<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report September 13, 1995 (September 6, 1995)
(Date of earliest event reported)
UTILICORP UNITED INC.
(Exact name of registrant as specified in charter)
DELAWARE 1-3562 44-0541877
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
3000 COMMERCE TOWER, 911 MAIN, KANSAS CITY, MISSOURI 64105
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (816) 421-6600
(Former name of former address, if changed since last report) NOT APPLICABLE
<PAGE>
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On September 6, 1995, Power Partnership Limited, of which the company owns
49.9 percent, acquired United Energy Limited, an Australian electric
distribution utility, from the State of Victoria. United Energy had
assets of approximately $734 million at June 30, 1995 and revenues of
approximately $510 million for the year ended June 30, 1995. United
Energy's service territory includes part of metropolitan Melbourne,
Victoria and has approximately 520,000 customers. The company paid
approximately $239 million in cash for its 49.9 percent ownership interest.
The company's cash contribution was primarily financed through a group of
Australian-based banks payable in Australian dollars. This transaction
is structured through a series of wholly-owned U.S. and Australian
companies.
The company will manage the operations of United Energy Limited on behalf
of the Power Partnership Limited and will receive a management fee that
consists of a base amount ($1 million Australian, indexed to the consumer
price index) and variable amount based on financial performance of United
Energy Limited. The management agreement extends 10 years from date of
closing.
The company will account for its investment in United Energy Limited on the
equity method in its consolidated financial statements.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) As of the date of this Current Report on Form 8-K, it is impracticable for
the Registrant to provide the financial statements required by this
Item 7 (a). In accordance with 7(a) (4) of Form 8-K, such financial
statements shall be filed by amendment to this Form 8-K no later than 60
days after September 21, 1995.
(b) Pro Forma Financial Information.
As of the date of this Current Report on Form 8-K, it is impracticable for
the Registrant to provide the financial statements required by this Item 7
(b). In accordance with 7(b) (4) of Form 8-K, such financial statements
shall be filed by amendment to this Form 8-K no later than 60 days after
September 21, 1995.
(c) Exhibits.
The Exhibits to this Report are listed below.
2.1 Asset Purchase Agreement between Power Partnership PTY LTD and United
Energy Limited.
2.2 Asset Sale Agreement between United Energy Limited and Power
Partnership PTY LTD.
2.3 Share Sales Agreement between the State of Victoria, Power Partnership
PTY LTD and the Covenantors.
Long-term debt incurred in connection with Item 2 above does not exceed 10
percent of the total assets of the company and its subsidiaries on a
consolidated basis, However, such documents will be furnished to the
commission upon request.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
UTILICORP UNITED INC.
---------------------
(Registrant)
September 13, 1995 /s/ Dale J. Wolf
---------------------- ----------------------------------
Date Dale J. Wolf
Vice President and Corporate Secretary
(Principal Finance Officer)
<PAGE>
EXHIBIT 2.1
POWER PARTNERSHIP PTY LTD
ACN 070 061 282
and
UNITED ENERGY LIMITED
ACN 064 651 029
--------------------------------------------------
POWER PARTNERSHIP
ASSET PURCHASE AGREEMENT
--------------------------------------------------
Freehill Hollingdale & Page
Solicitors
101 Collins Street
Melbourne VIC 3000
Australia
Telephone: (03) 288 1234
Facsimile: (03) 288 1567
Reference: RWN/SMR/1737493
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Interpretation. . . . . . . . . . . . . . . . . . . . . . . . . 3
2. SALE AND PURCHASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Dates for Payment . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . 5
3. COMPLETION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Date for Completion . . . . . . . . . . . . . . . . . . . . . . 5
3.2 Asset Buyer's Obligations at Completion . . . . . . . . . . . . 5
3.3 Property and Risk . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Interdependency between this agreement and Share Sale Agreement 6
3.5 Inconsistencies . . . . . . . . . . . . . . . . . . . . . . . . 6
4. ASSET BUYER'S WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Asset Buyer's Warranties. . . . . . . . . . . . . . . . . . . . 6
5. SELLER'S WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.1 Seller's Warranties . . . . . . . . . . . . . . . . . . . . . . 7
5.2 Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. DUTIES, COSTS AND EXPENSES . . . . . . . . . . . . . . . . . . . . . . . 8
6.1 Payment of Duty . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3 Costs and expenses. . . . . . . . . . . . . . . . . . . . . . . 8
6.4 Costs of performance. . . . . . . . . . . . . . . . . . . . . . 8
7. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.1 General . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2 Legibility of facsimile transmission. . . . . . . . . . . . . . 9
8. GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Government law and jurisdiction . . . . . . . . . . . . . . . . 10
8.2 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.3 Variation . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.4 Further assurances. . . . . . . . . . . . . . . . . . . . . . . 11
8.5 Specific performance. . . . . . . . . . . . . . . . . . . . . . 11
8.6 Third party rights. . . . . . . . . . . . . . . . . . . . . . . 11
8.7 This agreement supersedes others. . . . . . . . . . . . . . . . 11
<PAGE>
THIS ASSET PURCHASE AGREEMENT is made on 7 August 1995 between the following
parties:
1. POWER PARTNERSHIP PTY LTD ACN 070 061 282 of Level 27, 530 Collins Street,
Melbourne, Victoria ("Seller"); and
2. UNITED ENERGY LIMITED ACN 064 651 029 of 43-45 Centreway, Mt. Waverley 3149
("Asset Buyer").
RECITALS:
A. The Seller is the owner of the Assets.
B. The Seller agrees to sell and the Asset Buyer agrees to buy the Assets on
the terms and conditions set out in this agreement.
THE PARTIES AGREE as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
"APPROVAL DATE" means the date on which the Seller is able to give the Financial
Assistance, being:
(a) (where no application is made under section 205(12) of the Corporations
Law) the first Business Day after the 21 day notice period referred to in
section 205(12) has expired; or
(b) (where an application is or applications are made under section 205(12) of
the Corporations Law) the first Business Day after:
(1) the application or each application has been withdrawn; or
(2) the Court has approved the giving of the Financial Assistance,
whichever applicable date first occurs.
"ASSETS" means the Plant and Equipment.
"AUTHORISATION" includes:
(a) any consent, registration, filing, agreement, notarisation, certificate,
licence, approval, permit, authority or exemption from, by or with a
Governmental Agency; and
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2
(b) in relation to anything which may be proscribed or restricted in whole or
in part by law or otherwise if a Governmental Agency intervenes or acts in
any way within a specified period after lodgement, registration or other
notification of anything, the expiration of that period without the
intervention or action by that Governmental Agency.
"BUSINESS DAY" means a day on which banks are open for business in Melbourne,
excluding a Saturday or a Sunday or a public holiday.
"ASSET BUYER'S WARRANTIES" means the warranties and representations of the Asset
Buyer set out in clause 4.1.
"BORROWING ACT" means the Borrowing and Investment Powers Act 1987.
"COMPLETION" means completion of the sale and purchase of the Assets under
clause 3.
"COMPLETION DATE" means, subject to clause 5.5 of the Share Sale Agreement, the
first Business Day after the Approval Date.
"DOLLARS," "A$" and "$" means the lawful currency of the Commonwealth of
Australia.
"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.
"ELECTRICITY ACT" means the Electricity Industry Act 1993.
"FINANCIAL ASSISTANCE" means the financial assistance which the Asset Buyer may
give for the purpose of, or in connection with, the acquisition of shares by the
Seller under the Share Sale Agreement.
"GOVERNMENTAL AGENCY" means the government of any country and the government of
any state, territory, municipality or other political subdivision of a country,
and any administrative or judicial body, department, commission, authority,
instrumentality, tribunal, agency or entity of any such government.
"OFFICER" means a director or secretary of the relevant party or Seller (as the
case may be).
"PLANT AND EQUIPMENT" means all:
(a) plant, equipment and articles owned by the Seller; and
(b) (in relation to all land which is not owned by the Seller) structures
permanently affixed to land and other improvements to land owned by the
Seller (but not the land itself),
including without limitation all electricity transmission and distribution
lines, power poles, underground cables, stations, substations, switch yard
equipment and all other plant and
<PAGE>
3
equipment used in the reticulation, transformation or metering of electrical
power which, in its ordinary use, is located in a fixed position wherever
located.
"POWER" means any right, power, authority, discretion or remedy conferred on the
parties by this agreement or any applicable law.
"PURCHASE PRICE" means $950.5 million.
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset including, but not limited to,
any retention of title; or
(b) created or otherwise arising in or over any interest in any asset under a
bill of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt or any other monetary obligation or
the performance of any other obligation and includes, but is not limited to, any
agreement to grant or create any of the above.
"SHARE SALE AGREEMENT" means the agreement so titled to be entered into between
State Electricity Commission of Victoria, the State of Victoria and Power
Partnership Pty Ltd under which Power Partnership Pty Ltd shall acquire, inter
alia, all the issued ordinary shares in the capital of the Asset Buyer.
"STATE" means the State of Victoria.
"TAX" means any tax, levy, charge, impost, duty, fee, deduction or withholding
which is assessed, levied, imposed or collected by any State 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 and any amount
imposed under section 88 of the State Owned Enterprises Act 1992 but excludes
any Duty.
1.2 INTERPRETATION
In this agreement, unless the context otherwise requires:
(a) headings and underlinings are for convenience only and do not affect the
interpretation of this agreement;
(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;
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4
(e) an expression importing a natural person includes any company, partnership,
joint venture, association, corporation or other body corporate and any
Governmental Agency;
(f) a reference to a clause, party, annexure, exhibit or schedule is a
reference to a clause of, and a party, annexure, exhibit and schedule to,
this agreement and a reference to this agreement includes any such
annexure, exhibit and 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) 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;
(k) no rule of construction applies to the disadvantage of a party because that
party was responsible for the preparation of this agreement or any part of
it;
(l) a covenant or agreement on the part of two or more persons binds them
jointly and severally;
(m) a reference to an agreement other than this agreement includes an
undertaking, agreement or legally enforceable arrangement or understanding
whether or not in writing;
(n) a reference to an asset includes all property of any nature, including, but
not limited to, a business, and all rights, revenues and benefits;
(o) a reference to a document includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind;
(p) a reference to liquidation includes appointment of an administrator,
compromise, arrangement, merger, amalgamation, reconstruction, winding-up,
dissolution, assignment for the benefit of creditors, scheme, composition
or arrangement with creditors, insolvency, bankruptcy, or any similar
procedure or, where applicable, changes in the constitution of any
partnership or person, or death; and
(q) terms defined in the Corporations Law at the date of this agreement have
the meanings given to them in the Corporations Law at that date.
<PAGE>
5
2. SALE AND PURCHASE
2.1 SALE OF ASSETS
Subject to the terms of this agreement, the Seller must sell free of Security
Interests and the Asset Buyer must buy the Assets for the Purchase Price on the
Completion Date. The parties agree that the allocation of the Purchase Price
between the Assets is as follows:
(a) motor vehicles and mobile plant: $9 million;
(b) general plant and equipment: $8.2 million; and
(c) distribution plant and equipment: $933.3 million.
The Purchase Price allocated to the above asset categories is then further
allocated to each individual asset rateably on the basis of the current book
value of the asset as a proportion of the total book value of that respective
class.
2.2 DATES FOR PAYMENT
On and subject to the terms of this agreement, the Asset Buyer must pay the
Purchase Price on demand by the Seller.
2.3 METHOD OF PAYMENT
All payments to be made under this agreement must be made by bank cheque or in
such other method as may be agreed in writing between the Seller and the Asset
Buyer.
3. COMPLETION
3.1 DATE FOR COMPLETION
Completion must take place on the Completion Date at 10 am at the office of the
Seller's solicitors, Freehill Hollingdale & Page, 101 Collins Street, Melbourne.
3.2 ASSET BUYER'S OBLIGATIONS AT COMPLETION
At Completion, the Asset Buyer must pay the Seller the Purchase Price as
described in clause 2.
3.3 PROPERTY AND RISK
Property and risk in the Assets shall pass to the Asset Buyer on the Completion
Date.
<PAGE>
6
3.4 INTERDEPENDENCY BETWEEN THIS AGREEMENT AND SHARE SALE AGREEMENT
It is the intention of the parties that:
(a) Completion under this agreement;
(b) completion under the Share Sale Agreement;
(c) completion under the Asset Sale Agreement; and
(d) payment of the SECV Loan and TCV Loan under clause 6 of the Share Sale
Agreement,
are interdependent, so that if the obligations of the parties in respect of a
particular completion or payment under clause 6 are not satisfied, then no
delivery or payment which has been made, will be deemed to have been made.
For the avoidance of doubt the parties acknowledge and agree that once
Completion under this agreement, completion under the Share Sale Agreement and
the payments under clause 6 of the Share Sale Agreement have occurred, as a
chronological sequence of events, all deliveries and payments will be deemed to
have taken place in the order in which they occurred.
3.5 INCONSISTENCIES
In the event there are any inconsistencies between this agreement and the Share
Sale Agreement, the provisions of the Share Sale Agreement shall prevail.
4. ASSET BUYER'S WARRANTIES
4.1 ASSET BUYER'S WARRANTIES
The Asset Buyer represents and warrants to the Seller as at the date of this
agreement and the Completion Date that:
(a) it has the corporate power to enter into this agreement and has taken all
necessary action (including all shareholder approvals and Authorisations)
to authorise the execution, delivery and performance of this agreement;
(b) the agreement constitutes a legally valid and binding obligation of the
Asset Buyer enforceable in accordance with its terms; and
(c) the execution, delivery and performance of this agreement will not violate
any provision of:
(1) any law, regulation, order, rule or decree of any Governmental Agency
of the Commonwealth of Australia or any state or territory or any
recognised stock
<PAGE>
7
exchange on which its shares or the shares of any related body
corporate are listed;
(2) the memorandum or articles of association (or equivalent constituent
documentation) of the Asset Buyer; and
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Asset Buyer is a party or which is binding on
it and does not and will not result in the creation or imposition of
any security over any of its assets pursuant to the provision of any
such security agreement, deed, contract, undertaking or other
instruments.
5. SELLER'S WARRANTIES
5.1 SELLER'S WARRANTIES
The Seller represents and warrants to the Asset Buyer as at the date of this
agreement and the Completion Date that:
(a) it has the corporate power to enter into this agreement and has taken all
necessary action (including all shareholder approvals and Authorisations)
to authorise the execution, delivery and performance of this agreement;
(b) the agreement constitutes a legally valid and binding obligation of the
Seller enforceable in accordance with its terms; and
(c) the execution, delivery and performance of this agreement will not violate
any provision of:
(1) any law, regulation, order, rule or decree of any Governmental Agency
of the Commonwealth of Australia or any state or territory or any
recognised stock exchange on which its shares or the shares of any
related body corporate are listed;
(2) the memorandum or articles of association (or equivalent constituent
documentation) of the Seller; and
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Seller is a party or which is binding on it
and does not and will not result in the creation or imposition of any
security over any of its assets pursuant to the provision of any such
security agreement, deed, contract, undertaking or other instrument.
<PAGE>
8
5.2 REMEDIES
The sole remedy of the Asset Buyer for breach of any representation or warranty
in relation to the Assets is to damages in accordance with this agreement, and
in no event is the Asset Buyer to be entitled to rescind this agreement.
6. DUTIES, COSTS AND EXPENSES
6.1 PAYMENT OF DUTY
The Asset Buyer must pay:
(a) any Duty in respect of the execution, delivery and performance of this
agreement and any document entered into or signed under this agreement; and
(b) any fine, penalty or other cost in respect of a failure to pay any Duty
except to the extent that the fine, penalty or other cost is caused by an
act or default on the part of the Seller.
6.2 INDEMNITY
The Asset Buyer indemnifies the Seller against any amount payable under clause
6.1.
6.3 COSTS AND EXPENSES
Subject to clause 6.1, each party must pay its own costs and expenses in respect
of the negotiation, preparation, execution, delivery, stamping and registration
of this agreement or other document described in clause 6.1(a).
6.4 COSTS OF PERFORMANCE
Any action to be taken by a party in performing its obligations under this
agreement must be taken at its own cost and expense unless otherwise provided in
this agreement.
7. NOTICES
7.1 GENERAL
Any notice or other communication including, but not limited to, any request,
demand, consent or approval, to or by a party to this agreement:
(a) must be in legible writing and in English addressed as shown:
<PAGE>
9
(1) if to the Seller:
Address: Power Partnership Pty Ltd
91 William Street
Melbourne 3000
Attention: Mr Andrew M Guarriello
Facsimile: (03) 9627 2070;
(2) if to the Asset Buyer:
Address: United Energy Limited
43-45 Centreway
Mt Waverley 3149
Attention: The Company Secretary
Facsimile: (03) 9222 9223,
or as specified to the sender by any party by notice;
(b) where the sender is a company, must be signed by an Officer or under the
common seal of the sender;
(c) is regarded as being given by the sender and received by the addressee:
(1) if by delivery in person, when delivered to the addressee;
(2) if by post within Australia, 3 Business Days from and including the
date of postage; or
(3) if by facsimile transmission, when transmitted legibly to the
addressee,
but if the delivery or receipt is on a day which is not a Business Day or
is after 4.00 pm (addressee's time) it is regarded as received at 9.00 am
on the following Business Day; and
(d) can be relied upon by the addressee and the addressee is not liable to any
other person for any consequences of that reliance if the addressee
believes it to be genuine, correct and authorised by the sender.
<PAGE>
10
7.2 LEGIBILITY OF FACSIMILE TRANSMISSION
A facsimile transmission is regarded as legible unless the addressee telephones
the sender within 2 hours after the transmission is received or regarded as
received under clause 7.1(c)(3) and informs the sender that it is not legible.
8. GENERAL
8.1 GOVERNMENT LAW AND JURISDICTION
(a) This agreement is governed by the laws of Victoria. Each party irrevocably
submits to the exclusive jurisdiction of the courts of Victoria.
(b) Each party irrevocably waives any objection to the venue of any legal
process on the basis that the process has been brought in an inconvenient
forum.
8.2 WAIVERS
(a) Waiver of any right arising from a breach of this agreement or of any Power
arising upon default under this agreement must be in writing and executed
by the party granting the waiver.
(b) A failure or delay in exercise, of:
(1) a right arising from a breach of this agreement; or
(2) a Power created or arising upon default under this agreement,
does not result in a waiver of that right or Power.
(c) A party is not entitled to rely on a delay in the exercise or non-exercise
of a right or Power arising from a breach of this agreement or on a default
under this agreement as constituting a waiver of that right or Power.
(d) A party may not rely on any conduct of another party as a defence to
exercise of a right or Power by that other party.
(e) This clause 8.2 may not itself be waived except by writing executed by the
party granting the waiver.
8.3 VARIATION
A variation of any term of this agreement must be in writing and executed by the
parties.
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11
8.4 FURTHER ASSURANCES
Each party must do all things, and execute all further documents, necessary to
give full effect to this agreement.
8.5 SPECIFIC PERFORMANCE
The Seller acknowledges that monetary damages alone would not be adequate
compensation to the Asset Buyer for the Seller's breach of its obligations under
this agreement and that accordingly specific performance of those obligations is
an appropriate remedy.
8.6 THIRD PARTY RIGHTS
No person other than a party to this agreement is intended to have any right,
power or remedy or derives or is intended to derive any benefit under this
agreement.
8.7 THIS AGREEMENT SUPERSEDES OTHERS
This agreement embodies the entire agreement between the parties with respect to
the subject matter of this agreement and supersedes any prior negotiation,
arrangement, understanding or agreement with respect to the subject matter or
any term of this agreement.
<PAGE>
12
EXECUTED by the parties as an agreement.
THE COMMON SEAL of
POWER PARTNERSHIP PTY LTD
is affixed in accordance with
its articles of association in
the presence of:
/s/Robert Green /s/G.E. Timms
----------------------------------- ------------------------------------
Director Director/Secretary
/s/Robert Green /s/G.E. Timms
----------------------------------- ------------------------------------
Name (please print) Name (please print)
THE COMMON SEAL of
UNITED ENERGY LIMITED
is affixed in accordance with
its articles of association in
the presence of:
/s/Noel Bond /s/Brian Hamley
----------------------------------- ------------------------------------
Director Director
/s/Noel Bond /s/Brian Hamley
----------------------------------- ------------------------------------
Name (please print) Name (please print)
<PAGE>
EXHIBIT 2.2
UNITED ENERGY LIMITED
ACN 064 651 029
and
POWER PARTNERSHIP PTY LTD
ACN 070 061 282
--------------------------------------------------------
POWER PARTNERSHIP
Asset Sale Agreement
--------------------------------------------------------
Freehill Hollingdale & Page
Solicitors
101 Collins Street
Melbourne VIC 3000
Australia
Telephone: (03) 288 1234
Facsimile: (03) 288 1567
Reference: RWN/SMR/1737493
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION. . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2. SALE AND PURCHASE . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.1 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2 Dates for Payment. . . . . . . . . . . . . . . . . . . . . . . . . 5
2.3 Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . 6
3. COMPLETION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.1 Date for Completion. . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Delivery of documents. . . . . . . . . . . . . . . . . . . . . . . 6
3.3 Asset Buyer's obligations at Completion. . . . . . . . . . . . . . 6
3.4 Property and Risk. . . . . . . . . . . . . . . . . . . . . . . . . 6
3.5 Interdependency between this agreement and Share Sale Agreement. . 6
3.6 Inconsistencies. . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.7 Exercise of Rights . . . . . . . . . . . . . . . . . . . . . . . . 7
4. ASSET BUYER'S WARRANTIES. . . . . . . . . . . . . . . . . . . . . . 7
4.1 Asset Buyer's Warranties . . . . . . . . . . . . . . . . . . . . . 7
5.1 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. DUTIES, COSTS AND EXPENSES. . . . . . . . . . . . . . . . . . . . . 8
6.1 Payment of Duty. . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.2 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6.3 Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . 8
6.4 Costs of performance . . . . . . . . . . . . . . . . . . . . . . . 8
7. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
7.2 Legibility of facsimile transmission . . . . . . . . . . . . . . . 9
8. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.1 Governing law and jurisdiction . . . . . . . . . . . . . . . . . . 10
8.2 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.3 Variation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
8.4 Further assurances . . . . . . . . . . . . . . . . . . . . . . . . 10
8.5 Specific performance . . . . . . . . . . . . . . . . . . . . . . . 11
8.6 Third party rights . . . . . . . . . . . . . . . . . . . . . . . . 11
8.7 This agreement supersedes others . . . . . . . . . . . . . . . . . 11
<PAGE>
THIS ASSET SALE AGREEMENT is made on 7 August 1995 between the following
parties:
1. UNITED ENERGY LIMITED ACN 064 651 029 of 43-45 Centreway, Mt Waverley 3149
("Seller"); and
2. POWER PARTNERSHIP PTY LTD ACN 070 061 282 of Level 27, 530 Collins Street,
Melbourne, Victoria ("PPPL" or "Asset Buyer").
RECITALS:
A. The Seller is the owner of the Assets.
B. The Seller agrees to sell and the Asset Buyer agrees to buy the Assets on
the terms and conditions set out in this agreement.
THE PARTIES AGREE as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
"ADVISERS" means all of the advisers of the State or the Seller in relation to
the sale of the Assets and all other transactions contemplated by this agreement
including without limitation, CS First Boston Australia Limited, KPMG, KPMG
Corporate Finance (Vic.) Pty Ltd, Freehill Hollingdale & Page and Mallesons
Stephen Jaques.
"ALLOCATION STATEMENT" means, in relation to the Seller, any Statement which,
for the purposes of section 117 or 137 of the Electricity Act, is an allocation
statement pursuant to which any property, rights or liabilities of Electricity
Services Victoria or a municipal electrical undertaking were vested in the
Seller and include:
(a) the Electricity Services Victoria allocation statement of 3 October 1994
(as amended on 7 March 1995 and 7 August 1995); and
(b) the municipal electrical undertaking allocation statement of 3 October 1994
(as amended on 7 March 1995).
"APPROVAL DATE" means the date on which the Seller is able to give the Financial
Assistance, being:
(a) (where no application is made under section 205(12) of the Corporations
Law) the first Business Day after the 21 day notice period referred to in
section 205(12) has expired; or
(b) (where an application is or applications are made under section 205(12) of
the Corporations Law) the first Business Day after:
<PAGE>
2
(1) the application or each application has been withdrawn; or
(2) the Court has approved the given of the Financial Assistance,
whichever applicable date first occurs.
"ASSET BUYER" means PPPL.
"ASSETS" means the Plant and Equipment.
"ASSET BUYER" means PPPL.
"ASSETS" means the Plant and Equipment.
"AUTHORISATION" includes:
(a) any consent, registration, filing, agreement, notarisation, certificate,
licence, approval, permit, authority or exemption from, by or with a
Governmental Agency; and
(b) in relation to anything which may be proscribed or restricted in whole or
in part by law or otherwise if a Governmental Agency intervenes or acts in
any way within a specified period after lodgement, registration or other
notification of anything, the expiration of that period without the
intervention or action by that Governmental Agency.
"BUSINESS DAY" means a day on which banks are open for business in Melbourne,
excluding a Saturday or a Sunday or a public holiday.
"ASSET BUYER'S WARRANTIES" means the warranties and representations of the Asset
Buyer set out in clause 4.1.
"BORROWING ACT" means the Borrowing and Investment Powers Act 1987.
"COMPLETION" means completion of the sale and purchase of the Assets under
clause 3.
"COMPLETION DATE" means, subject to clause 5.5 of the Share Sale Agreement, the
first Business Day after the Approval Date.
"DOLLARS" "A$" and "$" means the lawful currency of the Commonwealth of
Australia.
"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.
"ELECTRICITY ACT" means the Electricity Industry Act 1993.
<PAGE>
3
"FINANCIAL ASSISTANCE" means the financial assistance which the Seller may give
for the purpose of, or in connection with, the acquisition of shares by the
Buyer under the Share Sale Agreement.
"GOVERNMENTAL AGENCY" means the government of any country and the government of
any state, territory, municipality or other political subdivision of a country,
and any administrative or judicial body, department, commission, authority,
instrumentality, tribunal, agency or entity of any such government.
"OFFICER" means a director or secretary of the relevant party or Seller (as the
case may be).
"PLANT AND EQUIPMENT" means all:
(a) plant, equipment and articles owned by the Seller; and
(b) (in relation to all land which is not owned by the Seller) structures
permanently affixed to land and other improvements to land owned by the
Seller (but not the land itself),
including without limitation all electricity transmission and distribution
lines, power poles, underground cables, stations, substations, switch yard
equipment and all other plant and equipment used in the reticulation,
transformation or metering of electrical power which, in its ordinary use, is
located in a fixed position wherever located.
"POWER" means any right, power, authority, discretion or remedy conferred on the
parties by this agreement or any applicable law.
"PURCHASE PRICE" means $950.5 million.
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset including, but not limited to,
any retention of title; or
(b) created or otherwise arising in or over any interest in any asset under a
bill of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt or any other monetary obligation or
the performance of any other obligation and includes, but is not limited to, any
agreement to grant or create any of the above.
"SHARE SALE AGREEMENT" means the agreement so titled to be entered into between
State Electricity Commission of Victoria, the State of Victoria and PPPL under
which PPPL shall acquire, inter alia, all the issued ordinary shares in the
capital of the Seller.
"STATE" means the State of Victoria.
<PAGE>
4
"TAX" means any tax, levy, charge, impost, duty, fee, deduction or withholding
which is assessed, levied, imposed or collected by any State 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 and any amount
imposed under section 88 of the State Owned Enterprises Act 1992 but excludes
any Duty.
1.2 INTERPRETATION
In this agreement, unless the context otherwise requires:
(a) headings and underlinings are for convenience only and do not affect the
interpretation of this agreement;
(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;
(f) a reference to a clause, party, annexure, exhibit or schedule is a
reference to a clause of, and a party, annexure, exhibit and schedule to,
this agreement and a reference to this agreement includes any such
annexure, exhibit and 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) 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;
(k) no rule of construction applies to the disadvantage of a party because that
party was responsible for the preparation of this agreement or any part of
it;
<PAGE>
5
(l) a covenant or agreement on the part of two or more persons binds them
jointly and severally;
(m) a reference to an agreement other than this agreement includes an
undertaking, agreement or legally enforceable arrangement or understanding
whether or not in writing;
(n) a reference to an asset includes all property of any nature, including, but
not limited to, a business, and all rights, revenues and benefits;
(o) a reference to a documents includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind;
(p) a reference to liquidation includes appointment of an administrator,
compromise, arrangement, merger, amalgamation, reconstruction, winding-up,
dissolution, assignment for the benefit of creditors, scheme, composition
or arrangement with creditors, insolvency, bankruptcy, or any similar
procedure or, where applicable, changes in the constitution of any
partnership or person, or death; and
(q) terms defined in the Corporations Law at the date of this agreement have
the meanings given to them in the Corporations Law at that date.
2. SALE AND PURCHASE
2.1 SALE OF ASSETS
Subject to the terms of this agreement, the Seller must sell free of Security
Interests and the Asset Buyer must buy the Assets for the Purchase Price on the
Completion Date. The parties agree that the allocation of the Purchase Price
between the Assets is as follows:
(a) motor vehicles and mobile plant: $9 million;
(b) general plant and equipment: $8.2 million; and
(c) distribution plant and equipment: $933.3 million.
The Purchase Price allocated to the above asset categories is then further
allocated to each individual asset rateably on the basis of the current book
value of the asset as a proportion of the total book value of that respective
class.
2.2 DATES FOR PAYMENT
On and subject to the terms of this agreement the Asset Buyer must pay $903.083
million on the Completion Date, and as to the balance of the Purchase Price, on
demand by the Seller.
<PAGE>
6
2.3 METHOD OF PAYMENT
All payments to be made under this agreement must be made by bank cheque or in
such other method as may be agreed in writing between the Seller and the Asset
Buyer.
3. COMPLETION
3.1 DATE FOR COMPLETION
Completion must take place on the Completion Date at 10 am at the office of the
Seller's solicitors, Freehill Hollingdale & Page, 101 Collins Street, Melbourne.
3.2 DELIVERY OF DOCUMENTS
At Completion, the Seller must deliver to the Asset Buyer a copy of the special
resolution passed by the State Electricity Commission of Victoria (as
shareholder) approving the sale of Assets by the Seller on and subject to the
terms of this agreement.
3.3 ASSET BUYER'S OBLIGATIONS AT COMPLETION
At Completion the Asset Buyer must pay the Seller the Purchase Price as
described in clause 2.
3.4 PROPERTY AND RISK
Property and risk in the Assets shall pass to the Asset Buyer on the Completion
Date.
3.5 INTERDEPENDENCY BETWEEN THIS AGREEMENT AND SHARE SALE AGREEMENT
It is the intention of the parties that:
(a) Completion under this agreement;
(b) completion under the Share Sale Agreement;
(c) completion under the Asset Purchase Agreement; and
(d) payment of the SECV Loan and TCV Loan under clause 6 of the Share Sale
Agreement,
are interdependent, so that if the obligations of the parties in respect of a
particular completion or payment under clause 6 are not satisfied, then no
delivery or payment which has been made, will be deemed to have been made.
For the avoidance of doubt the parties acknowledge and agree that once
Completion under this agreement, completion under the Share Sale Agreement and
the payments under clause 6 of the Share Sale Agreement have occurred, as a
chronological sequence of events, all
<PAGE>
7
deliveries and payments will be deemed to have taken place in the order in which
they occurred.
3.6 INCONSISTENCIES
In the event there are any inconsistencies between this agreement and the Share
Sale Agreement, the provisions of the Share Sale Agreement shall prevail.
3.7 EXERCISE OF RIGHTS
With effect from Completion, the Seller shall exercise all of its statutory and
other rights with respect to the Assets including, without limitation, its
rights under Part 3 of the Electricity Act, consistently with ownership of the
Assets having been vested in the Asset Buyer and shall act in accordance with
any directions given by the Asset Buyer to the Seller as to the manner of
exercise of such rights.
4. ASSET BUYER'S WARRANTIES
4.1 ASSET BUYER'S WARRANTIES
The Asset Buyer represents and warrants to the Seller as at the date of this
agreement and the Completion Date that:
(a) it has the corporate power to enter into this agreement and has taken all
necessary action (including all shareholder approvals and Authorisations)
to authorise the execution, delivery and performance of this agreement;
(b) the agreement constitutes a legally valid and binding obligation of the
Asset Buyer enforceable in accordance with its terms; and
(c) the execution, delivery and performance of this agreement will not violate
any provision of:
(1) any law, regulation, order, rule or decree of any Governmental Agency
of the Commonwealth of Australia or any state or territory or any
recognised stock exchange on which its shares or the shares of any
related body corporate are listed;
(2) the memorandum or articles of association (or equivalent constituent
documentation) of the Asset Buyer; and
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Asset Buyer is a party or which is binding on
it and does not and will not result in the creation or imposition of
any security over any of its assets pursuant to the provision of any
such security agreement, deed, contract, undertaking or other
instrument.
<PAGE>
8
5.1 REMEDIES
The sole remedy of the Asset Buyer for breach of any representation or warranty
in relation to the Assets is to damages in accordance with the Share Sale
Agreement, and in no event is the Asset Buyer to be entitled to rescind this
agreement or claim damages under this agreement.
6. DUTIES, COSTS AND EXPENSES
6.1 PAYMENT OF DUTY
The Asset Buyer must pay:
(a) any Duty in respect of the execution, delivery and performance of this
agreement and any document entered into or signed under this agreement; and
(b) any fine, penalty or other cost in respect of a failure to pay any Duty
except to the extent that the fine, penalty or other cost is caused by an
act or default on the part of the Seller.
6.2 INDEMNITY
The Asset Buyer indemnifies the Seller against any amount payable under clause
6.1.
6.3 COSTS AND EXPENSES
Subject to clause 6.1, each party must pay its own costs and expenses in respect
of the negotiation, preparation, execution, delivery, stamping and registration
of this agreement or other document described in clause 6.1(a).
6.4 COSTS OF PERFORMANCE
Any action to be taken by a party in performing its obligations under this
agreement must be taken at its own cost and expense unless otherwise provided in
this agreement.
7. NOTICES
7.1 GENERAL
Any notice or other communication including, but not limited to, any request,
demand, consent or approval, to or by a party to this agreement:
(a) must be in legible writing and in English addressed as shown:
(1) if to the Seller: The Administrator,
<PAGE>
9
Address: State Electricity Commission of Victoria,
15 William Street
Melbourne 3000
Attention: Mr G Brooke
Facsimile: (03) 9691 2112;
(2) if to the Asset Buyer:
Address: 91 William Street
Melbourne Vic 3000
Attention: Mr Andrew M Guarriello
Facsimile: (03) 9627 2070,
or as specified to the sender by any party by notice;
(b) where the sender is a company, must be signed by an Officer or under the
common seal of the sender;
(c) is regarded as being given by the sender and received by the addressee:
(1) if by delivery in person, when delivered to the addressee;
(2) if by post within Australia, 3 Business Days from and including the
date of postage; or
(3) if by facsimile transmission, when transmitted legibly to the
addressee,
but if the delivery or receipt is on a day which is not a Business Day or
is after 4.00 pm (addressee's time) it is regarded as received at 9.00 am
on the following Business Day; and
(d) can be relied upon by the addressee and the addressee is not liable to
any other person for any consequences of that reliance if the addressee
believes it to be genuine, correct and authorised by the sender.
7.2 LEGIBILITY OF FACSIMILE TRANSMISSION
A facsimile transmission is regarded as legible unless the addressee telephones
the sender within 2 hours after the transmission is received or regarded as
received under clause 7.1(c)(3) and informs the sender that it is not legible.
<PAGE>
10
8. GENERAL
8.1 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of Victoria. Each party irrevocably
submits to the exclusive jurisdiction of the courts of Victoria.
(b) Each party irrevocably waives any objection to the venue of any legal
process on the basis that the process has been brought in an inconvenient
forum.
8.2 WAIVERS
(a) Waiver of any right arising from a breach of this agreement or of any Power
arising upon default under this agreement must be in writing and executed
by the party granting the waiver.
(b) A failure or delay in exercise, of:
(1) a right arising from a breach of this agreement; or
(2) a Power created or arising upon default under this agreement,
does not result in a waiver of that right or Power.
(c) A party is not entitled to rely on a delay in the exercise or non-exercise
of a right or Power arising from a breach of this agreement or on a default
under this agreement as constituting a waiver of that right or Power.
(d) A party may not rely on any conduct of another party as a defence to
exercise of a right or Power by that other party.
(e) This clause 8.2 may not itself be waived except by writing executed by the
party granting the waiver.
8.3 VARIATION
A variation of any term of this agreement must be in writing and executed by the
parties.
8.4 FURTHER ASSURANCES
Each party must do all things, and execute all further documents, necessary to
give full effect to this agreement.
<PAGE>
11
8.5 SPECIFIC PERFORMANCE
The Seller acknowledges that monetary damages alone would not be adequate
compensation to the Asset Buyer for the Seller's breach of its obligations under
this agreement and that accordingly specific performance of those obligations is
an appropriate remedy.
8.6 THIRD PARTY RIGHTS
No person other than a party to this agreement is intended to have any right,
power or remedy or derives or is intended to derive any benefit under this
agreement.
8.7 THIS AGREEMENT SUPERSEDES OTHERS
This agreement and the Share Sale Agreement embodies the entire agreement
between the parties with respect to the subject matter of this agreement and
supersedes any prior negotiation, arrangement, understanding or agreement with
respect to the subject matter or any term of this agreement.
EXECUTED by the parties as an agreement.
THE COMMON SEAL of
UNITED ENERGY LIMITED
is affixed in accordance with its
articles of association in the
presence of:
/s/Noel Bond /s/Brian Hamley
------------------------------------- -------------------------------------
Director Director
Noel Bond Brian Hamley
------------------------------------- -------------------------------------
Name (please print) Name (please print)
THE COMMON SEAL of
POWER PARTNERSHIP PTY
LTD is affixed in accordance
with its articles of association
in the presence of:
/s/Robert Green /s/G.E. Timms
------------------------------------- -------------------------------------
Director Director/Secretary
Robert Green G.E. Timms
------------------------------------- -------------------------------------
Name (please print) Name (please print)
<PAGE>
STATE ELECTRICITY COMMISSION OF VICTORIA
and
THE STATE OF VICTORIA
and
POWER PARTNERSHIP PTY LTD
ACN 070 061 282
and
THE COVENANTORS
_______________________________________________
POWER PARTNERSHIP
Share Sale Agreement
relating to UNITED ENERGY LIMITED
_______________________________________________
Freehill Hollingdale & Page
Solicitors
101 Collins Street
Melbourne VIC 3000
Australia
Telephone: (03) 288 1234
Facsimile: (03) 288 1567
Reference: PAFH/SMR/1737493
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION . . . . . . . . . . . . . . . . . . . . . 2
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . 10
1.3 Accounting Standards . . . . . . . . . . . . . . . . . . . . . . . 12
2. SALE AND PURCHASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.1 Sale of shares . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.2 Treasurer's Approval . . . . . . . . . . . . . . . . . . . . . . . 14
2.3 Method of Payment. . . . . . . . . . . . . . . . . . . . . . . . . 14
2.4 Section 205. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2.5 Franchise Fee Option . . . . . . . . . . . . . . . . . . . . . . . 14
2.6 Subscription Option. . . . . . . . . . . . . . . . . . . . . . . . 15
3. PRE COMPLETION MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . 15
3.1 Asset Revaluation. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.2 Dividend Payments. . . . . . . . . . . . . . . . . . . . . . . . . 15
3.3 Capitalisation of SECV Loan. . . . . . . . . . . . . . . . . . . . 16
4. PURCHASE PRICE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.1 Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.3 Refund by Seller . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.4 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.5 LIBOR Interest . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.6 Franchise Fee Deduction. . . . . . . . . . . . . . . . . . . . . . 18
4.7 Tax Ruling . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5. COMPLETION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.1 Date for Completion. . . . . . . . . . . . . . . . . . . . . . . . 19
5.2 Board meeting. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.3 Delivery of documents. . . . . . . . . . . . . . . . . . . . . . . 20
5.4 Buyer's obligations at Completion. . . . . . . . . . . . . . . . . 20
5.5 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
5.6 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6. POST COMPLETION MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 23
6.1 Repayment of Loans . . . . . . . . . . . . . . . . . . . . . . . . 23
7. INTERDEPENDENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7.1 Interdependency between Completion and post-Completion matters . . 23
8. BALANCE SHEET. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.1 Preparation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.2 Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.3 Extension of Time. . . . . . . . . . . . . . . . . . . . . . . . . 24
8.4 Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
<PAGE>
8.5 Audit by Auditor-General . . . . . . . . . . . . . . . . . . . . . 24
8.6 Access to books. . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.7 Review Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.8 Buyer's Accountants. . . . . . . . . . . . . . . . . . . . . . . . 25
8.9 Circulation of balance sheet . . . . . . . . . . . . . . . . . . . 25
8.10 Dispute Notice . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.11 Deemed Acceptance. . . . . . . . . . . . . . . . . . . . . . . . . 26
8.12 Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9. BUYER'S OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.1 Buyer's Warranties . . . . . . . . . . . . . . . . . . . . . . . . 26
9.2 Continued Holding. . . . . . . . . . . . . . . . . . . . . . . . . 27
9.3 Buyer's Undertakings . . . . . . . . . . . . . . . . . . . . . . . 28
9.4 Buyer's Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . 28
9.5 Duty Adjustment. . . . . . . . . . . . . . . . . . . . . . . . . . 28
10. CROSS OWNERSHIP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
11. EMPLOYEE EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12. SELLER'S WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.1 Giving of Warranties . . . . . . . . . . . . . . . . . . . . . . . 29
12.2 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.3 Acknowledgment . . . . . . . . . . . . . . . . . . . . . . . . . . 29
12.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.5 Ability to claim . . . . . . . . . . . . . . . . . . . . . . . . . 31
12.6 Limitation on claims . . . . . . . . . . . . . . . . . . . . . . . 32
12.7 Quantification of Claims . . . . . . . . . . . . . . . . . . . . . 32
12.8 State Equivalent Tax . . . . . . . . . . . . . . . . . . . . . . . 33
13. INDEMNITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.1 Tax Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
13.2 Indemnity for breach . . . . . . . . . . . . . . . . . . . . . . . 33
13.3 Claims procedure . . . . . . . . . . . . . . . . . . . . . . . . . 33
14. ACTION PENDING COMPLETION . . . . . . . . . . . . . . . . . . . . . . . 34
14.1 Carrying on of business. . . . . . . . . . . . . . . . . . . . . . 34
14.2 Buyer's Representative . . . . . . . . . . . . . . . . . . . . . . 35
14.3 Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
14.4 EBA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
14.5 Draft Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . 36
15. ANNOUNCEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
15.1 Legal requirements . . . . . . . . . . . . . . . . . . . . . . . . 36
15.2 Disclosure to officers and professional advisers . . . . . . . . . 37
15.3 Further publicity. . . . . . . . . . . . . . . . . . . . . . . . . 37
15.4 Company's compliance with Electricity Act. . . . . . . . . . . . . 37
16. DUTIES, COSTS AND EXPENSES. . . . . . . . . . . . . . . . . . . . . . . 37
16.1 Payment of Duty. . . . . . . . . . . . . . . . . . . . . . . . . . 37
<PAGE>
16.2 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
16.3 Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . . 37
16.4 Costs of performance . . . . . . . . . . . . . . . . . . . . . . . 38
17. COVENANTORS' UNDERTAKINGS . . . . . . . . . . . . . . . . . . . . . . . 38
17.1 Undertakings . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
17.2 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
17.3 Warranties of the Covenantors. . . . . . . . . . . . . . . . . . . 38
18. STATE'S GUARANTEE AND INDEMNITY . . . . . . . . . . . . . . . . . . . . 39
18.1 Guarantee. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
18.2 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
18.3 Extent of guarantee and indemnity. . . . . . . . . . . . . . . . . 39
18.4 Avoidance of payments. . . . . . . . . . . . . . . . . . . . . . . 40
18.5 Continuing guarantee and indemnity . . . . . . . . . . . . . . . . 40
18.6 Warranties of the State. . . . . . . . . . . . . . . . . . . . . . 41
19. NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
19.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
19.2 Legibility of facsimile transmission . . . . . . . . . . . . . . . 43
20. CONTINUED ACCESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
21. GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
21.1 Governing law and jurisdiction . . . . . . . . . . . . . . . . . . 44
21.2 Waivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
21.3 Variation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
21.4 Further assurances . . . . . . . . . . . . . . . . . . . . . . . . 45
21.5 Specific performance . . . . . . . . . . . . . . . . . . . . . . . 45
21.6 Third party rights . . . . . . . . . . . . . . . . . . . . . . . . 45
21.7 This agreement supersedes others . . . . . . . . . . . . . . . . . 45
<PAGE>
THIS SHARE SALE AGREEMENT is made on 7 August 1995 between the following
parties:
1. STATE ELECTRICITY COMMISSION OF VICTORIA of 15 William Street, Melbourne
("Seller");
2. THE HONOURABLE ALAN ROBERT STOCKDALE in his capacity as Treasurer of the
State of Victoria for and on behalf of the Crown in right of the State
("State");
3. POWER PARTNERSHIP PTY LIMITED ACN 070 061 282 of Level 27, 530 Collins
Street, Melbourne, Victoria in its capacity as Buyer and Asset Buyer; and
4. UTILICORP UNITED INC. of 911 Main Street, Suite 3000, Kansas City,
Missouri, 64105 United States of America ("Utilicorp"); STATE AUTHORITIES
SUPERANNUATION BOARD a corporation incorporated under the Superannuation
Administration Act 1991, of Level 20, 83 Clarence Street, Sydney, New South
Wales ("State Authorities"); and AUSTRALIAN MUTUAL PROVIDENT SOCIETY ARBN
008 387 371 of 33 Alfred Street, Sydney, New South Wales ("AMP")
(individually a "Covenantor" and together "Covenantors").
RECITALS:
A. A consortium comprised of the Covenantors was chosen by the State as the
successful bidder for the Company.
B. The parties have agreed to effect the following transactions in the
following sequence:
(a) the Buyer and the State will endeavour to procure the amendment of the
ANZ Facility, so that it may be drawn by both the Company and the
Buyer. The Buyer will ensure that the AMP facility and the DB/NAB
facility or equivalent alternate facilities are available to both the
Company and the Buyer at Completion;
(b) the Company will capitalise $4 million of the SECV Loan into ordinary
shares of the Company;
(c) the Company will revalue the Licences to $600 million;
(d) out of the asset revaluation reserve created on the revaluation of the
Licences, the Company will declare a dividend of $600 million to be
satisfied by the issue to the Seller of Redeemable Preference Shares;
(e) the Asset Buyer will draw down the ANZ Facility and the AMP Facility;
(f) the Asset Buyer will buy the Excluded Assets for $950.5 million of
which $903.083 million is to be paid immediately and the balance of
$47.417 million will remain outstanding;
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2
(g) the Company will declare and pay a dividend to the Seller of $85.9
million being part of the profit on the sale of the Excluded Assets
and in respect of the profits of the Company for the year ending 30
June 1995;
(h) the Seller shall sell the Shares (including the Redeemable Preference
Shares) to the Buyer under this agreement;
(i) the Company will redeem the Redeemable Preference Shares for $600
million;
(j) the Company shall purchase the Excluded Assets from the Asset Buyer
under the Asset Purchase Agreement;
(k) the Asset Buyer will repay the ANZ Facility and the AMP Facility;
(l) the Company will draw down the ANZ Facility and the AMP Facility and
the Buyer will subscribe for the UEL debentures;
(m) the Company will repay the SECV Loan and the TCV Loan;
(n) the Asset Buyer will pay to the Company $47.417 million outstanding
from the sale of the Assets to the Buyer; and
(o) the Company will draw down on a new Facility to refinance all or part
of the facilities referred to in paragraph (k) above;
provided, however, that in the event that the new facility referred to in
paragraph (o) above is available at Completion, then the new facility will
be substituted for the ANZ Facility and the AMP Facility in paragraphs (e)
and (k) above, and the refinancing described in paragraph (o) will be
unnecessary, with the result that the State and the Seller receive a total
consideration of $1,510 million to $1,550 million, subject to adjustment
under clause 4.6.
C. The State agrees to guarantee the obligations of the Seller under this
agreement.
D. The Covenantors agree to give undertakings to fund (by way of debt and
equity) the obligations of the Buyer under this agreement to pay the
Purchase Price payable under this agreement.
THE PARTIES AGREE as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
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3
"ACCOUNTING STANDARDS" means the accounting standards and practices determined
under clause 1.3.
"ADVISERS" means all of the advisers of the State or the Seller in relation to
the sale of the Company and all other transactions contemplated by this
agreement including without limitation, CS First Boston Australia Limited, KPMG,
KPMG Corporate Finance (Vic.) Pty Ltd, Freehill Hollingdale & Page and Mallesons
Stephen Jaques.
"ALLOCATION STATEMENT" means, in relation to the Company, any Statement which,
for the purposes of section 117 or 137 of the Electricity Act, is an allocation
statement pursuant to which any property, rights or liabilities of Electricity
Services Victoria or a municipal electrical undertaking were vested in the
Company and include:
(a) the Electricity Services Victoria allocation statement of dated 29
September 1994 (as amended on 7 March 1995 and 4 August 1995) (the "ESV
Allocation Statement"); and
(b) the MEU allocation statement dated 29 September 1994 (as amended on 7 March
1995).
"AMP FACILITY" means the $360 million loan facility to be provided to the Asset
Buyer and the Company by AMP.
"ANZ FACILITY" means the $575 million loan facility of the Company dated 30 June
1995;
"APPROVAL DATE" means the date on which the Company is able to give the
Financial Assistance, being:
(a) (where no application is made under section 205(12) of the Corporations
Law) the first Business Day after the 21 day notice period referred to in
section 205(12) has expired;
(b) (where an application is or applications are made under section 205(12) of
the Corporations Law) the first Business Day after:
(1) the application or each application has been withdrawn; or
(2) the Court has approved the giving of the Financial Assistance,
whichever applicable date first occurs.
"ASSET BUYER" means the Buyer in its capacity as Asset Buyer under the Asset
Sale Agreement.
"ASSET SALE AGREEMENT" means the agreement so titled of today's date entered
into between the Company and the Buyer under which the Buyer shall acquire the
Excluded Assets.
<PAGE>
4
"ASSET PURCHASE AGREEMENT" means the agreement so titled of today's date entered
into between the Asset Buyer and the Company under which the Company shall
purchase the Excluded Assets.
"AUDITOR-GENERAL" means the Auditor-General for the State.
"AUTHORIZATION" includes:
(a) any consent, registration, filing, agreement, notarisation, certificate,
licence, approval, permit, authority or exemption from, by or with a
Governmental Agency; and
(b) in relation to anything which may be proscribed or restricted in whole or
in part by law or otherwise if a Governmental Agency intervenes or acts in
any way within a specified period after lodgement, registration or other
notification of anything, the expiration of that period without the
intervention or action by that Governmental Agency.
"BALANCE SHEET" means the balance sheet of the Company as at 30 June 1995
accepted in accordance with clause 8.
"BORROWING ACT" means the Borrowing and Investment Powers Act 1987.
"BUSINESS" means the businesses of the distribution of electricity, the retail
sale of electricity and the provision of related field, technical and
engineering services carried on by the Company in the State of Victoria.
"BUSINESS DAY" means a day on which banks are open for business in Melbourne,
excluding a Saturday or a Sunday or a public holiday.
"BUYER" means Power Partnership Pty Limited ACN 070 061 282.
"BUYER'S ACCOUNTANT" has the meaning given to that term in clause 8.8.
"BUYER'S ADVISERS" means all the advisers (being individual persons and not
firms) of the Buyer and/or the Covenantors as at the date of this agreement in
relation to the sale of the Company who, in accordance with the Confidentiality
Deeds, entered into undertakings contemplated by that Deed.
"BUYER'S WARRANTIES" means the warranties and representations of the Buyer set
out in clause 9.1.
"COMPANY" means United Energy Limited ACN 064 651 029.
"COMPANY'S FUND" means that part of the Victorian Electricity Industry
Superannuation Fund which relates to the Company, details of which are set out
in schedule 7.
"COMPLETION" means completion of the sale and purchase of the Shares under
clause 5.
<PAGE>
5
"COMPLETION DATE" means the first Business Day after the Approval Date, or such
other date as may be agreed in writing between the parties.
"CONFIDENTIALITY DEED" means the Deed of Confidentiality and Terms of
Participation entered into between the Company, the State and others.
"CONTROL" has the same meaning as that in parts 3.6 and 3.7 of the Corporations
Law.
"CONTROLLING GROUP MEMBER" has the meaning given to that term in clause
5.4(d)(4).
"DATA ROOM DOCUMENTATION" means all documentation contained in the data room and
listed in:
(a) the Project Genesis Data Room Index dated 25 May 1995; and
(b) the Project Genesis Supplementary Data Room Index Sheets numbered 1 to 21.
"DECEMBER ACCOUNTS" means the financial statements of the Company comprising:
(a) the audited balance sheet of the Company as at 31 December 1994;
(b) the audited profit and loss account and statement of cash flows of the
Company for the six months ended on 31 December 1994; and
(c) any notes attached to and forming part of those financial statements,
a copy of which is set out in annexure A.
"DISCLOSURES" means the information described in schedule 2.
"DISPOSE OF" incudes transfer, sell or otherwise dispose of any right, title or
interest in or otherwise allow any person to acquire a Relevant Interest in, but
does not include the giving of any Security Interest to a bank or other
financial institution.
"DISPUTE NOTICE" has the meaning given to that term in clause 8.10.
"DISTRIBUTION COMPANIES" means Powercor Australia Limited, Solaris Power
Limited, CitiPower Limited and Eastern Energy Limited.
"DISTRIBUTION LICENCE" means the distribution licence issued to the Company by
the Office of the regulator-General on 3 October 1994, as amended on 7 August
1995.
"DOLLARS" "A$" and "$" means the lawful currency of the Commonwealth of
Australia.
<PAGE>
6
"DRAFT BALANCE SHEET" means the:
(a) unaudited draft balance sheet of the Company as at 30 June 1995; and
(b) any notes attached to and forming part of that balance sheet,
a copy of which is set out in annexure C.
"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.
"ELECTRICITY ACT" means the Electricity Industry Act 1993.
"EMPLOYEES" means those employees engaged in the Business as at Completion.
"ENERGY LEVY ORDER" means any order made under section 158B of the Electricity
Act.
"EQUITY SECURITIES" means, in relation to a company, fully or partly paid shares
in the capital of that company (including stock), options in respect of or
rights to subscribe for any such shares, securities (debt or equity) convertible
into or exchangeable for any such shares, and equity securities the income
and/or capital rights of which are determined by reference to the income and/or
capital rights of any such shares in the company (together with options to
subscribe for any such securities and securities convertible into or
exchangeable for any such securities).
"ESTIMATED PURCHASE PRICE" means $652.284 million.
"EXCLUDED ASSETS" means the Plant and Equipment.
"EXPERT" has the meaning given to that term in clause 8.12.
"FINANCIAL ASSISTANCE" means the financial assistance which the Company may, in
relation to events contemplated in the Recitals give for the purpose of, or in
connection with, the acquisition by the Buyer of the Shares.
"FRANCHISE FEE ORDER" means any order determining the impost payable by the
Company in respect of the Company's licence to sell electricity to franchise
customers issued under section 163A of the Electricity Act.
"FRANCHISE FEE SALE AGREEMENT" means an agreement to be entered into between the
State and the proposed franchise fee buyer on terms reasonably acceptable to the
State as contemplated under clause 2.5.
"GOVERNMENTAL AGENCY" means the government of any country and any state,
territory, municipality or other political subdivision of a country, and any
administrative or judicial body,
<PAGE>
7
department, commission, authority, instrumentality, tribunal, agency or entity
of any such government.
"GROUP" means, in relation to each shareholder in the Buyer and the Asset Buyer
(and each person who holds a beneficial interest in the shares held by that
shareholder) ("first named person"):
(a) the Ultimate Holding Vehicle of that first named person; and
(b) every person interposed between that Ultimate Holding Vehicle and the first
named person,
with each such vehicle, person or corporation being a "Group Member".
"INTELLECTUAL PROPERTY RIGHTS" means any patents, utility models, copyrights,
registered or unregistered trade marks or service marks, business names, trade
names, b rand names, indications of source or appellations of original, eligible
layout rights, registered designs and commercial names and designations
specified in schedule 3.
"LIBOR" means the arithmetic mean (rounded upwards, if necessary, to the nearest
fourth decimal place) of the London Interbank Offer Rate quoted at 10 am by
Australia and New Zealand Banking Group Limited, Commonwealth Bank Limited and
Westpac Banking Corporation on the Completion Date for deposits in Australian
currency for a duration equal to the period on and from 15 September 1995 until
Completion.
"LICENCES" means the Distribution Licence and the Retail Licence.
"MATERIAL CONTRACT" has the meaning given that term in warranty 4.1(b) of
schedule 1.
"NEWLY CONSTITUTED BOARD" means the board of directors of the Company newly
constituted as contemplated under clause 5.2.
"NOMINEES" means Messrs Greaves, Drewett, Coughlin and McMahen.
"OFFICER" means a director or secretary of the relevant party or Company (as the
case may be).
"OPTION" means the franchise fee option referred to in clause 2.5.
"PLANT AND EQUIPMENT" has the meaning given to that term in the Asset Sale
Agreement.
"POWER" means any right, power, authority, discretion or remedy conferred on the
parties by this agreement or any applicable law.
"PURCHASE PRICE" means the price payable for the Shares under clause 4.1.
<PAGE>
8
"REDEEMABLE PREFERENCE SHARES" means the redeemable preference shares to be
issued as set out in clause 3.1 with the following terms:
(a) Par: $0.01 per share;
(b) Premium: $99,999.99 per share;
(c) redemption to be made and dividends to be paid, only at the discretion of
the Company; and
(d) such other terms as shall be notified to the Seller at least 10 Business
Days before the Completion Date.
"RELEVANT INTEREST" has the meaning given that expression in the Corporations
Law.
"REPORT" has the meaning given that term in clause 8.4.
"RETAIL LICENCE" means the retail licence issued to the Company by the Office of
the Regulator-General on 3 October 1994 as amended on 7 August 1995.
"REVIEWER" means KPMG of 161 Collins Street, Melbourne.
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset including, but not limited to,
any retention of title; or
(b) created or otherwise arising in or over any interest in any asset under a
bill of sale, mortgage, charge, lien, pledge, trust or power,
by way of security for the payment of a debt or any other monetary obligation or
the performance of any other obligation and includes, but is not limited to, any
agreement to grant or create any of the above.
"SECV LOAN" means:
(a) any liability (on such terms and conditions as apply on the Completion
Date) of the Company to the Seller arising as a result of a direction given
by the Treasurer under subsections 153W(1) or (2) of the Electricity Act
(which on the Completion Date shall not exceed $343,359,921.73); and
(b) any amounts which the Company is liable to pay to the Seller under clause
8.2 of the ESV Allocation Statement, including all accrued interest, as at
the Completion D ate, calculated as the market value determined by TCV from
the then current TCV yield curve for settlement at 11.00 am on the
Completion Date after consultation with TCV's dealer panels.
<PAGE>
9
A certificate signed by an officer of TCV stating the market value of such
amounts (or any other liability referred to in paragraphs (a) and (b)) is, in
the absence of manifest error, conclusive evidence of that value.
"SELLER'S WARRANTIES" means the warranties and representations of the Seller set
out in schedule 1.
"SHARES" means the:
(a) five issued ordinary shares of $1.00 each in the capital of the Company;
(b) 4 million ordinary shares of $1.00 each in the capital of the Company to be
issued to the Seller in accordance with clause 3.3; and
(c) 6,000 Redeemable Preference Shares.
"STATE EQUIVALENT TAX" means such amounts due to the Treasurer under section
88(1)(a) of the State Owned Enterprises Act 1992 in respect of tax (not being
sales tax) that would be payable by the Company if it were liable to pay taxes
under the law of the Commonwealth.
"TARGET GROUP MEMBER" has the meaning given to that term in clause 5.4(d).
"TARIFF ORDER" means any order made union section 158A of the Electricity Act.
"TAX" means any tax, levy, charge, impost, duty, fee, deduction or withholding
which is assessed, levied, imposed or collected by any State 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 and any amount
imposed under section 88 of the State Owned Enterprises Act 1992 but excludes:
(a) any Duty; and
(b) the SECV Loan.
"TCV" means Treasury Corporation of Victoria.
"TCV LOAN" means the market value of all financial accommodation (as defined in
section 3 of the Borrowing Act) of the Company to TCV including any amounts
which the Company is liable to pay to TCV under clause 8.1 of the ESV Allocation
Statements, including all accrued interest, and the market value of all
financial arrangements (as defined in section 3 of the Borrowing Act) of the
Company with TCV, as at the Completion Date, determined as follows:
(a) in respect of financial accommodation or amounts payable under clause 8.1
of the ESV Allocation Statement, the market value determined by TCV from
the then current TCV yield curve for settlement at 11.00 am on the
Completion Date after consultation with TCV's dealer panels; and
<PAGE>
10
(b) in respect of financial arrangements, the market value determined by TCV
for settlement at 11.00 am on the Completion Date after consultation with
not less than 3 banks (within the meaning of the Banking Act 1959).
In each case a certificate signed by an officer of TCV stating the market value
of the financial accommodation or financial arrangements or any other liability
referred to in paragraphs (a) or (b) above is, in the absence of manifest error,
conclusive evidence of that value.
"THIRD PARTY CLAIM" has the meaning given to that term in clause 13.3.
"TREASURER" means the Treasurer of the State of Victoria.
"ULTIMATE HOLDING VEHICLE" means:
(a) in relation to a body corporate, the same meaning as that given to
"Ultimate Holding Company" in the Corporations Law; and
(b) in relation to any other investment vehicle (trust or otherwise), the
person who Controls that investment vehicle and is itself not Controlled by
any person.
"ZONE SUB-STATION PROPERTIES" means the land owned or leased by the Company, on
which zone sub-stations are located, as described in schedule 4.
1.2 INTERPRETATION
In this agreement, unless the context otherwise requires:
(a) headings and underlinings are for convenience only and do not affect the
interpretation of this agreement;
(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;
(f) a reference to a clause, party, annexure, exhibit or schedule is a
reference to a clause of, and a party, annexure, exhibit and schedule to,
this agreement and a reference to this agreement incudes any annexure,
exhibit and schedule;
<PAGE>
11
(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
incudes 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) 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;
(k) no rule of construction applies to the disadvantage of a party because that
party was responsible for the preparation of this agreement or any part of
it;
(l) a covenant or agreement on the part of two or more persons binds them
jointly and severally save that the undertakings given by the Covenantors
under clause 17 shall bind them severally (not jointly);
(m) a reference to an agreement other than this agreement includes an
undertaking, agreement or legally enforceable arrangement or understanding
whether or not in writing;
(n) a reference to an asset incudes all property of any nature, including, but
not limited to, a business, and all rights, revenues and benefits;
(o) a reference to a document includes any agreement in writing, or any
certificate, notice, instrument or other document of any kind;
(p) a reference to liquidation includes appointment of an administrator,
compromise, arrangement, merger, amalgamation, reconstruction, winding-up,
dissolution, assignment for the benefit of creditors, scheme, composition
or arrangement with creditors, insolvency, bankruptcy, or any similar
procedure or, where applicable, changes in the constitution of any
partnership or person, or death;
(q) terms used in this agreement and defined in the Corporations Law at the
date of this agreement have the meanings given to them in the Corporations
Law at that date;
(r) the benefit of this agreement to the extent it relates to any undertaking
given by the Buyer to the State in relation to its contributions to the
Company's Fund, shall be held by the State beneficially for itself and as
trustee for all other contributing employers to, and the trustee of, that
Fund; and
<PAGE>
12
(s) the benefit of this agreement to the extent it relates to a representative
of the company or an Adviser, shall be held by the State beneficially for
itself and as trustee for that representative or Adviser (as the case may
be).
1.3 ACCOUNTING STANDARDS
In respect of the Balance Sheet, the accounting policies (details of which are
set out in annexure (A) adopted by the Company in the preparation of the
December Accounts apply, except that where applicable the following principles
shall prevail (unless the adoption of such principles would result in the
Balance Sheet not showing a true and fair view of the financial position of the
Company as at 30 June 1995 subject to clauses 1.3(c) and 1.3(1) below):
(a) (ACCRUED REVENUE): Accrued revenue is to be calculated using the Customer
Information System administered by Electricity Industry Technology Company
Pty Ltd in accordance with the process set out in schedule 9.
(b) (ACCRUAL FOR ENERGY PURCHASES): The energy purchase accrual will be the sum
of amounts billed or to be billed by Victorian Power Exchange to the
company in respect of all periods up to 30 June 1995 and unpaid at the date
to which the Balance Sheet is drawn up together with any amounts due to or
by the Company in respect of hedge contracts relating to energy purchases
by the Company. No accrual is to be made for the difference between the
historical distribution power loss ratio incurred by the distribution
locations now operated by the Company, and the actual distribution power
loss ratio recorded by the Company.
(c) (INCOME TAX):
Only those timing differences which will reverse in the period from 1 July
1995 until Completion and/or persist following the Company ceasing to be
exempt from Federal income tax will be reflected in the future income tax
benefit and provision for deferred income tax.
No provision for Federal income tax will be made for any period up to
Completion.
A provision for deferred income tax in respect of accrued revenue at 30
June 1995 is to be included in the Balance Sheet. The provision is to be
made irrespective of whether it would result in the Balance Sheet not
showing a true and fair view of the financial position at 30 June 1995.
(d) (DEPRECIATION): The straight line method of depreciation is to be used for
all items of property, plant and equipment including buildings but
excluding freehold land, from the date of acquisition or from the time the
asset is completed and held ready for use.
The depreciation rates to be used are as per the fixed asset register used
in preparing the December Accounts.
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13
(e) (COGENERATION AGREEMENTS): There will be no provision in respect of
cogeneration agreements.
(f) (ESTABLISHMENT COSTS): The provision for establishment costs shall be
$30,179,000 adjusted for payments made from the provision since 31 December
1994.
(g) (ENVIRONMENTAL COSTS): The provision for environmental costs shall be
$6,100,000 adjusted for payments made from this provision since 31 December
1994.
(h) (DEBT): Debt, including loans, financial accommodation (as defined in
section 3 of the Borrowing Act) and other financial arrangements (as
defined in section 3 of the Borrowing Act) from related entities (including
TCV), will be recorded at Allocation Statement amount adjusted to reflect:
(1) repayments;
(2) new borrowings; and
(3) amortisation on a compound basis over the life of the borrowings, of
the premium represented by the difference between the face value and
the Allocation Statement amount (adjusted for (1) and (2)) for that
debt.
Debt for these purposes will not be marked to market.
(i) (DIVIDENDS): The provision for dividends shall be the amount calculated in
accordance with clause 3.
(j) (FEES AND CHARGES): All fees and charges payable under the Tariff Order,
Energy Levy Order and Franchise Fee Orders will be provided for on an
accrual basis using the straight line method.
(k) (PROPERTY, PLANT AND EQUIPMENT): All property, plant and equipment is to
be recorded at the amounts stated in the Allocation Statement adjusted for
depreciation and disposals since the allocation date adopting the
allocation of that amount to categories of assets per the fixed asset
register used in preparing the December Accounts. Additions since the
allocation date are to be recorded at cost, adjusted for depreciation and
disposal (if any). Internally construed assets are to be recorded at the
cost of materials, direct labour and a proportion of fixed and variable
overheads at the same rate as included in the work-in-progress balance
report as used in preparing the December Accounts. Except as reflected in
the Allocation Statements or the December Accounts, no asset revaluations
or devaluations will be made.
Non refundable contributions received from customers towards the cost of
capital works are to be netted off against the cost of the capital works
and the net amount is to be depreciated as detailed in (d) above.
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14
(l) (SECV LOAN): That part of the SECV Loan comprised in paragraph (a) of the
definition of SECV Loan (being $343,359,921.73) is to be classified as part
of net assets irrespective of whether it would result in the Balance Sheet
not showing a true and fair view of the financial position at 30 June 1995.
2. SALE AND PURCHASE
2.1 SALE OF SHARES
Subject to the terms of this agreement, the Seller must sell (and procure the
Nominees to sell) free of Security Interests and other third party rights and
the Buyer must buy the Shares for the Purchase Price on Completion.
2.2 TREASURER'S APPROVAL
For the purposes of section 12A(c) of the State Electricity Commission Act 1958,
the Treasurer (in his capacity as such) hereby approves the sale of the Shares
by the Seller on and subject to the terms of this agreement.
2.3 METHOD OF PAYMENT
All payments to be made under this agreement must be made by bank cheque or in
such other immediately available funds as may be agreed in writing between the
Seller and the Buyer.
2.4 SECTION 205
The Seller shall use its reasonable endeavours and procure that the Nominees use
all reasonable endeavours to procure that the Company obtains approvals or
authorisation for the provision of the Financial Assistance (including, without
limitation, under section 205(10) of the corporations Law) as required by the
Buyer before signing this agreement.
2.5 FRANCHISE FEE OPTION
It is the intention of the parties that the State shall have an option
("Option") exercisable at any time before Completion to sell its right to
receive a component of franchise fees as they become due and payable on the
following terms:
(a) the right to receive a component of franchise fees shall be calculated on
the basis of the aggregate present value of the scheduled franchise fees
and one of two specified discount rates;
(b) that the State is to bear no credit risk whatsoever (except from any act of
the State) in relation to the sale; and
(c) otherwise as set out in annexure E,
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15
which shall be incorporated into a Franchise Fee Sale Agreement. The Buyer must
arrange that within 10 Business Days before Completion the State is made an
offer (by persons reasonably acceptable to the State) to securitise the payment
of the franchise payment on substantially the same terms as that set out and
referred to in this clause 2.5, subject to any variations due to market
conditions.
2.6 SUBSCRIPTION OPTION
The Buyer agrees that if the Company at any time defaults (whether in whole or
in part) in the discharge of its obligations under the Franchise Fee Order than
the State may give notice to the Buyer to prohibit the payment of principal or
interest of shareholder subordinated debentures of the Company (or replacements
thereof).
3. PRE COMPLETION MATTERS
3.1 ASSET REVALUATION
The Buyer will take action to ensure the Newly Constituted Board, immediately
before Completion:
(a) revalues the Company's Licences, to be recorded in the books of the Company
at $600 millon; and
(b) declares a dividend to the Seller of $600 million from the asset
revaluation reserve to be satisfied by the issue prior to Completion of
6,000 Redeemable Preference Shares as notified by the Buyer to the Seller
at least 10 Business Days before Completion with an aggregate issue price
equal to $600 million.
3.2 DIVIDEND PAYMENTS
The Buyer will take action to ensure the Newly Constituted Board does,
immediately before Completion (but after completion of the sale of the Excluded
Assets under the Asset Sale Agreement), declare and pay to the Seller:
(a) a cash dividend of an amount equal to $85.9 million, being the aggregate of
the:
(1) accumulated profits after State Equivalent Tax (taking into account
the interim dividend of $10.4 million paid on 30 June 1995) of the
Company at 30 June 1995; and
(2) part of the profits on the sale of the Excluded Assets; and
(b) such further dividend (if any) notified by the Buyer to the Seller within 5
Business Days before Completion.
<PAGE>
16
3.3 CAPITALISATION OF SECV LOAN
The State and the Seller will take action on or before Completion to capitalise
$4 million of the SECV Loan to 4 million ordinary shares of $1.00 each in the
capital of the Company.
4. PURCHASE PRICE
4.1 AMOUNT
The price ("Purchase Price") payable for the Shares is as follows:
(a) in respect of the Redeemable Preference Shares, $600 million; and
(b) in respect of the remaining Shares:
(1) the sum of:
(i) $52.284 million;
(ii) the amount (if any) by which the net assets of the company as
at 30 June 1995 as shown in the Balance Sheet exceed $343.4
million; and
(iii) the amount (if any) by which the value of the TCV Loan (plus
any amount owing by reference to paragraph (b) of the
definition of SECV Loan) on Completion is less than $425.3
million;
(iv) the amount (if any) by which the dividend paid under clause
3.2(a) is less than $85.9 millon,
less
(2) the sum of:
(i) the amount (if any) by which the net assets of the company as
at 30 June 1995 as shown in the Balance Sheet is less than
$343.4 million;
(ii) an amount equal to the dividends (if any) declared and paid by
the Company after 30 June 1995 but on or before the Completion
Date as contemplated under clause 3.2(b); and
(iii) the amount (if any) by which the value of the TCV Loan (plus
any amount owing by reference to paragraph (b) of the
definition of SECV Loan) on Completion is more than $465.3
million.
<PAGE>
17
4.2 PAYMENT
On and subject to the terms and conditions of this agreement the Buyer must pay
the Purchase Price as follows:
(a) on the Completion Date: the Estimated Purchase Price; and
(b) within 7 days after acceptance (or deemed acceptance under clause 8.11) by
the Buyer of the Balance Sheet: the balance of the Purchase Price (if any)
together with interest calculated in accordance with clause 4.4.
4.3 REFUND BY SELLER
If, after preparation of the Balance Sheet in accordance with clause 8, the
Purchase Price is less than the Estimated Purchase Price, the Seller shall
refund the amount of the difference to the Buyer within 7 days after acceptance
(or deemed acceptance under clause 8.11) by the Buyer of the Balance Sheet,
together with interest calculated in accordance with clause 4.4.
4.4 INTEREST
If:
(a) any party fails to pay any sum payable by it under this agreement at the
time and otherwise in the manner provided in this agreement, that party
must; or
(b) the Buyer or the Seller is, after the Completion Date, obliged to pay money
under clause 4.2(b) or 4.3, the Buyer or the Seller (as the case may be)
must,
pay interest on that sum from the due date of payment (or the Completion Date if
paragraph (b) applies) until that sum is paid in full at 14% per annum.
Interest accrues from day to day and is payable on demand.
4.5 LIBOR INTEREST
If:
(a) the Approval Date has occurred; and
(b) 15 September 1995 has been reached;
and
(c) Completion has not occurred because of the finalisation of the Buyer's
financial arrangements with its bankers (excluding the ANZ Facility), then
the Buyer must pay interest to the Seller on $1,085 million on and from 15
September 1995 until Completion at LIBOR plus 5%;
<PAGE>
18
or
(d) Completion has not occurred because of the finalisation of the Buyer's
financial arrangements with its bankers (including the ANZ Facility) then
the Buyer must pay interest to the Seller on $1,085 million on and from 15
September 1995 until Completion at LIBOR plus 2.5%.
The intention being that if Completion occurs on or before 31 October 1995 then
the only claim the State or Seller has against the Buyer for the delay in
Completion is for interest under this clause 4.5, but if Completion does not
occur on or before 31 October 1995 then this clause 4.5 shall not in any way
abrogate or limit the State or Seller's rights provided by law or under this
agreement.
4.6 FRANCHISE FEE DEDUCTION
If:
(a) within 3 years after Completion a court order which is not subject to
appeal is obtained; or
(b) (subject to having exhausted all rights under clause 4.7), within 3 years
after Completion a tax ruling is obtained,
stating that the franchise fees payable by the Company under the Franchise Fee
Order are not deductible under Section 51(1) or any other section of the Income
Tax Assessment Act 1936 (as in force from time to time); or
(c) at the expiration of 3 years after the Completion Date, no definitive order
or decision (being an order or decision which is not subject to appeal) has
been obtained overturning any unfavourable tax ruling on franchise fee
deductibility,
then the Seller must promptly pay to the Buyer the sum of $85 million.
4.7 TAX RULING
The parties shall use their respective best endeavours to obtain a favourable
tax ruling on franchise fee deductibility. The State may require the Buyer to
procure that the Company does all such acts, matters and things and makes all
reasonable endeavours to enable the State to challenge the tax ruling given on 3
August 1995 (or any other unfavorable tax ruling) in any court or tribunal in
the name and on behalf of the Company and shall make available such of its
officers, documents and records as may reasonably be required for this purpose.
The costs of any such action (including the reasonable costs of any assistance
rendered by the Company at the request of the State) shall be borne by the
State.
Nothing in this clause shall preclude the Company from taking any such action on
its own initiative, save that the State may take over any action commenced by
the Company at any
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19
time pursuant to this clause if it is reasonably satisfied that the Company is
not bona fide in prosecuting the challenge.
5. COMPLETION
5.1 DATE FOR COMPLETION
Completion must take place on the Completion Date immediately after completion
under the Asset Sale Agreement at the office of the Seller's solicitors,
Freehill Hollingdale & Page, 101 Collins Street, Melbourne.
5.2 BOARD MEETING
Immediately before Completion, the Seller must ensure that a meeting of the
directors or shareholders as appropriate of the Company is convened and conducts
the following business:
(a) approval of the registration of the Buyer or its nominee as the holder of
the Shares in the books of the Company, subject to the payment of any Duty
on the transfer of the Shares;
(b) appointment of the nominees of the Buyer as directors of the Company with
immediate effect;
(c) resignation of such of the directors of the Company notified by the Buyer
at least 5 Business Days prior to Completion; and
(d) revocation of all existing mandates for the operation of bank accounts of
the Company and approval of new mandates in favour of the officers of the
Company nominated by the Buyer.
To this end:
(1) the Seller must deliver to the Buyer the written resignations of such of
the directors of the Company notified by the Buyer to the Seller at least 2
Business Days prior to Completion (such resignations to acknowledge that
the resigning directors have no claim against the Company and agree not to
bring any claim in relation to their resignation other than in respect of
accrued directors' fees up until the date of resignation) to be effective
on the appointment of the directors to be appointed at the Board meeting to
be convened under this clause; and
(2) the Buyer must deliver to the Seller written consents to act from the
persons nominated by the Buyer as the directors of the Company at least 2
Business Days prior to Completion (and provide them with a suitable
indemnity) and a list nominating the officers of the Company for inclusion
in the new mandates referred to in clause 5.2(d).
<PAGE>
20
5.3 DELIVERY OF DOCUMENTS
At Completion, the Seller must:
(a) deliver to the Buyer share certificates for the Shares;
(b) deliver to the Buyer completed transfers of the Shares to the Buyer in
registrable form, executed by the Seller and, where applicable, the
Nominees;
(c) deliver to the Buyer the certificate of incorporation, common seal, all
statutory, minute and other record books and share certificate books of the
Company;
(d) make available to the Buyer at the respective offices or places of business
of the Company:
(1) all ledgers, journals and books of account of the Company;
(2) all cheque books of the Company and a list of all bank accounts
maintained by the Company; and
(3) all documents in the possession of the Company relating to the
operation, ownership and use of the assets of the Company;
(e) deliver to the Buyer the Distribution Licence and Retail Licence;
5.4 BUYER'S OBLIGATIONS AT COMPLETION
At Completion the Buyer must:
(a) pay the Seller the Estimated Purchase Price;
(b) deliver to the State evidence to the State's reasonable satisfaction that
all debt provided by shareholders in the Buyer or related parties to the
Company and convertible debt in the Company is subordinated to all other
unsecured creditors of the Company;
(c) deliver to the State covenants (in form and substance satisfactory to the
State) from each shareholder in the Buyer (and each person who holds a
beneficial interest in the shares held by that shareholder) (not being a
person who holds that interest by virtue of its shareholding or investments
in an Ultimate Holding Vehicle listed on a recognised stock exchange) that
it will not, except with the prior written consent of the Treasurer, for
two years after the Completion Date:
(1) create, grant or issue any Equity Securities in the Buyer (except to
the shareholders of the Buyer, where the relative percentage
beneficial ownership
<PAGE>
21
of shares in the Buyer (as they exist as at the Completion Date) are
maintained); or
(2) dispose of any Equity Securities in the Buyer;
(3) transfer, sell or otherwise dispose of any right, title or interest in
the whole or any substantial part of the undertaking or assets of the
Buyer, and
(d) deliver to the State in respect of each Group, covenants (in form and
substance satisfactory to the State) from each Group Member (not being a
Group Member who holds that interest by virtue of its shareholding or
investment in an Ultimate Holding Vehicle listed on a recognised stock
exchange), that it will not, except with the prior written consent of the
Treasurer, for two years after the Completion Date:
(1) create, grant or issue (or permit the creation, grant or issue of) any
Equity Securities, units or other interests in any Group Member it
Controls; or
(2) dispose of any Equity Securities, units or other interests in any
Group Member it Controls;
(3) transfer, sell or otherwise dispose of any right, title or interest in
the whole or any substantial part of the undertaking or assets of any
Group Member it Controls, unless
(4) it (the "Controlling Group Member") is able to show, to the reasonable
satisfaction of the Treasurer, that the book value at cost of the
Group's investment in the Buyer constitutes less than 50% of the book
value at cost of the total assets (excluding intangibles, cash and
short term marketable securities) of the Group Member it Controls
("Target Group Member"),
in which event
(5) the Controlling Group Member may dispose of up to 49.9% of the Target
Group Member (or 49.9% of the Target Group Member after allowing for
full dilution on the creation, grant or issue of any Equity
Securities, units or other interests in the Target Group Member); and
(6) where the Controlling Group Member is the Ultimate Holding Vehicle of
the Target Group Member, any restriction that might otherwise be
imposed on the shareholders or investors in that Vehicle shall not
apply;
provided that nothing in this clause 5.4 shall prohibit:
(7) Australian Mutual Provident Society allocating all or part of its
interest in the Buyer prior to Completion to not more than ten of its
clients, trusts or managed funds (collectively "funds") nominated to
the State at least 2 Business Days
<PAGE>
22
prior to Completion (and who each deliver on Completion covenants (in
form and substance satisfactory to the State) as contemplated by this
clause 5.4);
(8) all or part of AMP's interest in the Buyer being transferred to such
funds;
(9) a private placement by AMP or any of those funds prior to 31 December
1995 provided that:
(1) where that fund's investment in the Buyer (after normal
management fees) constitutes greater than 50% of the book value
at cost of the total assets (excluding intangibles, cash and
short term marketable securities but including an amount equal
to any other committed investment of the fund) of that fund,
the capital raising shall be at no less than net asset value
per unit calculated by reference to the book value at cost
(less normal management fees) of the fund's investment in the
Buyer; and
(2) AMP undertakes in favour of the State not to withdraw its
services as manager from that fund for a period of 2 years
after Completion; or
(10) a private placement by AMP or any of those funds after 31 December
1995 provided that AMP undertakes in favour of the State not to
withdraw its services as manager from that fund for a period of 2
years after Completion.
5.5 TERMINATION
If Completion has not occurred on or before 31 October 1995 (or such other date
as the parties may have agreed in writing) then either the Buyer on the one part
or the State on the other part may, if not in breach of this agreement, give
written notice to the other of its intention to terminate this agreement (and
the Asset Sale Agreement) within three Business Days. After such notice has
been delivered both parties shall use their best efforts to reach Completion
within the three day notice period. If Completion does not occur within such
period then this agreement and the Asset Sale Agreement shall automatically
terminate on expiration of the three day notice period.
5.6 REMEDIES
If this agreement is terminated under clause 5.5 then in addition to any other
rights provided by law:
(a) each party is released from its obligations to continue performance under
this agreement except those imposing obligations of confidentiality; and
(b) each party retains the rights it has against any other party in respect of
any past breach.
<PAGE>
23
6. POST COMPLETION MATTERS
6.1 REPAYMENT OF LOANS
Immediately after Completion:
(a) the Buyer shall ensure that the Company has available to it sufficient
funds (by the subscription for subordinated debentures or otherwise) to
repay, and the Buyer shall procure that the Company repays, the SECV Loan
and the TCV Loan; and
(b) the State shall deliver to Buyer a full discharge and release in respect of
the SECV Loan, the TCV Loan and any liability to the Treasurer under
section 121 or section 141 of the Electricity Act.
7. INTERDEPENDENCY
7.1 INTERDEPENDENCY BETWEEN COMPLETION AND POST-COMPLETION MATTERS
It is the intention of the parties that:
(a) completion under the Asset Sale Agreement;
(b) Completion under this Agreement;
(c) completion under the Asset Purchase Agreement; and
(d) payment of the SECV Loan and TCV Loan under clause 6,
are interdependent, so that if the obligations of the parties in respect of a
particular completion or payment under clause 6 are not satisfied, then no
delivery or payment which has been made, will be deemed to have been made.
For the avoidance of doubt the parties acknowledge and agree that once
Completion under this agreement, completion under the Asset Sale Agreement and
Asset Purchase Agreement and the payments under clause 6 have occurred, as a
chronological sequence of events, all deliveries and payments will be deemed to
have taken place in the order in which they occurred.
8. BALANCE SHEET
8.1 PREPARATION
Immediately after Completion the Buyer must direct the Company to prepare a
balance sheet of the Company as at 30 June 1995 in accordance with the
Accounting Standards as soon as reasonably practicable (but in any event within
30 days) after Completion. The Company must consult with the Reviewer in the
preparation of the balance sheet. Immediately the
<PAGE>
24
balance sheet is prepared it must be delivered to the Reviewer, together with a
certificate signed by an Officer of the Company that the balance sheet has been
prepared in accordance with the Accounting Standards.
8.2 ASSISTANCE
The State must procure that the Reviewer undertakes a review of the balance
sheet in accordance with this clause within 30 days of receipt. The Buyer must
procure that the Company affords the Reviewer all such assistance (including the
preparation or calculation of any amount) as the Reviewer may from time to time
request in undertaking its review, in the form requested by the Reviewer and in
a timely manner.
8.3 EXTENSION OF TIME
If the assistance referred to in clause 8.2 is not given in a timely manner,
then the 30 day period shall be extended to reflect the delays experienced by
the Reviewer in receiving that assistance (but in any event not more than 60
days).
8.4 REPORT
The Reviewer must review the balance sheet and include a report ("Report")
which:
(a) sets out any adjustments which need to be made to the balance sheet to
comply with the Accounting Standards;
(b) calculates the Purchase Price; and
(c) reports that, having completed procedures to the standards specified in the
Australian Auditing Standards, the balance sheet adjusted as set out in the
Reviewer's Report has been drawn up in accordance with the Accounting
Standards.
8.5 AUDIT BY AUDITOR-GENERAL
The Buyer acknowledges that:
(a) the balance sheet and accounts for the year ended 30 June 1995 may also be
audited by the Auditor-General (or his agent) who may publish accounts for
any period up to and including the Completion Date or his report on such
accounts; but that
(b) any such audit or report shall have no impact on matters to be determined
under this agreement by reference to the balance sheet and the Report.
8.6 ACCESS TO BOOKS
The Buyer must grant, and procure that the Company grants, the Reviewer, the
Auditor-General (and/or the agents of any of them) and the Seller full and free
access at all reasonable
<PAGE>
25
times to those employees of the Company whose knowledge or information is needed
by the Seller, the Auditor General (or its agent) or the Reviewer and to all
books, records and other data pertaining to the Company, in order to enable:
(a) the Reviewer to review the balance sheet prepared by the Company and the
Report;
(b) the Auditor-General to conduct his audit; and
(c) the Seller to review the balance sheet prepared by the Company and the
Report.
8.7 REVIEW FEES
The Seller must pay the Reviewer's fees in respect of the review of the balance
sheet and the preparation of the Report.
8.8 BUYER'S ACCOUNTANTS
The Buyer may engage independent accountants ("Buyer's Accountants") at its own
expense to examine and review the balance sheet, the Report and all working
papers of the Reviewer. The Seller and the Buyer must co-operate fully with
each other (and the Reviewer and the Buyer's Accountants must consult) in
connection with the preparation of the balance sheet by the Company and the
completion of the Report.
8.9 CIRCULATION OF BALANCE SHEET
As soon as the balance sheet has been reviewed by the Reviewer, the Reviewer
must deliver one copy (and a copy of the balance sheet adjusted as set out in
the Report), together with its Report, to the Buyer, Seller and the Buyer's
Accountants (if any). If either the Buyer or Seller wishes to dispute any
amount contained in the adjusted balance sheet, it must do so by notice in
writing ("Dispute Notice") to the other party before 4 pm on the 10th Business
Day after receipt by the Buyer or the Seller (as the case may be) of the balance
sheet, the Report and the adjusted balance sheet.
8.10 DISPUTE NOTICE
A Dispute Notice is only valid if it:
(a) is received by the other party within the period set out in clause 8.9;
(b) identifies the items in dispute;
(c) identifies insofar as possible the amount in dispute;
(d) sets out the reasons for the dispute; and
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26
(e) sets out the adjustments to the adjusted balance sheet (or matters referred
to in the Report) if the Dispute Notice were to be accepted.
8.11 DEEMED ACCEPTANCE
If the Buyer or Seller does not give to the other party a Dispute Notice
required by clause 8.9 within the specified period, it will be taken to have
accepted the balance sheet and the matters referred to in the Report.
8.12 EXPERT
If the Buyer or Seller gives a Dispute Notice and the Seller and the Buyer (in
conjunction with the Reviewer) are not able to agree on the balance sheet within
14 days after receipt of that Notice, either the Seller or the Buyer may refer
the items in dispute to an independent chartered accountant (not being the
Reviewer or the Buyer's Accountant) nominated by the President for the time
being of the Institute of Chartered Accountants (Victorian Division) ("Expert").
The Expert must be requested to make a decision within 7 days from receiving the
reference. The decision of the Expert is to be final and binding on all
parties, with the adjusted balance sheet and the matters referred to in the
Report being amended as required by that decision, provided that, in the absence
of manifest error, the total net adjustment to the adjusted balance sheet
(taking into account the items successfully disputed by the Seller and the items
successfully disputed by the Buyer) must not exceed $2,000,000. For the
purposes of clause 8.11 the Balance Sheet and the matters referred to in the
Report as so amended will be taken to have been accepted by the Buyer and the
Seller. The Seller and the Buyer must each pay one half of the Expert's costs
and expenses in respect of any such reference. The Expert, in acting in respect
of any such reference, is to act as an expert and not as an arbitrator.
9. BUYER'S OBLIGATIONS
9.1 BUYER'S WARRANTIES
Each of the Buyer and the Asset Buyer represents and warrants to the Seller and
the State as at the date of this agreement and the Completion Date that:
(a) except as set out in schedule 5, no person has any legal or beneficial
interest (or obligation (actual, contingent or otherwise) to acquire a
legal or beneficial interest) in;
(1) the capital of the Buyer or the Asset Buyer; or
(2) (in relation to each shareholder in the Buyer and the Asset Buyer
which is not listed on any recognised stock exchange) the capital of
each Group Member;
(b) annexure B sets out complete and accurate details of all agreements,
arrangements or understandings to which Group Members or shareholders in
the Buyer or the Asset
<PAGE>
27
Buyer (or each person who holds a beneficial interest in the shares held by
that shareholder) which have (directly or indirectly) an impact on or
relate to:
(1) the financial and operating policies or management of the Company or
the Business;
(2) the activities of the Company as a licensee; or
(3) the exercise of any voting power in another Group Member.
(c) it has the corporate power to enter into this agreement and has taken all
necessary action (including all shareholder approvals and Authorisations)
to authorise the execution, delivery and performance of this agreement;
(d) the agreement constitutes a legally valid and binding obligation of the
Buyer and the Asset Buyer enforceable in accordance with its terms; and
(e) the execution, delivery and performance of this agreement and (subject to
the Company carrying out the Financial Assistance approval procedure
contemplated by this agreement and any actions of or approvals required by
the Seller or the State) completion of the events contemplated in Recital B
will not violate any provision of:
(1) any law, regulation, order, rule or decree of any Governmental Agency
of the Commonwealth of Australia or any state or territory or any
recognised stock exchange on which its shares or the shares of any
related body corporate are listed;
(2) the memorandum or articles of association (or equivalent constituent
documentation) of the Buyer or the Asset Buyer; and
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Buyer or the Asset Buyer is a party or which
is binding on it and does not and will not result in the creation or
imposition of any security over any of its assets pursuant to the
provision of any such security agreement, deed, contract, undertaking
or other instrument.
9.2 CONTINUED HOLDING
Except with the prior written consent of the Treasurer, for the period of 2
years commencing on the Completion Date, the Buyer must not, and must cause the
Company not to:
(a) create, grant or issue any Equity Securities in the Company to any person
(except to the shareholders of the Company listed in schedule 5 where the
relative percentage beneficial ownership of shares in the Company (as set
out in schedule 5) are maintained);
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28
(b) dispose of the Shares or any Equity Securities in the Company to any
person; or
(c) transfer, sell or otherwise dispose of any right, title or interest in the
whole or any substantial part of the distribution or retail business of the
Company, provided that this shall not prohibit the Buyer creating any
security in relation to any loan or debt.
9.3 BUYER'S UNDERTAKINGS
The Buyer undertakes to the State that it will, on and from the Completion Date:
(a) ensure that the Company pays, in a timely manner, all superannuation
contributions imposed on the Company by the trustee (acting on the advice
of the actuary) of the Company's Fund; and
(b) promptly notify the State in writing of any variations to the agreements,
arrangements and understandings set out in annexure B.
9.4 BUYER'S INDEMNITY
Without prejudice to clause 12, the Buyer indemnifies the Seller and the State
against any liability or loss suffered or incurred by one or both of them which
arises from (and any costs, charges or expenses incurred by one or both of them
in connection with) any failure by the Company to discharge (as and when they
fall due) all debts incurred by the Company on or before the Completion Date for
which either of them may be or become liable under section 186 of the
Corporations Law.
9.5 DUTY ADJUSTMENT
If the aggregate Victorian Duty payable by the Company, any Group Member, Asset
Buyer or the Buyer (whether because of a reduced assessment, ex gratia payment
or relief or otherwise) in respect of:
(a) the sale of the Excluded Assets from the Company to the Asset Buyer and
from the Asset Buyer to the Company;
(b) the sale of Shares under this agreement; and
(c) any financing or refinancing entered into by the Company, any Group Member,
the Asset Buyer or the Buyer within 60 days after the Completion Date is:
(1) less than $7.041 million, then the Asset Buyer and the Buyer must
promptly pay to the Seller an amount equal to the shortfall; or
(2) more than $7.041 million, then the Seller must promptly pay to the
Asset Buyer and the Buyer an amount equal to the excess.
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29
The Asset Buyer must lodge the Share transfers and other relevant dutiable
documents with the State Revenue Office as soon as possible after the Completion
Date and pay the Duty within the time permitted by the Stamps Act 1956.
10. CROSS OWNERSHIP
The State acknowledges that it is its present intention to ensure, by
legislating or passing regulations, that the cross ownership provisions of the
Electricity Act are modified to achieve the effect of the draft regulations set
out in schedule 10 (including their extension to apply to trusts).
11. EMPLOYEE EQUITY
The Buyer undertakes to the State that if, at any time, the Company, the Buyer
or the Asset Buyer (or any other company/trust which is controlled by the Buyer
or the Asset Buyer which owns or conducts the Business or any substantial part
of the assets used to conduct any part of the Business) is listed on the
Australian Stock Exchange Limited, it will ensure that as part of that listing,
employees of the Business will be given an opportunity to invest in the relevant
company or trust.
12. SELLER'S WARRANTIES
12.1 GIVING OF WARRANTIES
The Seller gives the Seller's Warranties in favour of the Buyer and (to the
extent the Seller's Warranties relate to the Excluded Assets, the Asset Buyer)
as at the date of this agreement.
12.2 RELIANCE
The Buyer and the Asset Buyer have entered into this agreement in reliance on
the Seller's Warranties and other terms of this agreement and the Asset Sale
Agreement and nothing else.
12.3 ACKNOWLEDGMENT
The Buyer in its own capacity and as the Asset Buyer acknowledges and agrees
that:
(a) on the basis that the Disclosures have, to the knowledge and belief of the
State and its Advisers, been made in good faith and that the State has no
knowledge that the information therein is misleading or deceptive (but
acknowledging that the State is under no obligation to make any enquiries
to verify that state of knowledge) any statement, representation, term,
warranty, condition, promise or undertaking made, given or agreed to by the
Seller, the State, a representative of the Company or an Adviser in any
prior negotiation, arrangement, understanding or agreement, has no effect
except to the extent expressly set out or incorporated by reference in this
agreement or the Asset Sale Agreement;
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30
(b) it has entered into this agreement after inspection and investigation of
the affairs of the Company by review of the Disclosures and other
information available to it;
(c) the franchise fees payable by the Company under Franchise Fee Orders and
the energy levy payable by the Company under the pool rules as modified by
any Energy Levy Order, are an integral part of the regulatory framework
under which the Company carries on the Business, and accepts that the
Company must, to carry on that Business pay the franchise fees and energy
levy. Accordingly, the Buyer will not, and will ensure that the Company
does not, challenge the appropriateness, amount or basis of such fees or
levies at the rates sent by, or pursuant to, any law as at the date of this
agreement (the proposed Franchise Fee Order and Tariff Order being set out
in annexure D);
(d) no representation or warranty is made by the Seller or the State (nor has
the Seller or the State any liability whatsoever to the Buyer or the Asset
Buyer) in relation to:
(1) the principles to be applied by the Office of the Regulator-General or
its successor(s) or other Governmental Agencies with respect to the
regulation of the Victorian electricity industry and in particular
matters affecting prices and charges;
(2) the regulation of the Victorian electricity industry (including any
act or omission by the Office of the Regulator-General, Victorian
Power Exchange, the Pool, the Consultative Committee or Chief
Electrical Inspector) and other industries in Victoria (and the
relationship of such other industry regulation to the regulation of
the Victorian electricity industry);
(3) the status of relations between the Company and its employees, other
than in respect of any enterprise bargaining agreement or draft
thereof, contained within the Data Room Documentation;
(4) the future cost of wholesale electricity to and impact on the Company,
other than the existence and terms of vesting contracts entered into
by the Company on or about 31 March 1995 and contained in the Data
Room Documentation; or
(5) the value of the Shares or the value ascribed by the Electricity Act
and Allocation Statement to each asset acquired by the Company (in
particular the Excluded Assets), for the purposes of depreciation,
capital gains or otherwise; and
(e) it has made its own enquiries about the structure and ambit of the
development of a "national" electricity market involving some or all of the
eastern States of Australia and the ACT and the impact such a market and
market rules would (or would be likely to) have on the profitability or
otherwise of the Business or any part thereof.
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31
12.4 REMEDIES
The sole remedy of the Buyer and the Asset Buyer for breach of any Seller
Warranty is to damages in accordance with this clause 12 or the indemnity in
accordance with clause 13, and in no event is the Buyer or Asset Buyer to be
entitled to rescind this agreement or the Asset Sale Agreement.
12.5 ABILITY TO CLAIM
The Buyer and Asset Buyer are precluded from bringing a claim for breach of any
Seller Warranty, the Asset Sale Agreement or under the indemnities in clause
13.2, to the extent:
(a) that (except in the case of a claim relating to sales tax) the claim is
based on any fact, matter or circumstance:
(1) set out in the Disclosures in a manner which ought reasonably to have
drawn the Buyer's or the Asset Buyer's attention to the potential for
the claim.
(2) within the actual knowledge of the Buyer or Asset Buyer or which ought
to have been known by the Buyer or Asset Buyer, having regard to its
knowledge (and the knowledge of the Buyer's Advisers where, in the
context of the role and duties of those advisers, they ought
reasonably to have bought that knowledge to the attention of the Buyer
or Asset Buyer) of the electricity industry and having regard to its
opportunities to make enquiries of the State and the Company; or
(3) which, before the date of this agreement, had been communicated in
writing to the Buyer or Asset Buyer;
(b) that the claim arises or is increased directly as a result of action taken
(or not taken as the case may be) by the Seller on or after the date of
this agreement, after consultation with, and receipt of no objection within
a reasonable period from, the Buyer or Asset Buyer;
(c) that provision has been made in the Balance Sheet for any fact, matter of
circumstance on which the claim is based;
(d) to which the claim is recoverable (or would have been recoverable under
insurance if notified to the Seller or the insurers in a timely manner
after the date of this agreement);
(e) that (except in the case of a claim relating to sales tax) the claim is
based on any risk (actual or potential), fact, matter or circumstance which
was generally known in relation to the Victorian electricity industry
before the Completion Date;
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32
(f) of any change after the Completion Date in any applicable federal law which
has retrospective effect;
(g) that any of the Buyer, Asset Buyer or the Company has failed to comply with
the procedures set out in clause 13.3, so that the Seller is effectively
unable to assume or conduct (or is materially prejudiced in so assuming or
conducting) any defence or other action contemplated by that clause;
(h) (in the case of a claim relating to sales tax paid or payable by the
Company in respect of the period before Completion) to which the Buyer, the
Asset Buyer or the Company is entitled to compensation from the
Commonwealth of Australia or the State of Victoria; or
(i) that the claim is based on any forecasts, projections or representations as
to the future revenue or profits in respect of the Company or the Business
given by or on behalf of the Seller, the State, representatives of the
Company or the Advisers.
12.6 LIMITATION ON CLAIMS
The Buyer's and Asset Buyer's right to claim under the Seller's Warranties, the
Asset Sale Agreement and the indemnity in clause 13.2 is limited as follows:
(a) either must give written notice to the State of the general nature of the
claim as soon as is reasonable after it becomes aware of the facts, matters
or circumstances on which the claim is based (and where the claim is
recoverable under insurance the time limits imposed by the relevant insurer
shall be taken into account in determining what is reasonable) and in any
event within twelve months after the Completion Date.
(b) in the case of a single claim, where the amount claimed exceeds $1 million
provided that no claim may be brought by the Buyer or Asset Buyer unless
and until the aggregate of all such claims exceeds $3 million (and then
only to the extent of the excess); and
(c) the maximum aggregate amount which the Buyer and Asset Buyer may recover
from the Seller in respect of all claims is $40 million.
The limitations in paragraphs (a), (b) and (c) do not apply in respect of a
claim under clause 13.1.
12.7 QUANTIFICATION OF CLAIMS
The quantum of any liability the Seller has to the Buyer or the Asset Buyer
under the Seller's Warranties, clause 13 and otherwise under this agreement or
the Asset Sale Agreement shall be determined solely by reference to the direct
financial impact on the Company (or Asset Buyer) which results from the facts,
matters or circumstances on which the claim is based, not being as Warranted.
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33
12.8 STATE EQUIVALENT TAX
The State shall indemnify the Buyer for any State Equivalent Tax imposed on the
Company with respect to the period on and from 1 July 1995 until the Completion
Date which exceeds the amounts calculated as follows:
(a) profit on sale of the Excluded Assets by the Company: $nil;
(b) profit earnt by the Company in the months of July, August, September and
October 1995: $nil,
(with any amount referred to in paragraph (b) being reduced proportionately if
the period is less than one month). The Buyer shall procure the Company does
not challenge the basis or any of the amounts specified above.
13. INDEMNITIES
13.1 TAX INDEMNITY
The Seller indemnifies the Buyer as a continuing indemnity against:
(a) any liability or loss suffered or incurred by the Company which arises from
(and any costs, charges or expenses incurred by the Company in connection
with) any liability to pay Tax which is not fully provided for in the
Balance Sheet and which arises in respect of the period before 30 June
1995; and
(b) any increase in the franchise fee (or any replacement fee, levy or charge)
from that set out in the draft Franchise Fee Order in annexure D.
13.2 INDEMNITY FOR BREACH
The Seller indemnifies the Buyer against any liability or loss suffered on
incurred by the Buyer or the Asset Buyer and arising from (and any costs,
charges or expenses incurred by the Buyer or the Asset Buyer or in connection
with):
(a) any matter or thing in respect of the Company being other than as
represented or warranted in this agreement or the Asset Sale Agreement; and
(b) any breach of, or default under, this agreement by the Seller or the Asset
Sale Agreement.
13.3 CLAIMS PROCEDURE
On receipt of a notice under clause 12.6(a) which involves a Third Party Claim,
the State shall assume the defence of the claim unless the claim is covered by
insurance, in which event the defence will be conducted by the insurer's
lawyers. The Buyer or the Asset Buyer, as
<PAGE>
34
applicable, shall have the right, at its own cost, to employ separate lawyers or
other advisers in any such action or claim and, subject to the consent of the
relevant insurance company, to participate in the defence. The Buyer agrees
that:
(a) it shall not, and shall ensure the Company does not, pay or settle any
claim in respect of which an indemnity may be claimed under this clause 13
or make any admission in respect of any claim in respect of which an
indemnity may be claimed under this clause 13 without the prior written
consent of the State;
(b) it shall procure that the Company executes such forms and documents and
also makes such personnel and documents available to the State as the State
may reasonably require to enable the State to assume, defend or take such
other action in respect of any such Third Party Claim (including without
limitation the lodgment of an objection to the assessment or decision by
the Commissioner of Taxation relating to Tax within the time required by
the relevant applicable law); and
(c) it must promptly notify the State of receipt of any advice, correspondence
or other communication with the third party (or its advisers) which relates
to the Third Party Claim.
In this clause "THIRD PARTY CLAIM" means any liability of the Company to a third
party which arises out of or results from claims asserted against the Company by
a third party, and in respect of which the Seller or the State may be liable to
the Buyer or the Asset Buyer under this agreement.
14. ACTION PENDING COMPLETION
14.1 CARRYING ON OF BUSINESS
(a) Before Completion the Seller and the State will ensure that the Company
carries on the Business (including payment of its debts as and when they
fall due) in the ordinary and normal course so as to preserve the value of
the assets, financial and trading position of the Business.
(b) The Seller and the State must also ensure that before Completion (and in
the case of paragraph (5) before 30 June 1996) unless the Buyer consents
(or fails to object) in accordance with clause 14.2 or as otherwise
contemplated by this agreement:
(1) the Company does not enter into any commitment for more than $100,000
(or commitments with a particular person where the aggregate value of
those commitments is more than $100,000) or for longer than 5 years;
(2) the Company does not issue any shares, options or securities which are
convertible into shares in the Company;
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35
(3) the Company does not dispose of, or agree to dispose of or grant an
option to purchase, any material asset of the Company or the Business,
or any interest in such asset except pursuant to the Asset Sale
Agreement;
(4) the Company does not engage any new employee with an annual
remuneration package in excess of $100,000, terminate any of the
Employees, change the terms of employment (including remuneration) of
any of the Employees, or pay or provide any bonus to any Employee;
(5) the Company does not change its financial year end from 30 June in a
calendar year; and
(6) the Company manages the working capital requirements and any
liabilities of the Company in the ordinary course of business (with
both the Seller and the Buyer having the right to have their
respective representatives observe management in carrying out such
activities).
(c) The State and the Seller must ensure that before Completion any cheque to
be drawn by the Company in excess of $100,000 (and any repayment of the TCV
Loan) must be countersigned by a representative of the Seller and (if
available) the Buyer's Representative. The parties must ensure that no
payments are split with a view to avoiding this provision.
14.2 BUYER'S REPRESENTATIVE
(a) The Buyer must nominate a person ("Buyer's Representative") who has
authority to act on behalf of the Buyer in relation to any queries,
consents or approvals required under this agreement (including the
signature of cheques under clause 14.1(c)) or the Asset Sale Agreement.
The Buyer's Representative shall be Mr Andrew M Guarriello.
(b) If the Buyer's Representative does not consent or object to the entry into
of a particular contract or conduct of the type described in clause 14.1(b)
within 5 Business Days of being notified of the Company's intention to
enter into that contract or implement that conduct, the Buyer shall be
deemed to have consented to the entry into of that contract or
implementation of that course of conduct.
14.3 ACCESS
Before the Completion Date the Seller and the State must use reasonable
endeavours to:
(a) ensure that the Buyer, and any person authorised by the Buyer, is given all
reasonable access during normal business hours to the assets, properties,
books of account, records and documents of the Company (including an
office, telephone and other reasonable office facilities in its Mt Waverley
head office);
<PAGE>
36
(b) promptly provide the Buyer with all explanations and information it
requests in respect of the Company or the Business; and
(c) ensure that the Buyer, and any person authorised by the Buyer is given
reasonable access to senior management of the Company.
14.4 EBA
As from the date of this agreement, the Buyer is entitled to participate and be
actively involved in all discussions or negotiations with senior management
relating to the enterprise bargaining agreement on behalf of the Company.
14.5 DRAFT CONTRACTS
The Buyer acknowledges that:
(a) a draft contract relating to the supply of community service obligations by
the Company; and
(b) an amendment to the connection agreement dated 3 October 1994 between Power
Net Victoria and the Company,
is included within the Data Room Documentation, and that the Company will, on or
before Completion, enter into those agreements and effect those amendments on
terms which, in the case of the contract referred to in paragraph (a), require
full compensation to be paid to the Company for the cost of discharging its
obligations.
15. ANNOUNCEMENTS
15.1 LEGAL REQUIREMENTS
Each of the Buyer and the Asset Buyer may disclose anything in respect of this
agreement or the terms of sale of the Shares or Excluded Assets as required:
(a) by applicable law; or
(b) by the requirements of any recognised stock exchange on which its shares or
the shares of any related body corporate are listed,
but must consult with the State before making the disclosure; and
(c) use reasonable endeavours to accommodate reasonable request by the State as
to the form and content of the disclosure; and
(d) claim, to the maximum extent possible, any rights of confidentiality that
may be afforded the Buyer or the Asset Buyer under such laws or
requirements.
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37
15.2 DISCLOSURE TO OFFICERS AND PROFESSIONAL ADVISERS
A party may disclose anything in respect of this agreement or the terms of the
sale of the Shares or Excluded Assets to such of the officers and professional
advisers of that party and its related bodies corporate as need to know that
thing for the ordinary business purposes of the Company, the Buyer or the Asset
Buyer but it must use its best endeavours to ensure all matters disclosed are
kept confidential.
15.3 FURTHER PUBLICITY
Subject to clauses 15.1 and 15.2 neither the Buyer nor the Asset Buyer may
disclose the provisions of this agreement, the Asset Sale Agreement the terms on
which the Shares are sold or the terms on which the Excluded Assets are sold
unless the State has first consented in writing.
15.4 COMPANY'S COMPLIANCE WITH ELECTRICITY ACT
The Buyer, the Asset Buyer, the Seller and the State each acknowledge that the
Company is, while it is a public distribution company under the Electricity Act,
under obligations to provide information to the Minister or the Treasurer under
sections 35 and 36 of that Act.
16. DUTIES, COSTS AND EXPENSES
16.1 PAYMENT OF DUTY
Subject to clause 9.5, the Buyer must pay:
(a) any Duty in respect to the execution, delivery and performance of this
agreement and any document entered into or signed under this agreement; and
(b) any fine, penalty or other cost in respect of a failure to pay any Duty
except to the extent that the fine, penalty or other cost is caused by an
act or default on the part of the Seller, in which case the Seller shall
pay the Buyer the amount of such fine, penalty or other cost.
16.2 INDEMNITY
Subject to clause 9.5, the Buyer indemnifies the Seller against any amount
payable under clause 16.1.
16.3 COSTS AND EXPENSES
Subject to clause 16.1, each party must pay its own costs and expenses in
respect of the negotiation, preparation, execution, delivery, stamping and
registration of this agreement or other document described in clause 16.1(a).
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38
16.4 COSTS OF PERFORMANCE
Any action to be taken by a party in performing its obligations under this
agreement must be taken at its own cost and expense unless otherwise provided in
this agreement.
17. COVENANTORS' UNDERTAKINGS
17.1 UNDERTAKINGS
Each Covenantor undertakes to the State and the Seller that it shall fund in
each component of the capital structure (excluding the AMP Facility) either by
way of debt or equity the Buyer in the following proportions:
Utilicorp: 49.9%
State Authorities: 9.23%
AMP: 40.87%
so that on Completion the Buyer has sufficient funds to pay the Estimated
Purchase Price (and when due for payment, the balance (if any) of the Purchase
Price). This clause 17.1 may only be amended with the consent of the Treasurer,
and the Covenantors (acting together) may at any time seek that approval.
17.2 INDEMNITY
As a separate and independent principal obligation, each Covenantor indemnifies
the Seller and the State against all liabilities, losses, damages, costs or
expenses incurred or suffered by the Seller or the State and all actions,
proceedings, claims or demands made against the Seller or the State as a result
of default by that Covenantor in relation to its obligations specified in clause
17.1 or from any such express or implied obligations being unenforceable.
17.3 WARRANTIES OF THE COVENANTORS
Each of the Covenantors represent and warrant that:
(a) it has the corporate power to enter into this undertaking and has taken all
necessary action to authorise the execution, delivery and performance of
this agreement;
(b) this undertaking constitutes a legally valid and binding obligation of the
Covenantors enforceable in accordance with its terms;
(c) the execution, delivery and performance of this undertaking 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 or
relevant jurisdiction in which it is incorporated;
<PAGE>
39
(2) the memorandum or articles of association of the Covenantors or
equivalent constituent documents; and
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Covenantors are a party or which is binding on
them and does not and will not result in the creation or imposition of
any security over any of their assets pursuant to the provision of any
such security agreement, deed, contract, undertaking or other
instrument; and
(d) it has complied with the terms of the Confidentiality Deed.
18. STATE'S GUARANTEE AND INDEMNITY
18.1 GUARANTEE
The State, pursuant to section 85B of the State Electricity Commission Act 1958,
unconditionally and irrevocably guarantees to the Buyer and the Asset Buyer the
due and punctual performance of the Seller's obligations under this agreement
(including any indemnities given in favour of the Buyer or the Asset Buyer).
18.2 INDEMNITY
As a separate and independent principal obligation, the State indemnifies the
Buyer and the Asset Buyer against all liabilities, losses, damages, costs or
expenses incurred or suffered by one or both of the Buyer and the Asset Buyer
and all actions, proceedings, claims or demands made against the Buyer or the
Asset Buyer as a result of default by the Seller in the performance of any such
obligation or from any such express or implied obligations being unenforceable.
18.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 18 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 State under this clause 18 extend to any change in
the obligations of the Seller as a result of:
(1) any amendment, supplement, renewal or replacement of this agreement;
or
(2) the occurrence of any other thing.
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40
(c) This clause 18 is not affected, nor are the obligations of the State under
this agreement released or discharged or otherwise affected, by anything
which, but for this provision, might have that effect.
(d) This clause 18.3 applies:
(1) regardless of whether the State 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.
18.4 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to or
affecting any obligation of the Seller under this agreement is:
(1) void, voidable or unenforceable in whole or in part; or
(2) is claimed to be void, voidable or unenforceable and that claim is
upheld, conceded or compromised in whole or in part,
the liability of the State under this clause 18 and any Power is the same
as if:
(3) that payment, transaction, conveyance or transfer (or the void,
voidable or unenforceable part of it); and
(4) any release, settlement or discharge made in reliance on any thing
referred to in clause 18.4(a)(3),
had not been made and the State must immediately take all action and sign
all documents necessary or required by the Buyer to restore to the Buyer
this clause 18 and any Security Interest held by the Buyer immediately
before the payment, conveyance, transfer or transaction.
(b) Clause 18.4(a) applies whether or not the Seller knew, or ought to have
known of, anything referred to in that clause.
18.5 CONTINUING GUARANTEE AND INDEMNITY
This is a continuing obligation of the State, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
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41
and remains in full force and effect until:
(c) the obligations of the Seller under this agreement have been performed; and
(d) this clause 18 has been finally discharged by the Buyer.
18.6 WARRANTIES OF THE STATE
The State represents and warrants that this guarantee and indemnity constitutes
a legally valid and binding obligation of the guarantor enforceable in
accordance with its terms.
19. NOTICES
19.1 GENERAL
Any notice or other communication including, but not limited to, any request,
demand, consent or approval, to or by a party to this agreement:
(a) must be in legible writing and in English addressed as shown:
(1) if to the Seller: The Administrator,
Address: State Electricity Commission of Victoria,
15 William Street
Melbourne 3000
Attention: Mr G Brooke
Facsimile: (03) 9691 2112;
(2) if to the State: The Treasurer
Address: Office of the Treasurer
55 Collins Street
Melbourne 3000
Attention: Mr John Perham
Facsimile: (03) 9651 6487;
(3) if to the Buyer or the Asset Buyer:
Address: 91 William Street
Melbourne Vic 3000
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42
Attention: Mr Andrew M Guarriello
Facsimile: (03) 9627 2070; and
(4) if to the Covenantors:
If to UtiliCorp United Inc:
Address: 911 Main Street
Suite 3000
Kansas City, Missouri 64105
Attention: R. Paul Perkins
Facsimile: 00-111-816-691-3591
with a copy to:
Address: Blackwell Sanders Matheny
Weary & Lombardi L.C.
2300 Main Street
Suite 1100
Kansas City, Missouri 64108
Attention: Ralph G Wrobley, Esq.
Facsimile: 00-111-816-274-6914
If to State Authorities Superannuation Board:
Address: 83 Clarence Street
Sydney, New South Wales
Attention: Manager, Private Capital
Facsimile: (02) 238 5374
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43
If to Australian Mutual Provident Society:
Address: 33 Alfred Street,
Sydney, New South Wales
Attention: Manager, Infrastructure Investments
Facsimile: (02) 257-2746
or as specified to the sender by any party by notice;
(b) where the sender is a company, must be signed by an Officer or under the
common seal of the sender;
(c) is regarded as being given by the sender and received by the addressee:
(1) if by delivery in person, when delivered to the addressee; or
(2) if by facsimile transmission, when transmitted legibly to the
addressee,
but if the delivery or receipt is on a day which is not a Business Day or
is after 4.00 pm (addressee's time) it is regarded as received at 9.00 am
on the following Business Day; and
(d) can be relied upon by the addressee and the addressee is not liable to any
other person for any consequences of that reliance if the addressee
believes it to be genuine, correct and authorised by the sender.
19.2 LEGIBILITY OF FACSIMILE TRANSMISSION
A facsimile transmission is regarded as legible unless the addressee telephones
the sender within 2 hours after the transmission is received or regarded as
received under clause 19.1(c)(2) and informs the sender that it is not legible.
20. CONTINUED ACCESS
The Buyer and Asset Buyer acknowledges that the State has continuing reporting
obligations under:
(a) the uniform budget presentation standards and Australian loan council
standards, as agreed from time to time by the Premiers of various States
within Australia; and
(b) the Financial Management Act 1994.
<PAGE>
44
Accordingly, the Buyer and the Asset Buyer must ensure that from Completion up
until 31 December 1996, the State is granted full and free access at all
reasonable times to those employees of the Company whose knowledge or
information is needed by the State (together with all books, records and other
data pertaining to the Company and which are referable to the period on and
before the Completion Date) to enable it to comply with these obligations.
21. GENERAL
21.1 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of Victoria. Each party irrevocably
submits to the exclusive jurisdiction of the courts of Victoria.
(b) Each party irrevocably waives any objection to the venue of any legal
process on the basis that the process has been brought in an inconvenient
forum.
21.2 WAIVERS
(a) Waiver of any right arising from a breach of this agreement or of any Power
arising upon default under this agreement must be in writing and executed
by the party granting the waiver.
(b) A failure or delay in exercise, of:
(1) a right arising from a breach of this agreement; or
(2) a Power created or arising upon default under this agreement,
does not result in a waiver of that right or Power.
(c) A party is not entitled to rely on a delay in the exercise or non-exercise
of a right or Power arising from a breach of this agreement or on a default
under this agreement as constituting a waiver of that right or Power.
(d) A party may not rely on any conduct of another party as a defence to
exercise of a right or Power by that other party.
(e) This clause 21.2 may not itself be waived except by writing executed by the
party granting the waiver.
21.3 VARIATION
A variation of any term of this agreement must be in writing and executed by the
parties.
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45
21.4 FURTHER ASSURANCES
Each party must do all things, and execute all further documents, necessary to
give full effect to this agreement.
21.5 SPECIFIC PERFORMANCE
The Seller acknowledges that monetary damages alone would not be adequate
compensation to the Buyer for the Seller's breach of its obligations under this
agreement and that accordingly specific performance of those obligations is an
appropriate remedy.
21.6 THIRD PARTY RIGHTS
No person (including, but not limited to, an Employee) other than a party to
this agreement and those persons expressly referred to in paragraphs (r) and (s)
of clause 1.2 has or is intended to have any right, power or remedy or derives
or is intended to derive any benefit under this agreement.
21.7 THIS AGREEMENT SUPERSEDES OTHERS
This agreement and the Asset Sale Agreement embodies the entire agreement
between the parties with respect to the subject matter of this agreement and
supersedes any prior negotiation, arrangement, understanding or agreement with
respect to the subject matter or any term of this agreement.
EXECUTED by the parties as an agreement.
SIGNED by the Honourable Alan
Robert Stockdale for and on behalf
of the STATE OF VICTORIA in
the presence of:
/s/Suzzanne Redshaw /s/Alan Robert Stockdale
--------------------------------- -----------------------------------
Witness Alan Robert Stockdale
Suzzanne Redshaw
---------------------------------
Name (please print)
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46
THE COMMON SEAL of STATE
ELECTRICITY COMMISSION
OF VICTORIA was affixed to this
document in accordance with the
State Electricity Commission Act in
the presence of:
/s/Graham Brooke /s/Robert Henry Neil Byrons
--------------------------------- -----------------------------------
Administrator Witness
Robert Henry Neil Byrons
-----------------------------------
Name (please print)
THE COMMON SEAL of
POWER PARTNERSHIP PTY LTD
is affixed in accordance with its
articles of association in the presence
of:
/s/Robert Green /s/Graham Timms
--------------------------------- -----------------------------------
Director Director/Secretary
Robert Green Graham Timms
--------------------------------- -----------------------------------
Name (please print) Name (please print)
SIGNED BY
under power of attorney dated
for UTILICORP UNITED INC
in the presence of:
/s/Leslie J. Parrette, Jr. /s/Robert Green
--------------------------------- -----------------------------------
Witness Attorney
Leslie J. Parrette, Jr. Robert Green
--------------------------------- -----------------------------------
Name (please print) Name (please print)
<PAGE>
47
SIGNED for and on behalf of
STATE AUTHORITIES
SUPERANNUATION BOARD
by its duly authorized attorney /s/David Shields
DAVID SHIELDS under power -----------------------------------
of attorney registered book 4016 Signature of David Shields
no. 710 in the presence of:
/s/Paul Quinn
---------------------------------
Signature of Witness
Paul Quinn
---------------------------------
Name of Witness (print)
SIGNED BY
under power of attorney dated
for AUSTRALIAN MUTUAL
PROVIDENT SOCIETY
in the presence of:
/s/Leslie J. Parrette, Jr. /s/Graham Edward Timms
--------------------------------- /s/Daniel Vincent Latham
Witness -----------------------------------
Attorney
/s/Leslie J. Parrette, Jr. /s/Graham Edward Timms
--------------------------------- /s/Daniel Vincent Latham
Name (please print) -----------------------------------
Name (please print)
<PAGE>
The schedules (or similar attachments) to the Share Sale Agreement listed
below have been omitted. The registrant will furnish a supplementary copy of
any omitted schedule to the Commission on request.
Schedule 1 Seller's Warranties
Schedule 2 Disclosures
Schedule 3 Intellectual Property Rights
Schedule 4 Zone Sub-Station Properties
Schedule 5 Buyer's Shareholding
Schedule 6 Security Interests
Schedule 7 Superannuation
Schedule 8 Insurance
Schedule 9 EITC Formula
Schedule 10 Cross Ownership Regulations
Annexure A December Accounts
Annexure B Agreements ETC Between Group Members/Shareholders in
the Buyer
Annexure C Draft Balance Sheet
Annexure D Draft Franchise Fee Order and Tariff Order
Annexure E Franchise Fee Option Terms
