<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 (date of earliest event reported):
December 12, 1995
PACIFICORP
(Exact name of registrant as specified in its charter)
State of Oregon 1-5152 93-0246090
(State of Incorporation) (Commission (I.R.S. Employer
File No.) Identification No.)
700 N.E. Multnomah, Suite 1600, Portland, Oregon 97232-4116
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
(503) 731-2000
No Change
(Former Name or Former Address, if changed since last report)
<PAGE>2
Item 2. ACQUISITION OR DISPOSITION OF ASSETS
On December 12, 1995, PacifiCorp Holdings, Inc. ("Holdings"), a
wholly owned subsidiary of PacifiCorp, purchased Powercor Australia, Limited
("Powercor"), an Australian electric distribution utility, from the State of
Victoria for approximately $1.6 billion in cash. The purchase price was
established pursuant to a bidding process. Powercor had assets of
approximately $855 million at June 30, 1995 and revenues of approximately
$561 million for the year ended June 30, 1995. Powercor's service territory
includes a portion of suburban Melbourne and the western and central regions
of the State of Victoria and has approximately 570,000 customers.
The acquisition was financed with borrowings of A$1.2 billion in
Australia under a A$1.325 billion credit facility co-arranged by Citibank
Limited, National Australia Bank Limited, Morgan Guaranty Trust Company of New
York and UBS Australia Limited and with an equity contribution from Holdings
which has been initially financed with short-term debt in the U.S. The
transaction was structured through a series of wholly owned U.S. and
Australian companies.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements for Businesses Acquired.
1. Audited Financial Statements of Powercor as of and for the
period from May 11, 1994 to June 30, 1995, together with
the Auditor-General's Report. (Page 1)
2. Unaudited Financial Statements of Powercor as of and for
the three months ended September 30, 1995. (Page 42)
(b) Pro Forma Financial Information.
1. Unaudited Pro Forma Condensed Consolidated Balance Sheet
and Income Statement as of and for the year ended
December 31, 1994. (Page 36)
2. Unaudited Pro forma Condensed Consolidated Balance Sheet
and Income Statement as of and for the nine months ended
September 30, 1995. (Page 38)
(c) Exhibits.
The Exhibits to this Report are listed below.
2.1 Asset Sale Agreement between Powercor Australia Limited
and PacifiCorp Australia Holdings Pty Ltd.
2.2 Share Sale Agreement between the State Electricity
Commission of Victoria and the State of Victoria and
PacifiCorp Australia Holdings Pty Ltd. and PacifiCorp
Holdings, Inc.
<PAGE>3
2.3 Asset Purchase Agreement between PacifiCorp Australia
Holdings Pty Ltd. and Powercor Australia Limited.
23 Consent of the Auditor-General, Melbourne, Australia.
SIGNATURE
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 thereunto duly authorized.
PACIFICORP
(Registrant)
By: RICHARD T. O'BRIEN
________________________________
Richard T. O'Brien
Senior Vice President
and Chief Financial Officer
Date: December 22, 1995
<PAGE>
All Dollars are Australian with Australian Accounting Standards applied.
Powercor Australia Limited
Financial Statements and Reports
For The Period From
11 May 1994 to 30 June 1995
Contents
Page
____
Profit and Loss Account 1
Balance Sheet 2
Statement of Cash Flows 3
Notes on and Forming Part of the Financial Statements 4
Auditor General's Report 34
<PAGE>1
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
PROFIT AND LOSS ACCOUNT
for the period ended 30 June 1995 [i]
______________________________________________________________________________
1995
Notes $000
______________________________________________________________________________
<S> <C> <C>
Operating profit before income tax (2),(3) 111,079
Income tax attributable to operating profit (4) 43,221
__________
Operating profit after income tax 67,858
Retained profits at the beginning of the period 0
__________
Total available for appropriation 67,858
Less dividends provided for or paid (13) 44,108
__________
Retained profits at the end of the financial period 23,750
==========
<FN>
The above profit and loss account of Powercor Australia Ltd (Powercor) should
be read in conjunction with the Notes On and Forming Part of the Financial
Statements.
[i] Refer note 1 under the heading "Financial Period"
</FN>
</TABLE>
<PAGE>2
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
BALANCE SHEET
as at 30 June 1995
______________________________________________________________________________
1995
Notes $000
______________________________________________________________________________
<S> <C> <C>
Current Assets
Cash 132
Receivables (7) 49,383
Inventories (8) 12,367
Other (9) 66,384
__________
Total Current Assets 128,266
__________
Non-current Assets
Receivables (7) 3,525
Inventories (8) 3,412
Property, plant and equipment (10) 1,065,456
Other (9) 3,343
__________
Total Non-current Assets 1,075,736
__________
TOTAL ASSETS 1,204,002
__________
Current liabilities
Creditors and borrowings (11) 749,490
Provisions (12) 51,134
__________
Total Current Liabilities 800,624
__________
Non-current Liabilities
Creditors and borrowings (11) 315,658
Provisions (12) 63,970
__________
Total Non-current Liabilities 379,628
__________
TOTAL LIABILITIES 1,180,252
__________
NET ASSETS 23,750
==========
Shareholders Equity
Share Capital (13) 0
Retained Profits 23,750
__________
SHAREHOLDERS' EQUITY 23,750
==========
</TABLE>
The above Balance Sheet should be read in conjunction with the Notes On and
Forming Part of the Financial Statements.
<PAGE>3
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS
for the period ended 30 June 1995 [i]
______________________________________________________________________________
1995
Notes $000
______________________________________________________________________________
Inflows
(Outflows)
<S> <C> <C>
Cash flows from operating activities
Receipts from customers 747,659
Payments to suppliers and employees for goods and services (219,697)
Interest and other items of a similar nature received 2,874
Interest and other costs of finance paid (57,171)
Purchased electricity (342,449)
__________
Net cash inflow from operating activities (5) 131,216
Cash flows from investing activities
Payments to acquire property, plant and equipment (70,659)
Purchase of investments and licences (106)
Contributions from customers for capital works 24,222
Proceeds from sale of assets 685
__________
Net cash outflow from investing activities (45,858)
Cash flows from financing activities
Proceeds from borrowings 414,297
Repayment of borrowings (principal only) (484,230)
Payment of dividends (13) (18,100)
Net payment of trust moneys (502)
Net transfer of cash from allocation statement 1,221
__________
Net cash outflow from financing activities (87,314)
__________
Net decrease in cash held (1,956)
Cash at the beginning of the period 0
__________
Cash at the end of the period (6) (1,956)
==========
<FN>
The Statement of Cash Flows should be read in conjunction with the Notes On
and Forming Part of the Financial Statements.
[i] Refer note 1 under the heading "Financial Period"
</FN>
</TABLE>
<PAGE>4
All Dollars are Australian with Australian Accounting Standards applied.
NOTES ON AND FORMING PART OF THE FINANCIAL STATEMENTS
______________________________________________________________________________
1 SUMMARY OF THE SIGNIFICANT ACCOUNTING POLICIES
______________________________________________
The following significant accounting policies have been adopted in the
presentation of the Financial Statements. The Financial Statements have been
drawn up in accordance with applicable Australian Accounting Standards, the
provisions of Schedule 5 to the Corporations Regulations and other
requirements of law. Although not mandatory, Powercor Australia Ltd
(Powercor) has included additional disclosures where practical which relate to
the Financial Management Act 1994.
The Financial Statements have been drawn up in accordance with the Historical
Cost Convention except where otherwise indicated.
Allocation Statement
As part of the current Victorian Government's Electricity Industry
privatisation and reform process, Powercor was incorporated on 11 May 1994 as
an independent Distribution company operating entirely within the Australian
electricity retail and distribution industry. Before Powercor could
effectively begin trading as a new entity within this new environment, certain
regulations and processes had to be empowered by legislation in defining the
legal, regulatory, and financial framework in which the business was to
operate. One such process known as the `Allocation Statement' was prepared by
order of the legislation and requirements of the Electricity Industry Act.
The Allocation Statement itself was the formal vehicle established in order to
provide for the transfer of all assets, liabilities, employees, debt balances
and other interest and obligations. Under the predetermined guidelines and
for various commercial reasons, the allocation of these balances were vested
in Powercor's accounts effective from 1 July 1994.
The valuations transferred for both Distribution and Subtransmission assets
were based on an Optimised Depreciated Replacement Cost method which was then
installed in the fixed asset register to reflect these valuations.
Debt was transferred at market value and reflected in Powercor's opening
accounts.
All other assets and liabilities were transferred at book values with any
residual equity after allowing for assets and the forementioned debt being
reflected in shareholders loans.
Certain obligations arising from payments made on Powercor's behalf for wages,
salaries, related provisions, related tax instalments, and other contracted
services were resolved through a separate process or `Settlement' which
concluded 31 December 1994.
<PAGE>5
All Dollars are Australian with Australian Accounting Standards applied.
Income Tax
Tax effect accounting procedures are followed whereby the income tax expense
in the Profit and Loss account is matched with the accounting profit (after
allowing for permanent differences). The future tax benefit relating to tax
losses is not carried forward as an asset unless the benefit can be regarded
as being virtually certain of realisation. Income tax on net cumulative
timing differences is set aside to the deferred income tax and future income
tax benefit accounts at the rates which are expected to apply when those
timing differences reverse. A tax rate of 33% has been used and a restatement
in deferred tax was made as a result of an increase in the company tax rate to
36%.
The $11.896M write back of the FITB during the financial period was
attributable to proposed tax legislation for tax exempt bodies entering the
Federal income tax arena which will apply a `rule the books' approach to
determine whether outgoings connected to the tax exempt period are deductible.
Financial Period
As there were no financial transactions for the period from date of
Incorporation 11 May 1994 to 30 June 1994, Powercor's Board of Directors have
resolved to extend the initial reporting period for the preparation of the
Financial Statements from the date of Incorporation, 11 May 1994 to 30 June
1995.
Comparative Accounting Information
As these accounts are the first accounts prepared by Powercor, comparisons
against prior year results are not available.
Acquisition of Assets
The cost method of accounting is used for all acquisitions of assets
regardless of whether shares or other assets are acquired. Cost is determined
as the fair value of the assets acquired at the date of acquisition plus costs
incidental to the acquisition.
Recoverable Amount of Non-Current Assets
The recoverable amount of an asset is the net amount expected to be recovered
through the net cash inflows arising from its continued use and subsequent
disposal.
Where the carrying amount of a non-current asset is greater than its
recoverable amount the asset is revalued to its recoverable amount. Where net
cash inflows are derived from a group of assets working together, recoverable
<PAGE>6
All Dollars are Australian with Australian Accounting Standards applied.
amount is determined on the basis of the relevant group of assets. To the
extent that any revaluation decrement reverses a revaluation increment
previously credited to, and still included in the balance of, an asset
revaluation reserve, the decrement is debited directly to that reserve.
Otherwise the decrement is recognised as an expense in the Profit and Loss
Account.
Revaluations do not result in the carrying value of assets exceeding their
recoverable amount.
The expected net cash inflows included in determining recoverable amounts of
non-current assets are discounted to their present values using a
market-determined, risk-adjusted discount rate.
Capital Project Costs
Powercor finances part of its distribution works programme by a self help
scheme whereby customers requesting electricity supply are required to
contribute all or part of the estimated capital cost.
Contributions for Capital Works
Customer contributions are treated as reductions to the carrying value of the
assets to which they relate, with the corresponding depreciation calculated on
the net asset value over the assets depreciable life.
Refundable Contributions and Advances for Capital Works
Where customers are required to lodge security deposits for capital works,
Powercor will refund these amounts with interest over the period specified in
each individual contract. All balances held in this category are included in
the Balance Sheet item Loans.
Cogeneration Contract Agreements
Where Powercor installs interconnection facilities between its customers
generation assets and its pre existing load bearing assets, and where the
construction of these assets are funded by a long term interest bearing loan
from Powercor, the loan has been recognised in the accounts at its face value
with the cash flows discounted using the rate of interest implicit in the
original contract.
Where the customer generates electricity from these generation assets in
excess of its own requirements, the surplus electricity will be fed back into
Powercor's supply system. The tariffs for both the supply and purchase of
electricity are governed by specific contracts in determining special rates
for cogeneration customers.
<PAGE>7
All Dollars are Australian with Australian Accounting Standards applied.
Insurance
Powercor assesses the risk associated with all events which are specific to
its operations and which are expected in the normal course of business.
Powercor will in some circumstances take out insurance for catastrophic losses
and other specific risks, and in other situations will elect to self insure.
Powercor included in its accounts at 30 June 1995, a provision for uninsured
losses for both outstanding claims by third parties and claims against
Powercor which were not received at period end.
An additional provision has been raised in the financial statements at 30 June
1995 for an amount which Powercor expects to expend to compensate employees
for work related illnesses associated with both claims which have occurred and
are ongoing, and claims which are expected to arise which have not yet been
reported.
Inventories
Raw Materials and Stores, Work in Progress and Finished Goods
Raw materials, goods manufactured for stock, and spare parts are recorded at
the lower of cost and net realisable value. Cost is represented by weighted
average cost of purchase or manufacture. An estimation of net realisable
value is made after consideration of obsolete, obsolescent and slow moving
stock.
Construction Work in Progress
Construction work in progress is stated at cost plus attributable overheads.
Cost includes all costs directly related to specific projects and an
allocation of capital overhead expenses incurred in connection with Powercor's
operations.
Restructuring and Establishment Costs
Powercor is expected to expend resources as a direct result of the
restructuring process associated with the disaggregation and privatisation of
the State owned Electricity Services Victoria. Where these costs are
identifiable to the `establishment' and/or `restructuring' of the business and
are in addition to costs that would otherwise be incurred, a provision for
these costs has been raised. The amount of the provision has been reassessed
at balance date and allocated between current and non-current for the period
ended 30 June 1995.
<PAGE>8
All Dollars are Australian with Australian Accounting Standards applied.
Restoration
An estimate of the total cost for land, heatbank, asbestos, PCB and
environmental restoration is brought to account in the period that the
requirement to restore a site arises, and where the cost associated in
restoring such sites can be reliably measured.
Depreciation
Depreciation for all fixed assets other than freehold land is calculated on a
straight-line basis to write off the net cost or revalued amount of each item
of property, plant and equipment over its expected useful life. Estimates of
remaining useful lives are made on a regular basis for all assets, with annual
reassessments for major items. Depreciation for all assets commences on the
first day of the month closest to the in-service date.
Major spares purchased specifically for particular plant and equipment are
capitalised and depreciated over the same period as the items of plant and
equipment to which they relate.
Cash
For purposes of the Statement of Cash Flows, cash includes deposits at call
which are readily convertible to cash on hand and which are used in the cash
management function on a day-to-day basis, net of outstanding bank overdrafts.
Interest on Term Debtors
Interest is brought to account as income over the term of each contract in
direct proportion to the estimated amounts owing in the relevant accounting
periods.
Estimated Doubtful Debts
Powercor establishes a provision for doubtful debts based on a review of all
electricity receivables greater than ninety days old, with an additional
provision for doubtful debts being determined by specific review of other
receivables.
<PAGE>9
All Dollars are Australian with Australian Accounting Standards applied.
Leased Non-Current Assets
A distinction is made between finance leases which effectively transfer, from
the lessor to the lessee, substantially all the risks and benefits incidental
to ownership of leased non-current assets (finance leases), and operating
leases under which the lessor effectively retains substantially all such risks
and benefits.
Where a non-current asset is acquired by means of a finance lease, the asset
is established at its fair value at the inception of the lease. The liability
is established at the same amount. Lease payments are allocated between the
principal component and the interest expense.
Operating lease payments are representative of the pattern of benefits derived
from the leased assets and accordingly are charged to the Profit and Loss
Account in the period in which they are incurred.
Construction of Non-Current Assets
The cost of non-current assets constructed by Powercor includes the cost of
all materials used in construction, direct labour on the project and an
appropriate proportion of variable and fixed overhead.
Investments
Powercor's interests in listed and unlisted securities are brought to account
at cost, with dividend income being recognised in the Profit and Loss Account
when received.
Negotiable Securities
Where interest is paid in advance on negotiable securities, the interest is
recognised as an asset and progressively charged to the Profit and Loss
Account over the applicable interest period. Interest payable in arrears is
accrued as it becomes due, and charged to the Profit and Loss Account.
Discounts and premiums from face value on the issue of negotiable securities
are recognised as variations of the liability to which they relate. The
variations are amortised over the term of the issue, using the effective yield
method. Changes in the capital value of Powercor's outstanding liability on
Index linked securities are recognised as variations in the book value of the
liability. Changes are charged to the Profit and Loss Account.
Securities
Securities are recorded at the lower of cost and net realisable value.
<PAGE>10
All Dollars are Australian with Australian Accounting Standards applied.
Buybacks of Negotiable Securities
Any gains or losses arising from the buyback of negotiable securities are
charged to the Profit and Loss Account as incurred.
Foreign Currency Translations
Transactions in foreign currencies are recorded at the rate of exchange ruling
on the date of each transaction. At balance date, amounts payable and
receivable in foreign currencies are converted at the rates of exchange ruling
at the end of the financial period. Exchange differences arising on foreign
currency amounts payable and receivable are brought to account in the Profit
and Loss Account. In the case of hedges of monetary items, exchange gains or
losses are brought to account in the financial period in which the exchange
rates change. Gains or costs arising at the time of entering into such hedging
transactions are brought to account in the profit and loss account over the
lives of the hedges.
Joint Ventures and Other Interests
The proportion of assets, liabilities and expenses attributable to the
interest of the Company in a joint venture has been incorporated in the
financial statements under the appropriate headings. Details of the joint
ventures and other interests are set out in note 14.
Research and Development
Research and Development costs are expensed to the current year Profit and
Loss Account.
Employee Entitlements
Wages and Salaries, Recreation Leave
Liabilities for wages and salaries, and recreation leave are recognised, and
are measured as the amount unpaid at the reporting date at current pay rates
in respect of employee's services up to that date.
Long Service Leave
A liability for long service leave is recognised and is measured as the
present value of expected future payments to be made in respect of services
provided by employees up to the reporting date. Consideration is given to
expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using interest
rates attaching, as at the reporting date, to national Government guaranteed
<PAGE>11
All Dollars are Australian with Australian Accounting Standards applied.
securities with terms to maturity that match, as closely as possible, the
estimated future cash outflows.
Oncosts
Consequential oncosts relating to Payroll Tax, Workcover, and Superannuation
have been considered and taken to account in respect to Long Service and
Recreation Leave Entitlements.
Superannuation
Contributions paid by Powercor to defined benefit superannuation plans are
expensed in the year they are paid or become payable. No amount is recognised
in Powercor's accounts in respect of the net surplus or deficiency of the
Superannuation Trust, however a liability in respect of defined benefit
Superannuation is included and disclosed in the accounts of the external
Superannuation Trust Fund as governed by the required legislation.
All moneys, investments or other property in the Fund are held in trust in the
name of the Trustee company, VEI Super Pty Ltd for the benefit of the members
and beneficiaries of the Fund.
Maintenance and Repairs
Maintenance, repair costs, and minor renewals are charged as expenses when
incurred.
Rounding of Amounts
Powercor is a company of the kind referred to in the Corporations Law
Regulation 3.6.05(6) and unless otherwise stated, the amounts in the
accompanying accounts have been rounded to the nearest thousand dollars in
accordance with section 311 of the Corporations Law.
<PAGE>12
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
2 OPERATING REVENUE
1995
$000
______________________________________________________________________________
<S> <C>
Operating profit is stated after crediting the following revenues
Sales Revenue 734,093
Other Operating Revenue
Charges for Minor Services 3,160
Proceeds from the sale of assets [i] 685
Customer transfer and reconnection fees 1,834
Bad debts recovered 647
Proceeds from Sales of Materials 1,899
Interest Revenue [ii] 2,874
New Business Ventures 505
Property Rentals 294
Trade Incentive and Rebate 1,290
Revenue from other Distribution Businesses 5,860
Other 2,063
__________
Total Operating Revenue 755,204
==========
[i] Losses arising from disposal of Non-current Assets 1,442
==========
[ii] Interest from
Related bodies corporate 131
Other persons and/or corporations 2,743
__________
Total interest received 2,874
==========
</TABLE>
<PAGE>13
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
3 OPERATING PROFIT
1995
Notes $000
______________________________________________________________________________
<S> <C> <C>
Operating Expenses
Operating profit is stated after charging the following expenses:
Interest
Related bodies corporate 48,650
Other persons and/or corporations 2,282
__________
Total Interest Expense 50,932
==========
Operating lease rentals 667
==========
Provisions
Employee entitlements 11,033
Accident Compensation (841)
Uninsured losses 2,112
Stock write-off 201
Restoration 2,768
Provision for deferred tax (4) 32,037
__________
Total provisions 47,310
==========
Depreciation
Buildings 1,268
Distribution system, net of customer contributions amortised 43,460
Plant and equipment 3,422
__________
Total depreciation 48,150
==========
Bad debt expense 2,538
==========
Abnormal items included in operating profit before income tax are:
Abnormal profits
Writeback of establishment and restructuring provision 13,221
Writeback of provision for future Cogeneration losses 9,010
__________
22,231
==========
Tax calculated on abnormal items 2,973
==========
</TABLE>
<PAGE>14
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
4 INCOME TAX
1995
Notes $000
______________________________________________________________________________
<S> <C> <C>
(a) The aggregate amount of income tax attributable to the financial period
differs by more than 15% from the amount calculated on the operating profit.
The differences are reconciled as follows:
Operating profit before income tax 111,079
__________
Income tax calculated at 33% 36,656
Add/(deduct) reconciling items expressed on a tax effected basis:
Tax losses not carried forward 1,011
Non-assessable items:
General Investment Allowance (108)
Building & Structural Improvement Allowance (199)
Provision for Establishment Costs (8,601)
Non-deductible items:
Other 24
Future Income Tax Benefit write-back (1) 11,896
Restatement of deferred tax balances on change in
tax rate to 36% 2,542
__________
Total income tax attributable to operating profit 43,221
==========
Total income tax expense comprises movements in:
Provision for income tax 0
Provision for deferred income tax 32,037
Future income tax benefit (9) 11,184
__________
43,221
==========
The allocation between these categories corresponds to the tax effect
accounting entries.
(b) The future income tax benefit attributable to tax losses but not
recognised in the financial statements is 1,103
==========
</TABLE>
This benefit for tax loss will only be obtained if
(i) Powercor derives future assessable income of a nature and of an amount
sufficient to enable the benefit from the deductions for the losses to
be realised;
(ii) Powercor continues to comply with the conditions for deductibility
imposed by law; and
(iii) no changes in tax legislation adversely affect Powercor in realising
the benefit from the deductions for the losses.
<PAGE>15
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
5 CASH FLOW DISCLOSURES 1995
$000
______________________________________________________________________________
<S> <C>
During the reporting period, Powercor acquired assets and liabilities with an
aggregate fair value of $466,704 million by means of Allocation. With the
exception of cash and bank overdraft transfers, these allocations represent
the non-cash financing and investing activities between the date of
incorporation 11 May 1994, and the time of transfer 1 July 1994, and is not
reflected in the Statement of Cash Flows. Since no prior trading occurred
between these dates, the balances have been considered as opening balances in
calculating the relative movements in operating cash flows.
The amounts of assets and liabilities acquired by major class are
Cash and Bank Overdraft 1,221
Receivables 45,684
Accrued Revenue 67,072
Inventories 15,688
Property, Plant and Equipment, Net 1,065,700
Other 17,047
Accounts Payable (66,203)
Provisions (87,725)
Deposits (9,811)
Borrowings (581,969)
__________
466,704
==========
Reconciliation of operating profit after income tax to net cash flow from
operating activities
Operating Profit After Income Tax 67,858
Depreciation 48,419
Loss on disposal of assets 1,442
Amortised finance charges (8,849)
Increase in deferred debtors (546)
Increase in prepayments (610)
Increase in accounts receivable (3,699)
Increase in material inventories (291)
Decrease in accrued revenue 2,310
Decrease in interest accrued (458)
Increase in deferred revenue 4
Increase in accounts payable and accruals 10,489
Decrease in provisions (28,074)
Increase in tax provisions 43,221
__________
Cash Flow from Operating Activities 131,216
==========
</TABLE>
<PAGE>16
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
6 CASH AT BANK AND SHORT TERM DEPOSITS 1995
$000
______________________________________________________________________________
<S> <C>
Cash at the end of the financial year as shown in the Statement of Cash Flows
is reconciled to the related items in the Balance Sheet as follows:
Cash Accounts
- - National Australia Bank Advance Account 132
Bank overdraft
- - National Australia Bank Drawing Account (2,088)
__________
(1,956)
==========
</TABLE>
<PAGE>17
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
7 RECEIVABLES 1995
$000
______________________________________________________________________________
<S> <C>
Current
Trade debtors [i] 42,569
Less: Provision for doubtful debts 238
__________
42,331
Non trade debtors 7,173
Less: Provision for doubtful debts 121
__________
7,052
__________
Total Current Receivables 49,383
==========
Non-current
Deferred debtors
Amounts due from cogeneration customers 1,536
Other 1,989
__________
Total Non-current Receivables 3,525
==========
<FN>
[i] Trade debtors comprise electricity accounts receivable.
</FN>
Powercor provides bridging finance in specified instances where employees are
required to relocate their place of residence as part of a permanent
appointment or transfer. Balances of employee loans are included in current
non trade debtors, with outstanding amounts as at 30 June 1995 as follows.
Balance Employee Loans Outstanding 630
==========
</TABLE>
<PAGE>18
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
8 INVENTORIES 1995
$000
______________________________________________________________________________
<S> <C>
Construction, General Purpose and Maintenance Stocks
Current 12,568
Less provision for stock obsolescence 201
__________
12,367
Non-current 3,412
__________
Total Construction, General Purpose and Maintenance Stocks 15,779
==========
</TABLE>
<PAGE>19
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
9 OTHER ASSETS 1995
$000
______________________________________________________________________________
<S> <C>
Current
Prepayments 1,622
Accrued unread and unbilled meter revenues 64,762
__________
Total Current Other Assets 66,384
__________
Non-current
Future income tax benefit:
Attributable to carry forward tax losses 781
FITB carried forward from Allocation Statement 142
__________
923
Attributable to timing differences
Provision for restoration 180
Provision for uninsured losses 270
Provision for doubtful debts 351
__________
801
Other:
Other non-deductible items 198
Fringe benefits tax (50)
__________
148
__________
Total future income tax benefit 1,872
Investments in other corporations 56
Licences 50
Victorian Power Exchange Trust Fund 1,365
__________
Total Non-current Other Assets 3,343
__________
Total Other Assets 69,727
==========
</TABLE>
<PAGE>20
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
10 PROPERTY, PLANT AND EQUIPMENT 1995
$000
______________________________________________________________________________
<S> <C>
Land and Buildings
Freehold land
At cost 9,267
__________
Buildings
At cost 28,260
Less: Accumulated depreciation 1,268
__________
26,992
__________
Total Land and Buildings, Net 36,259
__________
Distribution System
At cost 1,064,206
Less: Customer and Cogeneration Contributions 23,971
Less: Accumulated depreciation 43,650
__________
Total Distribution System, Net 996,585
__________
Other
At cost 35,953
Less: Accumulated depreciation 3,341
__________
Total Other, Net 32,612
__________
Total Property, Plant and Equipment, Net 1,065,456
==========
</TABLE>
<PAGE>21
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
11 CREDITORS AND BORROWINGS 1995
$000
______________________________________________________________________________
<S> <C>
Current
Shareholder's Loan [i] 466,704
Other Loans [ii] 190,443
Bank overdraft [iii] 2,088
Trade creditors 59,936
Accrued interest 11,571
Accruals and other creditors 8,073
Customer, contractor and miscellaneous deposits 10,675
__________
Total Current Creditors and Borrowings 749,490
==========
Non-current
Other Loans [ii] 315,654
Deferred revenue 4
__________
Total Non-current Creditors and Borrowings 315,658
==========
<FN>
[i] [ii] Security for Loans
Shareholder's Loan and loans payable to Treasury Corporation Victoria under
Other Loans, are guaranteed by the Victorian State Government. The Treasurer
of Victoria for the Victorian State Government has indicated these loans will
not be fully or partially called upon prior to privatisation, unless Powercor
has the capacity to facilitate redemption as a result of build up of cash
reserves from operational activities, or an alternative loan or other
financial arrangement is put into place. (Facilitation to be assisted by the
Government if necessary). Therefore the SECV shareholder loan represents an
equity position as far as the Government and Powercor are concerned.
[iii] Bank Overdraft Facilities
Powercor has a bank overdraft facility of $5.0M which has no specific expiry
date. At 30 June 1995, $2.1M of this limit was used.
</FN>
</TABLE>
<PAGE>22
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
12 PROVISIONS
1995 Allocation
Current Non-current Total [i] Amounts
$000 $000 $000 $000
______________________________________________________________________________
<S> <C> <C> <C> <C>
Employee entitlements
Recreation leave 7,878 0 7,878 6,522
Long service leave 354 15,410 15,764 13,494
______ ______ _______ ______
8,232 15,410 23,642 20,016
______ ______ _______ ______
Restorations
Environmental cleaning 3,449 5,436 8,885 6,502
Other 100 774 874 894
______ ______ _______ ______
3,549 6,210 9,759 7,396
______ ______ _______ ______
Uninsured losses 5,184 680 5,864 4,079
Accident compensation 150 600 750 1,591
Future losses on
Cogeneration agreements 0 0 0 9,009
Establishment and
restructuring costs [ii] 8,011 8,700 16,711 45,300
Deferred Tax 0 32,370 32,370 333
Dividends Payable 26,008 0 26,008 0
______ ______ _______ ______
39,353 42,350 81,703 60,312
______ ______ _______ ______
Total Provisions 51,134 63,970 115,104 87,724
====== ====== ======= ======
<FN>
[i] All amounts represented as "Allocation Amounts" were transferred from
Electricity Services Victoria in the current year via an Allocation
Statement in accordance with the Electricity Supply Industry Act 1993,
and have been disclosed solely for the purpose of providing comparative
data regarding the movement in provision balances.
[ii] The decrease in the establishment and restructuring provision was as a
result of voluntary departure packages of $10.3M, and other costs
associated with restructuring of $5.1M being charged to the provision in
the current period. A total amount of $13.2M representing planned
Information Technology and other incremental establishment and
restructuring expenditure was written back to the current periods Profit
and Loss Account at 30 June 1995.
</FN>
</TABLE>
<PAGE>23
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
13 SHARE CAPITAL AND DIVIDENDS 1995
Notes $
______________________________________________________________________________
<S> <C> <C>
(a) Ordinary shares of $1 each
Authorised 500,000,000
===========
Issued and paid up 5
===========
(b) On Incorporation of the Company, 5 $1.00 ordinary
shares were issued on 11 May 1994.
(c) Dividends Provided for or Paid $000
Total dividends provided for or paid 44,108
Less: Interim dividend paid during the year [i] 18,100
___________
Balance at end of year [ii] (12) 26,008
===========
<FN>
Total dividends provided for or paid comprised:
[i] In accordance with a recommendation from the Treasurer of Victoria, an
interim dividend of $18.1M was approved by the Board of Directors and
paid as per section 38 of the Electricity Industry Act 1993 to the
State Electricity Commission of Victoria.
[ii] A final dividend of $26.0M was provided on the basis of total
dividends for the period being equal to 65% of after tax profits.
Payment of the final dividend is subject to further recommendation
from the Treasurer of Victoria and final approval from the Board of
Directors in accordance with the Electricity Industry Act 1993.
</FN>
</TABLE>
<PAGE>24
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
14 JOINT VENTURES AND OTHER INTERESTS
__________________________________________________________________________________________
Ventures/ Place of Principal Nature of Interest Method Net Value of Contribution Share in
Interest Business Activity Interest % $000 of Products to Profit Assets &
Accounting Received $000 Liabilities
_____________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Energy Victoria Provision Ownership 8% 56 Shares Nil (299) Nil
Business of Energy of 56,000 are valued
Centre Pty Ltd Management ($1) "A" class at cost
Services shares
Agreement for Victoria Ongoing Cost Sharing 20% - Expenses Nil (140) Nil
Distribution Development Arrangement recorded on
Businesses of Industry only Accrual Basis
Joint Venture Standards
and Systems
</TABLE>
<PAGE>25
All Dollars are Australian with Australian Accounting Standards applied.
15 RELATED PARTIES
______________________________________________________________________________
(a) Directors
The names of persons who were Directors of Powercor at any time during the
financial period are as follows:
L Wilson (appointed 02/10/94)
L Gason (appointed 02/10/94)
P Griffin (appointed 02/10/94)
R Guy OAM (appointed 02/10/94)
R King (appointed 02/10/94)
Y von Hartel (appointed 02/10/94)
C Mitchell (appointed 15/12/94, resigned 15/08/95)
J O'Rourke (resigned 16/05/94)
S McCarthy (resigned 16/05/94)
D Moulis (resigned 16/05/94)
R Nicholson (resigned 02/10/94)
S Mitchell (resigned 02/10/94)
P Hay (resigned 02/10/94)
(b) Remuneration
Remuneration of Directors is disclosed in note 16. During the financial
period there were no loans due to Powercor from any of the above-named
Directors.
(c) Other Transactions of Directors and Director-Related Entities
No Director or their related entities has declared an interest in a contract,
or proposed contract, during the period ended 30 June 1995 with Powercor other
than:
During the financial period ended 30 June 1995, payments were made to the
Victorian Power Exchange of $2.65M in connection with pricing adjustments on
electricity purchases. These payments were determined by VicPool rules taking
into account the quantity and price of electricity purchased. Subsequent to
30 June 1995, the VicPool rules were amended due to an error affecting the
payment calculations which resulted in a total of $1.325M being paid during
the period ended 30 June 1995 in excess of amounts that would have been
payable had the amended rules applied. Retrospective application of the
amended rules was sought so as to recover the excess payments. As at the date
of these financial statements, no agreement has been reached with the relevant
power generators to recover the excess payments, and no amount receivable has
been recognised in the Financial Statements. The Directors have resolved to
continue to pursue recovery of the overpayment.
<PAGE>26
All Dollars are Australian with Australian Accounting Standards applied.
Mr. Olaf B. O'Duill was appointed a Director of Powercor on 21 September 1995.
He is also a Director of the Victorian Power Exchange and Chairman of Yallourn
Energy Ltd. Due to the Victorian Government's common shareholding with
Powercor and the Victorian Power Exchange, the aforementioned transaction has
been disclosed.
Powercor may directly or indirectly supply energy from time to time to its
Directors or their director related parties. Transactions of this nature
occur within a normal employee, customer or supplier relationship on terms and
conditions no more favourable than those with which it is reasonable to expect
Powercor to adopt if dealing with the Director or director related party at
arm's length in similar circumstances.
(d) Financing of Debt
In accordance with the Borrowing and Investment Act 1987, Powercor is
empowered to continue to negotiate its debt position directly with the
Treasury Corporation of Victoria through the application of various borrowing,
investment and hedging instruments.
(e) Other Related Parties
Powercor trades regularly with government bodies and departments. The
Victorian Government still has control over Powercor and as such all
transactions with the Government must be disclosed as related party
transactions.
A revised ruling has been made by the Australian Securities Commission under
Accounting Standard AASB 1017: "The Commission has made an Order which
provides limited relief under sub-section 313(2) of the Law which exempts the
company from the requirement to disclose details relating to the classes of
the related parties involved and the aggregate amount recognised, where the
underlying transactions relate to either the supply of electricity or the
purchase of operating supplies and other services which would impose an
unreasonable burden on the company".
The relief has only been provided for the financial year ended 30 June 1995.
(f) Controlling Entities
Powercor is an entity which is 100% controlled by the Victorian Government.
The issued ordinary shares in Powercor are held by the State Electricity
Commission of Victoria of which votes cannot be cast without the expressed
written consent of the State of Victoria given by the Victorian Treasurer and
the Minister for Energy and Minerals, or their joint nominee.
<PAGE>27
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
16 REMUNERATION OF DIRECTORS 1995
______________________________________________________________________________
<S> <C>
Remuneration received, or due and receivable,
by Directors of the company $441,250
============
The number of Directors whose income was within the specified bands are as
follows (period covered is 3 October 1994 to 30 June 1995):
<CAPTION>
1995
$000 Number
<S> <C>
30-40 5
60-70 1
210-220[i] 1
_____
Total 7
=====
Amounts are shown in summary form as the directors believe the provision of
full particulars would be unreasonable.
Remuneration of Directors covers the period from 3 October 1994 to 30 June
1995 and has not been annualised.
<FN>
[i] A Director is included in both note 16 - Directors' Remuneration (based
on a period basis), and note 17 - Executives' Remuneration (based on an
annualised basis).
</FN>
</TABLE>
______________________________________________________________________________
<PAGE>28
All Dollars are Australian with Australian Accounting Standards applied.
17 REMUNERATION OF EXECUTIVES
______________________________________________________________________________
The number of Executive Officers domiciled in Australia who received, or were
due to receive, directly or indirectly from the company, or from any related
body corporate, a total annualised remuneration in connection with the
management of affairs of the company, or any related body corporate, whether
as Executive Officers or otherwise, is shown in the following bands:
<TABLE>
<CAPTION>
1995
$000 Number
<S> <C>
100-110 6
110-120 6
120-130 4
130-140 1
160-170 1
170-180 2
200-210 2
260-270[i] 1
_____
Total 23
=====
The aggregate (annualised) remuneration of the executives referred to in the
above bands, including bonuses paid or payable under contract at 30 June 1995,
was $3,177,120. Remuneration of executives at the directive of the Victorian
Treasurer requires the reporting entity to report the information on an annual
equivalent basis, Powercor therefore, has annualised the executive
remuneration for the 1994/95 income year.
<FN>
[i] A Director is included in both note 16 - Directors Remuneration (based on
a period basis), and note 17 - Executives Remuneration (based on an annualised
basis).
</FN>
</TABLE>
<PAGE>29
All Dollars are Australian with Australian Accounting Standards applied.
18 CONTINGENCIES AND OTHER COMMITMENTS
______________________________________________________________________________
Contingent liabilities at balance date, not otherwise provided for in these
financial statements, are categorised as, and supported by, the following
notes:
[i] Victorian Power Exchange Rules impose "collective responsibility" on Pool
customers for the default of a fellow Pool customer. Although not anticipated
to occur, there is a potential liability if a fellow Pool customer defaults on
payment.
[ii] Environmental provisions have been assessed as adequately provided for in
the current periods Financial Statements however, further reviews currently
being undertaken regarding additional costs associated with the restoration of
the Brooklyn quarry, may reveal an increase in future liabilities.
[iii] Powercor recently completed an external review and evaluation of all
zone substations and capacitor banks for existing contamination levels which
directly results from the current use of Polychlorinatedbiphenyls (PCBs). It
is anticipated that proposed changes in environmental legislation will require
the removal of all capacitor canisters containing PCBs. At 30 June the
preliminary findings indicated a contingency may eventuate, estimated costs
$2.7M for the replacement of capacitor bank canisters.
[iv] Powercor has a contingent liability for termination benefits under
various service agreements with General Managers and under the terms of
individual employment contracts with other management executives. The maximum
amount of such contingent liability at 30 June was $6.8M.
[v] Powercor will be expected to refinance its debt portfolio at a future
date. Depending upon the yield curve prevailing on the date of refinancing, a
gain or loss will be realised. At 3 July 1995 a loss of $11.8M would have
been realised had Powercor proceeded with refinancing.
[vi] The Victorian Electricity Supply Industry Tariff Order established by
Victorian Government legislation requires Powercor to supply electricity to a
number of franchised customers at uncommercial prices under "Tariff H". These
customers have the option of remaining on this tariff until the year 2000 or
joining the contestable market when Tariff H aligns with cost reflective
tariffs. At 30 June these contracts which represent 20% of Powercor's
business were individually costed on an estimated total cost basis which
revealed potential future losses to the business of $13.2M.
[vii] Commercial cogeneration agreements currently exist with a number of
Cogenerators. Under these contracts, Powercor undertakes to buy-back all
excess electricity generated by the cogenerators at a specific price; this
value represents a price higher than the cogenerators are required to pay for
their usage. At 30 June 1995 a total estimated future loss of $11.2M measured
at net present value was anticipated in honouring these contracts.
Amounts disclosed in respect to any of the above contingent liabilities or
other commitments are based on estimates only and may give rise to actual
losses in future periods.
<PAGE>30
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
19 COMMITMENTS FOR EXPENDITURE 1995
$000
______________________________________________________________________________
<S> <C>
(a) Capital Commitments
Total capital expenditure contracted for at balance date
but not provided for in the accounts, payable:
Not later than one year 715
===========
(b) Lease Commitments
Total lease expenditure contracted for at balance date but
not provided for in the accounts, payable:
Not later than one year 1,306
Later than one year but not later than two years 392
Later than two years but not later than five years 1,680
Later than five years 53
___________
3,431
===========
Representing:
Cancellable operating leases 34
Non-cancellable operating leases 3,397
___________
3,431
===========
Commitments in relation to non-cancellable operating leases are
payable as follows:
Not later than one year 1,282
Later than one year but not later than two years 382
Later than two years but not later than five years 1,680
Later than five years 53
___________
3,397
===========
</TABLE>
<PAGE>31
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
20 EMPLOYEE ENTITLEMENTS
1995
$000
______________________________________________________________________________
<S> <C>
(a) Aggregate employee entitlement liability
The aggregate employee entitlement liability includes amounts
for wages and salaries, annual leave, long service leave and
superannuation contributions 23,642
===========
In accordance with the application of Accounting Standard AASB 1028,
adjustments to employee liabilities were taken to account inclusive of
relevant oncosts as follows:
Provision for Long Service Leave 2,457
Provision for Annual Leave 1,228
___________
3,685
===========
</TABLE>
All amounts resulting from the application and compliance of AASB 1028 have
been taken to the current periods Profit and Loss account.
(b) Victorian Electricity Industry Superannuation Fund
All permanent employees of the company and casual employees hired directly are
entitled to benefits on termination from the V.E.I. Super Pty Ltd, casual
employees, some executives and all permanent employees engaged after 3 October
1994 are members of an accumulation fund, Division D or other external
accumulation funds. All other permanent employees are members of Divisions B
or C of the Fund which provide defined benefits in the form of pensions
(Division B) or lump sums (Division C). Both defined schemes are closed to new
members. Division B members contribute at 6% of superannuation salary, and
Division C members can contribute at 0, 3 or 6%. During 1994/95 the company
contributed to the Fund at the rate of 10% for the defined benefit.
The effective date of the most recent detailed valuation of the Fund was
30 June 1994. A summary valuation for annual accounts purposes was last made
at 30 June 1995 by Mr G I Burgess, FIA, FIAA of William M Mercer Pty Ltd. At
30 June 1995 the Fund had a surplus of assets over liabilities of $5.0M. At
30 June 1995, Mr Burgess prepared a further assessment of the defined benefit
schemes on an individual employer basis.
<PAGE>32
All Dollars are Australian with Australian Accounting Standards applied.
Based on that assessment, the unaudited situation for the company as at
30 June 1995 was:
<TABLE>
<CAPTION>
1995
$000
<S> <C>
Present value of employees' accrued benefits 82,100
Net market value of assets held by the Fund to meet future
benefit payments 87,100
___________
Excess/(deficit) of assets over present value of employees'
accrued benefits held to meet future benefit payments 5,000
===========
Employer contributions to the Fund for the year
ended 30 June 1995 7,008
===========
Vested benefits 83,900
===========
</TABLE>
The present value of employees' accrued benefits is equal to the past
membership liability calculated in accordance with Australian Accounting
Standard AAS25 "Financial Reporting by Superannuation Plans".
Vested benefits are those benefits which would have been paid on voluntary
termination from the Fund.
<PAGE>33
All Dollars are Australian with Australian Accounting Standards applied.
<TABLE>
<CAPTION>
21 AUDIT AND ACCOUNTING FEES
______________________________________________________________________________
1995
AUDITORS REMUNERATION $000
<S> <C>
Amounts paid or payable to:
Victorian Auditor-General
Audits of the Financial Statements - current year 88
Other Auditors
Arthur Andersen internal audit services - current year 262
___________
Total Audit Fees 350
___________
OTHER ACCOUNTING FEES
Charged to Other Accounts
- - Arthur Andersen 97
- - Price Waterhouse 56
___________
153
___________
Total Audit and Accounting Fees 503
===========
</TABLE>
______________________________________________________________________________
<TABLE>
<CAPTION>
22 CONSULTANCY FEES 1995
$000
______________________________________________________________________________
<S> <C>
Amounts paid or payable
TOTAL CONSULTANCY FEES 1,752
=====
</TABLE>
______________________________________________________________________________
23 SUBSEQUENT EVENTS
______________________________________________________________________________
On 15 August 1995, Mr Chris Mitchell resigned from the position of Chief
Executive Officer and Managing Director with Powercor.
As a result of the current Victorian Government's privatisation process,
Powercor is expected to be sold within the 1995/96 financial year. The sale
is expected to be transacted through a trade sale.
On 21 September 1995 Mr Olaf B. O'Duill was appointed as a Director of
Powercor.
(These events have no material impact on the state of affairs or results of
Powercor for the period ended 30 June 1995.)
<PAGE>34
Auditor-General's Report
________________________
AUDITOR-GENERAL'S REPORT
Audit Scope
The accompanying financial statements of Powercor Australia Limited for the
period 11 May 1994 to 30 June 1995, comprising profit and loss account,
balance sheet, statement of cash flows and notes to the financial statements,
have been audited. The company's directors are responsible for the
preparation and presentation of the financial statements and the information
they contain. An independent audit of these financial statements has been
carried out in order to express an opinion on them to the members of the
company as required by the Corporations Law and the Audit Act 1994.
________________ _________
The audit has been conducted in accordance with Australian Auditing Standards
to provide reasonable assurance as to whether the financial statements are
free of material misstatement. The audit procedures included an examination,
on a test basis, of evidence supporting the amounts and other disclosures in
the financial statements, and the evaluation of accounting policies and
significant accounting estimates. These procedures have been undertaken to
form an opinion as to whether, in all material respects, the financial
statements are presented fairly in accordance with applicable Accounting
Standards and other mandatory professional reporting requirements and comply
with the Corporations Law, so as to present a view which is consistent with my
________________
understanding of the company's financial position and the results of its
operations and its cash flows.
The audit opinion expressed on the financial statements has been formed on the
above basis.
Audit Opinion
In my opinion, the financial statements of Powercor Australia Limited are
properly drawn up:
(a) so as to give a true and fair view of:
(i) the company's state of affairs as at 30 June 1995 and of its
profit and cash flows for the period ended on that date; and
(ii) the other matters required by Divisions 4, 4A and 4B of
Part 3.6 of the Corporations Laws to be dealt with in the
_________________
financial statements;
(b) in accordance with the Corporations Law, and
________________
(c) in accordance with applicable Accounting Standards and other mandatory
professional reporting requirements.
MELBOURNE C.A. BARAGWANATH
3/10/1995 Auditor-General
_________ _______________
Level 14.222 Exhibition St, Melbourne, Victoria 3000
____________________________________________________
Tel (03) 9651 6012 Fax (03) 9651 6050
______________________________________
<PAGE>35
All Dollars are Australian with Australian Accounting Standards applied.
Appendix I
RECONCILIATION TO U.S. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES (GAAP)
(UNAUDITED)
______________________________________________________________________________
No significant adjustments to the income statement would be required if U.S.
GAAP had been applied instead of Australian accounting principles.
<PAGE>36
PACIFICORP
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
For the Year Ended December 31, 1994
In Millions of U.S. Dollars
(Unaudited)
<TABLE>
<CAPTION>
Historical Historical Purchase of Proforma
Consolidated Powercor Powercor and Consolidated
PacifiCorp Australia Adjustments PacifiCorp
____________ __________ ____________ ____________
<S> <C> <C> <C> <C>
Revenues $3,506.5 $560.9 - $4,067.4
Expenses
Depreciation and amortization 424.3 35.8 27.8 487.9
Operations, maintenance
and other 2,059.9 419.7 - 2,479.6
_____________________________________________________
Total 2,484.2 455.5 27.8 2,967.5
_____________________________________________________
Income from Operations 1,022.3 105.4 (27.8) 1,099.9
Other Expense (Income)
Interest expense 334.5 37.8 73.4 445.7
Other (30.0) (14.9) - (44.9)
_____________________________________________________
Total 304.5 22.9 73.4 400.8
_____________________________________________________
Income before Income Taxes 717.8 82.5 (101.2) 699.1
Income taxes 249.8 32.1 (36.4) 245.5
_____________________________________________________
Net Income $468.0 $50.4 $(64.8) $453.6
===================================================
Earnings on Common Stock $428.3 $50.4 $(64.8) $413.9
Earnings per Share $1.51 $1.46
Average Number of Common
Shares Outstanding 282,912 282,912
<FN>
See accompanying notes to pro forma condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>37
PACIFICORP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of December 31, 1994
In Millions of U.S. Dollars
(Unaudited)
<TABLE>
<CAPTION>
Historical Purchase of Pro Forma
Consolidated Historical Powercor and Consolidated
PacifiCorp Powercor Adjustments PacifiCorp
____________ __________ ____________ ____________
<S> <C> <C> <C> <C>
Assets
Property, plant and
equipment - net $8,446.2 $756.8 $538.1 $9,741.1
Current assets 815.4 91.1 0.0 906.5
Other assets 2,584.0 7.3 265.0 2,856.3
______________________________________________________
Total Assets $11,845.6 $855.2 $803.1 $13,503.9
======================================================
Capitalization and Liabilities
Common equity $3,459.8 $16.9 $(16.9) $3,459.8
Preferred stock 367.4 - - 367.4
Preferred stock subject to
mandatory redemption 219.0 - - 219.0
Long-term debt and capital
lease obligations 3,768.2 224.2 628.2 4,620.6
Short-term debt and long-term
currently maturing 550.5 466.7 214.8 1,232.0
Other current liabilities 718.5 101.9 - 820.4
Deferred income taxes and
investment tax credits 2,012.7 23.0 (23.0) 2,012.7
Other deferred credits 641.6 22.5 664.1
Minority interest 107.9 - 107.9
______________________________________________________
Total Capitalization and
Liabilities $11,845.6 $855.2 $803.1 $13,503.9
=====================================================
<FN>
See accompanying notes to pro forma condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>38
PACIFICORP
PRO FORMA CONDENSED CONSOLIDATED INCOME STATEMENT
For the Nine Months Ended September 30, 1995
In Millions of U.S. Dollars
(Unaudited)
<TABLE>
<CAPTION>
Historical Historical Purchase of Proforma
Consolidated Powercor Powercor and Consolidated
PacifiCorp Australia Adjustments PacifiCorp
____________ ___________ ____________ ____________
<C> <C> <C> <C>
Revenues $2,511.8 $424.1 $ - $2,935.9
Expenses
Depreciation and amortization 331.1 24.6 20.8 376.5
Operations, maintenance
and other 1,414.3 294.0 - 1,708.3
______________________________________________________
Total 1,745.4 318.6 20.8 2,084.8
______________________________________________________
Income from Operations 766.4 105.5 (20.8) 851.1
Other Expense (Income)
Interest expense 282.2 31.9 51.2 365.3
Other (68.2) (2.1) - (70.3)
______________________________________________________
Total 214.0 29.8 51.2 295.0
______________________________________________________
Income before Income Taxes 552.4 75.7 (72.0) 556.1
Income taxes 175.1 27.6 (25.9) 176.8
______________________________________________________
Net Income $377.3 $48.1 $(46.1) $379.3
======================================================
Earnings on Common Stock $346.9 $48.1 $(46.1) $348.9
Earnings per Share $1.22 $1.23
Average Number of Common
Shares Outstanding 284,271 284,271
<FN>
See accompanying notes to pro forma condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>39
PACIFICORP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
As of September 30, 1995
In Millions of U.S. Dollars
(Unaudited)
<TABLE>
<CAPTION>
Historical Purchase of Pro Forma
Consolidated Historical Powercor and Consolidated
PacifiCorp Powercor Adjustments PacifiCorp
____________ __________ ____________ ____________
<S> <C> <C> <C> <C>
Assets
Property, plant and
equipment - net $8,543.3 $806.7 $573.9 $9,923.9
Current assets 734.0 102.9 - 836.9
Other assets 2,677.7 7.2 219.4 2,904.3
______________________________________________________
Total Assets $11,955.0 $916.8 $793.3 $13,665.1
======================================================
Capitalization and Liabilities
Common equity $3,586.8 $12.2 $(12.2) $3,586.8
Preferred stock 367.4 - - 367.4
Preferred stock subject to
mandatory redemption 219.0 - - 219.0
Long-term debt and capital
lease obligations 3,707.2 212.7 694.0 4,613.9
Short-term debt and long-term
currently maturing 682.4 521.0 141.5 1,344.9
Other current liabilities 671.2 116.9 - 788.1
Deferred income taxes and
investment tax credits 2,053.2 30.0 (30.0) 2,053.2
Other deferred credits 646.3 24.0 670.3
Minority interest 21.5 - - 21.5
______________________________________________________
Total Capitalization and
Liabilities $11,955.0 $916.8 $793.3 $13,665.1
======================================================
<FN>
See accompanying notes to pro forma condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>40
PacifiCorp
NOTES TO PRO FORMA CONDENSED CONSOLIDATED
FINANCIAL INFORMATION
(UNAUDITED)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited pro forma condensed consolidated balance
sheets reflect the financial position of PacifiCorp (the "Company") after
giving effect to the acquisition of Powercor Australia, Limited ("Powercor")
on December 12, 1995 and the related financings as if it were consummated at
the end of the periods presented. The unaudited pro forma condensed
consolidated income statements reflect the acquisition of Powercor as if it
had occurred as of the beginning of the periods presented. As no financial
information is available for Powercor for periods earlier than July 1, 1994,
the pro forma condensed consolidated income statement for the Company for the
year ended December 31, 1994 has been prepared using the results of Powercor
for the period from May 11, 1994 to June 30, 1995 as if such results were for
the year ended December 31, 1994.
The unaudited pro forma condensed consolidated financial information has
been prepared by the Company based upon assumptions deemed proper by it and a
preliminary allocation of the purchase price paid. The unaudited pro forma
condensed consolidated financial information presented herein are shown for
illustrative purposes only and are not necessarily indicative of the future
financial position or future results of operations of the Company, or of the
financial position or results of operations of the Company that would have
actually occurred had the transaction been in effect as of the date or for the
periods presented. In addition, it should be noted that the Company's
financial statements will reflect the acquisition only from December 12, 1995,
the closing date for the acquisition.
The unaudited pro forma condensed consolidated financial information
should be read in conjunction with the historical financial statements and
related notes of the Company.
PacifiCorp -- Represents the condensed consolidated balance sheets of the
Company as of September 30, 1995 and December 31, 1994 and condensed
consolidated income statements of the Company for (a) the nine months ended
September 30, 1995 and (b) the year ended December 31, 1994 as they appear in
the Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995 and the Company's 1994 Annual Report on Form 10-K.
Powercor -- Represents the condensed balance sheets as of September 30,
1995 and June 30, 1995 and condensed income statements of Powercor for (a) the
nine months ended September 30, 1995 and (b) the period from May 11, 1994 to
June 30, 1995 as reflected on Powercor's statements of profit and loss
adjusted to U.S. generally accepted accounting principles.
<PAGE>41
NOTE 2 PRO FORMA ADJUSTMENTS
Balance Sheet
(a) Property, plant and equipment was increased to reflect balances at
fair market value.
(b) Other assets were increased to reflect the value of licenses
acquired.
(c) Additional short-term and long-term debt issued to fund the
acquisition of Powercor was included and the retirement of
Powercor's short-term and long-term debt was reflected.
(d) The payment of deferred taxes related to the sale of fixed assets
was reflected.
Income Statement
(a) Intangible assets related to the purchase of Powercor were amortized
on a straight-line basis over a 40 year life.
(b) Interest expense related to Powercor's pre-acquisition activities
was removed and interest expense related to the acquisition debt was
included.
(c) Additional depreciation expense related to an increase in property,
plant and equipment to reflect balances at fair value was included.
(d) No material adjustments to conform to U.S. Generally Accepted
Accounting Principles were required.
(e) For the six months ended June 30, 1995, Powercor's revenues were
$277 million and net income was $36 million.
<PAGE>42
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 2 for Reconciliation to U.S. GAAP
Powercor Australia, Limited
Condensed Income Statement
For the Three Months Ended September 30, 1995
(Unaudited)
In Millions of Australian Dollars
<TABLE>
<CAPTION>
<S> <C>
Revenues $198.7
Cost of Sales 115.2
Operating expenses 34.5
Depreciation 12.0
Interest expense 12.9
______
Income before taxes 24.1
Income taxes 7.9
______
Net Income $16.2
======
<FN>
See accompanying notes to condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>43
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 2 for Reconciliation to U.S. GAAP
Powercor Australia, Limited
Condensed Balance Sheet
As of September 30, 1995
(Unaudited)
In Millions of Australian Dollars
<TABLE>
<CAPTION>
<S> <C>
Assets
Property, plant and equipment - net $1,067.7
Current assets 136.2
Other assets 9.4
________
Total Assets $1,213.3
========
Capitalization and Liabilities
Common equity $16.2
Long-term debt and capital
lease obligations 281.5
Current liabilities 844.2
Deferred credits 71.4
________
Total Capitalization and
Liabilities $1,213.3
========
<FN>
See accompanying notes to condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>44
All Dollars are Australian with Australian Accounting Standards applied.
See Footnote 2 for Reconciliation to U.S. GAAP
Powercor Australia, Limited
Condensed Statement of Cash Flows
For the Three Months Ended September 30, 1995
(Unaudited)
In Millions of Australian Dollars
<TABLE>
<CAPTION>
<S> <C>
Cash flows from operating activities
Receipts from customers $196.8
Payments to suppliers and employees for goods (55.2)
Interest and other (14.2)
Purchased electricity (98.6)
______
Net cash inflow from operating activities $28.8
======
Cash flows from investing activities
Payments to acquire property, plant and equipment (17.0)
Other (4.8)
______
Net cash outflow from investing activities $(21.8)
======
Cash flows from financing activities
Proceeds from borrowings 171.4
Repayment of borrowings (principal only) (171.7)
Other 1.8
______
Net cash inflow from investing activities $1.5
======
Net increase in cash held 8.5
Cash at the beginning of the period (2.0)
______
Cash at the end of the period $6.5
======
<FN>
See accompanying notes to condensed consolidated financial information.
</FN>
</TABLE>
<PAGE>45
Powercor Australia, Limited
NOTES TO CONDENSED FINANCIAL STATEMENTS
SEPTEMBER 30, 1995
UNAUDITED
Note 1
The financial statements of Powercor Australia, Limited ("Powercor") for
the three months ended and as of September 30, 1995 are unaudited. The
financial statements, in the opinion of Powercor's management, include all
adjustments, constituting only normal recording of accruals, necessary for a
fair presentation of financial position and results of operations. In
addition, such statements are denominated in Australian dollars. The
acquisition, related adjustments, including acquisition financing, have not
been reflected in the attached statements. No adjustments have been made to
reflect the statements in accordance with U.S. Generally Accepted Accounting
Principles (GAAP).
Note 2
No significant adjustments to the condensed income statement for the
three months ended September 30, 1995 would be required if U.S. GAAP had been
applied instead of Australian accounting principles.
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION PAGE
_______ ___________ ____
<S> <C> <C>
2.1 Asset Sale Agreement between Powercor Australia
Limited and PacifiCorp Australia Holdings Pty
Ltd.
2.2 Share Sale Agreement between the State
Electricity Commission of Victoria and the State
of Victoria and PacifiCorp Australia Holdings
Pty Ltd. and PacifiCorp Holdings, Inc.
2.3 Asset Purchase Agreement between PacifiCorp
Australia Holdings Pty Ltd. and Powercor
Australia Limited.
23 Consent of the Auditor-General, Melbourne,
Australia.
</TABLE>
<PAGE>
EXHIBIT 2.1
POWERCOR AUSTRALIA LIMITED
ACN 064 651 109
and
PACIFICORP AUSTRALIA HOLDINGS PTY LTD
ACN 068 231 005
________________________________________________
Asset Sale Agreement
________________________________________________
Mallesons Stephen Jaques
Solicitors
Level 28
525 Collins Street
Melbourne VIC 3000
Australia
Telephone: (03) 9619 0619
Facsimile: (03) 9614 1329
Reference: MELBOURNE/JAP/56973
<PAGE>1
THIS ASSET SALE AGREEMENT is made on 16 November 1995 between the following
parties:
1. POWERCOR AUSTRALIA LIMITED ACN 064 651 109 of Level 3, 77 Southbank
Boulevard, Southbank, Victoria 3006 ("Seller"); and
2. PACIFICORP AUSTRALIA HOLDINGS PTY LTD ACN 068 231 005 of 50th Floor,
120 Collins Street, Melbourne, 3000 ("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:
"ASSETS" means the Plant and Equipment and Intellectual Property.
"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.
"COMPLETION" means completion of the sale and purchase of the Assets under
clause 3.
"COMPLETION DATE" is the day on which Completion occurs under the Share Sale
Agreement.
"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.
<PAGE>2
"ELECTRICITY ACT" means the Electricity Industry Act 1993.
"GOVERNMENTAL AGENCY" means the government of any country or the government of
any state, territory, municipality or other political subdivision of a
country, and any minister, administrative or judicial body, department,
commission, authority, instrumentality, tribunal, agency or entity of any such
government.
"INTELLECTUAL PROPERTY" means rights to all patents, copyrights and designs
used in the business of the Company, and includes:
(a) rights under licence in respect of such patents, copyrights or designs;
and
(b) equitable rights in respect of such patents, copyrights or designs or
such licences.
"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, but excludes motor vehicles and
mobile plant owned or leased by the Seller and, for the avoidance of doubt,
does not include capital works in progress.
"POWER" means any right, power, authority, discretion or remedy conferred on
the parties by this agreement or any applicable law.
"PURCHASE PRICE" means $1,650,000,000.
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset excluding 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
the Asset Buyer under which the Asset Buyer shall acquire, inter alia, all the
issued ordinary shares in the capital of the Seller.
"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.
<PAGE>3
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;
(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>4
2. SALE AND PURCHASE
2.1 SALE OF ASSETS
Subject to the terms of this agreement, to the maximum extent permitted by
law, 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:
Plant and Equipment $1,610,000,000
Intellectual Property $40,000,000
__________
Total: $1,650,000,000
_____________
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 the Completion Date.
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, Mallesons Stephen Jaques, 525 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.
<PAGE>5
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; and
(c) 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.
3.6 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.
3.8 TERMINATION
This agreement shall automatically terminate on termination of the Share Sale
Agreement.
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>6
4.2 ACKNOWLEDGEMENT
The Asset Buyer acknowledges and agrees that:
(a) none of the Assets is "land" for the purposes of section 32 of the Sale
of Land Act 1962; and
(b) in no event is it entitled to rescind this agreement or claim damages
under this agreement.
5. DUTIES, COSTS AND EXPENSES
5.1 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.
5.2 INDEMNITY
The Asset Buyer indemnifies the Seller against any amount payable under clause
5.1.
5.3 COSTS AND EXPENSES
Subject to clause 5.1, 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 5.1(a).
5.4 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.
6. NOTICES
6.1 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,
Level 5, 452 Flinders Street
Melbourne 3000
Attention: Mr G Brooke
Facsimile: (03) 9679 4747;
(2) if to the Asset Buyer: Pacificorp Australia Holdings Pty Ltd
C/- Phillips Fox
Address: 120 Collins Street
Melbourne 3000
Attention: Peter Vines/Judith Earls
Facsimile: (03) 9274 5111,
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>7
6.2 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 6.1(c)(3) and informs the sender that it is
not legible.
7. GENERAL
7.1 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.
<PAGE>8
7.2 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 7.2 may not itself be waived except by writing executed by
the party granting the waiver.
7.3 VARIATION
A variation of any term of this agreement must be in writing and executed by
the parties.
7.4 FURTHER ASSURANCES
Each party must do all things, and execute all further documents, necessary to
give full effect to this agreement.
7.5 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.
7.6 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.
<PAGE>
THE COMMON SEAL of )
POWERCOR AUSTRALIA )
LIMITED (ACN 064 651 109) was )
affixed to this document in the )
presence of: )
Secretary Director
Name (please print) Name (please print)
THE COMMON SEAL of )
PACIFICORP AUSTRALIA )
HOLDINGS PTY LTD (ACN 068 )
231 005) was affixed to this )
document in the presence of: )
Secretary Director
Name (please print) Name (please print)
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION 1
1.1 Definitions 1
1.2 Interpretation 3
2. SALE AND PURCHASE 4
2.1 Sale of Assets 4
2.2 Dates for Payment 4
2.3 Method of Payment 4
3. COMPLETION 4
3.1 Date for Completion 4
3.2 Delivery of documents 4
3.3 Asset Buyer's obligations at Completion 4
3.4 Property and Risk 4
3.5 Interdependency between this agreement and Share Sale Agreement 5
3.6 Inconsistencies 5
3.7 Exercise of Rights 5
3.8 Termination 5
4. ASSET BUYER'S WARRANTIES 5
4.1 Asset Buyer's Warranties 5
4.2 Acknowledgement 6
5. DUTIES, COSTS AND EXPENSES 6
5.1 Payment of Duty 6
5.2 Indemnity 6
5.3 Costs and expenses 6
5.4 Costs of performance 6
6. NOTICES 6
6.1 General 6
6.2 Legibility of facsimile transmission 7
7. GENERAL 7
7.1 Governing law and jurisdiction 7
7.2 Waivers 8
7.3 Variation 8
7.4 Further assurances 8
7.5 Third party rights 8
7.6 This agreement supersedes others 8
<PAGE>
EXHIBIT 2.2
STATE ELECTRICITY COMMISSION OF VICTORIA
and
THE STATE OF VICTORIA
and
PACIFICORP AUSTRALIA HOLDINGS PTY LTD
and
PACIFICORP HOLDINGS, INC.
________________________________________________
Share Sale Agreement
relating to POWERCOR AUSTRALIA LIMITED
________________________________________________
Mallesons Stephen Jaques
Solicitors
525 Collins Street
Melbourne VIC 3000
Australia
Telephone: (03) 9619 0619
Facsimile: (03) 9614 1329
Reference: MELBOURNE/JAP/58197.01
<PAGE>
THIS SHARE SALE AGREEMENT is made on 16 November 1995 between the following
parties:
1. STATE ELECTRICITY COMMISSION OF VICTORIA of Level 5, 452 Flinders
Street, Melbourne 3000 ("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. PACIFICORP AUSTRALIA HOLDINGS PTY LTD ACN 068 231 005 of Level 50, 120
Collins Street, Melbourne, 3000 in its capacity as Buyer and Asset
Buyer; and
4. PACIFICORP HOLDINGS, INC. of 700 NE Multnomah - 1600 POP, Portland,
Oregon, United States of America ("Guarantor").
RECITALS:
A. The Seller is the beneficial owner of the Shares.
B. The Seller agrees to sell (and procure the sale by the Nominees) and the
Buyer agrees to buy, the Shares on the terms and conditions set out in
this agreement.
C. The parties have agreed to effect the following transactions in the
following sequence at Completion:
(a) the Asset Buyer will, under the Asset Sale Agreement, purchase the
Plant and Equipment and the Intellectual Property from the Company
for $1,650,000,000;
(b) the Company will pay a dividend from the retained earnings of the
Company for the period ended on 30 June 1995 of $23,750,000 to the
Seller;
(c) the Company will pay a dividend from the earnings of the Company
for the period after 1 July 1995 to the Seller;
(d) the Buyer will pay the Estimated Purchase Price to the Seller;
(e) the Company will pay the Estimated State Equivalent Tax to the
State;
(f) the Company will repay the SECV Loan; and
(g) the Company will repay the TCV Loan.
D. Immediately after the sale of the Shares, the Company will, under the
Asset Purchase Agreement, purchase the assets acquired by the Asset
Buyer under the Asset Sale Agreement.
E. Thus, if Completion occurs on 12 December 1995, the estimated total
proceeds to the State and the Seller, including dividends from the
profits of the Company for the year ended 30 June 1995 which were not
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provided for at 30 June 1995 (but excluding any working capital
movements from signing to Completion) are set out as follows:
(a) Sale of Shares $383,832,072
(b) Repayment of SECV Loan $466,704,000
(c) Repayment of TCV Loan $553,953,629
(d) Payment of Estimated State Equivalent
Tax on the sale of the Plant and
Equipment and Intellectual Property $136,684,000
(e) Payment of dividends on the profits
from the sale of the Plant and Equipment
and Intellectual Property $583,094,000
(f) Payment of dividends on profits in the
period after 1 July 1995 $ Nil
(g) Payment of dividends on pre-30 June 1995 profits $23,750,000
(h) Payment of stamp duty $2,302,993
$2,150,320,694
______________
F. The State agrees to guarantee the obligations of the Seller under this
agreement.
G. The Guarantor agrees to guarantee the obligations of the Buyer under
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 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 were vested in the Company and includes the
Electricity Services Victoria allocation statement dated 29 September 1994 (as
amended on 7 March 1995 and 7 August 1995) (the "ESV Allocation Statement").
"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; 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.
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"APPROVED SELL DOWN TRANSACTION" means the issue, transfer, sale or other
disposal of:
(a) Equity Securities in the Buyer, the Company, a shareholder in the Buyer
or any Group Member held by the Pacificorp Group to any person; or
(b) the assets or undertaking, or any substantial part of the assets or
undertaking, of the Buyer, the Company, a shareholder in the Buyer or
any Group Member held by the Pacificorp Group to any person,
which takes place,
(c) after Completion (as that term is defined and used in the agreement) has
occurred with respect to the sale of the issued share capital in each of
Citipower Ltd, Eastern Energy Limited, Solaris Power Limited and
Powercor Australia Ltd; or
(d) with the prior written consent of the Treasurer, or
(e) to a person other than an Australian-based financial institution,
investment company or pension or superannuation fund; or
(f) pursuant to the Buyer implementing the steps envisaged by the Buyer with
respect to the proposed compliance with section 205 of the Corporations
Law in accordance with this agreement and the sale of the Plant and
Equipment and Intellectual Property to the Company under the Asset
Purchase Agreement,
provided:
(g) the issue, transfer, sale or other disposal of the Equity Securities
does not form part of an initial public offering on a recognised stock
exchange nor are any Equity Securities in the person to whom the assets
or undertaking are sold, to be issued, transferred, sold or otherwise
disposed of as part of an initial public offering on a recognised stock
exchange; and
(h) the aggregate number of Equity Securities in the Company held by the
Pacificorp Group does not reduce below 75% of the total number of Equity
Securities in the Company or (as appropriate) the aggregate value of the
assets or undertaking of the Company (calculated at book value,
excluding intangibles, cash and short term marketable securities) held
by the Pacificorp Group does not reduce below 75% of the total value of
the assets or undertaking of the Company (calculated at book value,
excluding intangibles, cash and short term marketable securities) .
"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 between
the Company and the Asset Buyer under which the Asset Buyer shall acquire the
Plant and Equipment and the Intellectual Property.
"ASSET PURCHASE AGREEMENT" means the agreement so titled to be entered into
between the Asset Buyer and the Company under which the Company shall purchase
the assets acquired by the Asset Buyer under the Asset Sale Agreement.
"ASSOCIATE" has the meaning given to that term in the Electricity Act.
"AUDITOR-GENERAL" means the Auditor-General for the State.
"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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(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.
"BASE RATE" means, in respect of a given date, the rate percent per annum
which is described as the "Average Mid Rate" and appears on the page entitled
"BBSW" on the Reuters Monitor System at or about 10.00 am (Melbourne time) on
that date for a bank accepted bill of exchange having a tenor of 30 days.
"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 Pacificorp Australia Holdings Pty Limited ACN 068 231 005.
"BUYER'S WARRANTIES" means the warranties and representations of the Buyer set
out in clause 8.1.
"COMPANY" means POWERCOR AUSTRALIA LIMITED ACN 064 651 109.
"COMPANY'S FUND" means that part of the Victorian Electricity Industry
Superannuation Fund which relates to the Company.
"COMPLETION" means completion of the sale and purchase of the Shares under
clause 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.
"COMPLETION DATE PAYMENTS" means the payments to be made on the Completion
Date under clause 4.2(b).
"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
5.6(c)(4).
"DATA ROOM DOCUMENTATION" means all documentation referred to in schedule 2.
"DEPOSIT" means $50,000,000.
"DISCLOSURES" means the information described in schedule 2.
"DISPOSE OF" includes transfer, sell or otherwise dispose of any right, title
or interest in or otherwise allow any person to acquire a Relevant Interest
in, but does not include the giving of any Security Interest to a bank or
other financial institution.
"DISTRIBUTION LICENCE" means the distribution licence issued to the Company by
the Office of the Regulator-General on 3 October 1994, as amended on 7 August
1995.
"DOLLARS" "A$" and "$" means the lawful currency of the Commonwealth of
Australia.
"DRAFT BALANCE SHEET" means the:
(a) unaudited draft balance sheet of the Company as at 30 September 1995
based on accounts prepared by management of the Company; and
(b) any notes attached to and forming part of that balance sheet,
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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 $383,832,072, being the estimated amount of
the Purchase Price under clause 4.1(a)(1), subject to adjustment under clause
4.1(a)(4) or 4.1(b)(3).
"ESTIMATED STATE EQUIVALENT TAX" has the meaning given to that term in clause
10.8.
"ESV ALLOCATION STATEMENT" has the meaning given that term in the definition
of "Allocation Statement".
"FINANCIAL ASSISTANCE" means the financial assistance which the Company may
give for the purpose of, or in connection with, the acquisition by the Buyer
of the Shares, the procedure relating to which has been agreed between the
parties.
"GOVERNMENTAL AGENCY" means the government of any country or any state,
territory, municipality or other political subdivision of a country, and any
minister, administrative or judicial body, department, commission, authority,
instrumentality, tribunal, agency or entity of any such government.
"GROUP" means, in relation to each shareholder in the Buyer or 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" means rights to all patents, copyrights and designs
used in the business of the Company, and includes:
(a) rights under licence in respect of such patents, copyrights or designs;
and
(b) equitable rights in respect of such patents, copyrights or designs or
such licences.
"JUNE ACCOUNTS" means the financial statements of the Company comprising:
(a) the audited balance sheet of the Company as at 30 June 1995;
(b) the audited profit and loss account and statement of cash flows of the
Company for the period 11 May 1994 to 30 June 1995; and
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(c) any notes attached to and forming part of those financial statements,
a copy of which is set out in annexure A.
"LICENCES" means the Distribution Licence and the Retail Licence.
"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).
"PACIFICORP GROUP" means the Guarantor and any wholly owned or wholly
Controlled entity of the Guarantor.
"PLANT AND EQUIPMENT" means all:
(a) plant, equipment and articles owned by the Company; and
(b) (in relation to all land which is not owned by the Company) structures
permanently affixed to land and other improvements to land owned by the
Company (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, but excludes motor vehicles and
mobile plant owned or leased by the Company and, for the avoidance of doubt,
does not include capital works in progress.
"POWER" means any right, power, authority, discretion or remedy conferred on
the parties by this agreement or any applicable law.
"PROHIBITED INTEREST" has the meaning given to that term in the Electricity
Act (as modified by the draft regulations set out in schedule 5).
"PURCHASE PRICE" means the price payable for the Shares under clause 4.1.
"RELEVANT AGREEMENT" has the meaning given to that term in the Electricity
Act.
"RELEVANT INTEREST" has the meaning given that expression in the Corporations
Law.
"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.
"SALES TAX AGREEMENT" means the sales tax agreement to be entered into between
the Seller and the Company in substantially the same form as set out in
annexure D.
"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.
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"SECV LOAN" means any liability pursuant to sections 121 and 141 of the
Electricity Act (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 sub-sections 153W(1) or (2) of the Electricity Act (which on
the Completion Date shall not exceed $466,704,000).
"SELLER'S WARRANTIES" means the warranties and representations of the Seller
set out in schedule 1.
"SHARES" means the five issued ordinary shares of $1.00 each in the capital of
the Company.
"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 5.6(c)(4).
"TARIFF ORDER" means any order made under 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 amount specified in clause 5.9(a)(2).
"THIRD PARTY CLAIM" has the meaning given to that term in clause 11.3.
"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.
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;
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(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
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;
(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
(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).
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(1)(e) 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.
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2.4 PROFIT ENTITLEMENT
The Seller shall be entitled to all accumulated profits (after State
Equivalent Tax) of the Company in respect of the period up to and including 30
June 1995 and accordingly, the Seller shall procure, to the extent it has not
already been done, that the Company declares and pays a dividend in an amount
equal to that profit entitlement, on or before the Completion Date.
2.5 DIVIDEND PAYMENT
The Buyer shall be entitled, at any time before the date which is 5 Business
Days before Completion, to notify the Seller that it wishes the Company to
declare and pay to the Seller a dividend out of the profit (after State
Equivalent Tax), including all profits on the sale of the Plant and Equipment
and Intellectual Property, in respect of the period on and from 1 July 1995.
The Seller shall procure that the board of directors of the Company declares
and pays to the Seller, to the maximum extent permissible under the
Corporations Law, the amount of the dividend so notified. Save for the
dividend to be paid to the Seller as contemplated under this clause, any
dividend which is provided for in the June Accounts and the dividend referred
to in Recital E(g) no dividend or other distribution of profits or capital has
been declared or made to the Shareholders in the Company on or since 1 July
1995 nor will be declared or made prior to Completion.
2.6 SECTION 205
The Seller shall pass, and procure that the Nominees ensure that the Company
passes resolutions in relation to obtaining all approvals, authorisations or
other requirements set out in section 205 of the Corporations Law in a form
proposed by the Buyer and agreed to by the Seller.
3. DEPOSIT
3.1 PAYMENT
If Completion does not occur on 12 December 1995 then the Buyer must, on that
date, pay to the Seller the Deposit, unless the failure to Complete arises
solely because of:
(a) a Court failing to make an order under section 205(13) of the
Corporations Law if a person not associated with the Buyer makes an
application under section 205(12) of the Corporations Law with respect
to the Financial Assistance;
(b) the Foreign Investment Review Board or the Treasurer (after being given
by the Buyer all necessary information and notices in a timely and
proper manner) failing to provide an Authorisation required (or
reasonably necessary) to complete the purchaser of the Shares; or
(c) a default by the State or the Seller in meeting their obligations to
complete under this agreement.
If any of the reasons specified in (a), (b) or (c) above cease to prevent
Completion occurring then the Buyer must, on the first Business Day after the
reason ceases to prevent Completion occurring, pay to the Seller the Deposit.
3.2 NON-REFUND
The Deposit shall be refunded to the Buyer (and the Seller must refund the
Deposit) if the State exercises its right to terminate this agreement under
clause 5.7 and the Buyer is not in breach of this agreement.
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3.3 NOTICE OF TERMINATION FOR BREACH
If the Buyer does not pay to the Seller the Deposit as required under clause
3.1, then the State may, at any time after 12 December 1995 give written
notice (the "First Notice") to the Buyer that it may terminate this agreement
(and the Asset Sale Agreement and Asset Purchase Agreement) by a further
notice in writing to the Buyer, if the Buyer does not pay the Deposit
(together with interest calculated in accordance with clause 4.3) within three
Business Days of receipt of the First Notice by the Buyer.
3.4 AUTOMATIC TERMINATION
If the Deposit and interest is not paid within such period then, the Seller
may at any time after the expiration of the three Business Day period
terminate this agreement promptly by notice in writing to the Buyer. On
termination of this agreement, the Asset Sale Agreement and the Asset Purchase
Agreement shall automatically terminate.
3.5 REMEDIES
If this agreement is terminated under this clause then in addition to any
other rights provided by law, the Seller retains the rights it has against the
Buyer, including without limitation, the right to claim and recover damages
for loss of profit.
4. PURCHASE PRICE AND PAYMENTS
4.1 AMOUNT
The price ("Purchase Price") payable for the Shares is as follows:
(a) the sum of:
(1) $383,832,072;\
(2) the amount (if any) by which the State Equivalent Tax paid by the
Company for the period commencing on and from 1 July 1995 and
ending on the Completion Date is less than the Estimated State
Equivalent Tax for the equivalent period; and
(3) an amount (if any) equal to the amount by which the aggregate
Victorian Duty paid by the Company, Asset Buyer or the Buyer in
respect of:
(i) the sale of the Plant and Equipment and Intellectual
Property from the Company to the Asset Buyer under the Asset
Sale Agreement and the sale of assets by the Asset Buyer to
the Company under the Asset Purchase Agreement;
(ii) the sale of Shares under this agreement; and
(iii) financing relating to the foregoing (if any),
is less than $2,302,993; and
(4) the amount (if any) by which any dividend declared and paid
pursuant to clause 2.5 is less than $583,094,000,
less
(b) the sum of:
(1) the amount (if any) by which the State Equivalent Tax paid by the
Company for the period commencing on and from 1 July 1995 and
ending on the Completion Date exceeds the Estimated State
Equivalent Tax for the equivalent period; and
(2) an amount (if any) equal to the amount by which the aggregate
Victorian Duty paid by the Company, Asset Buyer or the Buyer in
respect of:
(i) the sale of the Plant and Equipment and Intellectual
Property from the Company to the Asset Buyer and the sale of
assets by the Asset Buyer to the Company under the Share
Purchase Agreement;
(ii) the sale of Shares under this agreement; and
(iii) financing relating to the foregoing (if any),
exceeds $2,302,993; and
(3) the amount (if any) by which any dividend declared and paid
pursuant to clause 2.5 exceeds $583,094,000.
<PAGE>11
4.2 PAYMENTS
(a) Subject to clause 3.1, on 12 December 1995 the Buyer will pay to the
Seller the Deposit.
(b) On the Completion Date, the Buyer and the Company will make the
following payments:
(1) the Company will pay any dividend pursuant to clause 2.5 to the
Seller (the "Dividend Payment");
(2) the Company will pay the Estimated State Equivalent Tax to the
State;
(3) the Buyer will pay the Estimated Purchase Price to the Seller
(less any Deposit paid);
(4) the Company will repay the SECV Loan pursuant to clause 5.9 (the
"SECV Loan Payment"); and
(5) the Company will repay the TCV Loan and other amounts owing to TCV
pursuant to clause 5.9 (the "TCV Loan Payment").
(c) Within 7 days after payment of both the Duty payable pursuant to clause
14.3 and the State Equivalent Tax payable pursuant to clause 10.8, the
Buyer will provide written notice, and evidence, to the Seller that
those payments have been made. The Buyer or the Seller (as appropriate)
must, within 7 days after the notice referred to above is provided, pay
the amount of the adjustment to the Purchase Price under clause 4.1 to
the other party.
4.3 INTEREST
If:
(a) any party or the Company 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 pay interest on that sum from the due date of
payment until that sum is paid in full;
(b) the Buyer or the Seller is obliged to pay money under clause 4.2(c), the
Buyer or Seller (as the case may be) must pay interest on that sum from
the Completion Date until that sum is paid in full; or
(c) Completion does not occur on the first Business Day after the Approval
Date due to the fault of the Buyer, the Buyer must pay interest on the
Estimated Purchase Price (less the Deposit paid) from that Business Day
until that sum is paid in full,
at the rate equal to the Base Rate plus 4%. The parties acknowledge and agree
that if Completion does not occur on 12 December 1995 solely because an
application is made under section 205(12) of the Corporations Law in respect
of the Financial Assistance, then the Buyer must pay interest on the Estimated
Purchase Price (less the Deposit paid) from that date until the sum is paid in
full at the rate equal to the Base Rate. Interest accrues from day to day and
is payable on demand.
<PAGE>12
5. COMPLETION
5.1 DATE FOR COMPLETION
The actions required on the Completion Date, including Completion shall
commence at 10 am on the Completion Date at the office of the Seller's
solicitors, Mallesons Stephen Jaques, 28th Floor, 525 Collins Street,
Melbourne.
5.2 COMPLETION DATE ACTIONS
On the Completion Date, the following actions shall be taken and shall be
presumed to have occurred in the order listed:
(a) completion under the Asset Sale Agreement;
(b) the Dividend Payment;
(c) Completion under this Agreement including payment of the Estimated
Purchase Price;
(d) payment of the Estimated State Equivalent Tax;
(e) the TCV Loan Payment; and
(f) the SECV Loan Payment.
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 and
all statutory, minute and share certificate books of the Company;
(d) deliver to the Buyer the written resignations of all directors of the
Company except those directors whom the Buyer notifies the Seller no
later than five Business Days before the Completion Date that it wishes
to retain, to be effective on the appointment of the directors to be
appointed at the Board meeting to be convened under clause 5.4;
(e) 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
ownership and use of the assets of the Company;
(f) deliver to the Buyer copies of the Distribution Licence and the Retail
Licence; and
(g) deliver to the Buyer one counterpart of the Sales Tax Agreement duly
executed by the Seller.
<PAGE>13
5.4 FIRST MEETING
At 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
Duty on the transfer of the Shares;
(b) appointment of the nominees of the Buyer as directors of the Company
with effect from the close of the meeting;
(c) 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;
(d) acceptance of the resignations of the existing directors (except those
directors to be retained as notified to the Seller under clause 5.3(d)),
with effect from the close of the meeting; and
(e) adoption of memorandum and articles of association prepared by the
Buyer.
5.5 SECOND MEETING
At Completion, the Seller and the Buyer must ensure that a meeting of the
directors or shareholders (as appropriate) of the Company is convened
following the meeting referred to in clause 5.4, and conducts the following
business:
(a) such action as may be required to facilitate the Buyer's financing for
this transaction; and
(b) authorising the dividend contemplated by this agreement.
5.6 BUYER'S OBLIGATIONS AT COMPLETION
At Completion the Buyer must:
(a) pay the Seller the Estimated Purchase Price and procure that the Company
pays the remaining Completion Date Payments pursuant to clause 4.2(b);
(b) 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 of shares in the Buyer (as they exist as at
the Completion Date) are maintained);
(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,
provided that nothing in this clause 5.6(b) shall prohibit an Approved
Sell Down Transaction (and the covenants referred to in this clause may
be so limited);
(c) 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
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 5.6(c) shall prohibit an Approved
Sell Down Transaction (and the covenants referred to in this clause may
be so limited);
(d) procure that the Asset Buyer delivers to the State the same covenants in
respect of each of its shareholders (and each person who holds a
beneficial interest in the shares held by that shareholder) and Group
Members as those to be delivered by the Buyer under paragraphs (b) and
(c) above (mutatis mutandis),
provided that nothing in this clause 5.6(d) shall prohibit an Approved
Sell Down Transaction (and the covenants referred to in this clause may
be so limited); and
(e) deliver to the Seller one counterpart of the Sales Tax Agreement duly
executed by the Company.
<PAGE>14
5.7 TERMINATION BY LAPSE OF TIME
If:
(a) this agreement has not already been terminated by the State under clause
3.3; and
(b) Completion has not occurred on or before 28 February 1996 (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 and Asset
Purchase Agreement) after three Business Days of receipt of the notice. 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, the Asset Sale Agreement and the
Asset Purchase Agreement shall automatically terminate on expiration of the
three Business Day notice period.
<PAGE>15
5.8 REMEDIES
If this agreement is terminated under clause 5.7 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.
5.9 REPAYMENT OF LOANS
At Completion:
(a) the Buyer shall ensure that the Company has available to it sufficient
funds to repay, and the Buyer shall procure that the Company repays:
(1) the SECV Loan; and
(2) in respect of the TCV Loan, either:
(A) (if Completion occurs on 12 December 1995), $553,953,629
(being the TCV Loan); or
(B) (if Completion does not occur on 12 December 1995),
$553,953,629 together with interest accrued on that amount,
at the Cash Rate plus 0.05 per cent per annum, reset and
compounded daily from and including 13 December 1995 to the
Completion Date;
(b) the Buyer shall ensure that the Company has available to it sufficient
funds to pay and the Buyer shall procure that the Company pays (or the
Seller, as the case may be, shall pay) the following payments:
(1) if on the Completion Date the outstanding level of cash advances
made by TCV for working capital requirements exceeds the money
standing to the credit of the Company with TCV in respect of
dealings with TCV on or after the date of this agreement), then
the Company must pay to TCV the amount of the excess;
(2) if on the Completion Date the level of money standing to the
credit of the Company with TCV exceeds the outstanding level of
cash advances made by TCV for working capital requirements in
respect of dealings with TCV on or after the date of this
agreement, then TCV must pay to the Company the amount of the
excess;
(3) all Accrued Interest; and
(4) all outstanding TCV administration fees (being an amount per month
not to exceed $13,750); and
(c) the State shall deliver to the Buyer a full discharge and release in
respect of the SECV Loan, the TCV Loan, any other amounts owing to TCV
and any liability to the Treasurer under section 121 or section 141 of
the Electricity Act.
<PAGE>16
5.10 DEFINITIONS
For the purposes of clause 5.9:
(a) a certificate signed by an officer of TCV stating the aggregate amount
of such cash advances, all accrued interest and all TCV administration
fees is, in the absence of manifest error, conclusive evidence of that
value;
(b) "ACCRUED INTEREST" means in respect of transactions with TCV after the
date of this agreement, the net amount of interest which has accrued but
remains unpaid to the account of TCV or the Company from the date of
this agreement to the Completion Date. For the purposes of calculating
the accrued interest:
(1) all interest shall be calculated each day on the balance owing to
TCV or the Company;
(2) where on the relevant day there is a cash advance owing from the
Company to TCV, the interest rate shall be the Cash Rate plus 0.05
per cent per annum;
(3) where on the relevant day there is a deposit from the Company to
TCV, the interest rate shall be the Cash Rate less 0.05 per cent
per annum; and
(4) the aggregated amount of daily interest payable or received shall
be paid by TCV or the Company (as appropriate) on the last day of
each calendar month prior to Completion and at Completion (in
respect of the period from the first day of the month in which
Completion occurs to the day of Completion); and
(c) "CASH RATE" means on the relevant date, the rate per cent per annum
determined by TCV by taking the rates quoted on the page entitled "IIAM"
on the Reuters Monitor System at or about 11am (Melbourne time).
6. INTERDEPENDENCY
6.1 INTERDEPENDENCY BETWEEN AGREEMENTS
For the avoidance of doubt the parties acknowledge and agree:
(a) the Buyer shall not be obliged to complete this agreement if the Company
fails to complete under, or is otherwise in breach of, the Asset Sale
Agreement immediately before Completion; and
(b) that once Completion under this agreement and the Asset 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.
7. AUDITOR-GENERAL REVIEW
7.1 AUDIT BY AUDITOR-GENERAL
The Buyer acknowledges that financial statements as nominated by the Treasurer
for the period from 1 July 1995 until 30 September 1995 may be audited by the
Auditor-General (or his agent) and/or reviewed by independent accountants
appointed by the Treasurer ("Treasurer's Accountants"), who may publish
accounts for any period up to and including 30 September 1995 or publish his
(or their) report on such accounts.
<PAGE>17
7.2 ACCESS TO BOOKS
The Buyer must grant, and procure that the Company grants, the Auditor-General
and the Treasurer's Accountants (and/or the agents of any of them) full and
free access at all reasonable times to those employees of the Company whose
knowledge or information is needed by the Auditor-General and/or the
Treasurer's Accountants (and/or the agents of any of them) and to all books,
records and other data pertaining to the Company, in order to enable the
Auditor-General and/or the Treasurer's Accountants to conduct his (or their)
audit(s).
8. BUYER'S OBLIGATIONS
8.1 BUYER'S WARRANTIES
The Buyer represents and warrants to the Seller and the State as at:
(a) the date of this agreement and the Completion Date that, except as set
out in schedule 4, 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) the date of this agreement and the Completion Date that, 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 Buyer (or each person who holds a beneficial interest in the
shares held by that shareholder) are a party 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) the date of this agreement and the Completion Date that, it has the
corporate power to enter into this agreement and has taken all necessary
action (including obtaining all shareholder approvals and
Authorisations) to authorise the execution, delivery and performance of
this agreement;
(d) the date of this agreement and the Completion Date, that, the agreement
constitutes a legally valid and binding obligation of the Buyer
enforceable in accordance with its terms;
(e) the date of this agreement and the Completion Date that, it will on
12 December 1995 and at Completion have sufficient funds available to it
to pay the Estimated Purchase Price and otherwise satisfy its
obligations on Completion;
(f) the date of this agreement and the Completion Date that, the execution,
delivery and performance of this agreement (and, subject to the
resolutions relating to the Financial Assistance being passed and no
successful application being made under section 205(12) of the
Corporations Law, the giving of the Financial Assistance) 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;
(g) as at the Completion Date that:
(1) neither it nor any of its Associates will hold a Prohibited
Interest; and
(2) it is not aware of any fact, matter or circumstance (including
without limitation any pending or contemplated Relevant Agreement
to which it or any of its Associates is or may be a party) which
might, after the Completion Date, result in the Company acquiring
a Prohibited Interest; or the Buyer or any Associate of the Buyer
holding a Prohibited Interest; and
(h) as at the date of this agreement it has (and on the Completion Date it
will have) disclosed to the State complete and accurate details of all
Relevant Agreements to which it or any of its Associates is or may be a
party under which a Prohibited Interest has or may be acquired.
<PAGE>18
8.2 CERTIFICATION
Subject to clause 8.1(h), the Buyer must before Completion apply to the
Treasurer for a certificate from him, setting out whether or not, based on the
information disclosed to him, the Buyer and any Associate of the Buyer holds a
Prohibited Interest.
8.3 CONTINUED HOLDING
Except with the prior written consent of the Treasurer, for the period from
the date of this agreement to the Completion Date and 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 4
where the relative percentage beneficial ownership of shares in the
Company (as set out in schedule 4) are maintained);
(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 bona fide loan or debt,
provided that nothing in this clause 8.3 shall prohibit an Approved Sell Down
Transaction.
8.4 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.
<PAGE>19
8.5 BUYER'S INDEMNITIES
Without prejudice to clause 10, 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):
(a) any material breach of, or material default under, this agreement by the
Buyer;
(b) any act or decision of the directors of the Company as contemplated by
this agreement or failure to comply with section 205(10) of the
Corporations Law; and
(c) 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.
8.6 CROSS OWNERSHIP REGULATIONS
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 5 (including their extension to apply to trusts).
9. 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.
10. SELLER'S WARRANTIES
10.1 GIVING OF WARRANTIES
The Seller gives the Seller's Warranties in favour of the Buyer as at the date
of this agreement.
10.2 RELIANCE
The Buyer has entered into this agreement in reliance on the Seller's
Warranties and other terms of this agreement and nothing else.
10.3 ACKNOWLEDGMENT
The Buyer acknowledges and agrees that:
(a) on the basis that the Disclosures have, to the knowledge and belief of
the State, 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;
(b) it has entered into this agreement after satisfactory inspection and
investigation, and with a knowledge of the affairs of the Company by a
review of the Disclosures and other information available to it,
including in meetings with management of the Company arranged by the
Advisers, and including in connection with the Buyer's due diligence
investigations on any other electricity distribution companies sold or
to be sold by the Seller;
(c) the energy levy payable by the Company under the pool rules as modified
by any Energy Levy Order is 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 energy levy.
Accordingly, the Buyer will not, and will ensure that the Company does
not, challenge the appropriateness, amount or basis of such levies at
the rates set by, or pursuant to, any law as at the date of this
agreement;
(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) 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 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,
including 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 its impact on,
the Company, including as to 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;
(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 Plant and Equipment and Intellectual Property),
for the purposes of depreciation, capital gains or otherwise; or
(6) the giving of the Financial Assistance by the Company;
(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; and
(f) no "land" for the purposes of section 32 of the Sale of Land Act 1962 is
being sold under the Asset Sale Agreement.
In this clause 10.3, a reference to the knowledge and belief or opinion of the
State or the Seller shall be limited to and constituted by the knowledge and
belief or opinion obtained or formed by the State or the Seller (as the case
may be) after due enquiry of Peter Troughton and Sally Farrier.
<PAGE>20
10.4 REMEDIES
The sole remedy of the Buyer for breach of any Seller Warranty is to damages
in accordance with this clause 10, and in no event is the Buyer to be entitled
to rescind this agreement.
<PAGE>21
10.5 ABILITY TO CLAIM
The Buyer is precluded from bringing a claim for breach of any Seller
Warranty, to the extent:
(a) that the claim is based on any fact, matter or circumstance:
(1) set out in the Disclosures;
(2) (i) peculiar to the electricity industry; and
(ii) within the actual knowledge of the Guarantor or which ought
to have been known by the Guarantor or the Buyer, having
regard to its knowledge (and the knowledge of its advisers)
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 the Guarantor;
(b) that the claim is attributable to action taken (or not taken as the case
may be) by the Seller or the Company on or after the date of this
agreement (including, without limitation, all actions taken by the
Company on Completion as contemplated by this agreement), after
consultation with, and receipt of no objection within a reasonable
period from, the Buyer;
(c) of the provision made in the Draft Balance Sheet for the fact, matter or
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
peculiar to the electricity industry which was generally known in
relation to the Victorian electricity industry before the Completion
Date;
(f) of any change after the Completion Date in any applicable federal law
which has retrospective effect;
(g) that either the Buyer or the Company has failed to comply with the
procedures set out in clause 11, 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
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.
<PAGE>22
10.6 LIMITATION ON CLAIMS
The Buyer's right to claim under the Seller's Warranties is limited as
follows:
(a) the Buyer 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 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 may recover from the Seller
in respect of all claims is $40 million.
10.7 QUANTIFICATION OF CLAIMS
The quantum of any liability the Seller has to the Buyer under the Seller's
Warranties and otherwise under this agreement shall be determined solely by
reference to the direct financial impact on the Company which results from the
facts, matters or circumstances on which the claim is based, not being as
Warranted.
10.8 ESTIMATED STATE EQUIVALENT TAX
The State Equivalent Tax imposed on the Company with respect to the period
commencing on and from 1 July 1995 and ending on 28 February 1996 is estimated
to be as follows:
(a) in respect of profit (before State Equivalent Tax) on sale of the Plant
and Equipment and Intellectual Property by the Company: $136,684,000;
(b) in respect of operating profit (before State Equivalent Tax) earnt by
the Company in the months of:
. 1 July - 30 November 1995 $Nil
. December 1995 $Nil
. January 1996 $Nil
. February 1996 $Nil,
(in aggregate the "Estimated State Equivalent Tax"). The Buyer shall procure
the Company does not challenge the basis of the amounts specified above.
The Buyer shall procure that the Company lodges a return in respect of the
State Equivalent Tax payable by the Company for the above periods within 60
days after the Completion Date. The Company must prepare the return
consistently with past practice and, in particular, consistent with binding
tax rulings and instructions of the Treasurer. Any necessary adjustment of the
actual State Equivalent Tax payable by the Company shall be made as part of
the Purchase Price calculation.
11. CLAIMS PROCEDURE
11.1 CLAIMS PROCEDURE
On receipt of a notice under clause 10.6(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 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
11 or make any admission in respect of any claim in respect of which an
indemnity may be claimed under this clause 11 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 by it or the Company 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 under this agreement.
<PAGE>23
12. ACTION PENDING COMPLETION
12.1 CARRYING ON OF BUSINESS
(a) Before Completion the Seller and the State will ensure that, except as
expressly contemplated by this agreement, 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 unless
the Buyer consents (or fails to object) in accordance with clause 12.2
or as otherwise contemplated by this agreement:
(1) the Company does not enter into any contractual commitment
requiring the Company to pay more than $100,000 (or commitments
with a particular person where the aggregate value of those
commitments is more than $100,000) or a commitment for a period
more than 5 years from the Completion Date, except as otherwise
disclosed in the Disclosures, commitments to Victorian Power
Exchange made in the ordinary course of business and the Company's
program of bushfire mitigation;
(2) the Company does not issue any shares, options or securities which
are convertible into shares in the Company;
(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, (and, except in the
ordinary course of business) 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 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);
(6) the Company obtains the authorisation of the Buyer to any
expenditure or payment in excess of $100,000;
(7) the Company does not incur any indebtedness, except under the TCV
Loan or with TCV in the ordinary course of business;
(8) the Company does not declare or pay any dividend or make any
distribution of profits or capital;
(9) the Company does not mortgage, pledge or encumber any of its
assets, except as a result of operation of law;
(10) the Company does not, except in the ordinary course of business,
dispose of, or agree to dispose of any assets; and
(11) the Company does not acquire any assets outside the ordinary
course of business or acquire any Equity Securities.
<PAGE>24
12.2 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. The Buyer's
Representative shall be Peter Vines.
(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
12.1(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.
12.3 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;
(b) provide the Buyer with copies of all documents listed in the Data Room
Index dated 8 November 1995, excluding copies of documents already
provided as listed in schedule 2;
(c) promptly provide the Buyer with all explanations and information it
requests in respect of the Company or the Business;
(d) ensure that the Buyer, and any person authorised by the Buyer is given
reasonable access to senior management of the Company; and
(e) provide an office for personnel of Buyer at the Company's headquarters.
<PAGE>25
13. ANNOUNCEMENTS
13.1 LEGAL REQUIREMENTS
The Buyer may not (and must procure that the Asset Buyer does not) disclose
anything in respect of this agreement or the terms of sale of the Shares or
Plant and Equipment and Intellectual Property except 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 the Buyer
must
(c) use reasonable endeavours to accommodate reasonable requests by the
State as to the form and content of the disclosure;
(d) claim and apply for, to the maximum extent possible, any exemptions or
rights of confidentiality that may be afforded the Buyer or the Asset
Buyer under such laws or requirements; and
(e) co-operate with the State's lawyers and, if reasonably required by the
State or its lawyers, follow the directions of the State's lawyers in
making any such claims or applications and in making submissions and
approaches to relevant authorities in respect of the claims or
applications referred to in (d).
13.2 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 Plant and Equipment and Intellectual Property 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.
13.3 FURTHER PUBLICITY
Subject to clauses 13.1 and 13.2 the Buyer must not (and must procure that the
Asset Buyer does not) disclose the provisions of this agreement, the Asset
Sale Agreement or Asset Purchase Agreement, the terms on which the Shares are
sold or the terms on which the Plant and Equipment and Intellectual Property
are sold and repurchased unless the State has first consented in writing.
13.4 COMPANY'S COMPLIANCE WITH ELECTRICITY ACT
The 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.
14. JOINT COVENANTS, DUTIES, COSTS AND EXPENSES
14.1 GOVERNMENT NOTIFICATION, ETC
Promptly following the execution of this agreement, the parties will proceed
to prepare and file with the appropriate governmental authorities any notices,
requests for approval or waiver, if any, that are required from governmental
authorities in connection with transactions contemplated hereby, and the
parties shall diligently and expeditiously prosecute and co-operate fully in
the prosecution of such requests for approval or waiver and all proceedings
necessary to secure such approvals and waivers.
<PAGE>26
14.2 BEST EFFORTS; NO INCONSISTENT ACTION
Each party will use its best efforts to effect the transaction contemplated by
this agreement and to fulfil the conditions to the obligations of the parties
set forth in this agreement. No party will take any action inconsistent with
its obligations under this agreement or that could hinder or delay the
consummation of the transactions contemplated by this agreement.
14.3 DUTY
The 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.
14.4 COSTS AND EXPENSES
Subject to clause 14.3, 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 14.3(a).
14.5 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.
15. GUARANTOR'S GUARANTEE AND INDEMNITY
15.1 GUARANTEE
The Guarantor unconditionally and irrevocably guarantees to the Seller and the
State the due and punctual performance of the Buyer's obligations under this
agreement (including any indemnities given in favour of the Seller or the
State).
15.2 INDEMNITY
As a separate and independent principal obligation, the Guarantor 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 the Buyer in the performance of any such obligation or
from any such express or implied obligations being unenforceable.
15.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 15 applies:
(1) to the present and future obligations of the Buyer under this
agreement; and
(2) to this agreement, as amended, supplemented, renewed or replaced.
(b) The obligations of the Guarantor under this clause 15 extend to any
change in the obligations of the Buyer as a result of:
(1) any amendment, supplement, renewal or replacement of this
agreement; or
(2) the occurrence of any other thing.
(c) This clause 15 is not affected, nor are the obligations of the Guarantor
under this agreement released or discharged or otherwise affected, by
anything which, but for this provision, might have that effect.
(d) This clause 15.3 applies:
(1) regardless of whether the Guarantor is aware of, or has consented
to, or is given notice of, any amendment, supplement, renewal or
replacement of any agreement to which the Seller, the State, the
Buyer are a party or the occurrence of any other thing; and
(2) irrespective of any rule of law or equity to the contrary.
<PAGE>27
15.4 AVOIDANCE OF PAYMENTS
(a) If any payment, conveyance, transfer or other transaction relating to or
affecting any obligation of the Buyer 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 Guarantor under this clause 15 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 15.4(a)(3),
had not been made and the Guarantor must immediately take all action and
sign all documents necessary or required by the Seller or the State to
restore to the Seller and the State the benefit of this clause 15 and
any Security Interest held by the Seller or the State immediately before
the payment, conveyance, transfer or transaction.
(b) Clause 15.4(a) applies whether or not the Seller or the State knew, or
ought to have known of, anything referred to in that clause.
15.5 CONTINUING GUARANTEE AND INDEMNITY
This is a continuing obligation of the Guarantor, despite:
(a) any settlement of account; or
(b) the occurrence of any other thing,
and remains in full force and effect until:
(c) the obligations of the Buyer under this agreement have been performed;
and
(d) this clause 15 has been finally discharged by the Buyer.
15.6 WARRANTIES OF THE GUARANTOR
The Guarantor represents and warrants that:
(a) it has the corporate power to enter into this guarantee and indemnity
and has taken all necessary action to authorise the execution, delivery
and performance of this agreement;
(b) this guarantee and indemnity constitutes a legally valid and binding
obligation of the guarantor enforceable in accordance with its terms;
and
(c) the execution, delivery and performance of this guarantee and indemnity
will not violate any provision of:
(1) any law or regulation or any order or decree of any Governmental
Agency of the Commonwealth of Australia or any state or territory;
(2) the memorandum or articles of association of the Guarantor or
equivalent constituent documents; and
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Guarantor 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>28
16. STATE'S GUARANTEE AND INDEMNITY
16.1 GUARANTEE
The State, pursuant to section 85B of the State Electricity Commission Act
1958, unconditionally and irrevocably guarantees to the Buyer the due and
punctual performance of the Seller's obligations under this agreement
(including any indemnities given in favour of the Buyer).
16.2 INDEMNITY
As a separate and independent principal obligation, the State indemnifies the
Buyer against all liabilities, losses, damages, costs or expenses incurred or
suffered by the Buyer and all actions, proceedings, claims or demands made
against the Buyer as a result of default by the Seller in the performance of
any such obligation or from any such express or implied obligations being
unenforceable.
16.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 16 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 16 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.
(c) This clause 16 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 16.3 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.
(e) The indemnity in clause 16.2 does not apply to the giving of the
Financial Assistance nor the resolutions to be passed by the Seller and
the directors of the Company as contemplated by this agreement.
<PAGE>29
16.4 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 16 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 16.4(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 the benefit of this clause 16 and any Security Interest held by
the Buyer immediately before the payment, conveyance, transfer or
transaction.
(b) Clause 16.4(a) applies whether or not the Seller knew, or ought to have
known of, anything referred to in that clause.
16.5 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,
and remains in full force and effect until:
(c) the obligations of the Seller under this agreement have been performed;
and
(d) this clause 16 has been finally discharged by the Buyer.
16.6 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.
17. NOTICES
17.1 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,
Level 5, 452 Flinders Street
Melbourne 3000
Attention: Mr G Brooke
Facsimile: (03) 9679 4747;
(2) if to the State: The Treasurer
Address: Office of the Treasurer
Level 4, 1 Treasury Place
East Melbourne 3002
Attention: Mr John Perham
Facsimile: (03) 9651 6487;
(3) if to the Buyer: Pacificorp Australia Holdings Pty Limited
C/- Phillips Fox
Address: Level 50, 120 Collins Street
Melbourne 3000
Attention: Peter Vines/Judith Earls
Facsimile: (03) 9274 5111; and
(4) if to the Guarantor: Pacificorp Holdings, Inc.
Address: 700 NE Multnomah
1600 POP
Portland, Oregon
United States of America
Attention: Daniel L Spalding/Bruce Williams
Facsimile: (503) 731 2136
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.
<PAGE>30
17.2 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 17.1(c)(2) and informs the sender that it is
not legible.
<PAGE>31
18. ON-GOING OBLIGATIONS
18.1 CONTINUED ACCESS
The 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 and the Audit Act 1994.
Accordingly, the Buyer must ensure that from Completion up until 31 December
1996:
(a) 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 referrable to the period on and before the
Completion Date) to enable it to comply with these obligations;
(b) if, to comply with such reporting obligations, the Auditor-General or
the Treasurer requires the Company to prepare any accounts or other
financial information, the Company must either:
(1) prepare such accounts or other financial information on a basis
consistent with the accounting policies and practices applied by
the Company in the June Accounts; or
(2) prepare such accounts or other financial information on the basis
of its then current accounting policies and practices, but with a
reconciliation setting out the differences between its current
accounting policies and practices and those which applied in the
June accounts; and
(c) the Company at all times keeps the State promptly informed on all
rulings received on asset valuations for depreciation purposes.
19. GENERAL
19.1 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.
19.2 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 19.2 may not itself be waived except in writing executed by
the party granting the waiver.
<PAGE>32
19.3 VARIATION
A variation of any term of this agreement must be in writing and executed by
the parties.
19.4 FURTHER ASSURANCES
Each party must do all things, and execute all further documents, necessary to
give full effect to this agreement.
19.5 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.
19.6 THIS AGREEMENT SUPERSEDES OTHERS
This agreement and the Asset Sale Agreement embody the entire agreement
between the parties with respect to the subject matter of this agreement and
supersede 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.
<PAGE>
SCHEDULE 1
SELLER'S WARRANTIES
<PAGE>
SCHEDULE 1
SELLER'S WARRANTIES
1. TITLE
The Seller will at Completion be the beneficial owner of the Shares (which are
free of all Security Interests and other third party interests or rights) with
the legal ownership of the Shares held as follows:
the Seller: one ordinary share;
Mr Graeme Greaves: one ordinary share;
Mr John Drewett: one ordinary share;
Mr Peter Coughlin: one ordinary share; and
Mr Noel McMahen: one ordinary share.
2. CONSENTS
On Completion the Seller and Nominees will be able to sell and transfer the
Shares without the consent of any other person and free of any pre-emptive
rights or rights of first refusal.
3. ISSUED CAPITAL
On Completion the Shares are all the issued Equity Securities in the capital
of the Company.
4. AUTHORISED CAPITAL
The authorised capital of the Company at the date of this agreement is
$500,000,000 divided into 500,000,000 ordinary shares of $1.00 each.
5. FULLY PAID
On Completion the Shares will be fully paid and no money will be owing in
respect of them.
6. ISSUE OF OTHER SECURITIES
The Company is not under any obligation to issue or allot, and has not granted
any person the right to call for the issue or allotment of, any shares or
other securities of the Company at any time.
7. NO LEGAL IMPEDIMENT
Except for those matters relating to the giving of the Financial Assistance by
the Company, the execution, delivery and performance by the Seller and the
State of this agreement complies with:
(a) each law, regulation, Authorisation, ruling, judgment, order or decree
of any Governmental Agency; and
(b) any Security Interest or document which is binding on the Seller.
<PAGE>2
8. AUTHORISATIONS
The Treasurer has the power to execute this agreement on behalf of the State,
and, except for those matters relating to the giving of the Financial
Assistance by the Company, the Seller has taken all necessary action to
authorise the execution, delivery and performance of this agreement in
accordance with its terms.
<PAGE>
SCHEDULE 2
DISCLOSURES
1. All information which is available on public record.
2. All information set out in the Information Memorandum dated August 1995.
3. All information set out in the documents listed in the table set out on
the next two pages.
<PAGE>
TABLE OF CONTENTS
1. DEFINITIONS AND INTERPRETATION 2
1.1 Definitions 2
1.2 Interpretation 7
2. SALE AND PURCHASE 8
2.1 Sale of shares 8
2.2 Treasurer's Approval 8
2.3 Method of Payment 8
2.4 Profit Entitlement 9
2.5 Dividend Payment 9
2.6 Section 205 9
3. DEPOSIT 9
3.1 Payment 9
3.2 Non-refund 9
3.3 Notice of termination for breach 10
3.4 Automatic termination 10
3.5 Remedies 10
4. PURCHASE PRICE AND PAYMENTS 10
4.1 Amount 10
4.2 Payments 11
4.3 Interest 11
5. COMPLETION 12
5.1 Date for Completion 12
5.2 Completion Date Actions 12
5.3 Delivery of documents 12
5.4 First meeting 13
5.5 Second meeting 13
5.6 Buyer's obligations at Completion 13
5.7 Termination by lapse of time 14
5.8 Remedies 15
5.9 Repayment of Loans 15
5.10 Definitions 16
6. INTERDEPENDENCY 16
6.1 Interdependency between agreements 16
7. AUDITOR-GENERAL REVIEW 16
7.1 Audit by Auditor-General 16
7.2 Access to books 17
<PAGE>
8. BUYER'S OBLIGATIONS 17
8.1 Buyer's Warranties 17
8.2 Certification 18
8.3 Continued Holding 18
8.4 Buyer's Undertakings 18
8.5 Buyer's Indemnities 19
8.6 Cross Ownership Regulations 19
9. EMPLOYEE EQUITY 19
10. SELLER'S WARRANTIES 19
10.1 Giving of Warranties 19
10.2 Reliance 19
10.3 Acknowledgment 19
10.4 Remedies 20
10.5 Ability to claim 21
10.6 Limitation on claims 22
10.7 Quantification of Claims 22
10.8 Estimated State Equivalent Tax 22
11. CLAIMS PROCEDURE 22
11.1 Claims procedure 22
12. ACTION PENDING COMPLETION 23
12.1 Carrying on of business 23
12.2 Buyer's Representative 24
12.3 Access 24
13. ANNOUNCEMENTS 25
13.1 Legal requirements 25
13.2 Disclosure to officers and professional advisers 25
13.3 Further publicity 25
13.4 Company's compliance with Electricity Act 25
14. JOINT COVENANTS, DUTIES, COSTS AND EXPENSES 25
14.1 Government Notification, etc 25
14.2 Best Efforts; No Inconsistent Action 26
14.4 Costs and expenses 26
14.5 Costs of performance 26
15. GUARANTOR'S GUARANTEE AND INDEMNITY 26
15.1 Guarantee 26
15.2 Indemnity 26
15.3 Extent of guarantee and indemnity 26
15.4 Avoidance of payments 27
15.5 Continuing guarantee and indemnity 27
15.6 Warranties of the Guarantor 27
<PAGE>
16. STATE'S GUARANTEE AND INDEMNITY 28
16.1 Guarantee 28
16.2 Indemnity 28
16.3 Extent of guarantee and indemnity 28
16.4 Avoidance of payments 29
16.5 Continuing guarantee and indemnity 29
16.6 Warranties of the State 29
17. NOTICES 29
17.1 General 29
17.2 Legibility of facsimile transmission 30
18. ON-GOING OBLIGATIONS 31
18.1 Continued Access 31
19. GENERAL 31
19.1 Governing law and jurisdiction 31
19.2 Waivers 31
19.3 Variation 32
19.4 Further assurances 32
19.5 Third party rights 32
19.6 This agreement supersedes others 32
SCHEDULES
Schedule 1 Seller's Warranties
Schedule 2 Disclosures
Schedule 3 Zone Sub-Station Properties
Schedule 4 Buyer's Shareholding
Schedule 5 Cross Ownership Regulations
ANNEXURES
Annexure A June Accounts
Annexure B Agreements etc between Group Members/Shareholders in the Buyer
Annexure C Draft Balance Sheet (as at 30 September 1995)
Annexure D Sales Tax Agreement
<PAGE>
SCHEDULE 2
DISCLOSURES
<PAGE>
SCHEDULE 3
ZONE SUB-STATION PROPERTIES
NOT APPLICABLE
<PAGE>
SCHEDULE 4
BUYER'S SHAREHOLDING
SEE STRUCTURE CHART ATTACHED
<PAGE>
SCHEDULE 5
CROSS OWNERSHIP REGULATIONS
<PAGE>
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: )
..............................
......................................... Witness
Administrator
..............................
Name (please print)
.........................................
Name (please print)
SIGNED by THE HONOURABLE )
ALAN ROBERT STOCKDALE for )
and on behalf of the Crown in right of )
the State of Victoria in the presence of: )
)
......................................... )
Signature of witness )
)
......................................... )
Name of witness (block letters) )
)
......................................... ) ..............................
Address of witness ) Signature of
) Alan Robert Stockdale
......................................... )
Occupation of witness )
)
THE COMMON SEAL of )
PACIFICORP AUSTRALIA )
HOLDINGS PTY LTD (ACN 068 231 )
005) is affixed in accordance with its )
articles of association in the presence )
of: )
......................................... ..............................
Signature of authorised person Signature of authorised person
......................................... ..............................
Office held Office held
......................................... ..............................
Name of authorised person (block letters) Name of authorised person
(block letters)
SIGNED by Daniel L Spalding as )
authorised representative for )
PACIFICORP HOLDINGS, INC. in )
the presence of: )
......................................... ..............................
Signature of witness Daniel L. Spalding
.........................................
Occupation
.........................................
Name of witness (block letters)
<PAGE>
ANNEXURE A
JUNE ACCOUNTS
<PAGE>
ANNEXURE B
AGREEMENTS ETC BETWEEN GROUP
MEMBERS/SHAREHOLDERS IN THE BUYER
NOT APPLICABLE
<PAGE>
ANNEXURE C
DRAFT BALANCE SHEET (AS AT 30 SEPTEMBER 1995)
<PAGE>
ANNEXURE D
SALES TAX AGREEMENT
<PAGE>
EXHIBIT 2.3
PACIFICORP AUSTRALIA HOLDINGS PTY LTD
ACN 068 231 005
and
POWERCOR AUSTRALIA LIMITED
ACN 064 651 109
____________________________________________________________________________
Asset Purchase Agreement
____________________________________________________________________________
PHILLIPS FOX
50th Floor
120 Collins Street
Melbourne VIC 3000
Ref: JAE:PACI9000-006
<PAGE>1
THIS ASSET PURCHASE AGREEMENT is made on 12 December 1995 between the
following parties:
1. PACIFICORP AUSTRALIA HOLDINGS PTY LTD ACN 068 231 005 of 50th Floor, 120
Collins Street, Melbourne in the State of Victoria ("Seller"); and
2. POWERCOR AUSTRALIA LIMITED ACN 064 651 109 of Level 3, 77 Southbank
Boulevard Southbank in the State of Victoria ("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 Asset Buyer 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 days 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 and Intellectual Property.
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"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 Government 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.
"COMPLETION DATE" is the day on which Completion occurs under the Share
Sale Agreement.
"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 or the
government of any state, territory, municipality or other political
subdivision of a country, and any minister, administrative or judicial
body, department, commission, authority, instrumentality, tribunal,
agency or entity of any such government.
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"INTELLECTUAL PROPERTY" means rights to all patents, copyrights and
designs used in the business of the Seller, and includes:
(a) rights under licence in respect of such patents, copyrights or
designs; and
(b) equitable rights in respect of such patents, copyrights or designs
or such licences.
"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 Company)
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,
switchyard 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, but excludes motor vehicles and mobile plant
owned or leased by the Seller and, for the avoidance of doubt,
does not include capital works in progress.
"POWER" means any right, power, authority, discretion or remedy
conferred on the parties by this agreement or any applicable law.
"PURCHASE PRICE" means A$1,650,000,000.00.
"SECURITY INTEREST" means an interest or power:
(a) reserved in or over an interest in any asset excluding 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 for 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 dated 16 December 1995,
between State Electricity Commission of Victoria, the State of Victoria,
the Seller and PacifiCorp Holdings Inc. under which the Seller shall
acquire, inter alia, all the issued ordinary shares in the capital of
the Asset Buyer.
"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.
<PAGE>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 or 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 anything is to be done is not a
Business Day, that thing must be done 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;
(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; and
(r) terms defined in the Share Sale agreement shall have the meanings
given to them in the Share Sale Agreement in this agreement unless
the context otherwise requires.
<PAGE>5
2. SALE OF 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:
Plant and Equipment $1,610,000,000.00
Intellectual Property $40,000,000.00
_________________
Total: $1,650,000,000.00
_________________
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.
<PAGE>6
2.2 DATE FOR SATISFACTION OF PURCHASE PRICE
On and subject to the terms of this agreement the Asset Buyer must
satisfy the Purchase Price on the Completion Date.
3. COMPLETION
3.1 DATE AND TIME FOR COMPLETION
Completion must take place on the Completion Date at the place nominated
for completion under the Share Sale Agreement and shall occur
immediately after completion under the Asset Sale Agreement.
3.2 PROPERTY AND RISK
Property and risk in the Assets shall pass to the Asset Buyer on the
Completion Date, subject to satisfaction of the Purchase Price.
4. 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) this 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>7
5. SELLER'S WARRANTIES
5.1 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.
5.2 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.
<PAGE>8
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 the
agreement; and
(b) any fine, penalty or other cost in respect of a failure to pay any
Duty.
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
below:
(1) if to the Seller:
Address: 50th Floor
120 Collins Street,
Melbourne Vic 3000
Attention: Mr Peter Vines/Ms J Earls
Facsimile: (03) 9274 5111
(2) if to the Asset Buyer:
Address: Level 3
77 Southbank Boulevard
Southbank Vic 3006
Attention: The Company Secretary
Facsimile: 9679 4566
or as specified to the sender by any party by notice;
<PAGE>9
(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 is after 4.00pm (addressee's time) it is regarded as received
at 9.00am 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 GOVERNING LAW AND JURISDICTION
(a) The 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 partys granting the waiver.
(b) A failure or delay in the 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.
<PAGE>11
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.
8.5 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.
8.6 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.
EXECUTED by the parties as an agreement.
<PAGE>12
THE COMMON SEAL of )
PACIFICORP AUSTRALIA )
HOLDINGS PTY LTD ACN 068 231 )
005 was hereunto affixed in )
accordance with its Articles of )
Association in the presence of: )
..................................
Director - Daniel L. Spalding
..................................
Director - Verl R Topham
THE COMMON SEAL of )
POWERCOR AUSTRALIA LIMITED )
(ACN 064 651 109) was hereunto )
affixed in accordance with its )
Articles of Association in the )
presence of: )
..................................
Director - Daniel L. Spalding
..................................
Director - Verl R Topham
<PAGE>i
CONTENTS
1. DEFINITIONS AND INTERPRETATION 1
1.1 Definitions ................................................ 1
1.2 Interpretation ............................................. 4
2. SALE OF PURCHASE 5
2.1 Sale of Assets ............................................. 5
2.2 Date for Satisfaction of Purchase Price .................... 6
3. COMPLETION 6
3.1 Date and Time for Completion ............................... 6
3.2 Property and Risk .......................................... 6
4. ASSET BUYER'S WARRANTIES 6
5. SELLER'S WARRANTIES 7
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 ....................... 10
8. GENERAL 10
8.1 Governing law and jurisdiction ............................. 10
8.2 Waivers .................................................... 10
8.3 Variation .................................................. 11
8.4 Further assurances ......................................... 11
8.5 Third Party rights ......................................... 11
8.6 This agreement supersedes others ........................... 11
<PAGE>
EXHIBIT 23
AUDITOR'S CONSENT
I consent to the incorporation by reference in Registration Statement Nos.
33-51163, 33-55309 and 33-62095, all on Form S-3; in Post-Effective Amendment
No. 1 to Registration Statement No. 33-17970 and Registration Statement Nos.
33-51277, 33-54169, 33-56625, 33-57043 and 33-58461, all on Form S-8; and in
Registration Statement Nos. 33-36239 and 33-58569 on Form S-4 of my report,
dated 3 October, 1995, included with the Current Report on Form 8-K of
PacifiCorp dated 12 December, 1995.
Melbourne, Australia C.A. BARAGWANATH
12 December, 1995 Auditor-General
