year ending on 30 June 2002 and
ensure that its employees fully co-operate with the Seller in relation
to completing and finalising such returns to a form fit for lodgement
by the Seller. The Buyer must provide a first draft of such returns to
the Seller on or before 30 October 2002.
14 STRATEGIC INVESTMENT PROGRAMME
(a) The parties agree that at or as soon as practicable after
Completion, they will do everything necessary to procure that
each SIP Registration is transferred to the Buyer.
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(b) The parties acknowledge that their respective entitlements to
receive the benefit of any amounts received under the SIP Scheme
in respect of the SIP Registrations, are set out in the
Co-ordination Agreement, except in relation to the SIP Receivable
which is a Business Asset transferred under this agreement.
15 COMPETITION
15.1 UNDERTAKING
In consideration for the respective promises of the Seller and the
Buyer to each other in this agreement, the Seller undertakes to the
Buyer that it will not for 5 years, 4 years, 3 years, 2 years or one
year after the Completion Date in Australia:
(a) engage in any business or activity which is the same as or
substantially similar to or competitive with, the Business or any
material part of it;
(b) solicit, canvass, induce or encourage any person who was at any
time during the 6 months period ending on the Completion Date
employed in the Business to cease to be employed in the Business;
(c) solicit, canvass, approach or accept any approach from any person
who was at any time during the 6 months period ending on the
Completion Date, a client or customer of the Business with a view
to obtaining the custom of that person in a business which is the
same as or substantially similar to or competitive with, the
Business; or
(d) interfere with the relationship between the Buyer and its
clients, customers, employees or suppliers.
15.2 ACQUISITION OF INTERESTS IN COMPETING BUSINESSES
Clause 15.1 does not prevent the Seller or any of its Related
Corporations from acquiring an interest, directly or indirectly, in a
business in competition with the Business in the area referred to in
that clause if:
(a) the acquisition of the interest in the competing business occurs
as a result of or in conjunction with an acquisition of an
interest, directly or indirectly, in other assets;
(b) the value of the competing business is not more than 15% of the
value of the acquisition taken as a whole; and
(c) the Seller or the relevant Related Corporation uses its best
endeavours to dispose of the competing business or its interest
in the business within 12 months after its acquisition.
15.3 EXCLUSION FROM RESTRAINT
This clause 15 does not restrict the Seller or any of its Related
Corporations from:
(a) continuing to carry on any business (other than the Business as
sold under this agreement) carried on at the date of this
agreement; or
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Australia Asset Agreement
(b) holding less than 5% of the issued share capital of a company
listed on a recognised Stock Exchange.
15.4 RELATED CORPORATIONS
The Buyer agrees that the provisions of this clause 15 only apply to
the Related Corporations of the Seller for so long as those entities
remain Related Corporations of the Seller.
15.5 SEVERABILITY
(a) If any of the several separate and independent covenants and
restraints in clause 15.1 are or become invalid or unenforceable
for any reason, then that invalidity or unenforceability will not
affect the validity or enforceability of any of the other
separate and independent covenants and restraints in clause 15.1.
(b) If any of the prohibitions or restrictions contained in this
clause 15 is judged to go beyond what is reasonable in the
circumstances and necessary to protect the goodwill of the
Seller, but would be judged reasonable and necessary if any
activity were deleted or the period or area were reduced, then
the prohibitions or restrictions apply with that activity deleted
or that period or area reduced by the minimum amount necessary.
16 WARRANTIES
(a) The Buyer gives the Buyer's Warranties in favour of the Seller on
and subject to the terms set out in the Co-ordination Agreement.
(b) The Seller gives the Seller's Warranties in favour of the Buyer
on and subject to the terms set out in the Co-ordination
Agreement.
17 LIMITATION OF LIABILITY
17.1 CO-ORDINATION AGREEMENT
The Seller gives the Seller's Warranties in favour of the Buyer on and
subject to the limitations on liability set out in the Co-ordination
Agreement.
17.2 SPECIFIC EXCLUSIONS - FREEHOLD PROPERTIES
(a) The Buyer acknowledges that apart from the Seller's Warranties
the terms and warranties implied by the operation of section 52A
of the Conveyancing Act 1919 (NSW) and Regulations 6 and 7 of the
Conveyancing (Sale of Land) Regulations (2000), and provided that
nothing in this clause 17.2(a) shall operate in any way to limit
the liability of the Guarantor under clause 6.8 of the
Co-ordination Agreement, in respect of the Freehold Properties
known as:
(1) 159 Kingsgrove Road, Kingsgrove, New South Wales; and
(2) 16 Bellambi Road, Bellambi, New South Wales,
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it has relied on its own investigations and assessment of and has
relied on no representation or warranty but acknowledges the
disclosure referred to in clause 17.2(b) and will bring no Claim
against the Seller or its Related Corporations, officers,
employees, agents or advisers in relation to any breach of
Environmental Law or any Environmental Liability which may affect
the Buyer or any other person in relation to ownership of those
Freehold Properties.
(b) The Buyer acknowledges that it has been given the opportunity to
make physical inspections of the Freehold Properties and
buildings, plant, equipment and other assets located at the
Freehold Properties and accepts that apart from the Seller's
Warranties and the terms and warranties implied by the operation
of section 52A of the Conveyancing Act 1919 NSW and Regulations 6
and 7 of the Conveyancing (Sale of Land) Regulations (2000) , in
respect of the Freehold Properties known as:
(1) 159 Kingsgrove Road, Kingsgrove, New South Wales; and
(2) 16 Bellambi Road, Bellambi, New South Wales,
it has relied on its own investigations and assessment of and it
has relied on no representation or warranty and will bring no
Claim against the Seller or its Related Corporations, officers,
employees, agents or advisers in relation to the dimensions,
description, condition, fitness for use, safety or legal
compliance status of those Freehold Properties or any buildings,
plant, equipment or other assets located at the Freehold
Properties.
(c) The Buyer acknowledges that in respect of the property known as 9
Sodium Street, Narangba, Queensland (Narangba Property):
(1) the Narangba Property is included in the Environmental
Management Register;
(2) the Buyer has received from the Seller and read before the
date of this agreement, a notice pursuant to section 421(2)
of the Environmental Protection Act 1994 (Qld) in respect of
the Narangba Property.
(d) The Buyer acknowledges that the warranties implied by section 3
of the Conveyancing and Law of Property Act 1884 (Tasmania) and
section 56 of the Land Titles Act 1980 (Tasmania) do not apply to
this agreement.
(e) The Buyer purchases the Freehold Properties subject to:
(1) the easements and covenants noted on the title to the
Freehold Properties concerned;
(2) in the case of the Freehold Property located at Bellambi
(described in paragraph 3(b) above), the registered lease
number 727645;
(3) the reservations, exceptions and conditions (if any)
contained in the crown grant;
(4) in the case of the Sunnybank Hills Property, the provisions
of the Land Act 1994 (Qld) and the reservations, exceptions
and conditions (if any) contained in the terms of the grant
of the Sunnybank Hills Property;
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Australia Asset Agreement
(5) all easements or rights vested in any Governmental Agency
and not registered on the title to the Freehold Properties
except for matters not disclosed to the Buyer which
constitute breaches of the Seller's Warranties; and
(6) subject to all town planning or other restrictions on the
use and development of the Freehold Properties.
17.3 DISCLOSURE STATEMENTS
(a) The Buyer acknowledges that prior to the execution of this
agreement, the Buyer received from the Seller:
(1) a Vendor's Statement under section 32 of the Sale of Land
Act 1962 (Vic) (Vendor's Statement) in relation to all
Freehold Properties located in Victoria;
(2) the prescribed documents under section 52A(2) of the
Conveyancing Act 1919 (NSW) (Section 52A Statement) in
relation to all Freehold Properties located in New South
Wales; and
(3) a notice pursuant to section 421(2) of the Environmental
Protection Act 1994 (Qld) (Environmental) Management
Register Notice in respect of the Narangba Property.
(b) The Vendor's Statement, section 52A Statement and Environmental
Management Register Notice are scheduled to the Disclosure
Schedule.
17.4 PROPERTY COVENANTS
The Seller covenants to the Buyer at the date of this agreement and on
Completion:
(a) that it consents to the lodgement of caveats by the Buyer on
Completion in respect of the Freehold Properties;
(b) that it will not take any action or procure any person to do
anything that may cause a lapsing notice to be lodged at a Land
Titles Office;
(c) that there are no unsatisfied or outstanding judgements or
notices against the Freehold Properties;
(d) to answer all requisitions that may be made by a Land Titles
Office in relation to registration of the Transfers.
17.5 TRANSFER OF SUNNYBANK HILLS PROPERTY
(a) Despite anything to the contrary in this agreement, the Buyer
acknowledges that on Completion the Buyer may not obtain a
transfer of the Sunnybank Hills Property capable of immediate
registration.
(b) As soon as practicable following the date of this agreement, the
Seller and the Buyer must use their best endeavours to transfer
the Sunnybank Hills Property to the Buyer by attending to the
matters referred to in clause 17.5(c).
(c) The Seller and the Buyer must:
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(1) at the Seller's cost, make the necessary application
pursuant to the Land Act 1994 for consent to the transfer of
the Sunnybank Hills Property to the Buyer; and
(2) the Seller must deliver the consent to the Buyer within 2
Business Days of receipt of the same or on Completion
whichever is the latter.
(d) For the purposes of this clause 17.5, the Buyer must do all
things necessary to enable the Seller to obtain the consent
referred to in clause 17.5(c)(1).
17.6 OBLIGATIONS PENDING TRANSFER - SUNNYBANK HILLS PROPERTY
If the Sunnybank Hills Property has not been transferred to the Buyer
by Completion, then after Completion:
(a) the Buyer must:
(1) to the extent it lawfully can, perform all the Seller's
obligations in respect of the Sunnybank Hills Property; and
(2) indemnify the Seller against any Loss suffered, paid or
incurred by the Seller after the Effective Time in respect
of the Sunnybank Hills Property other than one which is
attributable to default of the Seller in discharging the
Seller's obligations in respect of the Sunnybank Hills
Property before the Effective Time provided always that this
exclusion from the Buyer's indemnity obligation does not
apply to a default or obligation relating to the physical
condition of the Sunnybank Hills Property unless it is the
subject of a notice from the relevant lessor received by the
Seller before the date of this agreement; and
(3) pay all rental for the Sunnybank Hills Property from the
Effective Time, as and when it falls due; and
(b) the Seller must:
(1) if the Buyer cannot lawfully perform an obligation or
exercise a right of the Seller in respect of the Sunnybank
Hills Property, at the request and expense of and with the
full assistance of the Buyer use all reasonable endeavours
to perform that obligation or exercise that right; and
(2) within 2 Business Days after receipt pay to the Buyer any
amount, or account to the Buyer for the value of any other
benefit, it receives after the Effective Time in respect of
the Sunnybank Hills Property.
17.7 USE OR OCCUPATION PENDING TRANSFER/FAILURE TO TRANSFER
(a) If the Sunnybank Hills Property has not been transferred to the
Buyer by Completion the Seller must, to the extent it lawfully
can, allow the Buyer to use or occupy the Sunnybank Hills
Property as licensee from Completion until the transfer is
completed.
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(b) If the Sunnybank Hills Property has not been transferred to the
Buyer by the date [6 months] after Completion or another later
date agreed by the parties, the Seller will immediately repay the
amount of the Purchase Price apportioned to the Sunnybank Hills
Property under the Co-ordination Agreement to the Buyer and the
Sunnybank Hills Property will remain the Seller's.
18 GST
18.1 SUPPLY OF A GOING CONCERN
(a) The parties agree that the transfer of the Business Assets from
the Seller to the Buyer under this agreement is the supply of a
going concern for the purposes of section 38-325 of the GST Act.
(b) Under this agreement, the Seller supplies to the Buyer all of the
things necessary for the continued operation of the Business.
(c) The Buyer warrants that it is registered or required to be
registered for GST purposes.
18.2 GST PASS-ON
(a) If it is subsequently determined by the Commissioner of Taxation
that a liability exists in respect of a supply made by a party
(Supplier) under or in connection with this agreement, the
Supplier may, to the extent that the consideration otherwise
provided for that supply under this agreement is not stated to
already include an amount in respect of GST on the supply:
(1) increase the consideration otherwise provided for that
supply under this agreement by the amount of that GST; or
(2) otherwise recover from the recipient of the supply
(Recipient) the amount of that GST together with any penalty
or interest amount levied on that GST.
(b) The recovery of any amount in respect of GST by the Supplier
under this agreement on a supply is subject to the issuing of the
relevant Tax Invoice or Adjustment Note to the Recipient.
(c) If there is an adjustment event in relation to a supply which
results in the amount of GST on a supply being different from the
amount in respect of GST recovered by the Supplier, as
appropriate, the Supplier:
(1) may recover from the Recipient the amount by which the
amount of GST on the supply exceeds the amount recovered;
and
(2) must refund to the Recipient the amount by which the amount
recovered exceeds the amount of GST on the supply.
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19 GUARANTEE AND INDEMNITY - SELLER
19.1 GUARANTEE
The Guarantor unconditionally and irrevocably guarantees to the Buyer
the due and punctual performance of the Seller's obligations under
this agreement.
19.2 INDEMNITY
The Guarantor indemnifies and holds the Buyer harmless from and
against all Loss incurred or suffered by the Buyer and all actions,
proceedings, claims or demands made against the Buyer as a result of
default by the Seller in the performance of any such obligation.
19.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 19 applies:
(1) to the present and future obligations of the Seller under
this agreement; and
(2) to this agreement, as amended, supplemented, renewed or
replaced.
(b) The obligations of the Guarantor under this clause 19 extend to
any change in the obligations of the Seller as a result of any
amendment, supplement, renewal or replacement of this agreement.
(c) This clause 19 is not affected, nor are the obligations of the
Guarantor under this agreement released or discharged or
otherwise affected, by anything which, but for this provision,
might have that effect.
(d) This clause 19 applies:
(1) regardless of whether the Guarantor is aware of, or has
consented to, or is given notice of, any amendment,
supplement, renewal or replacement of any agreement to which
the Buyer and the Seller are a party or the occurrence of
any other thing; and
(2) irrespective of any rule of law or equity to the contrary.
19.4 CONTINUING GUARANTEE AND INDEMNITY
This clause 19 is a continuing obligation of the Guarantor despite any
settlement of account and remains in full force and effect until the
obligations of the Seller under this agreement have been performed.
19.5 WARRANTIES OF THE GUARANTOR
The Guarantor represents and warrants to the Buyer that:
(a) it has the corporate power to enter into this guarantee and
indemnity and has taken all necessary action to authorise the
execution, delivery and performance of this agreement;
(b) the execution, delivery and performance of this guarantee and
indemnity will not violate any provision of:
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(1) any law or regulation or any order or decree of any
Governmental Agency of the Commonwealth of Australia or any
state or territory;
(2) the constitution of the Guarantor; or
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Guarantor is a party or which is
binding on it.
19.6 RIGHTS
The Guarantor waives any right it has of first requiring the Buyer to
commence proceedings or enforce any other right against the Seller or
any other person before claiming under this clause 19.
20 GUARANTEE AND INDEMNITY - BUYER
20.1 GUARANTEE
The Buyer Guarantor unconditionally and irrevocably guarantees to the
Seller the due and punctual performance of the Buyer's obligations
under this agreement.
20.2 INDEMNITY
The Buyer Guarantor indemnifies and holds the Seller harmless from and
against all Loss incurred or suffered by the Seller and all actions,
proceedings, claims or demands made against the Seller as a result of
default by the Buyer in the performance of any such obligation.
20.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 20 applies:
(1) to the present and future obligations of the Buyer under
this agreement; and
(2) to this agreement, as amended, supplemented, renewed or
replaced.
(b) The obligations of the Buyer Guarantor under this clause 20
extend to any change in the obligations of the Buyer as a result
of any amendment, supplement, renewal or replacement of this
agreement.
(c) This clause 20 is not affected, nor are the obligations of the
Buyer Guarantor under this agreement released or discharged or
otherwise affected, by anything which, but for this provision,
might have that effect.
(d) This clause 20 applies:
(1) regardless of whether the Buyer Guarantor is aware of, or
has consented to, or is given notice of, any amendment,
supplement, renewal or replacement of any agreement to which
the Seller and the Buyer are a party or the occurrence of
any other thing; and
(2) irrespective of any rule of law or equity to the contrary.
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20.4 CONTINUING GUARANTEE AND INDEMNITY
This clause 20 is a continuing obligation of the Buyer Guarantor
despite any settlement of account and remains in full force and effect
until the obligations of the Buyer under this agreement have been
performed.
20.5 WARRANTIES OF THE GUARANTOR
The Buyer Guarantor represents and warrants to the Seller that:
(a) it has the corporate power to enter into this guarantee and
indemnity and has taken all necessary action to authorise the
execution, delivery and performance of this agreement;
(b) the execution, delivery and performance of this guarantee and
indemnity will not violate any provision of:
(1) any law or regulation or any order or decree of any
Governmental Agency of the Commonwealth of Australia or any
state or territory;
(2) the constitution of the Buyer Guarantor; or
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Buyer Guarantor is a party or which
is binding on it.
20.6 RIGHTS
The Buyer Guarantor waives any right it has of first requiring the
Seller to commence proceedings or enforce any other right against the
Buyer or any other person before claiming under this clause 20.
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SCHEDULE 1 - WARRANTIES
CLAUSE 1.1 (DEFINITIONS)
A. BUYER'S WARRANTIES
1 BUYER AUTHORISED
The Buyer has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its
terms.
2 POWER TO BUY
The Buyer has full power to enter into and perform its obligations
under this agreement and can do so without the consent of any other
person.
3 NO LEGAL IMPEDIMENT
So far as the Buyer is aware, the execution, delivery and performance
by the Buyer of this agreement comply with:
(a) each law, regulation, Authorisation, ruling, judgment, order or
decree of any Governmental Agency;
(b) the constitution or other constituent documents of the Buyer; and
(c) any Encumbrance or document which is binding on the Buyer.
4 NO LIQUIDATION OR WINDING-UP
The Buyer has not gone into liquidation nor passed a winding-up
resolution nor received a notice under sections 601AA or 601AB of the
Corporations Act.
5 NO PETITION
No petition or other process for winding-up has been presented or
threatened against the Buyer and there are no circumstances justifying
such a petition or other process.
6 NO WRIT OF EXECUTION
No writ of execution has issued against the Buyer.
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7 NO RECEIVER OR ADMINISTRATOR
No receiver, receiver and manager or administrator of any part of the
undertaking or assets of the Buyer has been appointed.
8 BUYER'S KNOWLEDGE
Neither the Buyer nor any holding company (direct or indirect) of the
Buyer is aware of any matter or thing that constitutes at Completion a
breach of the Seller's Warranties.
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B. SELLER'S WARRANTIES
1 AUTHORITIES
1.1 SELLER AUTHORISED
The Seller has taken all necessary action to authorise the execution,
delivery and performance of this agreement in accordance with its
terms and is validly existing and in good standing.
1.2 POWER TO SELL
The Seller has full power to enter into and perform its obligations
under this agreement and can do so without the consent of any other
person (except for consents required under the Contracts, Assets
Leases and Property Leases) and free of any pre-emptive rights or
rights of first refusal.
1.3 NO LEGAL IMPEDIMENT
The execution, delivery and performance by the Seller of this
agreement complies with:
(a) each law, regulation, Authorisation, ruling, judgment, order or
decree of any Governmental Agency;
(b) the constitution or other constituent documents of the Seller;
and
(c) any Encumbrance or document which is binding on the Seller or any
of the Business Assets.
1.4 CORPORATE POWER
The Seller has full corporate power to own, lease and operate the
Business Assets and the Business.
2 COMPLIANCE WITH LAW
2.1 COMPLIANCE WITH LAW
The Seller has complied in all material respects with all applicable
laws (whether applicable to the conduct of the Business, the Business
Assets or the Properties) and no material contravention or allegation
of any material contravention of any applicable law is known to the
Seller.
2.2 AUTHORISATIONS
The Seller holds all necessary material Authorisations required to
conduct the Business, use the Business Assets and occupy the
Properties and has paid all fees due in relation to them and is not in
breach of any conditions under them where such breach would be likely
to have a material and adverse effect on the Business as currently
carried on.
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3 POSITION SINCE 30 JUNE 2001
3.1 POST ACCOUNTS DATE
Since 30 June 2001:
(a) the Seller in carrying on the Business has not acquired or
disposed of any assets other than on arm's length terms in the
ordinary course of business;
(b) the Seller has not in its conduct of the Business made any
material change to its policy or practice as to the payment of
creditors or collection of trade receivables;
(c) the Seller has not engaged any new employee to fill a new role in
relation to the Business with an annual remuneration package in
excess of $120,000 or, except in the ordinary course of the
Business, terminated the employment of any of the Employees or
changed, in any material respect, the terms of employment
(including remuneration of any of the Employees);
(d) the Seller has not sold or agreed to sell any fixed asset
relating to the Business with a value of more than $250,000 or
bought or committed to buy any fixed asset for use in the
Business with a value of more than $250,000;
(e) neither the Seller nor its Related Corporations has created any
Encumbrance over any asset of the Business;
(f) neither the Seller nor its Related Corporations has incurred any
indebtedness or liability in the nature of borrowings in relation
to the Business other than in the ordinary course of business;
(g) the Seller has not entered into any contract or arrangement for
the Business outside the ordinary course of trading or otherwise
than on arm's length terms;
(h) there has been no material adverse change in the Business Assets
and liabilities of the Business;
(i) there has been no change in the accounting policies, practices
and principles used by the Seller in respect of the Business.
3.2 SUPPLIERS/CUSTOMERS
Since 30 June 2001:
(a) none of the following suppliers of the Business: Kuehne & Nahgel,
Begley Hobba & Manton, Robert Ng, Zenith Media, Dow Chemical,
Helm AG, Ulee, Hewlett Packard, PT Goldindo Menawian and BASF
has:
(1) reduced the level of its supplies to the Business other than
in the ordinary course of business;
(2) indicated an intention to cease or reduce the volume of its
trading with the Business after Completion; or
(3) materially altered the terms on which it trades with the
Business.
(b) none of the following customers of the Business: Kmart, Big W,
Myer/Grace Bros, Target, Best & Less, Lowes Manhattan,
Woolworths, Payless Shoes, Harvey Norman and David Jones has:
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(1) reduced the level of its custom from the Business other than
in the ordinary course of business;
(2) indicated an intention to cease or reduce the volume of its
trading with the Business after Completion; or
(3) materially altered the terms on which it trades with the
Business .
4 TANGIBLE ASSETS
4.1 TITLE TO ASSETS
All material Tangible Assets are:
(a) (other than items under repair and stock-in-transit) in the
possession or under the control of the Seller;
(b) the absolute property of the Seller free of all Encumbrances,
other than the Tangible Assets subject to the Assets Leases.
4.2 ASSETS NOT OWNED
All material Tangible Assets which are used by the Seller in the
Business but are not owned by the Seller are used pursuant to the
Assets Leases or other arrangements entered into on arm's length terms
in the ordinary course of the Business.
4.3 PLANT AND EQUIPMENT
All Plant and Equipment listed in part 1 of schedule 8 and currently
in use in the Business is:
(a) in good working order;
(b) capable of doing the job for which it is now being used;
(c) in reasonable condition having regard to its age and fair wear
and tear.
5 ENCUMBRANCES
5.1 OWNERSHIP OF BUSINESS ASSETS
As at Completion the Seller will be the legal and beneficial owner of
the Business Assets free of Encumbrances.
5.2 DISCHARGES BY COMPLETION
The Seller has not granted or created, or agreed to grant or create,
any Encumbrance in respect of the Business Assets other than any which
will be discharged on or before Completion.
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5.3 BUSINESS ASSETS USED IN BUSINESS
The Business Assets comprise all the assets used by the Seller in the
Business and are the only assets required for the operation of the
Business in the manner in which it is currently operated.
6 INTELLECTUAL PROPERTY RIGHTS
6.1 SCOPE
So far as the Seller is aware, it or its Related Corporations own or
have an enforceable right to use all the Intellectual Property Rights
needed to carry on the Business in the places and in the manner
currently carried on and all the Intellectual Property Rights will be
transferred or licensed to the Buyer at Completion.
6.2 OWNERSHIP AND USE
(a) The Seller or its Related Corporations is the legal and
beneficial owner of all the Intellectual Property Rights listed
in parts 1 and 3 of schedule 4.
(b) The Seller or its Related Corporations have, by way of a valid,
binding and enforceable licence from a third party, a lawful
right to use in the places and manner in which they are currently
used by the Seller in the Business all the Intellectual Property
Rights listed in part 2 of schedule 4.
6.3 NO THIRD PARTY RIGHTS
So far as the Seller is aware, no person, other than the Seller or its
Related Corporations or a licensee from the Seller or its Related
Corporations disclosed in part 3 of schedule 4 has any right to any
intellectual property right listed in part 1 of schedule 4.
6.4 NO INFRINGEMENT
So far as the Seller is aware, the use by the Seller or any Related
Corporation of the Intellectual Property Rights listed in schedule 4
does not breach or infringe any Intellectual Property Right of any
other person nor, so far as the Seller is aware, are there any
allegations that the Seller or any Related Corporation has infringed
or is infringing the intellectual property rights of any third party.
6.5 DISPUTES
Neither the Seller nor its Related Corporations is currently involved
in any material dispute with any third party in relation to the
Intellectual Property Rights listed in schedule 4.
6.6 ASSIGNMENTS
The execution of assignments of Intellectual Property Rights by the
Seller or its Related Corporations and the performance by the Seller
or any Related Corporations of its obligations under those assignments
will not cause the Seller or its Related Corporations to be in breach
of any contract with a third party.
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6.7 ROYALTIES/FEES
Other than in respect of the Intellectual Property Rights set out in
part 2 of schedule 4, there are no material royalties, licence fees or
other similar fees payable by the Seller in connection with the use of
any Intellectual Property Rights.
7 ASSETS LEASES
7.1 NATURE
The Assets Leases to which the Seller is a party were entered into
within the ordinary course of business.
7.2 NO DEFAULT
The Seller is not and, so far as the Seller is aware, no other party
to any Assets Lease is in default under an Assets Lease where such
breach or default would be materially and adversely prejudicial to the
Seller in carrying on the Business and the Seller has received no
notice of any default of any Asset Lease.
7.3 VALIDITY
So far as the Seller is aware, each Asset Lease:
(a) is valid and subsisting;
(b) has not been amended or modified; and
(c) is not terminable by virtue of the sale of the Business Assets.
7.4 ASSETS LEASES USED IN THE BUSINESS
The Asset Leases constitute all the lease and hire purchase agreements
used in the Business.
8 CONTRACTS
8.1 NATURE OF CONTRACTS
So far as the Seller is aware, part 1 of schedule 5 and parts 2 and 3
of schedule 4 contain details of all Contracts which:
(a) are not within the ordinary course of ordinary business of the
Business;
(b) are not on arm's length terms;
(c) are not capable of complete performance or termination without
payment of damages, within 12 months from the date of this
agreement;
(d) restrict the Seller's freedom to carry on the Business in the
places and the manner in which it is currently carried on;
(e) are contracts (not being contracts for the purchase or sale of
Stock) which are expected to result in expenditure by the Seller
of more than $1 million;
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(f) are distribution or agency agreements; or
(g) entitle the other party to terminate the Contract or impose less
favourable terms by reason of a sale of some or all of the
Business Assets.
8.2 NO DEFAULT
The Seller is not and, so far as the Seller is aware, no other party
to any Contract is in default under such Contract where such breach or
default would be materially and adversely prejudicial to the Seller in
carrying on the Business as currently carried on and there no grounds
for rescission, avoidance or repudiation of any such Contract where
such rescission, avoidance or repudiation would be materially and
adversely prejudicial to the Seller in carrying on the Business as
currently carried on.
8.3 FOREIGN CURRENCY
Part 3 of Schedule 5 contains a listing, which is accurate in all
material respects, of outstanding commitments of the Seller in the
Business as at the date stated in that schedule in relation to foreign
currency hedging contracts.
8.4 COPIES OF CONTRACTS
So far as the Seller is aware, the Data Room contained copies of all
Contracts which are material to the operation of the Business.
9 PROPERTIES
9.1 INTERESTS
The Seller has no interest in real property which it uses in the
Business except for its interest in the Properties.
9.2 OCCUPATION AND USE
The Seller has exclusive occupation and quiet enjoyment of the
Properties. The Seller's use of the Properties, so far as the Seller
is aware, complies in all material respects with all acts,
regulations, developments, approvals, permits and requirements
(including zoning requirements) of any Governmental Agency (not
including in relation to Environmental Law, which this warranty does
not apply to). None of the Properties, so far as the Seller is aware,
are subject to any sub-lease, tenancy or right of occupation by any
other party.
9.3 NO BREACH
The Seller has not received a notice of default in respect of any
Leased Property which remains outstanding and asserts material
non-compliance with the lease of that property.
9.4 NO NOTICES
The Seller has not received any notice from any third party in respect
of any of the Properties:
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(a) in respect of the compulsory acquisition or resumption of any
part of any of the Properties; or
(b) asserting that the current use of any of the Properties breaches
the requirements of any relevant planning scheme; or
(c) which would be likely to have a materially adverse effect on the
use of the Properties in the Business as currently used.
9.5 PROPERTY DETAILS
The particulars of the Properties set out in schedules 7 and 10 are
true and correct in all material respects.
9.6 PROPERTY DISCLOSURE
Details of all material documentation pursuant to which the Properties
are used or occupied by the Seller are contained in the Data Room and
there are no other documents, correspondence or other material which
has not been provided to the Buyer which would have a material adverse
affect on the interests of the Seller in the Properties.
9.7 DISPUTES
There are no material disputes claims or actions relating to any of
the Properties or their use including, but not limited to, disputes
with any adjoining or neighbouring owner with respect to boundary
walls or fences or with respect to any easement, right or means of
access to the relevant Property.
9.8 FREEHOLD PROPERTY - SPECIFIC WARRANTIES
(a) So far as the Seller is aware, it is not in breach of or in
default under any covenant, easement or right affecting the
Freehold Properties which breach or default would have a
materially adverse effect on the use of the Freehold Properties
in the Business as currently used.
(b) Except for any matters indicated in documents of title provided
to the Buyer, the Freehold Properties are not, so far as the
Seller is aware:
(1) affected by any rights of adverse possession, easements,
rights vested in any Governmental Agency, restrictive
covenants, rights of way, proposed roads or resumptions or
proposed drains, sewers or stormwater channels;
(2) affected by any leases, licences or Encumbrances; or
(3) the subject of any claim notified to the Seller that any
third party asserts an ownership interest in any of the
Freehold Properties,
which, in any of the above cases, would be likely to have a
material and adverse effect on the current use of the Freehold
Properties in the Business.
9.9 PROPERTY LEASE DISCLOSURE
The Property Leases, particulars of which are set out in schedule 7:
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(a) so far as the Seller is aware, are, in all material respects, a
complete recording of their terms and there are no other
agreements, documents or understandings in relation to the
Property Leases; and
(b) so far as the Seller is aware, are current and enforceable.
9.10 TERMINATION NOTICE
The lessor under the Property Leases has not served any notice to
terminate the relevant Property Lease.
9.11 ASSIGNMENT
The Seller:
(a) has not agreed to any assignment, subletting, parting with
possession or surrender of any of the Property Leases or any part
of them; and
(b) has not given any materially false or misleading information to
any authority having jurisdiction over the property the subject
of the Property Leases.
10 OFFERS OUTSTANDING
Any offer, tender or quotation made by the Seller in respect of the
Business which is outstanding and capable of acceptance by a third
party, was made in the ordinary course of the Business.
11 MEMBERSHIPS
The Seller is not a member of any joint venture, partnership or
unincorporated association (other than a recognised trade association)
in respect of the Business.
12 EMPLOYEES
12.1 LIST OF EMPLOYEES COMPLETE
Schedule 3 contains a complete list of the Employees as at the date
indicated in the schedule and the Buyer has been given all material
details of their Employment Benefits.
12.2 INCENTIVE SCHEMES
The Seller has not agreed to any share incentive scheme, share option
scheme, bonus scheme, profit-sharing scheme or other employee
incentive scheme in respect of the Business or with any Employee which
has not been fairly disclosed to the Buyer.
12.3 SERVICE AGREEMENTS
The Seller is not a party to any written employment or service
agreement with any Employee requiring the giving of more than three
months notice to the employee which has not been fairly disclosed to
the Buyer.
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12.4 MANAGEMENT AGREEMENTS
The Seller is not a party to any material agreement with any person
for the provision of consulting or management services in respect of
the Business which has not been fairly disclosed to the Buyer.
12.5 DISPUTES
The Seller is not involved in any material dispute with any of the
Employees as at the date of this agreement and is not aware of any
circumstances likely to give rise to any dispute.
12.6 COMPLIANCE
The Seller is not in breach in any material respect of any employment
contract with any Employee as at the date of this agreement.
12.7 DISCLOSURE
The Seller is not a party to any agreement, arrangements or
understanding with a union or industrial organisation in respect of
the Employees which is not set out in the Data Room.
13 SUPERANNUATION
13.1 LIST OF SUPERANNUATION SCHEMES COMPLETE
The Seller's Fund and the External Funds are the only superannuation
schemes or pension arrangements to which the Seller pays contributions
in respect of the Employees.
13.2 GOVERNING RULES OF SELLER'S FUND
The copy of the governing rules of the Seller's Fund supplied to the
Buyer on or before the date of this agreement is a true and complete
copy.
13.3 FUNDING
The Seller has paid all contributions due by the Seller to the
Seller's Fund and the External Funds in respect of the Employees.
13.4 ACCRUED BENEFIT VALUES
There are sufficient assets in the Seller's Fund to support the
payment of:
(a) each Existing Member's Termination Benefit or Accrued Benefit
Value (as applicable); and
(b) the amount specified in clause 10.6(b) in respect of the
Transferring Ex-Clarks Members.
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13.5 POWER TO PAY AMOUNT IN RESPECT OF TRANSFERRING EX-CLARKS MEMBERS
The Trustee of the Seller's Fund has power and may properly pay the
amount specified in clause 10.6(b) to the Buyer's Fund under the
Successor Fund Agreement.
14 LITIGATION
14.1 NOT A PARTY TO ANY LITIGATION
The Seller is not:
(a) a party to any material prosecution, litigation or arbitration
proceedings affecting all or part of the Business or any of the
Business Assets; or
(b) so far as the Seller is aware, subject to any material
administrative or governmental investigation in respect of all or
part of the Business or any of the Business Assets,
and the Seller is not aware that any such proceeding or investigation
is threatened or pending.
14.2 NO CIRCUMSTANCES
There are no circumstances of which the Seller is aware which may give
rise to any proceeding or investigation referred to in warranty 14.1.
15 [NOT USED]
16 SOLVENCY
16.1 NO LIQUIDATION OR WINDING-UP
The Seller has not gone into liquidation nor passed a winding-up
resolution nor received a notice under sections 601AA or 601AB of the
Corporations Act.
16.2 NO PETITION
No petition or other process for winding-up has been presented or
threatened against the Seller and there are no circumstances
justifying such a petition or other process.
16.3 NO WRIT OF EXECUTION
No writ of execution has issued against the Seller or any of the
Business Assets.
16.4 NO RECEIVER OR ADMINISTRATOR
No receiver, receiver and manager, liquidator, provisional liquidator
or administrator of any part of the undertaking or assets of the
Seller has been appointed.
page 54
Australia Asset Agreement
16.5 PAYMENT OF DEBTS
The Seller:
(a) has not stopped paying its debts as and when they fall due;
(b) is not insolvent within the meaning of section 95A of the
Corporations Act; and
(c) is not subject to voluntary administration under Part 5.3A of the
Corporations Act.
17 INSURANCE
17.1 POLICIES
Those Business Assets which are of an insurable nature are insured
against fire and other usual risks on a basis which the Seller
considers commercially prudent.
17.2 NOTICE
The Seller has not received any notice from an insurer adversely
affecting its insurances for the Business or the Business Assets.
18 INFORMATION
18.1 WRITTEN INFORMATION
In relation to written information provided by the Seller to the Buyer
in relation to the sale of the Business:
(a) if that information comprised copies of documents, correspondence
or other materials the copies provided were, so far as the Seller
is aware, true and complete;
(b) if that information comprised historical data about the Business
prepared by the Seller that data was, so far as the Seller is
aware and for the purpose for which it was prepared, true and
correct in all material respects.
18.2 ACCURACY
Each of the statements and all information set out, or referred to, in
the Disclosure Schedule, the schedules numbered 3 to 13 to this
agreement is complete and accurate in all material respects and not
misleading.
19 BUSINESS RECORDS
The Business Records are in the Seller's possession or control and
will be maintained by the Seller in accordance with its usual practice
pending Completion.
page 55
Australia Asset Agreement
20 SELLER'S KNOWLEDGE
The Seller is not aware of any matter or thing that is or may be
inconsistent with the Buyer's Warranties.
21 DUTIES
All Duties or Taxes or documents which are necessary to establish the
title of the Seller to the Business Assets have been duly assessed and
paid.
22 TRADE PRACTICES
So far as the Seller is aware, the Seller has not in the two years
before Completion, committed or omitted to do any act or thing the
commission or omission of which is a material contravention of the
Trade Practices Act 1979 (Cth), the Fair Trading Act (NSW) or like
legislation in any other state or territory of Australia.
23 LIABILITY UNDER ASSET AND OTHER SALE AGREEMENTS
Neither the Seller nor any Related Corporation is a party to any
agreement entered into prior to Completion for the sale or purchase of
any business interest, shares or partnership interest which contain
any obligations or liabilities (actual or contingent) which may affect
the Business and/or any Buyer Group Company.
page 56
Australia Asset Agreement
SCHEDULE 2 - DISCLOSURE SCHEDULE
The matters set out in this disclosure schedule constitute formal
disclosure to the Buyer of facts or circumstances which are, or may
be, inconsistent with the Seller's Warranties. The Seller gives no
representation as to the completeness or accuracy of the disclosures
in this schedule. While some disclosures have, for convenience, been
set against specific Seller Warranties, they constitute disclosure
against any other Seller Warranty to which they may apply.
Seller Warranty Number Matter Disclosed
page 57
Australia Asset Agreement
SCHEDULE 3 - EMPLOYEES
As annexed
page 58
Australia Asset Agreement
SCHEDULE 4 - INTELLECTUAL PROPERTY RIGHTS
Part 1 - Owned by the Seller
Part 2 - Licensed to the Seller
Part 3 - Owned by the Seller and licensed to third parties
page 59
Australia Asset Agreement
PART 1
As annexed
page 60
Australia Asset Agreement
PART 2
As annexed
page 61
Australia Asset Agreement
PART 3
As annexed
page 62
Australia Asset Agreement
SCHEDULE 5 - CONTRACTS AND ASSETS LEASES
PART 1 CONTRACTS
As annexed
PART 2 ASSETS LEASES
As annexed
t
PART 3 FOREIGN EXCHANGE CONTRACTS
As annexed
page 63
Australia Asset Agreement
PART 1
As annexed
page 64
Australia Asset Agreement
PART 2
As annexed
page 65
Australia Asset Agreement
PART 3
As annexed
page 66
Australia Asset Agreement
SCHEDULE 6 - STATUTORY LICENCES
page 67
Australia Asset Agreement
SCHEDULE 7 - LEASED PROPERTIES
As annexed
page 68
Australia Asset Agreement
SCHEDULE 8 - PLANT AND EQUIPMENT
PART 1 PLANT AND EQUIPMENT
As annexed
PART 2 NOVATED LEASES
As annexed
page 69
Australia Asset Agreement
PART 1
As annexed
page 70
Australia Asset Agreement
PART 2
As annexed
page 71
Australia Asset Agreement
SCHEDULE 9 - LETTERS OF CREDIT
As annexed
page 72
Australia Asset Agreement
SCHEDULE 10 - FREEHOLD PROPERTIES
page 73
Australia Asset Agreement
SCHEDULE 11 - ACCEPTED LIABILITIES
page 74
Australia Asset Agreement
SCHEDULE 12 - GUARANTEES
u
page 75
Australia Asset Agreement
SCHEDULE 13 - EXTERNAL FUNDS
page 76
Australia Asset Agreement
EXECUTED AS AN AGREEMENT:
Signed for and on behalf of
Pacific Dunlop Limited
by its duly authorised Attorney under Power
in the presence of:
/s/ Paul Devereux /s/ Carly Mansell
- ------------------------- -------------------------
Witness Attorney
Paul Devereux Carly Mansell
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
Textile Industrial Design and Engineering Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
Union Knitting Mills Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
page 77
Australia Asset Agreement
Signed for and on behalf of
Boydex International Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
Foamlite (Australia) Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
Vita Pacific Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
PD Licensing Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
page 78
Australia Asset Agreement
Signed for and on behalf of
Niblick Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
Cliburn Investments Pty Ltd
by its duly authorised Attorney under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Holdings Pty Ltd
in the presence of:
/s/ Andrew Cummins /s/ Justin Ryan
- ------------------------- -------------------------
Director Director
Andrew Cummins Justin Ryan
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Footwear Pty Ltd
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Director Director
- ------------------------- -------------------------
Name (please print) Name (please print)
page 79
Australia Asset Agreement
Signed sealed and delivered by
Pacific Brands Sport & Leisure Pty Ltd
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Director Director
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Clothing Pty Ltd
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Director Director
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Household Products Pty Ltd
in the presence of:
/s/
- ------------------------- -------------------------
Director Director
/s/
- ------------------------- -------------------------
Name (please print) Name (please print)
Signed for and on behalf of
PB Holdings NV
by its duly authorised Attorneys under Power
in the presence of:
/s/ /s/
- ------------------------- -------------------------
Witness Attorney
- ------------------------- -------------------------
Name (please print) Name (please print)
/s/
-------------------------
Attorney
-------------------------
Name (please print)
page 80
Australia Asset Agreement
page 81
Australia Asset Agreement
ANNEXURE A - ASSIGNMENT OF TRADEMARKS
As annexed
Australia Asset Agreement
ANNEXURE B - ASSIGNMENT OF CONTRACTS AND ASSET LEASES
As annexed
Australia Asset Agreement
ANNEXURE C - ASSIGNMENT OF PROPERTY LEASES
As annexed
Australia Asset Agreement
ANNEXURE D - [NOT USED]
Australia Asset Agreement
ANNEXURE E - TRADE MARK RELATIONSHIP AGREEMENT
As annexed
Australia Asset Agreement
ANNEXURE F - SUCCESSOR FUND AGREEMENT
As annexed