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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) APRIL 30, 1999
---------------------------
RAILAMERICA, INC.
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(Exact name of registrant as specified in its charter)
DELAWARE
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(State or other jurisdiction of incorporation)
0-20618 65-0328006
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(Commission File Number) (IRS Employer Identification No.)
301 YAMATO ROAD, SUITE 1190
BOCA RATON, FLORIDA 33431
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code (561) 994-6015
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N/A
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 30, 1999, RailAmerica, Inc. (the "Company"), through its
wholly owned Australian subsidiary, Freight Victoria Limited ("Freight
Victoria"), completed the acquisition (the "Acquisition") of the assets
comprising the railroad freight business of V/Line Freight Corporation ("V/Line
Freight"), a corporation established by the Government of the State of Victoria,
Australia. V/Line Freight was established in March 1997 as part of Victoria's
public transportation privatization process and assumed many of the activities
formerly carried out by the V/Line Freight business unit of the Public
Transportation Corporation of the Government of Victoria.
Under the Sale of Assets Agreement (the "Agreement") dated February
22, 1999 by and between the Company, Freight Victoria and V/Line Freight,
Freight Victoria acquired all of the locomotives, wagons, motor vehicles,
equipment, stock, spare parts inventory and accounts receivable, certain
business, brand and trade names and trade marks, and the outstanding business
contracts of V/Line Freight for a purchase price of AUD$73.4 million in cash
(approximately U.S.$49.0 million). In connection with the Acquisition, Freight
Victoria also entered into other agreements, including a primary infrastructure
lease (the "Infrastructure Lease") with the Director of Public Transport of
Australia and various facilities leases, access agreements, maintenance and
service agreements and other miscellaneous agreements. Pursuant to the
Infrastructure Lease, Freight Victoria received a 45-year lease of the
non-electrified intrastate Victorian railway tracks and infrastructure.
Pursuant to certain other agreements, Freight Victoria is responsible for,
among other things, track and rolling stock maintenance, train control, access
to the railway infrastructure by other rail operators and safety and signaling.
Under a letter issued by Freight Victoria in connection with its bid for the
V/Line Freight business, Freight Victoria prepaid in cash the net present value
of the rental payments for the Infrastructure Lease totaling AUD$89.7 million
(approximately U.S.$60.0 million). Freight Victoria commenced operations of the
rail-based freight business on May 1, 1999.
To facilitate the Acquisition, Barclays Bank PLC provided Freight
Victoria with a U.S. $100.0 million bridge loan under a senior secured loan
facility (the "Loan Facility"). Upon the execution of the Loan Facility, the
Company issued to Barclays Bank PLC warrants to acquire 750,000 shares of its
common stock at an exercise price per share of $9.75. The Company also used
approximately U.S.$19.0 million in proceeds from two private offerings of its
equity securities to fund a portion of the purchase price for the Acquisition.
The foregoing information contained in this Form 8-K with respect to
the Agreement, the Infrastructure Lease and the Loan Facility is qualified in
its entirety by reference to the complete texts of the Agreement, the
Infrastructure Lease and the Loan Facility, which are filed herewith as
exhibits.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Financial Statements of Business Acquired.
It is currently impracticable to provide the financial
information required pursuant to Item 7(a) prior to the due
date of this Report. This Report will be amended within
60 days of the date this Report is filed to include such
financial information.
(b) Pro Forma Financial Information.
It is currently impracticable to provide the pro forma
financial information required pursuant to Item 7(b) prior to
the due date of this Report. This Report will be amended
within 60 days of the date this Report is filed to include
such pro forma financial information.
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(c) Exhibits
EXHIBIT
NUMBER DESCRIPTION
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10.1 Sale of Assets Agreement dated February 22, 1999 by and among
RailAmerica, Inc., Freight Victoria Limited and V/Line
Freight Corporation
10.2 Primary Infrastructure Lease dated April 30, 1999 by and
among the Director of Public Transport and Freight Victoria
Limited
10.3 Senior Secured Loan Facility and Guaranty Agreement dated as
of April 30, 1999 among Freight Victoria Limited, as
Borrower, RailAmerica, Inc., RailAmerica Australia, Inc. and
RailAmerica Australia Pty Ltd., as Guarantors, Barclays Bank
PLC, as Lender and Administrative Agent, and Barclays
Capital, as Arranger.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
RAILAMERICA, INC.
Dated: May 17, 1999 By: /s/ Gary O. Marino
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Name: Gary O. Marino
Its: Chief Executive Officer,
President and Treasurer
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EXHIBIT 10.1
ARTHUR ROBINSON ALLENS
& HEDDERWICKS ARTHUR ROBINSON
GROUP
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V/LINE FREIGHT CORPORATION
(VLF)
AND
FREIGHT VICTORIA LIMITED
AND
RAILAMERICA, INC.
- - -------------------------------------------------------------------------------
SALE OF ASSETS AGREEMENT
- - -------------------------------------------------------------------------------
ARTHUR ROBINSON & HEDDERWICKS
Melbourne
Ref RLO:PJS
Tel 9614 1011
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TABLE OF CONTENTS
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1. DEFINITIONS AND INTERPRETATION.................................................1
1.1 Definitions...........................................................1
1.2 Interpretation.......................................................15
1.3 Consents or approvals................................................15
2. SALE OF PLANT AND EQUIPMENT...................................................16
3. PURCHASE PRICE................................................................17
4. COMPLETION....................................................................18
4.1 Time and venue.......................................................18
4.2 VLF's obligations....................................................18
4.3 Purchaser's obligations..............................................19
4.4 Duty.................................................................21
4.5 Interdependence of Completion........................................22
4.6 Approval of assignment...............................................22
5. PASSING OF PROPERTY...........................................................22
6. REGISTRATION OF OWNERSHIP.....................................................22
7. RISK..........................................................................22
8. EMPLOYEES.....................................................................22
9. SUPERANNUATION ARRANGEMENTS...................................................25
9.1 Members of the State Superannuation Fund.............................25
9.2 Members of the Victorian Superannuation Fund.........................27
9.3 Administrative arrangements..........................................29
9.4 Superannuation Adjustment............................................31
10. BOOK DEBTS....................................................................31
11. SUBSISTING ORDERS AND CONTRACTUAL OBLIGATIONS.................................31
12. SOFTWARE LICENCES.............................................................32
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13. HIRING AGREEMENTS.............................................................32
14. ADJUSTMENT OF OUTGOINGS.......................................................32
15. WARRANTIES AND ACKNOWLEDGMENTS................................................33
15.1 Purchaser warranties.................................................33
15.2 VLF warranties.......................................................35
15.3 Exclusion of other warranties and warranty claims....................35
15.4 Purchaser acknowledgments............................................37
16. CONTINUITY OF THE BUSINESS....................................................41
19. INTEREST ON DEFAULT...........................................................42
20. BOOKS AND RECORDS.............................................................43
21. ACCESS........................................................................43
22. CONFIDENTIALITY...............................................................43
22.1 General obligations..................................................43
22.2 Exceptions...........................................................44
23. CONSEQUENCES OF TERMINATION...................................................45
24. DUTIES, COSTS AND EXPENSES....................................................45
24.1 Payment of Duty......................................................45
24.2 Indemnity............................................................45
24.3 Costs and expenses...................................................45
25. NO MERGER.....................................................................45
26. ASSIGNMENT....................................................................45
27. FURTHER ASSURANCES............................................................46
28. ENTIRE AGREEMENT..............................................................46
29. NO WAIVER.....................................................................46
30. NOTICES.......................................................................46
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31. GUARANTEE.....................................................................47
31.1 Guarantee............................................................47
31.2 Liability unaffected by other events.................................48
31.3 Continuing guarantee and indemnity...................................48
32. GOVERNING LAW AND JURISDICTION................................................48
33. COUNTERPARTS..................................................................48
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SALE OF ASSETS AGREEMENT
THIS AGREEMENT is made on 22 February 1999 between:
1. V/LINE FREIGHT of Level 1, 589 Collins Street, Melbourne (trading as
V/Line Freight Corporation) (VLF);
2. FREIGHT VICTORIA LIMITED (ACN 075 295 644) incorporated in the
Australian Capital Territory of Level 23, 101 Collins Street,
Melbourne; and
3. RAILAMERICA, INC. incorporated in Delaware of 301 Yamato Road, Suite
1190, Boca Raton, Florida 33431 (the GUARANTOR).
RECITALS
A. VLF is a body corporate established under the Rail Corporations Act
1996 (Vic).
B. VLF, at the request of the Guarantor, has agreed to sell the Assets to
the Purchaser and the Purchaser has agreed to buy the Assets and enter
into the other Transaction Documents on the terms of this Agreement.
C. The Purchaser and the Guarantor acknowledge that the objectives of VLF
and, through it, the State, pursuant to this Agreement and the other
Transaction Documents include:
(a) to minimize VLF's and the State's exposure to residual risks
and liabilities associated with the Business, the Assets and
the property, rights and interests arising under or in
connection with the Transaction Documents;
(b) to facilitate the development of an expanding rail freight
industry in Victoria as a viable alternative to road
transport; and
(c) to secure a progressive improvement in the quality of
services available to freight customers in Victoria.
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The following definitions apply unless the context requires otherwise:
ACCESS AGREEMENTS means:
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(a) an access agreement with VLP in the form set out in Annexure
1 and initialled by the parties for the purposes of
identification;
(b) an access agreement with Bayside Trains in the form set out
in Annexure 2 and initialled by the parties for the purposes
of identification;
(c) an access agreement with The Victorian Railway Corporation
Pty Ltd substantially in the form set out in Annexure 3 and
initialled by the parties for the purposes of identification;
(d) an access agreement with Hoys Roadlines Pty Ltd substantially
in the form set out in Annexure 4 and initialled by the
parties for the purposes of identification; and
(e) an access agreement with Great Northern Rail Services Pty Ltd
substantially in the form set out in Annexure 5 and
initialled by the parties for the purposes of identification.
ACTUAL REDUNDANCY COSTS means the aggregate redundancy costs incurred
by VLF, VRTC, PTC or the State in respect of employees of VLF, VRTC or
PTC identified in the Data Room as being in the pool of employees
available to be employed by the Purchaser who do not receive an
Employment Offer, calculated in accordance with the methodology set
out in Schedule 11.
ACCREDITATION means accreditation, as an operator of Rolling Stock and
as manager of the Intrastate Infrastructure, under Division 3 of Part
VI of the Transport Act 1983 (Vic).
ACTIVE MEMBER means a person who contributes to, or who is accruing
benefits in, a superannuation fund.
ADVERTISING MATERIAL means all advertising, sales and marketing
material used by VLF in connection with the Business.
ARBITRATOR means the Director or a person nominated by the Director
for the purpose of determining a dispute under Clause 2.2.
ARTC ACCESS AGREEMENTS means the access agreements between Australian
Rail Track Corporation and VLF substantially in the form set out in
Annexure 6 and initialled by the parties for the purposes of
identification.
ASSETS means the assets to be sold by VLF under Clause 2.
ASSET REGISTER means the asset register of any of VLF, PTC or VRTC.
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AUTHORISATION includes:
(a) any consent, authorisation, registration, filing, lodgement,
permit, franchise, agreement, notarisation, certificate,
permission, licence, approval, direction, declaration,
authority or exemption from, by or with a Governmental
Agency; or
(b) in relation to anything that would be fully or partly
prohibited or restricted by law if a Governmental Agency
intervened or acted in any way within a specified period
after lodgement, filing, registration or notification, the
expiry of that period without intervention or action.
BAYSIDE TRAINS means Met Train 1, a statutory corporation established
under the Rail Corporations Act 1996 (Vic).
BENEFICIARY'S ACCOUNT means an account established and maintained by
the Victorian Superannuation Board under Section 37B of the Public
Sector Superannuation (Administration) Act 1993 (Vic).
BOARD PAPERS means all documents made available to the directors of
VLF or any one or more of them or tabled at meetings of the board of
directors of VLF including periodic board papers, submissions,
minutes, letters and board committee and sub-committee papers.
BOOK DEBTS means all amounts owing or due to VLF at the time of
Completion for services or goods provided or supplied by VLF in or in
connection with the Business.
BUSINESS means the business of operating rail freight services and
services ancillary or incidental to rail freight services conducted by
VLF.
BUSINESS CONTRACTS means the agreements specified in Schedule 1 made
by VLF with its customers or suppliers or otherwise in connection with
the Business.
BUSINESS NAMES means the business, trade and brand names specified in
Part 1 of Schedule 2.
BUSINESS RECORDS means all books of account, accounts, records and
data and all other documents relating solely to the Business or the
Assets including maintenance records for the Rolling Stock but
excluding Board Papers.
COMMUNICATIONS SYSTEMS IMPLEMENTATION SERVICES AGREEMENT means the
communications systems implementation services agreement substantially
in the form set out in Annexure 7 and initialled by the parties for
the purposes of identification.
COMPLETION means the completion by the parties of the sale and
purchase of the Assets as provided in Clause 4.
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COMPLETION DATE means that date prior to 30 June 1999 (not being a
date earlier than eight weeks after the date of this Agreement)
notified in writing by VLF to the Purchaser not less than two weeks
prior to that date.
COMPLYING SUPERANNUATION FUND means a superannuation fund which is a
complying superannuation fund for the purposes of the Income Tax
Assessment Act 1936 (Cth).
CONTRACTS means:
(a) the Business Contracts;
(b) all contracts and orders referred to in Clause 11; and
(c) the benefit of the contracts and orders referred to in
paragraphs (a) and (b) (including VLF's property and interest
in and rights under those contracts and orders).
CORPORATIONS LAW means the Corporations Law of Australia.
DATA ROOM means the data room relating to the sale of the Business
situated at Olderfleet Building, Level 6, 477 Collins Street,
Melbourne.
DEED OF COVENANT means a deed of covenant in the form set out in
Annexure 8 and initialled by the parties for the purposes of
identification.
DEFAULT RATE means the aggregate of two per centum per annum and the
rate per annum specified from time to time under the Penalty Interest
Rates Act 1983 (Vic).
DEPOSIT means the amount referred to in Clause 3.2(a).
DIRECT AGREEMENTS means:
(a) a direct agreement between the Director and the Purchaser in
the form set out in Annexure 9 and initialled by the parties
for the purposes of identification; and
(b) a direct agreement between the Director and the Purchaser in
the form set out in Annexure 10 and initialled by the parties
for the purposes of identification.
DIRECTOR means the Director of Public Transport under the Transport
Act 1983 (Vic).
DISCLOSED INFORMATION means:
(a) the Information Memorandum;
(b) the Invitation to Tender;
(c) the Environmental Report;
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(d) the Final Engineer's Report; and
(e) all information disclosed to the Purchaser or the Guarantor
or any person acting on behalf of or associated with the
Purchaser or the Guarantor by or on behalf of the State, VLF,
VRTC, PTC, any of the Passenger Rail Corporations or any
person acting on behalf of or associated with any of them or
which is otherwise acquired by or comes to the knowledge of
the Purchaser or the Guarantor or any person acting on behalf
of or associated with the Purchaser or the Guarantor directly
or indirectly from any of them, whether the information is in
oral, visual or written form or is recorded in any other
medium (including all information contained in the Data Room,
on CD-Rom or otherwise disclosed or made available to the
Purchaser or the Guarantor or any person acting on behalf of
or associated with the Purchaser or the Guarantor including
as a result of management presentations or question and
answer processes or sessions).
DUTY means any stamp, transaction or registration duty or similar
charge imposed by any government or Governmental Agency and includes
Victorian Duty and any interest, fine, penalty, charge or other amount
imposed in respect of any of them.
EBA has the meaning given to it in Clause 8.2.
ELECTROL AGREEMENT means an electrol agreement in the form set out in
Annexure 11 and initialled by the parties for the purposes of
identification.
EMPLOYMENT OFFER has the meaning given to it in Clause 8.1.
ENGINEERING SERVICES AGREEMENT means the engineering services
agreement between VRTC and Sinclair Knight Merz Pty Ltd dated 11
December 1998.
ENVIRONMENT includes the meaning given to that term at common law and
in any legislation in force in any State or Territory of Australia
(including any land, water, atmosphere, climate, sand, odour, taste,
the biological factors of animals and plants and the social factors of
aesthetics).
ENVIRONMENTAL LAW means any Law relating to the Environment including
any law relating to land use, planning, pollution of air, water, soil
or groundwater, chemicals, waste, the use of transport, the storage
and handling of dangerous goods, the health or safety of any person,
or any other matters relating to but not limited to the protection of
the Environment, health or property.
ENVIRONMENTAL REPORT means:
(a) the report in relation to the environmental assessment of the
Intrastate Infrastructure by CMPS&F Pty Limited titled
"V/Line Freight Corporation Environmental Assessment" and
dated October 1998; and
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(b) the report by CMPS&F Pty Limited titled "V/Line Freight
Corporation -- South Dynon Bulk Fuel Storage Area -- Baseline
Environmental Site Assessment July 1998".
ESTIMATED VICTORIAN DUTY means $300,000 (being the amount specified by
the Purchaser in the Final Bid as estimated Victorian Duty payable on
or in respect of the Transaction Documents and the deeds, instruments,
documents and transactions contemplated by them).
EXPECTED REDUNDANCY COSTS means $18,500,000 (being the amount
specified by the Purchaser in the Final Bid as expected redundancy
costs).
FACILITIES LEASES means:
(a) a lease of the South Dynon maintenance facility in the form
set out in Annexure 12 and initialled by the parties for the
purposes of identification;
(b) a lease of the Dynon container terminal in the form set out
in Annexure 13 and initialled by the parties for the purposes
of identification;
(c) a lease of the South Dynon refuelling point in the form set
out in Annexure 14 and initialled by the parties for the
purposes of identification;
(d) a license of part of Lot 69 at Dynon in the form set out in
Annexure 15 and initialled by the parties for the purposes of
identification;
(e) a license of Lot 86 at Dynon in the form set out in Annexure
16 and initialled by the parties for the purposes of
identification;
(f) leases of certain areas of certain railway stations in the
form set out in Annexure 17 and initialled by the parties for
the purposes of identification; and
(g) license of certain areas of certain railway stations in the
form set out in Annexure 18 and initialled by the parties for
the purposes of identification;
FAST TRACK SERVICES AGREEMENT means the fast track services agreement
between the Secretary of the Department of Infrastructure and VLF
dated 1 June 1998.
FINAL BID means the Purchaser's final bid to acquire the Business and
to enter into or otherwise become a party to or bound by the
Transaction Documents, lodged with the State on 25 January 1999 in
accordance with the Invitation to Tender.
FINAL ENGINEER'S REPORT means:
(a) the report in relation to the Intrastate Infrastructure dated
October 1998; and
(b) the report in relation to the Rolling Stock dated November
1998, both by TMG International Pty Ltd and together titled
"Engineering Report on V/Line Freight Corporation's Assets
and Infrastructure".
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GOODWILL means the goodwill of the Business including (but not limited
to):
(a) the Business Names; and
(b) any unregistered Trade Marks (including the goodwill
associated with them).
GOVERNMENTAL AGENCY means any Australian government or governmental,
semi-governmental, administrative, fiscal or judicial body, Minister,
office, department, commission, authority, tribunal, agency or entity.
GREAT NORTHERN LOCOMOTIVE FUEL AGREEMENT means the locomotive fuel
agreement between Great Northern Rail Services Pty Ltd. and VLF dated
31 October 1997.
HILLSIDE TRAINS means Met Train 2, a statutory corporation established
under the Rail Corporations Act 1996 (Vic).
HIRED PLANT AND EQUIPMENT means the plant and equipment and the motor
vehicles specified in Schedule 3.
HIRING AGREEMENTS means the agreements under which the Hired Plant and
Equipment is hired to VLF.
INFORMATION MEMORANDUM means the information memorandum titled "V/Line
Freight Information Memorandum" and dated September 1998 (including
any supplement to or replacement of it), issued by the State.
INFORMATION TECHNOLOGY SERVICES AGREEMENT means an information
technology services agreement between PTC and VLF in the form set out
in Annexure 19 and initialled by the parties for the purposes of
identification.
INFRASTRUCTURE MAINTENANCE AGREEMENTS means:
(a) an infrastructure maintenance agreement with Bayside Trains
in the form set out in Annexure 20 and initialled by the
parties for the purposes of identification; and
(b) an infrastructure maintenance agreement with Hillside Trains
in the form set out in Annexure 21 and initialled by the
parties for the purposes of identification.
INTANGIBLE ASSETS means:
(a) registered Trade Marks;
(b) the Know How;
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(c) the Technical Data;
(d) the Advertising Material (including VLF's copyright in it or
license to use it, if any);
(e) VLF's copyright (if any) in labelling and printing used by
VLF in connection with the Business; and
(f) all transferable licenses, permits, quotas, consents and
authorities held by VLF in connection with the Business.
INTELLECTUAL PROPERTY MANAGEMENT DEED means an intellectual property
management deed between PTC, VLF, VRTC and each of the Passenger Rail
Corporations in the form set out in Annexure 22 and initialled by the
parties for the purposes of identification.
INTEREST means interest calculated with monthly rests and compounded
on each monthly rest date.
INTRASTATE INFRASTRUCTURE means the infrastructure assets to be leased
by the Director to the Purchaser under the Primary Infrastructure
Lease.
INVITATION TO TENDER means the document titled "V/Line Freight
Invitation to Tender" and dated September 1998 (including any
supplement to or replacement of it), issued by the State.
KNOW HOW means all the knowledge and information (whether contained in
the Business Records or otherwise) which VLF has relating solely to
the Business.
LAWS means any statute, regulation, order, rule, subordinate
legislation or other document enforceable under a statute, regulation,
order, rule or subordinate legislation.
LIABILITIES means debts or liabilities of any kind, including those
which are prospective or contingent and those the amount of which is
not ascertained or able to be ascertained.
MAINTENANCE AGREEMENTS means:
(a) a maintenance agreement in respect of the Ballarat workshop
in the form set out in Annexure 23 and initialled by the
parties for the purposes of identification;
(b) a maintenance agreement in respect of the Geelong fuelling
point and locomotive maintenance facility in the form set out
in Annexure 24 and initialled by the parties for the purposes
of identification;
(c) a maintenance agreement in respect of the Bendigo locomotive
maintenance facility in the form set out in Annexure 25 and
initialled by the parties for the purposes of identification;
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(d) maintenance agreements in respect of the Newport workshop in
the form set out in Annexure 26 and initialled by the parties
for the purposes of identification;
(e) maintenance agreements in respect of mechanised track
maintenance in the form set out in Annexure 27 and initialled
by the parties for the purposes of identification;
(f) a maintenance agreement in respect of locomotive maintenance
to be provided by the Purchaser to VLP at South Dynon and
Wodonga in the form set out in Annexure 28 and initialled by
the parties for the purposes of identification.
MEMBER ELECTION DATE means the date on which a Superannuation Election
is made.
MISCELLANEOUS SERVICES AGREEMENTS means:
(a) miscellaneous services agreement between VLF and VLP in the
form set out in Annexure 29 and initialled by the parties for
the purposes of identifications;
(b) a miscellaneous services agreement between VLF and Bayside
Trains in the form set out in Annexure 30 and initialled by
the parties for the purposes of identifications;
(c) a miscellaneous services agreement between VLF and Hillside
Trains in the form set out in Annexure 31 and initialled by
the parties for the purposes of identification;
(d) a miscellaneous services agreement between VRTC and Bayside
Trains in the form set out in Annexure 32 and initialled by
the parties for the purposes of identification; and
(e) a services agreement between VLF and PTC dated in the form
set out in Annexure 33 and initialled by the parties for the
purposes of identification.
NATIONAL RAIL LOCOMOTIVE FUEL AGREEMENT means the locomotive fuel
agreement between National Rail Corporation Ltd and PTC dated 3 July
1996.
NATIONAL RAIL LOCOMOTIVE PROVISIONING AGREEMENT means the locomotive
provisioning agreement between National Rail Corporation Ltd and PTC
dated 20 January 1997.
NOMINATED EMPLOYEE has the meaning given to it in Clause 8.1.
OPERATIONAL CONTROL AND SIGNALLING SERVICES AGREEMENT means an
operational control and signalling services agreement with Bayside
Trains in the form set out in Annexure 34 and initialled by the
parties for the purposes of identification.
OPTIONAL FACILITY LEASE means a sub-lease of Level 1 of Transport
House in the form set out in Annexure 35 and initialled by the parties
for the purposes of identification.
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PASSENGER RAIL CORPORATIONS means:
(a) Bayside Trains;
(b) Hillside Trains;
(c) Swanston Trams;
(d) Yarra Trams; and
(e) VLP.
PERMITTED SECURITY INTEREST means:
(a) a Permitted Security Interest within the meaning of the
Primary Infrastructure Lease; or
(b) a Security Interest approved in writing by VLF.
PLANT AND EQUIPMENT means the motor vehicles, plant, equipment, tools,
furniture, fixtures and fittings specified in Schedule 4.
PRIMARY INFRASTRUCTURE LEASE means a lease of the Intrastate
Infrastructure in the form set out in Annexure 36 and initialled by
the parties for the purposes of identification.
PTC means Public Transport Corporation, a statutory corporation
established under the Transport Act 1983 (Vic) of Level 15, 589
Collins Street, Melbourne.
PURCHASE PRICE means the purchase price specified in Clause 3.1.
PURCHASER means:
(a) Freight Victoria Limited (ACN 075 295 644); and
(b) if the context permits or requires in relation to any
obligation of the Purchaser under this Agreement, is taken to
include a reference to the Purchaser's Nominee and the
Purchaser's Employment Nominee.
PURCHASER'S EMPLOYMENT NOMINEE means a person nominated in writing by
the Purchaser and approved in writing by VLF for the purposes of
Clauses 8 and 9 of this Agreement.
PURCHASER'S NOMINEE means a person nominated in writing by the
Purchaser and approved in writing by VLF for the purpose of Clause 2
of this Agreement.
PURCHASER'S SCHEME means a Complying Superannuation Fund other than
the State Superannuation Fund, the Victorian Superannuation Fund or
Superannuation Trust of Australia of which the Purchaser or the
Purchaser's Employment Nominee is the employer sponsor or a
participating employer.
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RAC ACCESS AGREEMENT means the access agreement between Rail Access
Corporation and VLF substantially in the form set out in Annexure 37
and initialled by the parties for the purposes of identification.
REDUNDANCY BENEFIT means any payment or benefit paid or payable to an
employee of VLF, VRTC or PTC in connection with his or her redundancy
(however such payment or benefit is described) and includes separation
payments and any additional superannuation redundancy amount but does
not include any leave entitlement.
RELATED BODY CORPORATE has the meaning given in the Corporations Law.
ROLLING STOCK means the locomotives, wagons, power pack and rail
tractors specified in Schedule 6.
ROLLING STOCK HIRE AGREEMENTS means the rolling stock hire agreements
between VLF and VLP in the form set out in Annexure 38 and initialled
by the parties for the purposes of identification.
SECONDMENT AGREEMENTS means the secondment agreements between VLF and
VLP in the form set out in Annexure 39 and initialled by the parties
for the purposes of identification.
SECURITY INTEREST means an interest or power:
(a) reserved in or over any interest in any asset including,
without limitations any retention of title; or
(b) created or otherwise arising in or over any interest in any
asset under a bill of sale, mortgage, charge, lien, pledge,
trust or power,
by way of security for the payment of debt or any other monetary
obligation or the performance of any other obligation and whether
existing or agreed to be granted or created.
SERVICES AGREEMENTS means:
(a) a services agreement with The Victorian Railway Company Pty
Limited substantially in the form set out in Annexure 40 and
initialled by the parties for the purposes of identification;
(b) a scientific services agreement with PTC in the form set out
in Annexure 41 and initialled by the parties for the purposes
of identification; and
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(c) an engineering services agreement with PTC in the form set
out in Annexure 42 and initialled by the parties for the
purposes of identification.
SHARED INFRASTRUCTURE AGREEMENT means a shared infrastructure
agreement with Australian Rail Track Corporation in the form set out
in Annexure 43 and initialled by the parties for the purposes of
identification.
SHELL FUEL SUPPLY AGREEMENT means the fuel supply agreement between
The Shell Company of Australia Limited and VLF dated 29 June 1998.
SPARE PARTS means spare and rotable parts for the Rolling Stock.
SOFTWARE LICENCES means the software licences details of which are
specified in Schedule 6.
STATE means the State of Victoria.
STATE SUPERANNUATION FUND means the fund of that name established
under the State Superannuation Act 1988 (Vic) and the Transport
Superannuation Act 1988 (Vic).
STOCK means all stock of the Business including all diesel fuel held
by VLF in storage tanks at the Portland locomotive and wagon
maintenance facility and at the Geelong locomotive depot, sleepers and
ballast but excluding Advertising Material.
SUPERANNUATION ELECTION means an election made by a Transferred
Employee as contemplated by Clause 9.1(a) or 9.2(a).
SUPERANNUATION ELECTION PERIOD means the period of three calendar
months commencing on the Completion Date.
SWANSTON TRAMS means Met Tram 1, a statutory corporation established
under the Rail Corporations Act 1996 (Vic).
TECHNICAL DATA means all drawings, specifications, formulae,
manufacturing processes, operating procedures and other technical data
relating solely to the Business.
TELECOMMUNICATIONS SERVICES AGREEMENT means a telecommunications
services agreement with VRTC in the form set out in Annexure 44 and
initialled by the parties for the purposes of identification.
TRADE MARKS means the trade marks the particulars of which are
specified in Part 2 of Schedule 2.
TRADE MARK LICENCE means a trade mark licence with PTC in the form set
out in Annexure 45 and initialled by the parties for the purposes of
identification.
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TRAIN CONTROL AGREEMENT means a train control agreement with VRTC in
the form set out in Annexure 46 and initialled by the parties for the
purposes of identification.
TRANSACTION DOCUMENTS means this Agreement and:
(a) the Primary Infrastructure Lease;
(b) each of the Facilities Leases;
(c) each of the Access Agreements;
(d) each of the Maintenance Agreements;
(e) the Train Control Agreement,
(f) the Direct Agreements;
(g) the Shared Infrastructure Agreement;
(h) each of the Services Agreements;
(i) the Deed of Covenant;
(j) the Fast Track Services Agreement;
(k) the Engineering Services Agreement;
(l) the Communications Systems Implementation Services Agreement;
(m) the Intellectual Property Management Deed;
(n) the Information Technology Services Agreement;
(o) the National Rail Locomotive Provisioning Agreement;
(p) the Shell Fuel Supply Agreement;
(q) the Great Northern Locomotive Fuel Agreement;
(r) the National Rail Locomotive Fuel Agreement;
(s) each of the Miscellaneous Services Agreements;
(t) the Electrol Agreement;
(u) the ARTC Access Agreement;
(v) the RAC Access Agreement;
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(w) each of the Secondment Agreements;
(x) each of the Rolling Stock Hire Agreements;
(y) (subject to Clause 4.3(i)) the Optional Facility Lease;
(z) each of the Infrastructure Maintenance Agreements;
(aa) the Trade Mark Licence;
(bb) the Telecommunications Services Agreement;
(cc) the Operational Control and Signalling Services Agreement;
and
(dd) each deed or agreement entered into by the Purchaser pursuant
to Clause 4.3(j).
TRANSFER AMOUNT BENEFIT means a transfer amount determined in
accordance with Section 9(4) of the Superannuation (Portability) Act
1989 (Vic).
TRANSFERRED EMPLOYEE means an employee of VLF, VRTC or PTC who
receives and accepts an Employment Offer and who is employed by the
Purchaser following such acceptance.
VICTORIAN DUTY means any stamp, transaction or registration duty or
similar charge imposed by the State or any Governmental Agency of the
State and includes any interest, fine, penalty, charge or other amount
imposed in respect of any of them.
VICTORIAN SUPERANNUATION FUND means the fund of that name established
under the Public Sector Superannuation (Administration) Act 1993
(Vic), VLP means V/Line Passenger Corporation, a statutory corporation
established under the Rail Corporations Act 1996 (Vic).
VRTC means Victorian Rail Track, a statutory corporation established
under the Rail Corporations Act 1996 (Vic) of Level 17, 589 Collins
Street, Melbourne.
VSB BENEFICIARY'S ACCOUNT means an account established and maintained
by the Victorian Superannuation Board under Section 37B of the Public
Sector Superannuation (Administration) Act 1993 (Vic).
YARRA TRAMS means Met Tram 2, a statutory corporation established
under the Rail Corporations Act 1996 (Vic).
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1.2 INTERPRETATION
Headings are for convenience only and do not affect interpretation.
The following rules apply unless the context requires otherwise.
(a) The singular includes the plural and conversely.
(b) A gender includes all genders.
(c) If a word or phrase is defined, its other grammatical forms
have a corresponding meaning.
(d) A reference to a person, corporation, trust, partnership,
unincorporated body or other entity includes any of them.
(e) A reference to a Clause, Schedule or Annexure is a reference
to a clause of, or a schedule or annexure to, this Agreement.
(f) A reference to an agreement or document (including, without
limitation, a reference to this Agreement) is to the
agreement or document as amended, varied, supplemented,
novated or replaced except to the extent prohibited by this
Agreement or that other agreement or document.
(g) A reference to a party means a party to this Agreement.
(h) A reference to a party to this Agreement or another agreement
or document includes the party's successors and permitted
substitutes or assigns (and, where applicable, the party's
legal personal representatives).
(i) A reference to legislation or to a provision of legislation
includes a modification or re-enactment of it, a legislative
provision substituted for it and a regulation or statutory
instrument issued under it.
(j) A reference to WRITING includes a facsimile transmission and
any means of reproducing words in a tangible and permanently
visible form.
(k) A reference to $ is a reference to Australian dollars.
(l) A reference to a right or obligation of any two or more
persons confers that right or imposes that obligation on all
of them jointly and on each of them severally.
1.3 CONSENTS OR APPROVALS
If the doing of any act, matter or thing under this Agreement is
dependent on the consent or approval of a party or is within the
discretion of a party, the consent or approval may be given or the
discretion may be exercised conditionally or unconditionally or
withheld by the party in its absolute discretion.
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2. SALE OF PLANT AND EQUIPMENT
2.1 VLF as legal and beneficial owner sells free from all Security
Interests and the Purchaser (or, if the Purchaser so nominates, the
Purchaser's Nominee) buys on the terms set out in this Agreement:
(a) the Plant and Equipment;
(b) the Rolling Stock;
(c) the Stock;
(d) the Spare Parts;
(e) the Book Debts;
(f) the Goodwill;
(g) the Intangible Assets;
(h) the Contracts, and
(i) each other asset used solely in the Business not specifically
referred to above.
2.2 (a) If, during the period of one year after the Completion Date,
the Purchaser reasonably forms the view that:
(i) an Asset used solely in the Business prior to
Completion has not been transferred to the Purchaser
as required in accordance with this Agreement; and
(ii) the market value of that Asset (as between a willing
but not anxious buyer and a willing but not anxious
seller on arm's length terms (MARKET VALUE)) exceeds
$1,000,000,
the Purchaser may give notice to VLF setting out full details
of that Asset (the DISPUTED Asset) and the basis for the view
so formed by the Purchaser.
(b) A notice under this Clause cannot be given after the end of
the period of one year after the Completion Date and during
that period a maximum of two notices may be given by the
Purchaser under this Clause.
(c) If a notice is given by the Purchaser to VLF under this
Clause and VLF and the Purchaser cannot agree the validity of
the claim made by the notice or on how that claim should be
resolved, VLF and the Purchaser must jointly refer the
dispute to the Arbitrator for determination.
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(d) Each party must provide the Arbitrator with reasonable access
to its books and records for the purpose of the Arbitrator
determining that dispute. The procedure to be adopted by the
Arbitrator for the purpose of determining the dispute will be
at the discretion of the Arbitrator.
(e) If the Arbitrator determines that a Dispute Asset was used
solely in the Business prior to Completion, that the market
value of the Disputed Asset exceeds $1,000,000 and that the
Disputed Asset has not been transferred to the Purchaser as
required by this Agreement, unless VLF and the Purchaser
agree otherwise VLF, within a reasonable period of time
following the Arbitrator's determination, must either (at its
discretion):
(i) cause the Disputed Asset to be transferred to the
Purchaser; or
(ii) pay to the Purchaser the market value of the
Disputed Asset (as determined by the Arbitrator).
(f) determination of the Arbitrator for the purpose of this
Clause 2.2 will be final and binding on the parties. The
costs of the Arbitrator in making that determination (as
certified by the Arbitrator) will be apportioned between VLF
and the Purchaser as determined by the Arbitrator or, if the
Arbitrator does not make a determination as to such
apportionment, will be borne by the Purchaser.
3. PURCHASE PRICE
3.1 The purchase price for the Assets is $73,400,000, subject to such
adjustments as are provided for in Clauses 2.2, 8.10, 9.4 and 14.2 of
this Agreement. The Purchase Price is allocated among the Assets as
set out in Schedule 12.
3.2 The Purchase Price must be paid by the Purchaser to or as directed by
VLF as follows:
(a) a deposit of $30,000,000 on the signing of this Agreement
(which VLF must place in an interest bearing deposit account
with a bank (within the meaning of the Banking Act 1959
(Cth)); and
(b) the balance on the Completion Date in accordance with Clause
4.3(a).
3.3 (a) The Deposit will vest absolutely in VLF on Completion
without the need for any order authorising such vesting or
any other notification whatsoever.
(b) If, prior to Completion, in accordance with Clause 18 VLF
lawfully terminates this Agreement because of a default in
observance or performance by the Purchaser or the Guarantor
of its obligations under this Agreement, then the Deposit
will vest absolutely in VLF without the need for any order
authorising such vesting or any other notification whatsoever
and VLF will, in its absolute discretion, be entitled to
exercise any rights and remedies available to it.
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(c) If, prior to Completion, in accordance with Clause 18 the
Purchaser lawfully terminates this Agreement because of a
failure or default in observance or performance by VLF of its
obligations under this Agreement, then the Deposit will vest
absolutely in the Purchaser without the need for any order
authorising such vesting or any other notification whatsoever
and the Purchaser will, in its absolute discretion, be
entitled to exercise any rights and remedies available to it.
(d) Interest which accrues on the Deposit will be deemed to form
part of the Deposit and will be dealt with as specified in
Clauses 3.3(a) to (c).
(e) For the purposes of this Clause 3.3, "INTEREST" means
interest earned on the Deposit less bank charges and other
moneys paid or payable in respect of the placement of the
Deposit in accordance with Clause 3.2(a).
4. COMPLETION
4.1 TIME AND VENUE
Completion will take place on the Completion Date at the offices of
Arthur Robinson Hedderwicks of 530 Collins Street, Melbourne or at
such other place as VLF and the Purchaser may agree.
4.2 VLF'S OBLIGATIONS
At Completion VLF must deliver (or must procure that there is
delivered) to the Purchaser:
(a) releases of any Security Interests affecting the Assets from
all persons holding them;
(b) duly executed notices of disposition of all motor vehicles
(not including Rolling Stock) sold together with current
certificates of roadworthiness relating to them;
(c) duly executed transfers to the Purchaser of the Business
Names;
(d) a duly executed deed of assignment of the Book Debts (in the
form set out in Schedule 13 or in such other form as is
reasonably determined by VLF);
(e) a duly executed deed of assignment of the Trade Marks (in the
form set out in Schedule 14 or in such other form as is
reasonably determined by VLF), together with any certificates
of registration or applications for registration of them;
(f) subject to Clause 11.3, duly executed assignments of the
Business Contracts together with such consents of the other
parties to the Business Contracts as VLF has been able to
obtain;
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(g) subject to Clause 12.2, duly executed assignments of the
Software Licences together with such consents of the
licensors of the Software Licences as VLF has been able to
obtain;
(h) subject to Clause 13.2, duly executed assignments of the
Hiring Agreements together with such consents of the owners
of the Hired Plant and Equipment as VLF has been able to
obtain;
(i) such other duly executed deeds, instruments and documents, in
such form as VLF and the Purchaser agree, as may properly be
required to vest legal and beneficial ownership of all of the
Assets in the Purchaser;
(j) each item of Rolling Stock, Plant and Equipment, Hired Plant
and Equipment, Stock and Spare Parts at the place at which it
is located at the Completion Date or at such other place as
may be agreed between VLF and the Purchaser;
(k) such of the Technical Data and the Advertising Material as is
in its possession at the place or places at which it is
located at the Completion Date and in respect of the
remainder of the Technical Data and Advertising Material VLF
must direct the person or persons in whose possession it is
to make it available to the Purchaser on request;
(l) the Business Records at the piece or places at which they are
located at the Completion Date or at such other place as may
be agreed between VLF and the Purchaser; and
(m) a counterpart, duly executed by each person (other than the
Purchaser) who is expressed to be a party thereto, of each of
the documents referred to in Clauses 4.3(h) and (j) and, if
applicable, Clause 4.3(i).
4.3 PURCHASER'S OBLIGATIONS
At or prior to Completion the Purchaser must:
(a) pay to or as directed by VLF the balance of the Purchase
Price which is payable on the Completion Date, subject to
such adjustment as is provided for in Clauses 8.10 and 14.2
of this Agreement;
(b) pay to the State (or the State Revenue Office) the Estimated
Victorian Duty;
(c) deliver to the State a duly executed Deed of Covenant;
(d) deliver to VLF evidence satisfactory to it that the Purchaser
has obtained Accreditation;
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(e) deliver to VLF evidence satisfactory to it that the Purchaser
has effected insurance in accordance with the requirements of
Clause 24 of the Primary Infrastructure Lease;
(f) if required in accordance with Clause 21.4 of the Primary
Infrastructure Lease, deliver to the Director a letter of
credit which satisfies the requirements of Clause 21.4(b) of
the Primary Infrastructure Lease;
(g) deliver to VLF a copy of the constitution of the Purchaser
and of the Guarantor signed by a director or secretary of the
Purchaser for the purpose of identification;
(h) deliver to each of the persons (other than the Purchaser)
expressed to be a party thereto, a duly executed counterpart
of each of the following documents:
(i) the Primary Infrastructure Lease;
(ii) each of the Facilities Leases;
(iii) each of the Access Agreements;
(iv) each of the Maintenance Agreements;
(v) the Train Control Agreement;
(vi) each of the Direct Agreements;
(vii) the Shared Infrastructure Agreement;
(viii) the Electrol Agreement.
(ix) the Operational Control and Signalling Agreement;
(x) the Telecommunications Services Agreement;
(xi) each of the Infrastructure Maintenance Agreements;
(xii) each of the Services Agreements; and
(xiii) the Trade Mark License;
(i) if not less than 30 days prior to the Completion Date the
Purchaser has given notice in writing to VLF that the
Purchaser proposes to enter into the Optional Facility Lease,
deliver to the persons (other than the Purchaser) expressed
to be a party thereto, a duly executed counterpart of the
Optional Facility Lease; and
(j) deliver to VLF duly executed deeds of assignment or novation
(in the form set out in Schedule 7 or in such other form as
is reasonably required by VLF) of each of the following deeds
or agreements:
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(i) the Fast Track Services Agreement;
(ii) the Engineering Services Agreement;
(iii) the Communications Systems Implementation Services
Agreement;
(iv) the Intellectual Property Management Deed;
(v) the Information Technology Services Agreement,
(vi) the National Rail Locomotive Provisioning Agreement;
(vii) the Shell Fuel Supply Agreement;
(viii) the Great Northern Locomotive Fuel Agreement;
(ix) the National Rail Locomotive Fuel Agreement;
(x) each of the Miscellaneous Services Agreements;
(xi) the ARTC Access Agreement;
(xii) the RAC Access Agreement;
(xiii) each of the Secondment Agreements; and
(xiv) each of the Rolling Stock Hire Agreements.
4.4 DUTY
(a) If the Victorian Duty payable by the Purchaser on or in
respect of the Transaction Documents and the deeds,
instruments, documents and transactions contemplated by them,
is greater than the Estimated Victorian Duty (excluding any
interest, fine, penalty, charge or other cost in respect of a
failure by the Purchaser to pay Victorian Duty on time or as
required) then the Purchase Price will be deemed to have been
reduced by the difference (and the Purchaser will be deemed
to have paid the Purchase Price reduced accordingly) and VLF
must procure that the State pays to the State Revenue Office,
on behalf of the Purchaser, the difference between that
Victorian Duty and the Estimated Victorian Duty.
(b) If the Victorian Duty payable by the Purchaser on or in
respect of the Transaction Documents and the deeds,
instruments, documents and transactions contemplated by them
(excluding, any interest, fine, penalty, charge or other cost
in respect of a failure by the Purchaser to pay Victorian
Duty on time or as required) is less than the Estimated
Victorian Duty, the State will be entitled to the difference
and, if so requested by VLF on behalf of the State, the
Purchaser must direct the State Revenue Office to pay the
difference to the State.
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4.5 INTERDEPENDENCE OF COMPLETION
Completion of the sale and purchase of each Asset is dependent on the
simultaneous completion of the sale and purchase of each other Asset.
4.6 APPROVAL OF ASSIGNMENT
If requested by VLF not less than seven days before the Completion
Date, the Purchaser will immediately make application to the other
party to any agreement which is to be assigned to the Purchaser under
this Agreement for approval to the assignment.
5. PASSING OF PROPERTY
Property in all of the Assets will pass to the Purchaser (and, in
particular, the Purchaser will become entitled to the benefit of the
Goodwill) on payment by the Purchaser to or as directed by VLF of the
amount payable on the Completion Date.
6. REGISTRATION OF OWNERSHIP
6.1 The cost of any notice of disposal and any roadworthiness certificate
required to be obtained in relation to any motor vehicle must be borne
by VLF. The costs of the preparation and lodging of any notices of
acquisition or other documents required to be lodged under the
relevant motor vehicle legislation and, subject to Clause 4.4, all
stamp and other duties payable with respect to the transfer of
ownership of the vehicles, must be borne by the Purchaser.
6.2 Following, Completion, the Purchaser must satisfy any law which
requires the Purchaser to register or give notice of its acquisition
of any Asset.
6.3 The Purchaser indemnifies VLF against any Liabilities which may be
incurred by or otherwise accrue to VLF in connection with any default
or delay by the Purchaser in complying with any requirement that the
Purchaser register or give notice of its acquisition of any Asset.
7. RISK
All Assets remain at the risk of VLF until property in the Assets
passes to the Purchaser.
8. EMPLOYEES
8.1 Within five weeks after the date of this Agreement (or such longer
period after the date of this Agreement as VLF may direct), the
Purchaser must make or must procure the Purchaser's Employment Nominee
to make an offer of employment (an EMPLOYMENT OFFER) to such of those
employees of VLF, VRTC and PTC identified in the Data Room as being in
the pool of employees available to be employed by the Purchaser as the
Purchaser or the Purchaser's Employment Nominee proposes to employ on
and from Completion. Each Employment Offer must comply with the
requirements of this Clause 8 and must be capable of acceptance by the
employee to whom it is made (the NOMINATED EMPLOYEE) at any time
within the period of two weeks after it is made.
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8.2 At least one week prior to making the Employment Offers, the Purchaser
must provide or must procure the Purchaser's Employment Nominee to
provide notice to VLF of the identity of each of the employees to whom
the Purchaser or the Purchaser's Employment Nominee intends to make
Employment Offers.
8.3 The Purchaser (for itself and for the Purchaser's Employment Nominee)
confirms that the Purchaser and the Purchaser's Employment Nominee
accepts the obligations under the provisions of the V/Line Freight
Corporation Enterprise Agreement 1997 as certified by the Australian
Industrial Relations Commission on 22 December 1997 (as varied from
time to time) (the EBA). For so long as the EBA remains in force, the
Purchaser or the Purchaser's Employment Nominee (as applicable) must
comply fully with such obligations in respect of each Transferred
Employee and must accord to each Transferred Employee the terms and
conditions of employment contained in the EBA except to the extent
that a new certified agreement is made between relevant unions and the
Purchaser or the Purchaser's Employment Nominee (as applicable) to
replace the terms of the EBA as provided for by the EBA.
8.4 Without limiting, Clause 8.3, each Employment Offer must be for
employment from the Completion Date on terms and conditions no less
favourable to the Nominated Employee than the terms and conditions on
which the Nominated Employee is employed immediately prior to the
Completion Date. The Purchaser further agrees to procure that each
Transferred Employee's service with VLF, VRTC, PTC or any Passenger
Rail Corporation (and any service with a previous employer recognised
by any of them) will count for all purposes as part of that employee's
service with the Purchaser or the Purchaser's Employment Nominee as
though there were a continuity of service in accordance with clause 9
of the EBA.
8.5 The Purchaser must consult and must procure the Purchaser's Employment
Nominee to consult with VLF, PTC and VRTC and staff industrial
representatives during the course of negotiations with the Nominated
Employees with respect to the Employment Offers.
8.6 VLF must release each Transferred Employee from his or her employment
on and from Completion.
8.7 Each party must use all reasonable endeavours to ensure that all of
the Nominated Employees accept the Employment Offers.
8.8 VLF is responsible for:
(a) the salary and wages (including any allowances or benefits)
of all the Transferred Employees for the period up to and
including the Completion Date, from which date the Purchaser
or the Purchaser's Employment Nominee will be responsible for
them; and
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(b) all taxes (including fringe benefits tax and payroll tax)
payable on the salary and wages (including any allowances or
benefits) of all the Transferred Employees in respect of the
period up to and including the Completion Date (whether such
taxes become due before, on or after the Completion Date).
Any necessary apportionment must be made and adjusted at Completion or
on such later date as the parties may agree.
8.9 Unless the application of this Clause (either generally or in a
particular case or cases) is expressly waived in writing by VLF, if
after Completion the Purchaser (which expression for the purposes of
this Clause includes the Purchaser's Employment Nominee and any
successor, assignee, Related Body Corporate or subcontractor of the
Purchaser or the Purchaser's Employment Nominee) hires as an employee
or otherwise engages the services of a person who at any time within
the period of 12 months prior to the Completion Date has been an
employee of VLF, VRTC, PTC or any Passenger Rail Corporation (other
than a Transferred Employee) and who within the period of three years
prior to such hiring or engagement his been paid Redundancy Benefits
by VLF, VRTC, PT'C, any Passenger Rail Corporation or the State, the
Purchaser must pay to or as directed by VLF in respect of each such
person an amount calculated in accordance with the following formula:
156-A x B
156
where A = the number of full weeks which have expired since the
Completion Date;
and B = the amount of the Redundancy Benefits paid to the
employee by VLF, VRTC, PTC, the State or any Passenger
Rail Corporation.
8.10 At Completion, the purchase price as set out in Clause 3.1 will be
adjusted as follows:
(a) if the Actual Redundancy Costs (as notified by VLF to the
Purchaser) are greater than the Expected Redundancy Costs,
the purchase price will be increased by an amount equal to
the amount by which the Actual Redundancy Costs exceed the
Expected Redundancy Costs; or
(b) if the Actual Redundancy Costs (as notified by VLF to the
Purchaser) are less than the Expected Redundancy Costs, the
purchase price-will be decreased by an amount equal to the
amount by which the Expected Redundancy Costs exceed the
Actual Redundancy Costs.
8.11 The Purchaser indemnities VLF against all clams for salary and wages
(including any allowances or benefits) and leave entitlements
(including sick, annual and long service-leave entitlements and
loadings) which are or may become payable to any Transferred Employee
under any contract of employment, award or statutory entitlement,
except as provided in Clause 8.8.
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8.12 The Purchaser must or must procure the Purchaser's Employment Nominee
to notify the Victorian WorkCover Authority as soon as practicable
after the Completion Date that it has become the employer of each of
the Transferred Employees and from the Completion Date the Purchaser
or the Purchaser's Employment Nominee will be liable to make the
weekly compensation payments (if any) payable under the Accident
Compensation Act 1985 (Vic) and the Accident Compensation (Workcover)
Insurance Act 1993 (Vic) in respect of the Transferred Employees.
9. SUPERANNUATION ARRANGEMENTS
9.1 MEMBERS OF THE STATE SUPERANNUATION FUND
The following provisions apply to each Nominated Employee who is
reasonably expected by VLF to be, on the Completion Date, an Active
Member of the State Superannuation Fund:
(a) The Purchaser must or must procure the Purchaser's Employment
Nominee to give to each such Nominated Employee, together
with his or her Employment Offer, an offer in respect of
superannuation arrangements on the following terms:
(i) the Nominated Employee will be entitled, if he or
she accepts the Employment Offer, to elect one of
the following, options:
(A) to continue after the Member Election Date
to be an Active Member of the State
Superannuation Fund; or
(B) to cease to be an Active Member of the
State Superannuation Fund and to join at
his or her election Superannuation Trust of
Australia or a Purchaser's Scheme (if the
Purchaser or the Purchaser's Employment
Nominee (as applicable) elects in its
absolute discretion to offer membership of
a Purchaser's Scheme), either:
(1) on the basis that such cessation
will take effect on and from the
Completion Date, and that he or
she will receive such resignation
or retirement benefit which the
Nominated Employee is entitled to
receive under the terms of the
State Superannuation Fund; or
(2) on the basis that such cessation
will take effect on and from the
Member Election Date, and that he
or she will receive a Transfer
Amount Benefit and elect for that
Transfer Amount Benefit to be
credited to a VSB Beneficiary's
Account, or to be transferred to
the fund which the Nominated
Employee has elected to join as
set out in his or her
Superannuation Election or to any
other Complying Superannuation
Fund nominated by him or her;
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(ii) an election referred to in paragraphs (a)(i)(A) and
(a)(i)(B)(2) of this sub-clause must be made not
later than the last day of the Superannuation
Election Period and an election referred to in
paragraph (a)(i)(B)(1) of this sub-clause must be
made on or prior to the Completion Date.
(b) Where a Nominated Employee:
(i) elects to continue to be an Active Member of the
State Superannuation Fund and becomes a Transferred
Employee, he or she will continue after the Member
Election Date to be an Active Member of the State
Superannuation Fund, and the Purchaser must or must
procure the Purchaser's Employment Nominee to make
employer contributions in respect of him or her as
provided in Clause 9.3(d);
(ii) elects to cease to be an Active Member of the State
Superannuation Fund and becomes a Transferred
Employee:
(A) VLF must, if the Transferred Employee has
elected to receive such resignation or
retirement benefit which the Transferred
Employee is entitled to receive under the
terms of the State Superannuation Fund, do
such acts and things as are necessary or
desirable to be done by it so as to permit
the Transferred Employee to receive such
benefit to which the Transferred Employee
is entitled;
(B) VLF must, if the Transferred Employee has
elected to receive a Transfer Amount
Benefit, do such acts and things as are
necessary or desirable to be done by it so
as to permit the Transferred Employee to
receive a Transfer Amount Benefit, and for
such Transfer Amount Benefit, in accordance
with the Superannuation Election made by
the Transferred Employee, to be credited to
a VSB Beneficiary's Account or transferred
to such other fund as is nominated for
these purposes by the Transferred Employee
in his or her Superannuation Election as
the case may be; and
(C) each of VLF and the Purchaser must (and the
Purchaser must procure the Purchaser's
Employment Nominee to) do such acts and
things as are necessary or desirable to be
done by it so as to enable the Transferred
Employee to become on and from the
Completion Date (if the relevant
Superannuation Election was made under
Clause 9.1(a)(i)(B)(1)) or the Member
Election Date (if the relevant
Superannuation Election was made under
Clause 9.1(a)(i)(B)(2)) a member of
Superannuation Trust of Australia, or of a
Purchaser's Scheme, in accordance with the
Superannuation Election. made by the
Transferred Employee:
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(iii) fails within the period referred to in Clause
9.1(a)(ii) to make a Superannuation Election and
becomes a Transferred Employee:
(A) each of VLF and the Purchaser must (and the
Purchaser must procure the Purchaser's
Employment Nominee to) do such acts and
things as are necessary or desirable to be
done by it so as to permit the Transferred
Employee to receive a Transfer Amount
Benefit calculated as at the last day of
the Superannuation Election Period and for
that benefit to be credited to a VSB
Beneficiary's Account; and
(B) each of VLF and the Purchaser must (and the
Purchaser must procure the Purchaser's
Employment Nominee to) do such acts and
things as are necessary or desirable to be
done by it so as to enable the Transferred
Employee to become on and from the first
day after the expiration of the
Superannuation Election Period (or as soon
as practicable thereafter) a member of
Superannuation Trust of Australia.
(c) VLF acknowledges that it is liable to pay to the State
Superannuation Fund all such contributions as are determined
by the Victorian Superannuation Board and approved by the
Minister of Finance on the advice of the actuary to the State
Superannuation Fund to be employer contributions payable in
respect of each Transferred Employee in respect of the
liability as at the Completion Date in respect of the period
prior to the Completion Date.
9.2 MEMBERS OF THE VICTORIAN SUPERANNUATION FUND
The following provisions apply to each Nominated Employee who is
reasonably expected by VLF to be, on the Completion Date, an Active
Member of the Victorian Superannuation Fund:
(a) The Purchaser must or must procure the Purchaser's Employment
Nominee to give to each such Nominated Employee, together
with his or her Employment Offer, an offer in respect of
superannuation arrangements on the following terms:
(i) the Nominated Employee will be entitled, if he or
she accepts the Employment Offer, to elect either:
(A) to continue after the Member Election Date
to be an Active Member of the Victorian
Superannuation Fund; or
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<PAGE> 32
(B) to cease on and from the Member Election
Date to be an Active Member of the
Victorian Superannuation Fund and to join
at his or her election Superannuation Trust
of Australia, or a Purchaser's Scheme (if
the Purchaser or the Purchaser's Employment
Nominee (as applicable) elects in its
absolute discretion to offer membership of
a Purchaser's Scheme) and to elect that
such amount to which the Nominated Employee
is entitled under the terms of the
Victorian Superannuation Fund be held on
his or her behalf in the Victorian
Superannuation Fund, or that such amount be
transferred to the fund which the Nominated
Employee has elected to join as set out in
his or her Superannuation Election or to
any other Complying Superannuation Fund
nominated by him or her;
(ii) the election referred to in paragraph (a)(i) of this
sub-clause must be made not later than the last day
of the Superannuation Election Period.
(b) Where a Nominated Employee:
(i) elects to continue to be an Active Member of the
Victorian Superannuation Fund and becomes a
Transferred Employee, he or she will continue after
the Member Election Date to be an Active Member of
the Victorian Superannuation Fund and the Purchaser
must or must procure the Purchaser's Employment
Nominee to make employer contributions in respect of
him or her as provided in Clause 9.3(d);
(ii) elects to cease to be an Active Member of the
Victorian Superannuation Fund and becomes a
Transferred Employee:
(A) VLF must, if the Transferred Employee has
elected to receive an amount as
contemplated by Clause 9.2(a)(i)(B), do
such acts and things as are necessary or
desirable to be done by it so as to permit
the Transferred Employee to receive such
amount to which the Transferred Employee is
entitled under the terms of the Victorian
Superannuation Fund, and for such amount to
be dealt with in accordance with the
Superannuation Election made by the
Transferred Employee; and
(B) each of VLF and the Purchaser must (and the
Purchaser must procure the Purchaser's
Employment Nominee to) do such acts and
things as are necessary or desirable to be
done by it so as to enable the Transferred
Employee to become on and from the Member
Election Date a member of Superannuation
Trust of Australia, or of a Purchaser's
Scheme, in accordance with the
Superannuation Election made by the
Transferred Employee;
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<PAGE> 33
(iii) fails within the period referred to in Clause
9.2(a)(ii) to make a Superannuation Election and
becomes a Transferred Employee, each of VLF and the
Purchaser must (and the Purchaser must procure the
Purchaser's Employment Nominee to) do such acts and
things as are necessary or desirable to be done by
it so as to enable the Transferred Employee to
continue, on and from the first day after the
expiration of the Superannuation Election Period, to
be an Active Member of the Victorian Superannuation
Fund.
9.3 ADMINISTRATIVE ARRANGEMENTS
(a) The Purchaser may or may procure the Purchaser's Employment
Nominee to, prior to the Completion Date, establish or
identify a Purchaser's Scheme which is able to accept as a
member any Transferred Employee who elects to join it. If the
Purchaser or the Purchaser's Employment Nominee (as
applicable) in its absolute discretion elects to establish or
identify a Purchaser's Scheme, the Purchaser must or must
procure the Purchaser's Employment Nominee to provide to each
Nominated Employee, together with the offer given pursuant to
Clause 9.1 or 9.2, such information regarding the Purchaser's
Scheme as would reasonably be required by a Nominated
Employee in order to make a decision as to whether to elect
to join that fund.
(b) If any Transferred Employee is on the Completion Date:
(i) an Active Member of the State Superannuation Fund,
then VLF must do, and must use reasonable endeavours
to procure that the Minister for Finance or the
Treasurer (as the case requires) will do, such acts
and things as are necessary or desirable to be done
by it, him or her so as to procure that the
Purchaser or the Purchaser's Employment Nominee (as
applicable) becomes an employing authority or a
transport authority in respect of the State
Superannuation Fund for the purposes of the State
Superannuation Act 1988 (Vic) or the Transport
Superannuation Act 1988 (Vic) (as the case
requires); or
(ii) an Active Member of the Victorian Superannuation
Fund, then VLF must do, and must use reasonable
endeavours to procure that the Secretary to the
Department of Treasury and Finance will do, such
acts and things as are necessary or desirable to be
done by it, him or her so as to procure that the
Purchaser or the Purchaser's Employment Nominee (as
applicable) becomes a participating employer in
respect of the Victorian Superannuation Fund for the
purposes of the Public Sector Superannuation
(Administration) Act 1993 (Vic).
(c) The Purchaser acknowledges (for itself and for the
Purchaser's Employment Nominee) that, upon it or the
Purchaser's Employment Nominee (as applicable) becoming an
employing authority or transport authority in respect of the
State Superannuation Fund, or a participating employer in
respect of the Victorian Superannuation Fund, it will be
bound by the requirements of the legislation governing or
relevant to those funds, and that penalties apply under that
legislation in respect of failure to comply with those
requirements.
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<PAGE> 34
(d) The Purchaser undertakes to VLF that it will and that it will
procure the Purchaser's Employment Nominee to, upon becoming
an employing authority or transport authority, in respect of
the State Superannuation Fund, or a participating employer in
respect of the Victorian Superannuation Fund, do in a timely
manner all such things as are required to be done by an
employing authority, transport authority or participating
employer (as the case may be), including without limitation:
(i) paying such employer contributions to the State
Superannuation Fund in respect of Transferred
Employees who are Active Members of the State
Superannuation Fund as are determined by the
Victorian Superannuation Board and, in the case of
determinations made by the Victorian Superannuation
Board for the purposes of the State Superannuation
Act 1988 (Vic), approved by the Minister of Finance
on advice of the actuary to the State Superannuation
Fund, to be employer contributions payable in
respect of each such Transferred Employee in respect
of the period commencing on the Completion Date and
ending on the earlier of the date on which the
Transferred Employee ceases to be an employee of the
Purchaser or the Purchaser's Employment Nominee or
ceases to be a member of the State Superannuation
Fund; and
(ii) paying such employer contributions to the Victorian
Superannuation Fund in respect of Transferred
Employees who are Active Members of the Victorian
Superannuation Fund as are sufficient to avoid the
imposition of superannuation guarantee charge
pursuant to the Superannuation Guarantee
(Administration) Act 1992 (Cth) and the
Superannuation Guarantee Charge Act 1992 (Cth) in
respect of each such Transferred Employee in respect
of the period commencing on the Completion Date and
ending on the earlier of the date on which the
Transferred Employee ceases to be an employee of the
Purchaser or of the Purchaser's Employment Nominee
or ceases to be an Active Member of the Victorian
Superannuation Fund.
(e) The Purchaser acknowledges that it has received from VLF and
has provided to the Purchaser's Employment Nominee a document
entitled "New Employer - Public Sector Superannuation
Contract Clauses" which describes certain administrative
requirements applying to the superannuation obligations of
the Purchaser and of the Purchaser's Employment Nominee in
respect of Transferred Employees, and the Purchaser
acknowledges that it will and that it will procure the
Purchaser's Employment Nominee to act in relation to those
superannuation obligations in a manner consistent with those
requirements. If there is any conflict between the provisions
of this Agreement and the contents of the document entitled
"New Employer - Public Sector Superannuation Contract
Clauses" the provisions of this Agreement will prevail.
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<PAGE> 35
9.4 SUPERANNUATION ADJUSTMENT
If less than 100% of the Transferred Employees to whom Clause 9.1
applies elect by the last day of the Superannuation Election Period to
continue after their respective Member Election Dates to be Active
Members of the State Superannuation Fund, the Purchaser must pay to or
as directed by VLF, no later than the thirtieth day after the last day
of the Superannuation Election Period, the amount calculated in
accordance with Schedule 10.
10. BOOK DEBTS
If, after Completion, VLF receives any amount which is expressed to be
made in payment of any Book Debt, VLF must promptly pay it to the
Purchaser and in the meantime hold it on behalf of the Purchaser.
11. SUBSISTING ORDERS AND CONTRACTUAL OBLIGATIONS
11.1 As from Completion, the Purchaser is entitled to the benefit of the
Business Contracts and of:
(a) all contracts (other than contracts of a type specifically
dealt with elsewhere in this Agreement and any contracts for
the provision of financial accommodation to VLF) entered into
in the ordinary course of business by VLF in connection with
the Business and subsisting at Completion;
(b) all orders received by VLF in the ordinary course of business
for the supply of goods or services by the Business and
remaining unsatisfied at that time; and
(c) all orders placed by VLF in the ordinary course of business
for the supply of goods or services to the Business and
remaining unsatisfied at that time.
11.2 As from Completion, the Purchaser must assume responsibility for
performance of the Contracts and must indemnify VLF against all
Liabilities which may be incurred by VLF in relation to any breach of
or failure to fulfil any Contract occurring after Completion. Prior to
Completion, VLF must pay the amounts due and payable by it, and comply
with the other obligations binding, on it, under the Contracts.
11.3 Subject to VLF obtaining the consent of the other parties to the
Business Contracts (if required), on Completion VLF will assign the
Business Contracts to the Purchaser (in the form set out in Schedule 7
or in such other form as is reasonably determined by VLF) and the
Purchaser must accept those assignments. If such consent cannot be
obtained, VLF and the Purchaser must consult with a view to
determining an alternative method by which the transfer to the
Purchaser of VLF's rights under the relevant Business Contracts and
the assumption by the Purchaser of VLF's obligations to the other
parties to the Business Contracts, can in substance be achieved.
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<PAGE> 36
12. SOFTWARE LICENCES
12.1 Prior to Completion, VLF must pay the amounts due and payable by it,
and comply with the other obligations binding, on it, under the
Software Licences,
12.2 Subject to VLF obtaining, the consent of the licensors of the Software
Licences (if required) on Completion VLF will assign the Software
Licences to the Purchaser (in the form set out in Schedule 8 or in
such other form as is reasonably determined by VLF) and the Purchaser
must accept those assignments. If such consent cannot be obtained, VLF
and the Purchaser must consult with a view to determining an
alternative method by which the transfer to the Purchaser of VLF's
rights under the relevant Software Licences and the assumption by the
Purchaser of VLF's obligations under the Software Licences, can in
substance be achieved.
13. HIRING AGREEMENTS
13.1 Prior to Completion VLF must pay the charges due and payable by it,
and comply with the other obligations binding on it, under the Hiring
Agreements.
13.2 Subject to VLF obtaining the consent of the owners of the Hired Plant
and Equipment (if required), on Completion VLF must assign the Hiring
Agreements to the Purchaser (in the form set out in Schedule 9 or in
such other form as is reasonably determined by VLF) and the Purchaser
must accept those assignments. If such consent cannot be obtained, VLF
and the Purchaser must consult with a view to determining an
alternative method by which the transfer to the Purchaser of VLF's
rights under the Hiring Agreements and the assumption by the Purchaser
of VLF's obligations under the Hiring Agreements, can in substance be
achieved.
13.3 As from Completion the Purchaser:
(a) must pay the charges provided for in, and comply with all
other obligations on the part of the hirer under, the Hiring
Agreements; and
(b) indemnifies VLF against all Liabilities which may be incurred
by VLF for any breach of or failure to fulfil any of the
Hiring Agreements occurring after Completion.
14. ADJUSTMENT OF OUTGOINGS
14.1 Except as otherwise expressly provided in this Agreement, all
outgoings of a periodical or recurring nature in respect of the
Business or any of the Assets must be borne by VLF for the period to
(and including) the Completion Date and after that by the Purchaser.
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<PAGE> 37
14.2 Appropriate adjustments as at the Completion Date must be made on or
as soon as practicable after that date between VLF and the Purchaser
to give effect to the provisions of Clause 14.1.
15. WARRANTIES AND ACKNOWLEDGMENTS
15.1 PURCHASER WARRANTIES
Each of the Purchaser and the Guarantor represents and warrants to VLF
(who as a result has been induced to enter into this Agreement) that:
(a) (STATUS) It is a corporation duly incorporated and validly
existing under the laws of the place of its incorporation
specified in this Agreement.
(b) (POWER) It has the power to enter into and perform its
obligations under this Agreement and each other Transaction
Document, to carry out the transactions contemplated by this
Agreement and each other Transaction Document and to carry on
its business as now conducted or contemplated.
(c) (CONSTITUTION) Its constitution (produced to VLF at the date
of this Agreement and signed by a director or secretary of
the Purchaser for the purposes of identification) is its
constitution including all resolutions affecting it.
(d) (CORPORATE AUTHORISATIONS) It has taken all necessary
corporate action to authorise the entry into and performance
of this Agreement and each other Transaction Document and to
carry out the transactions contemplated by this Agreement and
each other Transaction Document.
(e) (DOCUMENT BINDING) This Agreement and each other Transaction
Document creates, or upon its entry into it will create,
valid and binding obligations and is enforceable in
accordance with its terms, subject to any necessary stamping
and registration.
(f) (TRANSACTIONS PERMITTED) The execution aid performance by it
of this Agreement and each other Transaction Document and
each transaction contemplated under them does not and will
not violate in any respect a provision of:
(i) a law or treaty or a judgment, ruling, order or
decree of a Governmental Agency binding on it;
(ii) its constitution; or
(iii) any other document or agreement that is binding on
it or its assets.
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<PAGE> 38
(g) (LEGAL PROCEEDINGS)
(i) No suit, cause of action, proceeding, application,
claim or investigation is current, or, as far as it
is aware, pending, threatened or in prospect against
which may have a material effect on its performance
of its obligations under this Agreement.
(ii) No resolution has been passed for its winding up.
(iii) No resolution has been passed for the appointment of
an administrator to it.
(iv) There is no unsatisfied judgment against it which
may have a material effect on its performance of its
obligations under this Agreement.
(v) There are no facts, matters or circumstances that
give any person the right to apply to wind it up or
to appoint a controller within the meaning of
section 9 of the Corporations Law or an
administrator or an inspector under the Corporations
Law in respect of it or any part of its undertaken
or assets or income or to take any analogous or
equivalent step in any other jurisdiction.
(h) (AUTHORISATIONS) Each Authorisation that is required in
relation to:
(i) the execution, delivery and performance by it of
this Agreement, each other Transaction Document and
the transactions contemplated by them;
(ii) the validity and enforceability of this Agreement
and each other Transaction Document; and
(iii) its business as now conducted or contemplated to be
conducted from Completion and that is material
(including, under the Transport Act 1983 (Vic) and
under any Environmental Law),
has been obtained or effected and is in full force and
effect, or, in the case of' Accreditation, will be obtained
or effected and in full force and effect at and from
Completion. It has paid all applicable fees for each of them.
(i) (STATUTORY REQUIREMENTS)
(i) There are no notices of any Governmental Agency that
are or may be material to its business outstanding
against it.
(ii) All permits, licences and registrations necessary
for the conduct of its business are validly
subsisting and are held-by it.
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(iii) It has duly observed and complied in all respects
with the provisions of all Laws and all orders,
notices, awards and determinations made by any
Governmental Agency in any way relating to or
binding on it or any property owned or occupied by
it,
(j) (NO MISREPRESENTATION) All information provided by it to the
State or VLF (including, in the Final Bid) is true in all
material respects at the date of this Agreement or, if later,
when provided. Neither that information nor its conduct and
the conduct of anyone on its behalf in relation to the
transactions contemplated by this Agreement and the other
Transaction Documents was or is or will be misleading, by
omission or otherwise.
(k) (COPIES OF DOCUMENTS) All copies of documents (including its
latest audited accounts and all Authorisations) given by it
or on its behalf to the State or VLF (including in the Final
Bid) are true and complete copies. Those Authorisations all
are in full force and effect.
15.2 VLF WARRANTIES
Without limiting Clauses 15.3 or 15.4, VLF represents and warrants to
the Purchaser (who as a result has been induced to enter into this
Agreement) that:
(a) it has the power to enter into this Agreement and has taken
all necessary action to authorise the execution, delivery and
performance of this Agreement;
(b) this Agreement constitutes a legally valid and binding
obligation of VLF enforceable in accordance with its terms;
and
(c) the execution, delivery and performance of this Agreement
complies with:
(i) each law, regulation, authorisation, ruling,
judgement, order or decree of any Governmental
Agency which is binding on or applicable to VLF; and
(ii) any Security Interest or document which is binding
on VLF.
15.3 EXCLUSION OF OTHER WARRANTIES AND WARRANTY CLAIMS
To the maximum extent permitted by law and except as otherwise
provided in this Agreement all terms, conditions, warranties and
statements (whether express, implied, written, oral, collateral,
statutory or otherwise) which would be implied or incorporated into
this Agreement as having been given in favour of the Purchaser or the
Guarantor are excluded and VLF disclaims all liability in relation to
them.
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<PAGE> 40
(a) Despite any other provision of this Agreement and except as
otherwise provided by law:
(i) VLF is not liable to make any payment (whether by
way of damages or otherwise) for any breach of any
representation, warranty, condition or obligation
unless a claim is made in writing by the Purchaser
(setting forth in reasonable detail the nature of
the claim and the damages sought) on or before the
date one year after the Completion Date;
(ii) VLF's liability for breach of any implied condition
or warranty in relation to any Asset is limited to
one or more of the following, as determined by VLF
in its absolute discretion:
(A) repair or replacement of the Asset;
(B) the cost of obtaining an equivalent Asset;
(C) paying the cost of having the Asset
repaired or replaced; or
(D) paying the cost of obtaining an equivalent
Asset,
provided that VLF will not be liable under this
clause to make payment of an amount which, in the
aggregate, exceeds the amount described in Clause
15.3(b)(iii);
(iii) subject to Clause 15.3(b)(iv) VLF will not be liable
for any breach of representation, condition,
obligation or warranty for an amount which would
exceed, in the aggregate, $1.00; and
(iv) VLF will not be liable for any breach of its
obligations set out in Clause 2 for an amount which
would exceed, in the aggregate, $5,000,000.
(b) If a claim is made by any person against the Purchaser or the
Guarantor which if satisfied or paid by the Purchaser or the
Guarantor would permit the Purchaser to make a claim against
VLF under this Agreement:
(i) the Purchaser or the Guarantor must immediately give
notice of the claim to VLF; and
(ii) VLF must within 30 days after receipt of that notice
either:
(A) cause the Purchaser or the Guarantor to be
put in sufficient funds to satisfy or pay
the claim; or
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<PAGE> 41
(B) by notice to the Purchaser or the Guarantor
request the Purchaser or the Guarantor not
to satisfy or pay the claim in whole or in
part but at the expense and direction of
VLF to take such action (including, legal
proceedings) as VLF may direct to avoid,
dispute, defend, appeal or compromise the
claim and any adjudication of it and VLF
must also cause the Purchaser or the
Guarantor to be immediately put (and
afterwards maintained) in sufficient funds
in sufficient time to pay all reasonable
costs and expenses of the action directed
by VLF and (subject to this) the Purchaser
and the Guarantor must comply with the
directions of VLF.
(c) If the Purchaser or the Guarantor becomes aware of a claim or
potential claim the Purchaser or the Guarantor may have
against VLF with respect to any breach of any representation,
warranty or obligation the Purchaser or the Guarantor must
give notice of such claim to VLF within 21 days after
becoming so aware.
15.4 PURCHASER ACKNOWLEDGMENTS
(a) Each of the Purchaser and the Guarantor acknowledges that,
except as expressly set out in this Agreement, neither the
State, VLF, VRTC, PTC, the Passenger Rail Corporations nor
any person acting on behalf of or associated with any of them
has made any representation, given any advice or given any
warranty or undertaking of any kind in respect to any Plant
and Equipment, Rolling Stock, Hired Plant and Equipment,
Stock, Spare Parts, Hiring Agreements, Software Licences,
Contracts, Book Debts, Intangible Assets or the Goodwill or
otherwise in relation to or in connection with the Assets,
this Agreement, any of the other Transaction Documents or any
transaction or arrangement contemplated under any of them or
any other matter relevant to the Purchaser's or the
Guarantor's decision to enter into this Agreement or any of
the other Transaction Documents.
(b) Without limiting the Generality of Clause 15.4(a), each of
the Purchaser and the Guarantor acknowledges the following:
(i) the Disclosed Information (other than the Business
Records) and all intellectual property rights in the
Disclosed Information (other than the Business
Records) will remain the property of the State, VLF,
VRTC, PTC or a Passenger Rail Corporation (as the
case may be) at all times;
(ii) the Disclosed Information did not constitute an
invitation, offer or recommendation by or on behalf
of the State, VLF, VRTC, PTC or a Passenger Rail
Corporation;
(iii) the purpose of the Disclosed Information was to
provide the Purchaser with information to assist it
in preparing and lodging a proposal;
(iv) the Disclosed Information did not purport to contain
all of the information that the Purchaser or the
Guarantor required for the purpose of preparing and
lodging a proposal (including the Final Bid) or
making the decision to enter into this Agreement or
any of the other Transaction Documents and did not
purport to have been prepared having regard to the
Purchaser's or the Guarantor's business objectives,
financial situation or particular needs;
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<PAGE> 42
(v) neither the State, VLF, VRTC, PTC, the Passenger
Rail Corporations nor any other person acting on
behalf of or associated with any of them has
verified the accuracy, reliability or completeness
of the Disclosed Information;
(vi) neither the State, VLF, VRTC, PTC, the Passenger
Rail Corporations nor any other person acting on
behalf of or associated with any of them has made
any representation or warranty either express or
implied as to the accuracy, reliability or
completeness of the Disclosed Information;
(vii) the Purchaser and the Guarantor has not relied in
any way on the skill or judgment of the State, VLF,
VRTC, PTC or the Passenger Rail Corporations or any
person acting on behalf of or associated with any of
them and has relied absolutely on its own opinion
and professional advice based upon its own
independent analysis, assessment, investigation and
appraisal in deciding to tender a proposal and enter
into this Agreement and each of the other
Transaction Documents;
(viii) the Purchaser and the Guarantor has carried out all
relevant investigations and has examined and
acquainted itself concerning:
(A) the contents, correctness and sufficiency of
the Disclosed Information;
(B) all information which is relevant to the
risks, contingencies and other
circumstances which could affect its
decision to enter into this Agreement and
each of the other Transaction Documents;
and
(C) all amounts payable between the parties to
this Agreement and the other Transaction
Documents;
(ix) on the basis that the Disclosed Information has been
given in good faith and that neither the State, VLF,
VRTC, PTC nor any, Passenger Rail Corporation has
any knowledge that any part of the Disclosed
Information is misleading or deceptive (but
acknowledging that none of the State, VLF, VRTC,
PTC, any Passenger Rail Corporation or any person
acting on behalf of or associated with any of them
is under any obligation to make and that none of
them has made enquiries to verify that state of
knowledge), any statement, representation, term,
warranty. condition, promise or undertaking made,
given or agreed to by the State, VLF, VRTC, PTC, a
Passenger Rail Corporation or any person acting on
behalf of or associated with any of them in any
prior negotiation, arrangement, understanding or
agreement has no effect except to the extent
expressly set out or incorporated in this Agreement
or another Transaction Document; and
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(x) the acknowledgments under this Clause 15.4(b) are in
addition to and do not replace the terms and
conditions already agreed to or accepted by the
Purchaser and the Guarantor when receiving, the
Disclosed Information.
(c) Each of the Purchaser and the Guarantor acknowledges that no
representation or warranty is made by the State, VLF, VRTC,
PTC or any Passenger Rail Corporation (nor has the State,
VLF, VRTC, PTC or any Passenger Rail Corporation any
liability whatsoever to the Purchaser or the Guarantor) in
relation to:
(i) the apportioned value ascribed or to be ascribed to
any of the Assets for the purposes of taxation,
including depreciation, amortisation, capital gains
or otherwise; or
(ii) the basis on which any allowance or deduction for
depreciation of any of the items of Assets may be
calculated or allowed to the Purchaser for taxation
purposes.
(d) Each of the Purchaser and the Guarantor acknowledges that no
representation or warranty is made by the State, VLF, VRTC,
PTC or any Passenger Rail Corporation (nor has the State,
VLF, VRTC, PTC or any Passenger Rail Corporation any
liability whatsoever to the Purchaser or the Guarantor) in
relation to any defects in the computer hardware, software,
networks, data storage devices, peripherals, data stored in
electronic form and other information technology forming part
of or used in the Assets or the Business, including any
defect due to the problem commonly known as the Year 2000
problem.
(e) Each of the Purchaser and the Guarantor acknowledges that no
representation or warranty is made by the State, VLF, VRTC,
PTC or any Passenger Rail Corporation (nor has the State,
VLF, VRTC, PTC or any Passenger Rail Corporation any
liability whatsoever to the Purchaser or the Guarantor) in
relation to:
(i) the existence of any Stock or Spare Parts;
(ii) the state of maintenance, state of repair, condition
or serviceability of any item of Plant and
Equipment, Stock or Spare Parts;
(iii) compliance with any Authorisation in relation to the
use or operation of any item of Plant and Equipment,
Stock or Spare Parts;
(iv) the quality, fitness or suitability of any item of
Plant and Equipment, Stock or Spare Parts;
39
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(v) the safety of any item of Plant and Equipment, Stock
or Spare Parts; or
(vi) the accuracy, reliability or completeness of the
Asset Register, including whether:
(A) all items of Plant and Equipment, Stock or
Spare Parts are contained in the Asset
Register;
(B) items in the Asset Register are Assets to
be sold by VLF to the Purchaser under
Clause 2; or
(C) the Plant and Equipment, Stock or Spare
Parts correspond to any description in the
Asset Register.
(f) Each of the Purchaser and the Guarantor warrants to the
State, VLF, VRTC, PTC and each Passenger Rail Corporation
that in entering, into this Agreement and each other
Transaction Document, the Purchaser and the Guarantor is
aware that the State, VLF, VRTC, PTC and the Passenger Rail
Corporations have relied on the acknowledgments contained in
this Clause 15.4 in entering into this Agreement and each of
the other Transaction Documents.
(g) To the extent permitted by law, each of the Purchaser and the
Guarantor expressly waives any right which it has (whether at
the date of this Agreement or otherwise) to bring any action
or make any claim against the State, VLF, VRTC, PTC or any
Passenger Rail Corporation or any person acting on behalf of
or associated with any of them arising (directly or
indirectly) out of any alleged misrepresentation or
misleading or deceptive conduct on the part of the State,
VLF, VRTC, PTC or any Passenger Rail Corporation or any
person acting on behalf of or associated with any of them in
providing the Disclosed Information or in connection with
this Agreement or any other Transaction Document.
(h) The Purchaser indemnities the State, VLF, VRTC, PTC and each
Passenger Rail Corporation and will hold each of those
parties harmless against all claims, proceedings, costs,
expenses, loss, liability or damage that any of them may
sustain or incur as a result of or in connection with
(whether directly or indirectly) any breach of this Clause
15.4 by the Purchaser or the Guarantor including, any breach
of a warranty given by the Purchaser for the Guarantor under
this Clause 15.4.
(i) Each of the Purchaser and the Guarantor acknowledges that
this Clause 15.4 is intended to benefit and is to be
interpreted as benefiting the State, VLF, VRTC, PTC and each
Passenger Rail Corporation to the extent that this Clause
15.4 applies to them and is to be enforceable by them against
the Purchaser and the Guarantor accordingly. VLF holds the
benefit of the Purchaser's and the Guarantor's
representations, warranties, acknowledgments and agreements
under this Clause 15.4 on trust for the State, VRTC, PTC and
each Passenger Rail Corporation to the extent that this
Clause 15.4 applies to them.
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(j) Each of the Purchaser and the Guarantor acknowledges that all
of its representations, warranties, acknowledgments and
agreements under this Clause 15 survive the execution and
delivery of this Agreement and the completion of the
transactions contemplated by it.
16. CONTINUITY OF THE BUSINESS
16.1 VLF covenants with the Purchaser that prior to Completion it will
carry on the Business in the usual and ordinary course as it is
carried on by VLF at the date of this Agreement and prior to
Completion it will do all things reasonably necessary to preserve the
Goodwill, taking into account the transactions contemplated and the
obligations imposed on VLF by this Agreement.
16.2 Without limiting Clause 16.1, VLF covenants with the Purchaser that
prior to Completion VLF will not:
(a) enter into, terminate or alter the term of any Business
Contract or other Contract where the obligation of either
party under that Contract is to pay to the other an amount in
aggregate exceeding $350,000;
(b) other than pursuant to any Contract subsisting at the date of
this Agreement and disclosed in the Disclosed Information,
incur any liability the amount of which exceeds $350,000; or
(c) dispose of, agree to dispose of, encumber or grant an option
over any of the Assets or any interest in them other than in
the ordinary course of business, in each case without the
Purchaser's prior written consent (which must not be
unreasonably withheld).
16.3 VLF agrees that, prior to Completion, it will (at the expense and risk
of the Purchaser) provide the Purchaser with reasonable access during
business hours to VLF's premises to:
(a) observe the conduct of the Business; and
(b) examine records, property and affairs of VLF relating to the
Business (excluding, Board Papers),
provided that:
(i) on each occasion on which access is required, the
Purchaser provides VLF with reasonable prior notice
of the access that the Purchaser requires (including
the identity of the persons who are to exercise that
right of access on behalf of the Purchaser); and
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<PAGE> 46
(ii) such access will not, in VLF's reasonable opinion,
interfere with the conduct of the Business.
17. METHOD OF PAYMENT
All payments required to be made under this Agreement must be tendered
either in Australian dollars in cash or by bank cheque, direct credit
or in such other immediately available funds as may be agreed in
writing between VLF and the Purchaser.
18. TIME
18.1 Time is of the essence of this Agreement. However neither VLF nor the
Purchaser is at liberty to exercise any right or remedy (other than
those set out in Clause 19) arising out of the default of the other in
performing or observing any of the terms of this Agreement unless:
(a) notice is given to the other party specifying the default and
stating the intention of the party giving the notice to
enforce its rights and remedies if the default is not made
good and the proper legal costs incurred by it as a result of
the default are not paid within the period specified in the
notice (being not less than 14 days from the giving of the
notice); and
(b) the other party fails within that period to remedy the
default and pay those costs.
18.2 If a notice is given under Clause 18.1 prior to the Completion Date
which states that unless the default is remedied and the costs paid,
the Agreement will be treated as having been repudiated by the party
in default and the default is not remedied and the costs are not paid
within the period specified in the notice, then the Agreement will be
deemed to have been repudiated on the expiration of that period.
19. INTEREST ON DEFAULT
19.1 If any party defaults for more than seven days in payment of any money
payable under this Agreement that party must, if demand is made, pay
Interest on the amount in default until that amount has been paid in
full.
19.2 Interest will accrue daily at the Default Rate for each day from the
date on which the amount became due and payable until such amount (and
all Interest accrued on it) is paid in full, and is payable on the
date payment of the amount is made.
19.3 The right to require payment of Interest under this Clause is without
prejudice to any other rights and remedies of the party requiring that
payment in respect of the default.
19.4 If a liability under this Agreement becomes merged in an order or
judgment of a court of competent jurisdiction, the party obliged to
make payment in respect of the default must pay Interest on the amount
of that liability as an independent obligation. This Interest accrues
from the date the liability becomes due for payment (after or at the
time of the order or judgment) until it is paid, at a rate that is the
higher of the rate payable under the order or judgment and the Default
Rate.
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20. BOOKS AND RECORDS
All Business Records will become the property of the Purchaser from
Completion except to the extent they are required by law to be kept by
VLF. VLF will provide the Purchaser with a copy of Business Records
required by law to be kept by VLF, upon reasonable notice from the
Purchaser to VLF. The Purchaser acknowledges that Board Papers remain
the property of VLF after Completion and that VLF is not obliged to
provide a copy of any Board Papers to the Purchaser.
21. ACCESS
(a) The Purchaser acknowledges and agrees that VLF has continuing
reporting obligations under the Financial Management Act 1994
(Vic) and the Auditor-General has obligations in respect of
VLF under the Audit Act 1994 (Vic). Accordingly, the
Purchaser must ensure from Completion until 1 January 2001
that VLF, the Auditor-General and his officers and employees
and any representative of the State nominated by the
Treasurer are granted access without charge on reasonable
notice at all reasonable times to:
(i) those employees of the Purchaser and other persons
employed or engaged in the conduct of the business
after Completion whose knowledge or information is
needed by VLF, the Auditor-General or the State; and
(ii) to all books, records and other data pertaining to
VLF, the Business, the Assets, this Agreement or any
other Transaction Document and which are referable
to the period on and before Completion,
to enable VLF, the Auditor-General and the State to comply
with their respective obligations under or in respect of the
Financial Management Act 1994 (Vic) and the Audit Act 1994
(Vic).
(b) After Completion the Purchaser must allow VLF to have access
on reasonable notice at all reasonable times to the Business
Records (and to take extracts from or copies of them) if such
access reasonably is required by VLF for or in connection
with this Agreement or any other Transaction Document.
22. CONFIDENTIALITY
22.1 GENERAL OBLIGATIONS
The parties to this Agreement must keep confidential and not allow,
make or cause any disclosure of or in relation to:
(a) any Disclosed Information;
43
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(b) the terms of this Agreement or any other Transaction
Document; and
(c) any documents which are or information which is confidential
under this Agreement, without the prior written consent of
each of the other parties.
22.2 EXCEPTIONS
The parties' obligations in Clause 22.1 do not apply to disclosures to
the extent that the disclosure is:
(a) by a party to its legal and other professional advisers,
auditors or other consultants (consultants) or employees of
that party or that party's Related Bodies Corporate requiring
the information for the purposes of this Agreement or any
other Transaction Document (or any transactions contemplated
by any of them) or for the purposes of advising that party in
relation thereto;
(b) of information which is at the time lawfully in the
possession of the proposed recipient of the information
through sources other than a party;
(c) required by law or by a lawful requirement of any
Governmental Agency having jurisdiction over a party or its
Related Bodies Corporate;
(d) required by a lawful requirement of any stock exchange having
jurisdiction over a party or its Related Bodies Corporate;
(e) required in connection with legal proceedings, arbitration or
expert determination relating to this Agreement or any other
Transaction Document or for the purpose of advising a party
in relation thereto;
(f) of information which is at the time generally and publicly
available other than is result of breach of confidence by the
party wishing to disclose the information;
(g) necessary or commercially desirable to an existing or bona
fide proposed or prospective financier, however, the party
wishing to disclose the information must, if requested by
another party, procure that the proposed recipient of the
information executes a confidentiality deed in favour of the
other parties prior to the disclosure of the confidential
information;
(h) to the Crown in right of the State of Victoria or any
minister, officer, employee, agent, adviser or consultant of
the State or any of its Governmental Agencies or
instrumentalities; or
(i) contemplated by Clause 21.
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23. CONSEQUENCES OF TERMINATION
23.1 Termination of this Agreement for whatever cause is without prejudice
to any rights or obligations which may have accrued to, or be owing
by, a party at or prior to such termination.
23.2 Clauses 1, 15, 17, 19, 22, 24, 31, 32, and this Clause 23 continue to
apply after termination of this Agreement.
24. DUTIES, COSTS AND EXPENSES
24.1 PAYMENT OF DUTY
Subject to Clause 4.4, the Purchaser must pay:
(a) any Duty in respect of the execution, delivery and
performance of this Agreement the other Transaction Documents
and the deeds, instruments, documents and transactions
contemplated by them; and
(b) any interest, fine, penalty, charge or other amount in
respect of a failure to pay any Duty on time or as required.
24.2 INDEMNITY
The Purchaser indemnifies VLF against any amount payable by the
Purchaser under Clause 24.1.
24.3 COSTS AND EXPENSES
Subject to Clause 24.1, each party must pay its own costs and expenses
in respect of the negotiation, preparation, execution, delivery,
registration and performance of this Agreement and the other
Transaction Documents and the deeds, instruments, documents and
transactions contemplated by them.
25. NO MERGER
The rights and obligations of the parties will not merge on the
completion of any transaction contemplated by this Agreement. They
will survive the execution and delivery of any assignment or other
document entered into for the purpose of implementing any such
transaction.
26. ASSIGNMENT
(a) The Purchaser must not assign, encumber or otherwise dispose
of or deal with its rights or obligations under this
Agreement, or attempt or purport to do so, without the prior
written consent of VLF.
45
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(b) VLF may assign, encumber or otherwise dispose of or deal with
its rights and obligations under this Agreement at any time
following written notice to the Purchaser.
27. FURTHER ASSURANCES
Each party agrees to do all such things and execute all such deeds,
instruments, transfers or other documents as may be necessary or
desirable to give full effect to the provisions of this Agreement and
the transactions contemplated by it.
28. ENTIRE AGREEMENT
Except as expressly set out in this Agreement or another Transaction
Document, this Agreement and the other Transaction Documents contain
the entire agreement between the parties with respect to their subject
matter and supersede all prior agreements and understandings between
the parties in connection with them.
29. NO WAIVER
No failure to exercise nor any delay in exercising any right, power or
remedy by a party operates as a waiver. A single or partial exercise
of any right, power or remedy does not preclude any other or further
exercise of that or any other right, power or remedy. A waiver is not
valid or binding on the party granting that waiver unless made in
writing.
30. NOTICES
Any notice, demand, consent or other communication (a NOTICE) given or
made under this Agreement:
(a) must be in writing, and signed by a person duly authorised by
the sender;
(b) must be delivered to the intended recipient by prepaid post
(if posted to an address in another country, by registered
airmail) or by hand or fax to the address or fax number below
or the address or fix number last notified by the intended
recipient to the sender:
(i) to VLF: V/Line Freight Corporation
Level 1
589 Collins Street
MELBOURNE VIC 3000
Attention: Chief Executive Officer
Fax No: (03) 9619 4555
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(ii) to the Purchaser: Freight Victoria Limited
Level 1
140 King, Street
MELBOURNE VIC 3000
Attention: Chief Executive
Fax No: (03) 9827 8464
(iii) to the Guarantor: Rail America, Inc
301 Yamato Road, Suite 1190
Boca Raton, FL 33431
Attention: Senior Vice President
Fax No: (561) 994 3929
(c) will be taken to be duly given or made:
(i) in the case of delivery in person, when delivered;
(ii) in the case of delivery by post two business days
after the date of posting, (if posted to an address
in the same country) or seven business days after
the date of position (if posted to an address in
another country);
(iii) in the case of fix, on receipt by the sender of a
transmission control report from the despatching
machine showing the relevant number of pages and the
correct destination fix machine number and
indicating that the transmission had been made
without error,
but if the result is that a Notice would be taken to be given
or made on a day which is not a business day in the place to
which the Notice is sent or is later than 4.00pm (local time)
it will be taken to have been duly given or made at the
commencement of business on the next business day in that
place.
31. GUARANTEE
31.1 GUARANTEE
In consideration of VLF entering, into this Agreement at the request
of the Guarantor, the Guarantor:
(a) unconditionally and irrevocably guarantees to VLF the due and
punctual performance by the Purchaser of all its obligations
under this Agreement; and
(b) separately indemnities VLF against any Liabilities which may
be incurred or sustained by VLF in connection with any
default or delay by the Purchaser in the due and punctual
performance of any of its obligations under this Agreement.
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31.2 LIABILITY UNAFFECTED BY OTHER EVENTS
The liability of the Guarantor under this Clause is not affected by
any act, omission or thing which, but for this provision, might in any
way operate to release or otherwise exonerate or discharge the
Guarantor from any of its obligations including (without limitation)
the grant to the Purchaser or any other person of any time, waiver or
other indulgence, or the discharge or release of the Purchaser or any
other person from any, obligation.
31.3 CONTINUING GUARANTEE AND INDEMNITY
This Clause:
(a) extends to cover this Agreement as amended, varied or
replaced, whether with or without the consent of the
Guarantor; and
(b) is a continuing guarantee and indemnity and, despite
Completion, remains in full force and effect for so long as
the Purchaser has any liability or obligation to VLF under
this Agreement and until all of those liabilities or
obligations have been fully discharged.
32. GOVERNING LAW AND JURISDICTION
The Agreement is governed by the laws of Victoria. Each party submits
to the non-exclusive jurisdiction of courts exercising jurisdiction
there in connection with matters concerning this Agreement.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts. All
counterparts will be taken to constitute one instrument.
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EXECUTED in Melbourne
Each attorney executing this Deed states that he or she has no notice of
revocation or suspension of his or her power of attorney.
THE OFFICIAL SEAL of V/LINE )
FREIGHT was duly affixed in the presence )
of: )
/s/ ROBIN CLEMENTS /s/ ROD O'LOAN
- - ----------------------------------------- --------------------------------
Robin Clements Rod O'Loan
- - ----------------------------------------- --------------------------------
Print Name Print Name
THE COMMON SEAL of FREIGHT )
VICTORIA LIMITED was duly affixed in )
the presence of: )
/s/ DAVID J. FERRIS /s/ M. VAN ONSELEN
- - ----------------------------------------- --------------------------------
David J. Ferris M. Van Onselen
- - ----------------------------------------- --------------------------------
Print Name Print Name
SIGNED for and on behalf of )
RAILAMERICA, INC. by its duly )
appointed attorney in the presence of: )
/s/ KERRY C. H. DUNCAN /s/ M. VAN ONSELEN
- - ----------------------------------------- --------------------------------
Kerry C. H. Duncan M. Van Onselen
- - ----------------------------------------- --------------------------------
Print Name Print Name
49
<PAGE> 1
EXHIBIT 10.2
ARTHUR ROBINSON ALLENS
& HEDDERWICKS ARTHUR ROBINSON
GROUP
DIRECTOR OF PUBLIC TRANSPORT
and
FREIGHT VICTORIA LIMITED
(Lessee)
----------------------------------
PRIMARY INFRASTRUCTURE LEASE
----------------------------------
VOLUME 1
ARTHUR ROBINSON & HEDDERWICKS
Melbourne
Ref DAM:PJS
Tel 9614 1011
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
1. DEFINITIONS AND INTERPRETATION.................................................................................1
1.1 Definitions................................................................................................1
1.2 Interpretation............................................................................................11
1.3 Consents or approvals.....................................................................................12
1.4 Delegation................................................................................................12
1.5 Transfer of Functions.....................................................................................13
1.6 Indemnity Extent..........................................................................................13
1.7 Exclusion of Implied Covenants and Powers.................................................................14
1.8 Survival..................................................................................................14
2. LEASE AND RESERVATIONS........................................................................................14
2.1 Grant of Lease............................................................................................14
2.2 Lessee's Acknowledgement..................................................................................14
2.3 Reservations in Respect of Adjoining Land.................................................................14
2.4 Reservation in Respect of Non-Rail Activities.............................................................14
2.5 Conditions on Reservations................................................................................15
2.6 Title to Land.............................................................................................16
2.7 Access....................................................................................................16
2.8 Assignment of Existing Rights.............................................................................16
2.9 City Link Land............................................................................................16
3. CHANGES TO LAND...............................................................................................18
3.1 Changes to Area of Land...................................................................................18
3.2 Request by Director to Surrender Land.....................................................................18
3.3 Surrender of Station Grounds by Lessee....................................................................18
4. CHANGES TO RAILWAY INFRASTRUCTURE.............................................................................18
4.1 Upgrade by Lessee.........................................................................................18
4.2 Completion of Upgrade Works...............................................................................18
4.3 Removal of Railway Infrastructure.........................................................................19
4.4 Infrastructure to be Situated on Leased Land..............................................................19
4.5 Central Land Register.....................................................................................19
5. NEW WORKS REQUIRED BY THE DIRECTOR............................................................................20
5.1 Director's Right to Undertake New Works...................................................................20
5.2 Notice....................................................................................................20
5.3 Discussions with Lessee...................................................................................20
5.4 Lessee's Obligations......................................................................................21
5.5 Contracting for New Works.................................................................................21
5.6 Disruption................................................................................................21
5.7 Completion of Works.......................................................................................21
5.8 Property in Salvagable Material...........................................................................22
5.9 Payment of Compensation...................................................................................22
5.10 Amount of Compensation...................................................................................22
6. DE-ELECTRIFICATION OF PAKENHAM-WARRAGUL LINE..................................................................22
6.1 Proposal to Undertake De-electrification Works............................................................22
6.2 Discussions with Lessee...................................................................................23
6.3 Lessee's Obligations......................................................................................23
</TABLE>
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<TABLE>
<CAPTION>
<S> <C>
6.4 Disruption................................................................................................23
6.5 Property in Salvagable Material...........................................................................23
6.6 No Compensation...........................................................................................23
7. SURRENDER OF LINES............................................................................................24
7.1 Right to Surrender Lines..................................................................................24
7.2 Notice of Surrender.......................................................................................24
7.3 Lessee to Continue to Operate Line........................................................................24
7.4 Surrender.................................................................................................24
7.5 Director may Keep Line Open...............................................................................25
8. EXTENSION OF METROPOLITAN RAIL SYSTEM.........................................................................25
8.1 Director's Right to Electrify Track.......................................................................25
8.2 Notice....................................................................................................25
8.3 Surrender of Land.........................................................................................25
8.4 Discussions with Lessee...................................................................................25
8.5 Lessee's Obligations......................................................................................26
8.6 Contracting for Electrification Works.....................................................................26
8.7 Disruption................................................................................................27
8.8 Compensation..............................................................................................27
8.9 Amount of Compensation....................................................................................28
9. USE OF LAND...................................................................................................28
9.1 Permitted Use.............................................................................................28
9.2 No Warranty as to Use.....................................................................................28
9.3 Lessee's Acknowledgments..................................................................................28
9.4 Compliance with Laws......................................................................................29
9.5 Compliance with Notices...................................................................................29
9.6 Approvals.................................................................................................29
9.7 Accreditation.............................................................................................29
9.8 Native Title Claims.......................................................................................30
9.9 Access to Heritage Groups.................................................................................30
9.10 Provision of Accounts....................................................................................30
10. REPAIR AND MAINTENANCE.......................................................................................31
10.1 General Obligations......................................................................................31
10.2 Seymour Railway Heritage Centre..........................................................................32
10.3 Level Crossings..........................................................................................32
10.4 Bridges..................................................................................................32
10.5 Platforms................................................................................................32
10.6 VQI Testing..............................................................................................32
11. MAINTENANCE PLAN.............................................................................................32
11.1 Lessee to Submit Maintenance Plan........................................................................32
11.2 Form of Maintenance Plan.................................................................................33
11.3 Approval of Maintenance Plan.............................................................................33
11.4 Obligation to Comply with Maintenance Plan...............................................................33
11.5 Escrow Account...........................................................................................33
12. LEASES.......................................................................................................34
12.1 Existing Leases..........................................................................................34
12.2 Concurrent Lease.........................................................................................35
</TABLE>
(ii)
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
12.3 Release and Indemnity....................................................................................35
12.4 Granting of Sub-Leases...................................................................................35
12.5 No Release Of Liability..................................................................................35
13. LICENCES.....................................................................................................35
13.1 Existing Licences........................................................................................35
13.2 Excluded Licences........................................................................................36
13.3 Included Licences........................................................................................36
13.4 Lessee's Right to Grant New Licences.....................................................................36
13.5 No Release Of Liability..................................................................................36
14. INTERSTATE TRACK.............................................................................................37
15. ACCESS.......................................................................................................37
15.1 Director's Right of Access...............................................................................37
15.2 Exercise of Rights.......................................................................................37
16. PRE-EXISTING AND SUBSEQUENT CONTAMINATION....................................................................37
16.1 Clean-Up Notice..........................................................................................37
16.2 Indemnity by Director....................................................................................38
16.3 Indemnity by Lessee......................................................................................38
16.4 Covenant not to cause the service of a Clean-Up Notice...................................................38
17. ENVIRONMENTAL REPORTS........................................................................................38
17.1 Environmental Report.....................................................................................38
17.2 Random Audit.............................................................................................39
17.3 Final Audit..............................................................................................39
18. ENVIRONMENTAL COMPLIANCE.....................................................................................40
18.1 Lessee's Obligations.....................................................................................40
18.2 Indemnity by Lessee......................................................................................40
18.3 Indemnity by Director - Noise............................................................................40
19. ASBESTOS.....................................................................................................40
19.1 Asbestos Report..........................................................................................40
19.2 Obligations of Lessee....................................................................................41
19.3 Indemnity by Lessee......................................................................................41
20. LESSEE'S OBLIGATIONS - STORMWATER CONTAMINATION..............................................................41
20.1 Obligations of Lessee....................................................................................41
20.2 Indemnity by Lessee......................................................................................41
21. RENT.........................................................................................................41
21.1 Lessee to Pay Rent.......................................................................................41
21.2 Adjustment of Rent.......................................................................................42
21.3 No Abatement.............................................................................................42
21.4 Security.................................................................................................42
22. RATES, TAXES AND CHARGES.....................................................................................44
22.1 Rates and Taxes..........................................................................................44
22.2 GST......................................................................................................44
</TABLE>
(iii)
<PAGE> 5
<TABLE>
<CAPTION>
<S> <C>
22.3 Charges for Services.....................................................................................44
22.4 Separate Metering........................................................................................45
22.5 Payment by Director......................................................................................45
22.6 Shared Services..........................................................................................45
22.7 Access Roads.............................................................................................45
23. QUIET ENJOYMENT..............................................................................................45
24. INTELLECTUAL PROPERTY........................................................................................46
24.1 Grant of Licence.........................................................................................46
24.2 Improvements.............................................................................................46
24.3 Director's Right to License Improvements.................................................................46
24.4 Licence of Lessee's Intellectual Property................................................................47
24.5 Use of Third Party Intellectual Property Rights and Indemnity............................................47
24.6 Express Warranties with Respect to Infringement of Intellectual Property Rights..........................48
24.7 No Implied Warranties....................................................................................48
24.8 Sub-Licences.............................................................................................48
25. INSURANCE....................................................................................................48
25.1 Risk.....................................................................................................48
25.2 Obligation to insure Railway Infrastructure..............................................................48
25.3 Obligation to insure for public liability................................................................49
25.4 Obligation to insure against professional negligence.....................................................49
25.5 Obligation to insure for workers' compensation...........................................................49
25.6 Obligation to insure for motor vehicle liabilities.......................................................49
25.7 Periods of insurance.....................................................................................49
25.8 Insurers and policies....................................................................................50
25.9 Lessee to Satisfy Itself.................................................................................50
25.10 Insurance Policies in Joint Names.......................................................................51
25.11 Review of Insurances....................................................................................51
25.12 No Limitation...........................................................................................51
25.13 Joint insurance arrangements............................................................................51
26. DAMAGE AND DESTRUCTION.......................................................................................52
26.1 Destruction..............................................................................................52
26.2 No Right to Damage.......................................................................................52
27. INDEMNITY AND RELEASE........................................................................................53
27.1 Indemnity................................................................................................53
27.2 Release..................................................................................................53
27.3 Disclaimer...............................................................................................53
27.4 Year 2000 Risk...........................................................................................55
28. FURTHER TERMS................................................................................................55
28.1 Option...................................................................................................55
28.2 Exercise of First Option.................................................................................55
28.3 Exercise of Second Option................................................................................55
28.4 Granting of New Lease....................................................................................55
28.5 Director's Right of Refusal..............................................................................56
28.6 Guarantee of Obligations in Renewed Lease................................................................56
28.7 Additional Further Terms.................................................................................56
</TABLE>
(iv)
<PAGE> 6
<TABLE>
<CAPTION>
<S> <C>
29. DEFAULT......................................................................................................57
29.1 Occurrence of Default Event..............................................................................57
29.2 Cure Plan................................................................................................57
29.3 Cure Period..............................................................................................57
29.4 Extension to Cure Period.................................................................................57
29.5 Remedies for Default Event...............................................................................58
29.6 Remedies for Termination Event...........................................................................58
29.7 Interest on Financial Default............................................................................58
29.8 Waiver...................................................................................................59
29.9 Equitable Relief.........................................................................................59
30. OBLIGATIONS ON EXPIRATION OR TERMINATION.....................................................................59
30.1 Transitional Period......................................................................................59
30.2 Novation of Agreements...................................................................................59
30.3 Return of Maintenance Records............................................................................60
30.4 Power of Attorney........................................................................................60
30.5 Compensation.............................................................................................60
30.6 Set Off..................................................................................................61
31. DISPUTE RESOLUTION..........................................................................................61
31.1 Procedure to settle disputes.............................................................................61
31.2 Negotiation..............................................................................................61
31.3 Mediation................................................................................................61
31.4 Arbitration..............................................................................................62
31.5 Independent expert.......................................................................................63
31.6 Amalgamation of Disputes.................................................................................64
31.7 Continue to Perform......................................................................................64
32. REPRESENTATIONS AND WARRANTIES...............................................................................64
32.1 Lessee's Representations and Warranties..................................................................64
32.2 Survival of Representations and Warranties...............................................................65
32.3 Notification of Change...................................................................................65
32.4 Reliance on Representations and Warranties...............................................................66
33. CONFIDENTIALITY..............................................................................................66
33.1 General Obligations......................................................................................66
33.2 Exceptions...............................................................................................66
33.3 Disclosure for Purposes of this Lease....................................................................67
33.4 Other Confidential Information...........................................................................67
34. NOTICES......................................................................................................67
35. ENTIRE AGREEMENT.............................................................................................68
36. ASSIGNMENT...................................................................................................68
36.1 Assignment by Lessee.....................................................................................68
36.2 Assignment by Director...................................................................................68
36.3 Negative Pledge..........................................................................................68
36.4 Exclusion of Section 144 of Property Law Act.............................................................68
36.5 Change of Control........................................................................................68
</TABLE>
(v)
<PAGE> 7
<TABLE>
<CAPTION>
<S> <C>
37. AMENDMENT....................................................................................................69
38. NO WAIVER....................................................................................................69
39. SEVERABILITY.................................................................................................69
40. FURTHER ASSURANCES...........................................................................................69
41. NO MERGER....................................................................................................69
42. RIGHTS CUMULATIVE............................................................................................69
43. COSTS AND STAMP DUTY.........................................................................................69
44. GOVERNING LAW AND JURISDICTION...............................................................................69
45. COUNTERPARTS.................................................................................................70
</TABLE>
(vi)
<PAGE> 8
PRIMARY INFRASTRUCTURE LEASE
THIS LEASE is made on 30 April, 1999 between:
1. THE DIRECTOR OF PUBLIC TRANSPORT of 80 Collins Street, Melbourne on
behalf of THE CROWN IN RIGHT OF THE STATE OF VICTORIA; and
2. FREIGHT VICTORIA LIMITED (ACN 075 295 644) incorporated in the
Australian Capital Territory of Level 23, 101 Collins Street, Melbourne
(the LESSEE).
RECITALS
A. VRTC has agreed to lease the Land to the Director on the terms and
conditions contained in the Head-Lease.
B. The Director has agreed to sub-lease the Land to the Lessee on the
terms and conditions contained in this Lease.
C. The objectives of the State pursuant to this Lease include:
(a) to minimise the State's exposure to residual risks and
liabilities associated with the Land;
(b) to facilitate the development of an expanding rail freight
industry in Victoria as a viable alternative to road
transport; and
(c) to secure a progressive improvement in the quality of services
available to freight customers in Victoria.
D. The Lessee's obligations under the VLP Access Agreement include the
obligation to maintain those parts of the Railway Infrastructure used
by VLP in a condition which is fit for purpose.
E. The Director and the Lessee have entered into the Direct Agreement to
secure the provision of access and services to Operators in relation to
the Country Passenger Track (as defined in the Direct Agreement). The
rights of the Director under the Direct Agreement include certain
step-in rights if the Lessee does not comply with its obligations in
relation to the Country Passenger Track.
IT IS AGREED as follows.
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
The following definitions apply unless the context requires
otherwise.
ACCESS AGREEMENT means an agreement entered into between the
Lessee and an Operator pursuant to which the Lessee grants the
Operator a right to use Railway Infrastructure for the purpose
of transporting freight or passengers by rail.
ACCESS DETERMINATION means a determination of the Office of
the Regulator-General under Part 2A of the Rail Corporations
Act 1996 (Vic) requiring the Lessee to provide access to a
person seeking access to, or use of, Railway Infrastructure.
ACCREDITATION means the accreditation required to be held by
the Lessee as an operator of Rolling Stock and as a manager of
the Railway Infrastructure under Division 3, Part 6 of the
Transport Act
<PAGE> 9
1983 (Vic) (including any regulation, guideline or ordinance
made pursuant to that Division) and any other accreditation
required by any Laws.
AIR SPACE means all air space more than 6.825 metres above the
surface of the land or, where there is a structure on the land
the top of which is more than 6.825 metres above the surface
of the land, all air space above the top of that structure.
APPROVAL means any permit, licence, consent, grant,
certificate, sealing or other approval obtained or required to
be obtained by the Lessee from a Governmental Agency or any
other person in relation to the Land or the use and occupation
of the Land and includes any Planning Approval, Accreditation,
and any requisition, condition or requirement from a
Governmental Agency or any other person.
ASBESTOS LEGISLATION means any Law relating to the removal,
replacement control, identification, sealing, enclosing or
otherwise dealing with the existence of asbestos.
ASBESTOS REPORT means the report contained in Section 8 of the
Environmental Report.
AUTHORISATION includes:
(a) any consent, authorisation, registration, filing,
lodgement, permit, franchise, agreement,
notarisation, certificate, permission, licence,
approval, direction, declaration, authority or
exemption from, by or with a Governmental Agency; or
(b) in relation to anything that would be fully or partly
prohibited or restricted by law if a Governmental
Agency intervened or acted in any way within a
specified period after lodgement, filing,
registration or notification, the expiry of that
period without intervention or action.
BAYSIDE TRAINS means Met Train 1, a statutory corporation
established under the Rail Corporations Act 1996 (Vic).
CLEAN-UP NOTICE means a notice served or a direction made
under Section 62A of the Environment Protection Act 1970 (Vic)
or a notice served under any legislation relating to
Contamination in, on, under or emanating from the Land.
COMMENCEMENT DATE means 1 May 1999.
COMPLETION DATE means the day immediately preceding the 15th
anniversary of the Commencement Date.
CONTAMINATION means a solid, liquid, gas, odour, heat, sound,
vibration, radiation or substance of any kind which makes or
may make the Environment unsafe, unfit or harmful for
habitation, use or occupation by any person or animal or is
such that any part of the Environment does not satisfy the
contamination criteria or standards published or adopted by
the Victorian Environment Protection Authority from time to
time and the word Contaminant has a corresponding meaning.
CONTROLLED ENTITY means an entity in respect of which the
Lessee:
(a) is entitled to exercise or control the right to vote
attached to 50% or more of the issued shares or stock
(whether fully, partly or nil paid) in the entity;
(b) is entitled to dispose of or exercise a right of
disposal in respect of 50% or more of the issued
shares or stock (whether fully, partly or nil paid)
in the entity; or
-2-
<PAGE> 10
(c) is able, whether alone or in concert with another or others,
and whether by any act or omission or otherwise, to dominate
or control the entity or the financial or operating policies
or management of the entity.
CORPORATIONS LAW means the Corporations Law of Australia.
CURE PERIOD means:
(a) in respect of a Financial Default, 21 days from and including
the date of service of a Default Notice; and
(b) in respect of all other Default Events, the period specified
by the Director as such in the relevant Default Notice, being
such period of time from and including the date of service of
a Default Notice as, in all the circumstances, is a reasonable
period of time in which to cure the Default Event to which the
Default Notice relates or any greater period as may be allowed
pursuant to clause 29.4.
CURE PLAN, in respect of a Default Event which is not a Financial
Default, means a plan by the Lessee to remedy that Default Event which:
(a) is proposed during the Cure Period; and
(b) details:
(i) the time required to cure the relevant Default Event;
and
(ii) a work plan setting out each task to be undertaken in
order to rectify the Default Event and the time for
each task to be completed.
DATA ROOM means the data room relating to the sale of the business of
VLF situated at Olderfleet Building, Level 6, 477 Collins Street,
Melbourne.
DEED OF COVENANT means the document so titled dated on or about the
date of this Lease made by the Lessee in favour of the State.
DE-ELECTRIFICATION WORKS means the works referred to in clause 6.l.
DEFAULT EVENT means:
(a) any failure by the Lessee to comply with this Lease (including
a Financial Default); or
(b) a Financial Breach (as defined in the Direct Agreement) by the
Lessee under the Direct Agreement.
DEFAULT NOTICE means a notice given by the Director under clause 29.l.
DEFAULT RATE means the rate prescribed from time to time under Section
2 of the Penalty Interest Rates Act 1983 (Vic).
DIRECT AGREEMENT means the document titled "VLF Direct Agreement
Country Passenger Network" dated on or about the date of this Lease
between the Director and the Lessee.
DIRECTOR means the Director of Public Transport under the Transport Act
1983 (Vic) acting on behalf of the Crown in right of the State and an
obligation, right or remedy of the Director under this Lease is an
obligation, right or remedy of the Director in that capacity.
-3-
<PAGE> 11
DIRECTOR'S ASSOCIATES includes an employee, agent, contractor,
consultant, licensee, invitee, client, customer or visitor of the
Director (but does not include any Operator).
DISCLOSED INFORMATION means:
(a) the Information Memorandum;
(b) the Invitation to Tender;
(c) the Environmental Report;
(d) the Independent Engineer's Report; and
(e) all information disclosed to the Lessee or any person acting
on behalf of or associated with the Lessee by or on behalf of
the Director, the State, VLF, VRTC, PTC, any of the Passenger
Rail Corporations or any person acting on behalf of or
associated with any of them or which is otherwise acquired by
or comes to the knowledge of the Lessee or any person acting
on behalf of or associated with the Lessee directly or
indirectly from any of them, whether the information is in
oral, visual or written form or is recorded in any other
medium (including all information contained in the Data Room,
on CD-Rom or otherwise disclosed or made available to the
Lessee or any person acting on behalf of or associated with
the Lessee including as a result of management presentations
or question and answer processes or sessions).
ELECTRIFICATION WORKS means any works undertaken by or on behalf of the
Director pursuant to clause 8.l.
ENVIRONMENT includes the meaning given to that term at common law and
in any legislation in force in the State or Territory of Australia in
which the Land is situated including any land, water, atmosphere,
climate, sound, odours, tastes, the biological factors of animals and
plants and the social factors of aesthetics.
ENVIRONMENTAL HAZARD means a state of danger to human beings or the
Environment whether imminent or otherwise resulting from the location,
storage or handling of any substance having toxic, corrosive,
flammable, explosive, infectious or otherwise dangerous
characteristics.
ENVIRONMENTAL LAW means any Law relating to the Environment including
any law relating to land use, planning, pollution of air, water, soil
or groundwater, chemicals, waste, the use of transport, the storage and
handling of dangerous goods, the health or safety of any person, or any
other matters relating to but not limited to the protection of the
Environment, health or property.
ENVIRONMENTAL REPORT means the report titled "V/Line Freight
Corporation Environmental Assessment" prepared by CMPS&F Pty Ltd and
dated October 1998.
ESCROW ACCOUNT means a bank account opened in the name of the Director
with an Australian bank (within the meaning of the Banking Act 1959
(Cth)) the identity of which is approved in writing by the Director.
EXCLUDED INFRASTRUCTURE means the items listed in Schedule 4.
EXCLUDED LEASES means the leases listed in Schedule 8.
EXISTING AGREEMENTS means the agreements listed in Schedule 10.
EXISTING LEASES means the leases listed in Schedule 7.
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<PAGE> 12
EXISTING LICENCES means the licenses listed in Schedule 9.
FINAL AUDIT means the final audit referred to in clause 17.3(a).
FINANCIAL DEFAULT means a failure by the Lessee to:
(a) pay when due any money which the Lessee is obliged to pay to
the Director under this Lease (including a failure to pay Rent
when due); or
(b) provide or maintain the Letter of Credit in accordance with
clause 21.4.
FIRST FURTHER TERM means the term of 15 years commencing on the 15th
anniversary of the Commencement Date and ending on the day immediately
preceding the 30th anniversary of the Commencement Date.
GUARANTOR means Rail America, Inc.
GOVERNMENTAL AGENCY means a government or a governmental,
semi-governmental, judicial, municipal, statutory or public entity or
authority. It also includes a self-regulatory organisation established
under statute or a stock exchange.
GST means any tax in the nature of a tax on goods and services, value
added tax, broad based consumption tax or similar tax levied, imposed
or assessed by the Commonwealth of Australia or any state or territory
of Australia, which may operate at any time during the term of this
Lease.
HAZARDOUS SUBSTANCE means any substance which would or might reasonably
be expected to cause injury to any person or the Environment.
HEAD-LEASE means the lease dated on or about the date of this Lease
between VRTC and the Director.
HILLSIDE TRAINS means Met Train 2, a statutory corporation established
under the Rail Corporations Act 1996 (Vic).
IMPROVEMENT means:
(a) all alterations, modifications and enhancements to, and
applications, developments and adaptations of, the materials
in which any Licensed Rights subsist; and
(b) all other materials based upon or derived from the materials
in which any Licensed Rights subsist,
whether or not the use or reproduction of such alterations,
modifications, enhancements, applications, developments, adaptations or
other materials would constitute an infringement of the Licensed
Rights.
INDEPENDENT ENGINEERS REPORT means the report titled "Engineering
Report on V/Line Freight Corporation's Assets and Infrastructure"
prepared by TMG International Pty Ltd and dated October 1998.
INDUSTRIAL WASTE means any waste arising from commercial, industrial or
trade activities and any waste containing substances or materials which
are potentially harmful to human beings or the Environment.
INFORMATION MEMORANDUM means the information memorandum titled "V/Line
Freight Information Memorandum" dated September 1998 (including any
supplement to or replacement of it), issued by the State.
-5-
<PAGE> 13
INITIAL TERM means the term of fifteen years commencing on the
Commencement Date and ending on the day immediately preceding the 15th
anniversary of the Commencement.Date.
INSOLVENCY EVENT means when:
(a) the Lessee stops or suspends payment of all or a class of its
debts;
(b) the Lessee is insolvent within the meaning of section 95A of
the Corporations Law;
(c) the Lessee is presumed by a court to be insolvent by reason of
section 459C(2) of the Corporations Law;
(d) the Lessee fails to comply with a statutory demand (within the
meaning of section 459F(l) of the Corporations Law);
(e) the Lessee has an administrator appointed over all or any of
its assets or undertaking;
(f) the Lessee has a controller within the meaning of section 9 of
the Corporations Law or similar officer appointed to all or
any of its assets or undertaking;
(g) the Lessee has an order made or a resolution passed for its
winding up or dissolution or it enters into an arrangement,
compromise or composition with or assignment for the benefit
of its creditors or a class of them;
(h) any security over or a distress, execution or other similar
process is levied or served against the whole or a substantial
part of the Lessee's assets or undertaking; or
(i) any event occurs which, under the Law of any relevant
jurisdiction, has an analogous or equivalent effect to any of
the events listed above.
INTELLECTUAL PROPERTY means any intellectual or industrial property
whether protected by statute, at common law or in equity, including any
patent, invention, copyright, design (whether or not registrable),
trade secret, circuit layout design or right in relation to circuit
layouts, right to confidential information, technical information,
processes, techniques and know-how, but excluding registered and
unregistered trade marks, trade names, logos and get-up (and copyright
subsisting in such trade marks, logos and get-up).
INTEREST means interest calculated with monthly rests and compounded on
each monthly rest date.
INTERSTATE TRACK means the interstate standard and dual gauge railway
track.
INTERSTATE TRACK LAND means all that land which lies not more than two
metres from the centre line of the interstate standard and dual gauge
railway track on the Shared Corridors.
INTRASTATE CORRIDOR TRACK LAND means all that land which lies not more
than two metres from the centre line of the railway track on the Shared
Corridors, but excludes the Interstate Track Land.
INTRASTATE CORRIDORS means, in respect of the Shared Corridors, the
land which is bounded by:
(a) the line which is equidistant between the boundary of the
Interstate Track Land and the boundary of the Intrastate
Corridor Track Land; and
(b) the boundary of the land owned by VRTC directly adjacent to
the Intrastate Corridor Track Land (which is the boundary
reached by not crossing the Interstate Track Land),
provided that:
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<PAGE> 14
(c) where the Intrastate Corridor Track Land intersects with the
Interstate Track Land, the Intrastate Corridor Track Land is
excluded from the Intrastate Corridor; and
(d) where the Intrastate Corridor Track Land turns out from the
Interstate Track Land, that part of the Intrastate Corridor
Track Land up to and including the last long timber of the
turnout diverging off the railway track situated on the
Interstate Track Land is excluded from the Intrastate
Corridor.
Diagramatic representations of the matters set out in this definition
are contained in Schedule 3.
INTRASTATE TRACK means the railway track situated on the Land.
INVITATION TO TENDER means the document titled "V/Line Freight
Invitation to Tender" dated 'September 1998 (including any supplement
to or replacement of it), issued by the State.
LAND means all that land forming part of:
(a) the Railway Corridors;
(b) the area delineated and coloured yellow on the plans of the
Station Grounds listed in Schedule 2; and
(c) the Intrastate Corridors,
in each case as varied from time to time under the terms of this Lease,
and includes the Railway Infrastructure but excludes:
(d) the Air Space; and
(e) the land subject to the Excluded Leases.
LAWS means any statute, regulation, order, rule, subordinate
legislation or other document enforceable under a statute, regulation,
order, rule or subordinate legislation.
LEADR means Lawyers Engaged in Alternative Dispute Resolution.
LESSEE'S ASSOCIATES includes an employee, agent, contractor,
consultant, licensee, invitee, client, customer or visitor of the
Lessee (including any Operator).
LETTER OF CREDIT means an irrevocable stand-by letter of credit issued
by a bank or financial institution the identity of which is approved in
writing by the Director.
LICENSED RIGHTS means all Intellectual Property which is necessary to
use the Railway Infrastructure for or in connection with Railway
Operations and which is:
(a) owned solely by the Director as at the date of this Lease; or
(b) owned wholly or in part by a third party as at the date of
this Lease and which is:
(i) licensed to the Director; and
(ii) able to be lawfully sub-licensed by the
Director to the Lessee for the purpose of
allowing the Lessee to use the Railway
Infrastructure for Railway Operations.
LINE means a part of the Land which lies between two specified
locations which are serviced by the same railway track (including the
associated Railway Infrastructure on the Land needed to allow and
facilitate the operation of Rolling Stock between those two locations).
-7-
<PAGE> 15
MAINTENANCE PLAN means the plan or plans to be submitted by the Lessee
in accordance with clause 11.1.
METROPOLITAN FRANCHISEE means a metropolitan train operator (as defined
in the Rail Corporations Act 1996 (Vic)).
MINIMUM CONDITION, in respect of any Railway Infrastructure, means the
condition of that Railway Infrastructure which:
(a) would enable an Operator to use that Railway Infrastructure
for the purpose of transporting freight by rail in a manner in
all material respects the same as the manner in which that
Railway Infrastructure has most recently been used by the
Lessee or by a related body corporate (within the meaning of
the Corporations Law) of the Lessee or any other controlled
entity for that purpose (assuming that Operator is not
operating rail freight traffic on that Railway Infrastructure
at a greater frequency or to a greater extent than the Lessee
or a related body Corporate of the Lessee or any other
controlled entity has most recently operated rail freight
traffic on that Railway Infrastructure and assuming use by
that Operator of rolling stock of the type and age most
recently used by the Lessee or a related body Corporate of the
Lessee or any other controlled entity for rail freight traffic
on that Railway Infrastructure); and
(b) must be at least such as would enable rail freight traffic
generally to travel on the railway track forming part of that
Railway Infrastructure at a minimum speed of 20 km/h with 19
tonne axle loads.
MINIMUM MAINTENANCE LINES means the Lines listed in Schedule 6.
NATIVE TITLE LAW includes the Native Title Act 1993 (Cth) and any other
Commonwealth or State law relating to native or aboriginal title.
NEW WORKS means any works undertaken by the Director pursuant to clause
5.1.
NOISE CONTROL NOTICE means a notice served under Section 47 of the
Environment Protection Act 1970 (Vic) but excludes any notice served
under or pursuant to that Act which requires the preparation and/or
implementation of a noise management plan.
OPERATOR means a person who uses the Railway Infrastructure for the
purpose of transporting freight or passengers by rail.
PASSENGER RAIL CORPORATION means any of:
(a) Bayside Trains;
(b) Hillside Trains;
(c) Swanston Trams;
(d) Yarra Trams; and
(e) VLP.
PERMITTED SECURITY INTEREST means:
(a) a Security Interest approved in writing by the Director; or
(b) a Security Interest which by its terms will cease to exist
immediately upon the expiration or earlier determination of
this Lease.
-8-
<PAGE> 16
PERSONAL INJURY includes:
(a) bodily injury, death, sickness, disease, disability, shock,
fright, mental anguish or mental injury including the
resultant loss of consortium or services at any time;
(b) false arrest, detention, false imprisonment, discrimination,
malicious prosecution or humiliation, or breach of
confidentiality;
(c) wrongful entry or wrongful eviction or other invasion of the
right to private occupancy; and
(d) assault and/or battery not intentionally committed by or at
the discretion of the insured unless so directed for the
purpose of preventing or eliminating danger to property or
persons.
PLANNING APPROVAL means any Approval given under any Planning Scheme or
any Planning Scheme amendment approved and gazetted from time to time
under the Planning and Environment Act 1987 (Vic).
PLANNING SCHEME means any Planning Scheme made under the Planning and
Environment Act 1987 (Vic) applicable to the Land or any part of the
Land.
POLLUTANT means a discharge, emission or deposit (including noise and
vibrations) which brings about a detrimental change in the condition of
the Environment which creates any one or more of the conditions of the
Environment referred to in sections 39(l), 41(l) or 45(l) of the
Environment Protection Act 1970 (Vic) and the word Pollution has a
corresponding meaning.
PRE-EXISTING CONTAMINATION means any Contamination existing in, on,
under or emanating from the Land at the Commencement Date.
PTC means the Public Transport Corporation, a statutory corporation
established under the Transport Act 1983 (Vic).
RAILWAY CORRIDORS means all land owned by VRTC on which the railway
lines listed in Schedule I are situated, but excluding the Station
Grounds.
RAILWAY INFRASTRUCTURE means the facilities installed or erected upon
the Land from time to time necessary for or in connection with Railway
Operations and includes railway track, associated track structures and
works (such as cuttings, tunnels, bridges, stations, platforms,
sidings, excavations, landfill, track support earthworks and drainage
works), pedestrian crossings, over-track structures, under-track
structures, service roads, signalling systems, notices and signs,
overhead electrical power supply systems and associated buildings,
workshops, depots and yards, but excludes the Excluded Infrastructure.
RAILWAY OPERATIONS means:
(a) the provision, maintenance, movement, shunting, storage,
fuelling, loading and unloading of Rolling Stock to transport
freight or passengers by rail;
(b) the provision of Railway Infrastructure to enable the
transport of freight or passengers by rail;
(c) the maintenance, storage, building, rebuilding, servicing,
replacing and repairing of Railway Infrastructure and Rolling
Stock; and
-9-
<PAGE> 17
(d) the conduct of the business of handling, storing and
transporting freight or passengers by rail.
RATES AND TAXES means all municipal and water rates including excess
water rates, sewerage rates, drainage rates and other rates, taxes
(including all State and Federal land taxes), assessments, charges,
costs and expenses (including for the construction of any private
street, channel, kerbing, flagging or paving of any footway or pathway
abutting the Land) which may at any time be payable to any Governmental
Agency.
RENT, in respect of each year of the Term, means $4,162,637 adjusted in
accordance with clause 21.2.
ROADS CORPORATION means the Roads Corporation, a statutory corporation
established under the Transport Act 1983 (Vic).
ROLLING STOCK means any vehicle that operates on or uses a railway
track, including a locomotive, light inspection vehicle, road/rail
vehicle, trolley, carriage, diesel multiple unit and wagon (but does
not include a vehicle designed to operate both on and off a railway
track when the vehicle is not operating on a railway track).
SALE OF ASSETS AGREEMENT means the document so titled made between VLF,
the Lessee and the Guarantor.
SECOND FURTHER TERM means the term of 15 years commencing on the 30th
anniversary of the Commencement Date and ending on the day immediately
preceding the 45th anniversary of the Commencement Date.
SECRETARY means the Secretary of the Victorian Department of
Infrastructure or his or her delegate.
SECURITY INTEREST includes any mortgage, pledge, lien or charge or any
security or preferential interest or arrangement of any kind or any
other right of, or arrangement with, any creditor to have its claim
satisfied in priority to other creditors with, or from the proceeds of,
any asset.
SHARED CORRIDORS means all land owned by VRTC on which the railway
lines listed in Schedule 3 are situated, but excluding the Station
Grounds.
SHARED INFRASTRUCTURE means the items listed in Schedule 5.
SITES means the sites subject to the phase 2 soil and groundwater
assessment (as identified in the Environmental Report) which form part
of the Land.
STATE means the State of Victoria.
STATION GROUNDS means the area delineated as being owned by VRTC on the
plans listed in Schedule 2 which lies between the "End of Station
Ground" notations on those plans.
SUBSEQUENT CONTAMINATION means any Contamination existing in, on, under
or emanating from the Land that was not in existence at the
Commencement Date and any release or leaching of or deterioration in or
alteration to the Pre-Existing Contamination that arises by reason of
the use and occupation of the Land by the Lessee or any person deriving
an interest in the Land from the Lessee or enjoying the use or
occupation of the Land with the consent of the Lessee.
SUBSIDIARY has the meaning given in the Corporations Law.
SWANSTON TRAMS means Met Tram 1, a statutory corporation established
under the Rail Corporations Act 1996 (Vic).
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TERM means, as applicable, the Initial Term, the First Further Term or
the Second Further Term.
TERMINATION EVENT means:
(a) the occurrence of an Insolvency Event;
(b) the occurrence of an event or circumstance in contravention of
clause 36.1 or 36.3;
(c) the abandonment of the whole of the Land by the Lessee for a
continuous period of not less than 14 days; or
(d) a breach of any of the covenants contained in the Deed of
Covenant.
TOTTENHAM YARD means the area delineated and coloured yellow on the
plan titled "Tottenham Yard" listed in Schedule 2.
TRANSACTION DOCUMENT has the meaning given in the Sale of Assets
Agreement.
VLF means V/Line Freight, a body corporate established under the Rail
Corporations Act 1996 (Vic).
VLP means V/Line Passenger Corporation, a body corporate established
under the Rail Corporations Act 1996 (Vic).
VLP ACCESS AGREEMENT means the document titled "Access Agreement" dated
on or about the date of this Lease and made between the Lessee and VLP.
VRTC means Victorian Rail Track, a body corporate established under the
Rail Corporations Act 1996 (Vic).
YARRA TRAMS means Met Tram 2, a statutory corporation established under
the Rail Corporations Act 1996 (Vic).
1.2 INTERPRETATION
Headings are for convenience only and do not affect interpretation. The
following rules apply unless the context requires otherwise:
(a) The singular includes the plural and conversely.
(b) A gender includes all genders.
(c) If a word or phrase is defined, its other grammatical forms
have a corresponding meaning.
(d) A reference to INCLUDES OR INCLUDING should be construed
without limitation.
(e) A reference to a person, corporation, trust, partnership,
unincorporated body or other entity includes any of them.
(f) A reference to a clause, Schedule or Annexure is a reference
to a clause of, or a schedule or annexure to, this Lease.
(g) A reference to an agreement or document (including a reference
to this Lease) is to the agreement or document as amended,
varied, supplemented, novated or replaced, except to the
extent prohibited by this Lease or that other agreement or
document.
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(h) A reference to a party to this Lease or another agreement or
document includes the party's successors, permitted
substitutes and permitted assigns (and, where applicable, the
party's legal personal representatives).
(i) A reference to legislation or to a provision of legislation
includes a modification or re-enactment of it, a legislative
provision substituted for it and a regulation or statutory
instrument issued under it.
(j) A reference to conduct includes, without limitation, an
omission, statement or undertaking, whether or not in writing.
(k) A reference to an AGREEMENT includes any undertaking, deed,
agreement and legally enforceable arrangement, whether or not
in writing, and a reference to a document includes an
agreement (as so defined) in writing and any certificate,
notice, instrument and document of any kind.
(l) A reference to WRITING includes a facsimile transmission and
any means of reproducing words in a tangible and permanently
visible form.
(m) A reference to any professional body includes the successors
of that body.
(n) A reference to a YEAR or a MONTH is to a calendar year or a
calendar month respectively.
(o) A reference to DOLLARS and $ is to Australian currency.
(p) A reference to PARTY is a reference to a party to this Lease.
(q) For the purposes of clauses 2.2, 2.3, 2.4, 4, 5, 8, 9, 15, 16,
17.2, 18, 20, 22, 27 and 36, LAND includes any land in respect
of which the Director assigns or sub-licences the Director's
right, title and interest to the Lessee pursuant to clause 2.8
or clause 2.9 (as the case may be).
1.3 CONSENTS OR APPROVALS
If the doing of any act, matter or thing under this Lease is dependent
on the consent or approval of a party or is within the discretion of a
party, the consent or approval may be given or the discretion may be
exercised conditionally or unconditionally or withheld by the party in
its absolute discretion unless express provision to the contrary has
been made.
1.4 DELEGATION
(a) The Director may delegate any power, function or
responsibility which that party has under this Lease.
(b) Any such delegation may be:
(i) revoked, changed or delegated; and
(ii) limited or may be subject to such conditions
as the Director determines from time to
time.
(c) The Lessee is entitled to request from the Director details of
the delegation of any power, function or responsibility by the
Director under this Lease where a person purports to be acting
under such a delegation. Once the Lessee obtains such details,
it is entitled to rely on them unless and until given notice
of revocation of that delegation.
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(d) If the Director delegates any power, function or
responsibility under this Lease to an individual, the Director
must give notice of such delegation to the Lessee (including
the identity and address of any person to whom such power,
function or responsibility is delegated). Where such notice
has been given by the Director, the Lessee is entitled to rely
upon such notice unless and until given notice of revocation
of that delegation.
(e) Any person to whom a power, function or responsibility is
delegated by the Director has, to the extent of that
delegation and subject to compliance with the terms and
conditions of that delegation, full power and authority to act
for and on behalf of and to bind the Director under this
Lease.
1.5 TRANSFER OF FUNCTIONS
(a) The Lessee acknowledges that the Director or VRTC may be
reconstituted, renamed or replaced and that some or all of the
powers, functions or responsibilities of the Director or VRTC
(as the case may be) may be transferred to or vested in
another entity.
(b) If the Director or VRTC is reconstituted, renamed or replaced
or if some or all of the Director's or VRTC's (as the case may
be) powers, functions or responsibilities are transferred to
or vested in another entity, references in this Lease to the
Director or VRTC (as the case may be) must be deemed to refer,
as applicable, to that reconstituted, renamed or new entity to
the extent that the entity has assumed or has had transferred
to or vested in it those powers, functions or
responsibilities.
1.6 INDEMNITY EXTENT
(a) Where any indemnity is given under this Lease. the indemnity
extends to any loss, damage or expense, including:
(i) liability to third parties;
(ii) legal costs (on a solicitor own client basis) in
respect of enforcing the indemnity or defending any
claim brought by any party, including a third party,
in respect of a matter which is the subject of the
indemnity; and
(iii) any such loss, damage or expense arising from or in
any way connected with an act, default or omission or
other event in respect of which the indemnity is
given,
but does not extend to any indirect or consequential loss.
(b) For the purpose of clause 1.6(a), it is agreed that:
(i) the following losses are not included in the term
"indirect or consequential": property damage or
losses arising from third party claims in respect of
property damage, personal injury, nervous shock or
death; and
(ii) the following losses are included in the term
"indirect or consequential": loss of subsidy
payments, track and station access charges and
incentive payments, loss of business opportunity and
payment of liquidated sums, penalties or damages
under a franchise agreement or any other agreement
(other than this Lease).
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1.7 EXCLUSION OF IMPLIED COVENANTS AND POWERS
The covenants and powers implied by the Transfer of Land Act 1958 (Vic)
do not apply and will not be implied in this Lease except to the extent
those covenants and powers are included in the covenants and powers
contained in this Lease.
1.8 SURVIVAL
In addition to this clause 1, the following clauses survive the
expiration or earlier termination of this Lease: clauses 2.5(e),
2.8(d), 2.9(d), 4.5(d), 9.2, 9.3, 9.8, 10.1, 11.5(e) & (f), 12.3,
13.3(c), 16.2, 16.3, 17.3, 18.2, 19.3, 20.2, 24.4, 24.5, 24.8, 25.7,
26.2, 27, 29, 30, 31, 33 and 44.
2. LEASE AND RESERVATIONS
2.1 GRANT OF LEASE
The Director leases to the Lessee the Land to be held by the Lessee as
lessee for the Term on the terms and conditions contained in this
Lease.
2.2 LESSEE'S ACKNOWLEDGEMENT
The Lessee acknowledges that this Lease and the Lessee's rights in
respect of the Land are subject to:
(a) the Existing Leases, the Existing Licences and all other
interests, rights, licences, easements and reservations
affecting the Land (including, without limitation, all
interests, rights and licences at the date of this Lease
exercised by VLP and its employees, contractors and
customers); and
(b) any defects, whether latent or patent, in the Land or the
Railway Infrastructure, subject to clause 16.
2.3 RESERVATIONS IN RESPECT OF ADJOINING LAND
For the purpose of VRTC providing services to, through, on, over or
under land which is adjacent to or near the Land, the Lessee
acknowledges that VRTC has reserved the exclusive right under the
Head-Lease to:
(a) install, maintain, use, repair, alter and replace pipes,
ducts, conduits, cables, wires and poles through, on, over and
under the Land;
(b) hang cables and wires from the poles referred to in clause
2.3(a);
(c) pass and run water, electricity, sewerage, drainage, gas,
communications and other services through the pipes, ducts,
conduits, cables and wires; and
(d) for the purpose of exercising the rights referred to in
clauses 2.3(a), (b) and (c), grant easements to or enter into
agreements with any Governmental Agency or with owners,
lessees, occupiers or other persons interested in any land
adjacent to or near the Land.
2.4 RESERVATION IN RESPECT OF NON-RAIL ACTIVITIES
The Lessee acknowledges that VRTC has reserved the exclusive right
under the Head-Lease to:
(a) grant contractual and proprietary rights and interests over
the Land in respect of activities that do not constitute
Railway Operations (including rights in respect of the laying
and maintenance of oil, gas and other pipelines, electricity
and telecommunication cables
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including fibre optic cables) and to retain all revenue
received in respect of these rights. For and in connection
with the granting and exercise of these rights, the Lessee
acknowledges that VRTC has reserved the exclusive right under
the Head-Lease to:
(i) install, maintain, use, repair, alter and
replace pipes, ducts, conduits, cables,
wires and poles through, on, over and under
the Land;
(ii) hang cables and wires from the poles referred to in
clause 2.4(a)(i); and
(iii) pass and run water, electricity, sewerage, drainage,
gas, communications and other services through the
pipes, ducts, conduits, cables and wires; and
(b) develop, maintain, operate and manage, or arrange with other
persons to develop, maintain, operate and manage, the Air
Space and any buildings, works, structures or other property
in the Air Space and to retain all revenue received in respect
of those rights. For and in connection with the granting and
exercise of those rights, the Lessee acknowledges that VRTC
has reserved the right under the Head-Lease to enter upon the
Land and undertake works on, over or adjacent to the Land
(including the construction and erection of supporting
structures of any type or nature in or on the Land).
2.5 CONDITIONS ON RESERVATIONS
(a) The Director must ensure that VRTC gives the Lessee not less
than 30 days notice that VRTC proposes to undertake any works
in exercise of the rights referred to in clause 2.3 or 2.4,
except in the case of an emergency when no such notice will be
required.
(b) The Director must ensure that VRTC does not undertake any
works in exercise of the rights referred to in clauses 2.3 and
2.4 which would materially adversely interfere with the
permanent on-going use of the Land by the Lessee for Railway
Operations.
(c) If the Director gives the Lessee notice under clause 2.5(a)
the Lessee must:
(i) assist VRTC in ensuring, as far as reasonably
practicable, that arrangements and procedures are put
in place by VRTC and the Lessee to minimise any
disruption to the Lessee's use of the Land for or in
connection with Railway Operations during the
undertaking of the works;
(ii) implement, as far as may be reasonably practicable,
appropriate work practices during the undertaking of
the works to assist VRTC in completing the works in a
timely and cost efficient manner;
(iii) give VRTC access to the Land when required by VRTC
for the purpose of undertaking the works; and
(iv) use best endeavours to mitigate any loss or damage
suffered by the Lessee as a result of the works.
(d) Subject to the Lessee complying with its obligations under
clause 2.5(c), the Director must ensure that VRTC compensates
the Lessee on reasonable terms agreed by the Lessee for any
financial loss or damage suffered by the Lessee during the
undertaking of any works by VRTC referred to in clause 2.3 or
2.4 as a direct result of VRTC undertaking those works. If the
amount of compensation (if any) payable to the Lessee has not
been agreed within 60 days after completion of the works in
question, either the Director (on behalf of VRTC) or the
Lessee may refer that issue to be determined by an independent
expert in accordance with clause 31.5.
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(e) Except as provided for in clause 2.5(d), the Director and VRTC
will not be liable to the Lessee for any loss or damage
suffered by the Lessee as a result of any works undertaken by
VRTC in the exercise of the rights referred to in clause 2.3
or 2.4.
2.6 TITLE TO LAND
The Director makes no representations and gives no warranties as to
title and has no liability for any defect in title or right of
occupation or usage that may exist, either now or in the future.
2.7 ACCESS
The Director grants the Lessee a non-exclusive right of access over
those parts of the Station Grounds delineated and coloured brown
hatched on the plans listed in Schedule 2 for the purpose of gaining
ingress to and egress from the area delineated and coloured yellow on
those plans.
2.8 ASSIGNMENT OF EXISTING RIGHTS
(a) The Director assigns all its right, title and interest in each
of the Existing Agreements to the Lessee for the term
commencing on the Commencement Date and ending on the earlier
of:
(i) the expiration or earlier determination of the Existing
Agreement; or
(ii) the expiration or earlier determination of this Lease.
(b) The Lessee covenants with the Director that from the
Commencement Date the Lessee will perform and observe all of
the Director's obligations, liabilities, covenants and
conditions contained in the Existing Agreements (including the
payment of any moneys payable under the Existing Agreements).
(c) The Director releases to the full extent permitted by law and
indemnities and will keep indemnified the Lessee from all
losses, damages, liabilities, actions, suits, claims, demands,
costs and expenses of every kind in respect of or arising from
the Existing Agreements prior to the Commencement Date, except
to the extent the loss, damage, liability, action, suit,
claim, demand, cost or expense is caused by or results from an
act or omission of the Lessee or the Lessee's Associates.
(d) The Lessee releases to the full extent permitted by law and
indemnities and will keep indemnified the Director from all
losses, damages, liabilities, actions, suits, claims, demands,
costs and expenses of every kind in respect of or arising from
the Existing Agreements on and from the Commencement Date,
except to the extent the loss, damage, liability, action,
suit, claim, demand, cost or expense is caused by or results
from an act or omission of the Director or the Director's
Associates.
2.9 CITY LINK LAND
(a) The Lessee acknowledges that, to enable the construction of
the Project (as defined in Section 6 of the Melbourne City
Link Act 1995 (Vic)):
(i) the area delineated by the cross-hatching and marked
"Licence from MCLA to Use Land" on the plans listed
in Schedule 2 (the PROJECT AREA) was surrendered to
the Crown pursuant to Part 3 of the Melbourne City
Link Act 1995 (Vic);
(ii) the Project Area was temporarily reserved under the
Crown Land Reserves Act 1978 (Vic) for the purposes
of the Project pursuant to Part 3 of the Melbourne
City Link Act 1995 (Vic);
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<PAGE> 24
(iii) The Melbourne City Link Authority was appointed as
the committee of management of the Project Area
pursuant to Section 55(l) of the Melbourne City Link
Act 1995 (Vic);
(iv) The Melbourne City Link Authority granted Transurban
City Link Limited (TRANSURBAN) a non-exclusive right
of occupation over the Project Area pursuant to
Section 56 of the Melbourne City Link Act 1995 (Vic)
to enable Transurban to construct the Project; and
(v) pursuant to an agreement made pursuant to Section 32D
of the Melbourne City Link Act 1995 (Vic) (the
AGREEMENT), The Melbourne City Link Authority granted
the Director a licence to occupy the Project Area on
the terms and conditions contained in the Agreement.
(b) The Lessee further acknowledges that upon the completion of
construction of the Project it is intended that:
(i) the rights granted to Transurban pursuant to Section
56 of the Melbourne City Link Act 1995 (Vic) and the
Director pursuant to Section 32D of the Melbourne
City Link Act 1995 (Vic) will terminate;
(ii) the temporary reservation of the Project Area will be
revoked pursuant to Section 59 of the Melbourne City
Link Act 1995 (Vic);
(iii) Transurban will be granted a lease pursuant to
Section 60 of the Melbourne City Link Act 1995 (Vic)
over that part of the Project Area which it requires
for the purpose of managing any roadway constructed
on the Project Area; and
(iv) that part of the Project Area not leased to
Transurban will revert to unalienated Crown land.
(c) Pursuant to clause 4.2 of the Agreement the Director grants
the Lessee a sub-licence to use the Project Area for the
purposes and in the manner specified in clause 4.1 of the
Agreement and otherwise subject to and in accordance with the
Agreement for the term commencing on the Commencement Date and
ending on the earlier of:
(i) the day immediately prior to the expiration or
earlier determination of the Agreement; or
(ii) the expiration or earlier determination of this
Lease.
(d) The Lessee releases to the full extent permitted by law and
indemnities and will keep indemnified the Director from all
losses, damages, liabilities, actions, suits, claims, demands,
costs and expenses of every kind in respect of or arising from
the Agreement on and from the Commencement Date, except to the
extent the loss, damage, liability, action, suit, claim,
demand, cost or expense is caused by or results from an act or
omission of the Director.
(e) The Director will use reasonable endeavours to ensure that,
following the revocation of the temporary reservation of the
Project Area and subsequent reversion to unalienated Crown
land of that part of the Project Area not leased to Transurban
(the NON-TRANSURBAN LAND), the State will vest title in the
non-Transurban land in VRTC. Upon title vesting in VRTC that
land will form part of the Land for the purposes of the
Head-Lease and this Lease.
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3. CHANGES TO LAND
3.1 CHANGES TO AREA OF LAND
The area of the Land may be reduced from time to time in accordance
with the provisions of this clause 3. This clause does not apply to the
surrender of Lines, which is dealt with in clause 7, or the surrender
of part of the Land due to the electrification of part of the
Intrastate Track, which is dealt with in clause 8.
3.2 REQUEST BY DIRECTOR TO SURRENDER LAND
(a) If part of the Land has not been used for or in connection
with Railway Operations for a continuous period of 24 months
immediately prior to the service of a notice under this
clause, then the Director may give to the Lessee a notice
requiring that part of the Land to be surrendered to the
Director. Any such notice must adequately identify the land to
be surrendered.
(b) Unless the Lessee demonstrates to the satisfaction of the
Director, acting reasonably, within 60 days of giving of a
notice under clause 3.2(a) that the land identified in the
notice is required for use by the Lessee for or in connection
with Railway Operations, the land identified in the notice
will be surrendered to the Director. The surrender takes
effect 60 days from the date of giving of the notice under
clause 3.2(a).
3.3 SURRENDER OF STATION GROUNDS BY LESSEE
If any part of the area delineated and coloured yellow on the plans of
the Station Grounds listed in Schedule 2 is no longer required by the
Lessee, the Lessee may give to the Director a notice advising that it
proposes to surrender to the Director that part of the area delineated
and coloured yellow on those plans of the Station Grounds. Any such
notice must identify the land to be surrendered. The surrender takes
effect 14 days from the date of giving of the notice under this clause.
4. CHANGES TO RAILWAY INFRASTRUCTURE
4.1 UPGRADE BY LESSEE
The Lessee may from time to time upgrade, replace or add to any of the
Railway Infrastructure provided that the upgrade, replacement or
addition:
(a) is for the purpose of Railway Operations; and
(b) does not interfere with the Air Space, the Excluded
Infrastructure, the Excluded Leases or the Existing Licences.
4.2 COMPLETION OF UPGRADE WORKS
Unless otherwise agreed by the parties, upon completion of any works
pursuant to clause 4.1:
(a) property in the completed works will, as between the Director
and the Lessee, vest immediately in the Director; and
(b) the completed works will, or will be deemed to, form part of
the Railway Infrastructure for the purposes of this Lease.
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4.3 REMOVAL OF RAILWAY INFRASTRUCTURE
The Lessee may not remove any item of Railway Infrastructure from the
Land other than in compliance with the Lessee's repair, maintenance and
replacement obligations under this Lease, without first obtaining the
Director's written consent to the removal (which must not be
unreasonably withheld).
4.4 INFRASTRUCTURE TO BE SITUATED ON LEASED LAND
Any improvement, plant, equipment, fixture or fitting constructed,
erected or placed on land by the Lessee which is integral to or
necessary for the safe and proper conduct of Railway Operations must be
constructed, erected or located on the Land unless otherwise agreed in
writing by the Director.
4.5 CENTRAL LAND REGISTER
(a) The Lessee acknowledges that under the Head-Lease VRTC must,
or must procure another person to, maintain at VRTC's cost a
central land register which identifies all land and
infrastructure which forms part of the Victorian train and
tram transport network and all leases, licences and other
interests to which that land and infrastructure is subject.
(b) The Lessee must, at its own cost, promptly provide to VRTC
(or, if directed by VRTC, to the person retained by VRTC to
maintain the register) full and accurate particulars (as may
reasonably be requested by VRTC) of:
(i) all Land and Railway Infrastructure which is
surrendered from the Lease pursuant to clauses 3.2,
3.3, 7.3 or 8.7;
(ii) all infrastructure which forms part of the Railway
Infrastructure pursuant to clause 4.2;
(iii) all sub-leases granted by the Lessee pursuant to
clause 12.4; and
(iv) all licences granted by the Lessee pursuant to clause
13.4.
(c) The Director must, at the Director's own cost, promptly
provide VRTC with full and accurate particulars of all land
and infrastructure which is included in the Lease pursuant to
clause 5.7.
(d) The Lessee acknowledges that neither the Director, the State,
VRTC, PTC, VLF or any Passenger Rail Corporation nor any
person acting on their behalf or associated with any of them
makes any representation or undertaking or gives any advice or
warranty of any kind whatsoever to the Lessee or the Lessee's
Associates as to the accuracy, reliability or completeness of
the information contained in the central land register.
(e) The Lessee acknowledges that VRTC may elect to establish
separate registers for the land and the infrastructure which
forms part of the Victorian train and tram transport network.
(f) The Lessee acknowledges that VRTC will on terms and conditions
agreed by VRTC permit the Lessee to access the central land
register but only to the extent that the central land register
relates to the Land and the Railway Infrastructure. The Lessee
will not be permitted to access that part of the central land
register which relates to land and infrastructure which is not
subject to this Lease without the prior written approval of
VRTC and the Director.
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5. NEW WORKS REQUIRED BY THE DIRECTOR
5.1 DIRECTOR'S RIGHT TO UNDERTAKE NEW WORKS
The Director reserves the right, at the Director's own cost, to
upgrade, replace or add to any of the Railway Infrastructure or to
construct any new railway infrastructure on, under, over or adjacent to
the Land (including works to extend the standard gauge rail network in
Victoria by way of extension of existing standard gauge lines or
construction of new standard gauge lines, works to construct a railway
link from Tullamarine Airport to the Melbourne CBD or works relating to
the construction of a very fast train link between Sydney and
Melbourne.) This clause 5 does not apply to the de-electrification of
the Pakenham-Warragul line, which is dealt with under clause 6, or the
undertaking of works to electrify any part of the Railway
Infrastructure in connection with the extension of the metropolitan
railway system, which is dealt with under clause 8.
5.2 NOTICE
The Director must give the Lessee not less than 90 days' written notice
prior to physical commencement of any New Works. Any such notice must
identify that part of the Land and, if applicable, of the Railway
Infrastructure on or in relation to which the Director proposes to
undertake the New Works.
5.3 DISCUSSIONS WITH LESSEE
If the Director gives the Lessee notice under clause 5.2, a reasonable
time (which must not be less than 60 days) prior to physical
commencement of those New Works the Director must consult with the
Lessee regarding:
(a) the effect (if any) that the undertaking of the New Works or
the use or operation of the New Works when completed will have
on the Lessee's ongoing use of the Land for or in connection
with Railway Operations;
(b) the compatibility of the New Works when completed with the
existing Railway Infrastructure;
(c) the effect (if any) that the undertaking of the New Works will
have on the Lessee's use of the Land for or in connection with
Railway Operations during the period those works are being
undertaken;
(d) what arrangements or procedures (if any) reasonably can be put
in place by the Director and the Lessee to minimise as far as
reasonably possible any disruption to the Lessee's use of the
Land for or in connection with Railway Operations during the
undertaking of the New Works;
(e) the effect (if any) that the undertaking of the New Works or
the use or operation of the New Works when completed will have
on the Lessee's ability to continue to perform its obligations
under any existing agreements (including Access Agreements) to
which the Lessee is a party or under any existing Access
Determinations;
(f) the costs (if any) reasonably likely to be incurred by the
Lessee, and the revenue (if any) reasonably likely to be
foregone by the Lessee, as a direct result of the New Works;
and
(g) any other matters nominated by the Lessee as relevant matters
for the Director and the Lessee to consider in connection with
the New Works.
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5.4 LESSEE'S OBLIGATIONS
If the Director gives the Lessee notice under clause 5.2 the Lessee
must:
(a) assist the Director in ensuring, as far as reasonably
practicable, that arrangements and procedures are put in place
by the Director and the Lessee to minimise any disruption to
the Lessee's use of the Land for or in connection with Railway
Operations during the undertaking of the New Works;
(b) implement, as far as may be reasonably practicable,
appropriate work practices during the undertaking of the New
Works to assist the Director in completing the New Works in a
timely and cost efficient manner;
(c) give the Director and the Director's Associates access to the
Land when required by the Director for the purposes of
undertaking the New Works; and
(d) use best endeavours to mitigate any loss or damage suffered by
the Lessee as a result of the New Works.
5.5 CONTRACTING FOR NEW WORKS
If the Director proposes:
(a) to appoint or engage a person other than the Lessee to perform
the design and construction work for any New Works to be
undertaken; or
(b) to appoint or engage a person other than the Lessee to act as
contract manager to manage any New Works to be undertaken,
the Director must not do so unless it has given the Lessee a reasonable
opportunity to contract for such appointment or engagement but the
Director is under no obligation to make that opportunity available
exclusively to the Lessee or to retain the Lessee to design and
construct any New Works or to manage the construction of any New Works.
5.6 DISRUPTION
(a) Subject to clause 5.6(b), in undertaking any New Works the
Director must endeavour as far as reasonably practicable to
minimise any disruption to the Lessee's use of the Land which
is subject to the New Works for or in connection with Railway
Operations and to minimise any costs incurred by the Lessee
and any revenue foregone by the Lessee as a direct result of
the undertaking of the New Works.
(b) Clause 5.6(a) does not apply where the Director has retained
the Lessee pursuant to clause 5.5 to design and construct the
New Works or to manage the construction of the New Works.
5.7 COMPLETION OF WORKS
Upon completion of New Works:
(a) property in the New Works will, as between the Director and
the Lessee, vest immediately in the Director;
(b) to the extent that the New Works form part of the Railway
Infrastructure, the New Works will, or will be deemed to, form
part of the Railway Infrastructure for the purposes of this
Lease; and
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(c) to the extent that the New Works do not form part of the
Railway Infrastructure, the New Works will not, and will not
be deemed to, form part of the Railway Infrastructure for the
purposes of this Lease and the Lessee will provide the
Director, the Director's Associates and any other person
authorised by the Director with access to the New Works in
accordance with clause 15.1(d).
5.8 PROPERTY IN SALVAGABLE MATERIAL
Property in all material removed from the Land as part of the New Works
will, as between the Director and the Lessee, remain with the Director.
5.9 PAYMENT OF COMPENSATION
If the Lessee suffers financial loss or damage as a direct result of
any New Works, then subject to the Lessee complying with its
obligations under clause 5.4 the Director must compensate the Lessee
for that loss or damage. Any such compensation will be calculated on a
case by case basis, will be based on the principle of no net gain/no
net loss, and will take into account any cost or expense incurred by
the Lessee as a direct result of the New Works that otherwise would not
have been incurred, any cost or expense avoided by the Lessee as a
direct result of the New Works and any revenue foregone or received by
the Lessee as a direct result of the New Works that otherwise would
have been received or not been received (as the case may be), including
(as applicable):
(a) any operating and maintenance costs which the Lessee incurs
which, but for the New Works, the Lessee would not have
incurred;
(b) the benefit of any reduction in operating and maintenance
costs which, but for the New Works, the Lessee would not have
received;
(c) any access revenue or other revenue which the Lessee receives
which, but for the New Works, the Lessee would not have
received; and
(d) any costs (which costs may include any payment the Lessee is
obliged to make under the VLP Access Agreement or under a New
Access Agreement (as that term is defined in the Direct
Agreement)) incurred and any revenue foregone by the Lessee as
a direct result of the undertaking of the New Works.
Compensation (if any) payable by the Director to the Lessee must be
paid by the Director within 21 days of the amount of compensation being
agreed in writing by the Director and the Lessee or, failing agreement,
determined in accordance with clause 5.10.
5.10 AMOUNT OF COMPENSATION
If the amount of compensation (if any) payable by the Director to the
Lessee pursuant to clause 5.9 has not been agreed in writing by the
Director and the Lessee 60 days after completion of the New Works,
either party may refer that issue to be determined by an independent
expert in accordance with clause 31.5.
6. DE-ELECTRIFICATION OF PAKENHAM-WARRAGUL LINE
6.1 PROPOSAL TO UNDERTAKE DE-ELECTRIFICATION WORKS
The Lessee acknowledges that the Director proposes to undertake, at the
Director's cost, all works required for the de-electrification of the
Pakenham-Warragul Line.
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6.2 DISCUSSIONS WITH LESSEE
The Director must consult with the Lessee regarding:
(a) the effect (if any) that the undertaking of the
De-electrification Works will have on the Lessee's use of the
Land for or in connection with Railway Operations during the
period which those works are being undertaken;
(b) what procedures or arrangements (if any) reasonably can be put
in place by the Director and the Lessee to minimise as far as
reasonably practicable any disruption to the Lessee's use of
the Land for or in connection with Railway Operations during
the undertaking of the De-electrification Works;
(c) the costs (if any) reasonably likely to be incurred by the
Lessee, and the revenue (if any) reasonably likely to be
foregone by the Lessee, during the undertaking of the
De-electrification Works as a direct result of the
De-electrification Works; and
(d) any other matters nominated by the Lessee as relevant matters
for the Director and the Lessee to consider in connection with
the De-electrification Works.
6.3 LESSEE'S OBLIGATIONS
The Lessee must:
(a) assist the Director in ensuring, as far as reasonably
practicable, that procedures and arrangements are put in place
by the Director and the Lessee to minimise any disruption to
the Lessee's use of the Land for or in connection with Railway
Operations during the undertaking of the De-electrification
Works;
(b) implement, as far as may be reasonably practicable,
appropriate work practices during the undertaking of the
De-electrification Works to assist the Director in completing
the De-electrification Works in a timely and cost efficient
manner;
(c) give the Director and the Director's Associates access to the
Land when required by the Director for the purposes of
undertaking the De-electrification Works; and
(d) use best endeavours to mitigate any loss or damage suffered by
the Lessee as a result of the De-electrification Works.
6.4 DISRUPTION
In undertaking the De-electrification Works the Director must endeavour
as far as reasonably practicable to minimise any disruption to the
Lessee's use of the Land for or in connection with Railway Operations
and to minimise any costs incurred by the Lessee and any revenue
foregone by the Lessee as a direct result of the undertaking of the
De-electrification Works.
6.5 PROPERTY IN SALVAGABLE MATERIAL
Property in all material removed from the Land as part of the
De-electrification Works will, as between the Director and the Lessee,
remain with the Director.
6.6 NO COMPENSATION
The Director will not be liable for any loss or damage suffered by the
Lessee as a direct or indirect result of the De-electrification Works
and the Director has no obligation to compensate the Lessee for that
loss or damage.
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7. SURRENDER OF LINES
7.1 RIGHT TO SURRENDER LINES
The Lessee may at any time after the expiration of the first three
years of the Initial Term surrender a Line in accordance with the
provisions of this clause 7. This clause does not apply to the
surrender of Land not involving the surrender of a Line, which is dealt
with in clause 3, or the surrender of part of the Land due to
Electrification Works, which is dealt with in clause 8.
7.2 NOTICE OF SURRENDER
The Lessee may give to the Director written notice advising the
Director that the Lessee proposes to surrender a Line only if:
(a) there is no Access Agreement in effect in relation to that
Line or any part of that Line;
(b) there is not an application before the Office of the Regulator
General made pursuant to Section 38F(l) of the Rail
Corporations Act 1996 (Vic) in relation to that Line or any
part of that Line;
(c) there is no Access Determination in effect in relation to that
Line or any part of that Line; and
(d) the Lessee is able to surrender that Line or that part of the
Line in the condition required under clause 7.4.
The notice must adequately identify the Line to which the notice
relates.
7.3 LESSEE TO CONTINUE TO OPERATE LINE
Within 30 days of receipt of a notice under clause 7.2, the Director
may give to the Lessee written notice requiring the Lessee not to
surrender the Line or a part of the Line. If the Director gives the
Lessee notice in accordance with this clause, the Lessee must continue
to perform its obligations under this Lease in respect of that Line or
that part of the Line and the Director must pay the Lessee's reasonable
net costs and expenses of doing so.
7.4 SURRENDER
Subject to clause 7.3, a Line which is the subject of a notice given
under clause 7.2 is surrendered to the Director effective 30 days from
the date the notice is given under clause 7.2. The Lessee must
surrender the Railway Infrastructure situated on that Line to the
Director:
(a) in any event:
(i) if the Line being surrendered is not or does not form
part of a Minimum Maintenance Line, in a condition no
worse than Minimum Condition;
(ii) if the Line being surrendered is or forms part of a
Minimum Maintenance Line which has been used by an
Operator for the provision of passenger services
during the Term, in a condition no worse than Minimum
Condition; or
(iii) if the Line being surrendered is or forms part of a
Minimum Maintenance Line which has not been used by
an Operator for the provision of passenger services
during the Term, in a condition no worse than the
condition that Railway Infrastructure was in at the
Commencement Date; and
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(b) if within the period of 180 days prior to the surrender there
is either:
(i) an Access Agreement in effect in relation to that
Line or any part of that Line; or
(ii) an Access Determination in effect in relation to that
Line or any part of that Line,
in a condition which immediately after the surrender satisfies any
condition requirements specified in that Access Agreement or Access
Determination (as the case may be) and would permit the Operator under
that Access Agreement or Access Determination (as the case may be) to
continue operating Rolling Stock on that Line or that part of the Line
(as the case may be) in accordance with the operational criteria
specified in that Access Agreement or Access Determination (as the case
may be).
7.5 DIRECTOR MAY KEEP LINE OPEN
The Lessee acknowledges that the Director may, in the Director's
absolute discretion, keep open or re-open a Line or any part of a Line
which has been surrendered to the Director pursuant to this clause 7.
If the Director elects to keep open or re-open a Line or any part of a
Line the Director may operate the Line or that part of the Line or
engage another party to do so. The Lessee must do all things reasonably
required by the Director to be done by the Lessee for the purpose of
the Director, or a person engaged by the Director, operating the Line
or that part of the Line (including the provision of train control and
signalling) and the Director must pay the Lessee's reasonable costs and
expenses of doing so.
8. EXTENSION OF METROPOLITAN RAIL SYSTEM
8.1 DIRECTOR'S RIGHT TO ELECTRIFY TRACK
The Director reserves the right to require the Lessee to surrender part
or parts of the Land for the purpose of enabling the Director to
undertake works to electrify any part of the Railway Infrastructure
under this Lease which is contiguous to any land or railway
infrastructure that forms part of any property owned by or leased to
any Metropolitan Franchisee.
8.2 NOTICE
The Director must give the Lessee not less than 90 days' written notice
prior to the surrender of any part of the Land required for
Electrification Works. Any such notice must identify that part of the
Land on or in relation to which the Director proposes to undertake the
Electrification Works.
8.3 SURRENDER OF LAND
Upon the expiration of the notice period contained in the notice given
under clause 8.2, that part of the Land identified in the notice will
be surrendered immediately by the Lessee to the Director.
8.4 DISCUSSIONS WITH LESSEE
If the Director gives the Lessee notice under clause 8.2, a reasonable
time (which must not be less than 60 days) prior to the surrender of
the Land pursuant to clause 8.3 the Director must consult with the
Lessee regarding:
(a) the effect (if any) that the undertaking of the
Electrification Works will have on the Lessee's ongoing use of
that part of the Land which is not being surrendered for or in
connection with Railway Operations;
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(b) the compatibility of the Electrification Works when completed
with the existing Railway Infrastructure;
(c) the effect (if any) that the undertaking of the
Electrification Works will have on the Lessee's use of that
part of the Land which is to be surrendered for or in
Connection with Railway Operations during the period those
works are being undertaken;
(d) what arrangements or procedures (if any) reasonably can be put
in place by the Director and the Lessee to minimise as far as
reasonably possible any disruption to the Lessee's use of that
part of the Land which is to be surrendered for or in
connection with Railway Operations during the undertaking of
the Electrification Works;
(e) the effect (if any) that the undertaking of the
Electrification Works, or the surrender of that part of the
Land identified in the notice given under clause 8.2, will
have on the Lessee's ability to continue to perform its
obligations under any existing agreements (including Access
Agreements) to which the Lessee is a party or under any
existing Access Determinations;
(f) the costs (if any) reasonably likely to be incurred by the
Lessee, and the revenue (if any) reasonably likely to be
foregone by the Lessee, as a direct result of the undertaking
of the Electrification Works;
(g) the terms and conditions on which the Lessee may continue to
use that part of the Land which is to be surrendered for
Railway Operations during and following construction of the
Electrification Works; and
(h) any other matters nominated by the Lessee as relevant matters
for the Director and the Lessee to consider in connection with
the Electrification Works.
8.5 LESSEE'S OBLIGATIONS
If the Director gives the Lessee notice under clause 8.2 the Lessee
must:
(a) assist the Director in ensuring, as far as reasonably
practicable, that arrangements and procedures are put in place
by the Director and the Lessee to minimise any disruption to
the Lessee's use of both that part of the Land being
surrendered and that part of the Land not being surrendered
for or in connection with Railway Operations during the
undertaking of the Electrification Works;
(b) implement, as far as may be reasonably practicable,
appropriate work practices during the undertaking of the
Electrification Works to assist the Director in completing the
Electrification Works in a timely and cost efficient manner;
(c) give the Director and the Director's Associates access to that
part of the Land not being surrendered when required by the
Director for the purposes of undertaking the Electrification
Works; and
(d) use best endeavours to mitigate any loss or damage suffered by
the Lessee as a result of the Electrification Works.
8.6 CONTRACTING FOR ELECTRIFICATION WORKS
If the Director proposes:
(a) to appoint or engage a person other than the Lessee to perform
the design and construction work for any Electrification Works
to be undertaken; or
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(b) to appoint or engage a person other than the Lessee to act as
contract manager to manage any Electrification Works to be
undertaken,
the Director must not do so unless it has given the Lessee a reasonable
opportunity to contract for such appointment or engagement but the
Director is under no obligation to make that opportunity available
exclusively to the Lessee or to retain the Lessee to design and
construct any Electrification Works or to manage the construction of
any Electrification Works.
8.7 DISRUPTION
(a) Subject to clause 8.7(b), in undertaking any Electrification
Works the Director must endeavour as far as reasonably
practicable to minimise any disruption to the Lessee's use of
both that part of the Land being surrendered and that part of
the Land not being surrendered for or in connection with
Railway Operations and to minimise any costs incurred by the
Lessee and any revenue foregone by the Lessee as a direct
result of the undertaking of the Electrification Works.
(b) Clause 8.7(a) does not apply where the Director has retained
the Lessee pursuant to clause 8.6 to design and construct the
Electrification Works or to manage the construction of the
Electrification Works.
8.8 COMPENSATION
(a) If that part of the Land surrendered pursuant to clause 8.3 is
within a 120km radius of the Melbourne GPO, the Director will
not be liable for any loss or damage suffered by the Lessee as
a result of the surrendering of that part of the Land or the
Electrification Works undertaken on or in respect of that Land
and the Director has no obligation to compensate the Lessee
for that loss or damage.
(b) To the extent that part of the Land surrendered pursuant to
clause 8.3 is not within a 120km radius of the Melbourne GPO,
and the Lessee suffers financial loss or damage as a direct
result of the Electrification Works, then subject to the
Lessee complying with its obligations under clause 8.5 the
Director must compensate the Lessee for that loss or damage.
Any such compensation will be calculated on a case by case
basis, will be based on the principle of no net gain/no net
loss, and will take into account any cost or expense incurred
by the Lessee as a direct result of the Electrification Works
that otherwise would not have been incurred, any cost or
expense avoided by the Lessee as a direct result of the
Electrification Works and any revenue foregone or received by
the Lessee as a direct result of the Electrification Works
that otherwise would have been received or not been received
(as the case may be), including (as applicable):
(i) that from the date of surrender of that part of the
Land surrendered pursuant to clause 8.3, the Lessee
will no longer be required to maintain that part of
the Land which has been surrendered;
(ii) that, to the extent that immediately prior to the
date of surrender of that part of the Land
surrendered pursuant to clause 8.3, the Lessee had
been receiving access revenue from other Operators
for their use of that part of the Land for Railway
Operations, the Lessee may cease to be entitled to
receive such access revenue;
(iii) that, to the extent that immediately prior to the
date of surrender of that part of the Land
surrendered pursuant to clause 8.3 the Lessee had
been using that part of the Land for or in connection
with Railway Operations, following the date of
surrender of that part of the Land the Lessee may
become liable to pay access
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fees in order to use the railway infrastructure on
that part of the Land for or in connection with
Railway Operations; and
(iv) any costs (which costs may include any payment the
Lessee is obliged to make under the VLP Access
Agreement or under a New Access Agreement (as that
term is defined in the Direct Agreement)) incurred
and any other revenue foregone by the Lessee as a
direct result of the undertaking of the
Electrification Works.
Compensation (if any) payable by the Director to the Lessee must be
paid by the Director within 21 days of the amount of compensation being
agreed in writing by the Director and the Lessee or, failing agreement,
determined in accordance with clause 8.9.
8.9 AMOUNT OF COMPENSATION
If the amount of compensation (if any) payable by the Director to the
Lessee pursuant to clause 8.8 has not been agreed in writing by the
Director and the Lessee 60 days after completion of the Electrification
Works, either party may refer that issue to be determined by an
independent expert in accordance with clause 31.5.
9. USE OF LAND
9.1 PERMITTED USE
(a) The Lessee covenants to use the Land solely for Railway
Operations.
(b) The Land must only be used for those purposes which are
permitted under the Planning Schemes.
(c) Despite any other provision contained in this Lease, the
Lessee must not grant contractual or proprietary rights or
interests over the Land in respect of activities that do not
constitute Railway Operations (including the granting of
rights or interests to be used (whether solely or partly) for
non-Railway Operations purposes).
9.2 NO WARRANTY AS TO USE
The Lessee acknowledges that neither the Director, the Director's
Associates nor any other person has made any representation, given any
advice or given any warranty as to:
(a) how the Land may be used;
(b) the suitability of the Land for use for or in connection with
Railway Operations;
(c) any prohibitions and restrictions relating to the Land;
(d) the condition of the Land;
(e) whether Railway Operations are permitted on the Land under the
Planning Schemes; or
(f) the compliance or otherwise of the Land with any applicable
Laws or Approvals.
9.3 LESSEE'S ACKNOWLEDGMENTS
(a) The Lessee acknowledges that it has not relied on any
representation, advice or warranty from the Director, any of
the Director's Associates or any other person in respect of
the matters listed in clauses 9.2(a) to (f) inclusive.
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(b) The Lessee acknowledges that it is aware of and has made its
own appraisal of the matters listed in clauses 9.2(a) to (f)
inclusive.
9.4 COMPLIANCE WITH LAWS
Except to the extent that the Director is required to comply with any
Law pursuant to clause 16.1, the Lessee must at its sole cost and
expense comply with all Laws which affect or relate to:
(a) the Land; and
(b) the use or occupation of the Land,
regardless of whether the Law requires compliance by either or both of
the Lessee and the Director or any other person.
9.5 COMPLIANCE WITH NOTICES
Except to the extent that the Director is required to comply with any
notices pursuant to clause 16.1, the Lessee must at its sole cost and
expense comply with all notices, orders and directions issued or given
by a Governmental Agency which affect or relate to:
(a) the Land; or
(b) the use or occupation of the Land,
regardless of whether the notice, order or direction is addressed to or
requires compliance by either or both of the Lessee and the Director or
any other person.
9.6 APPROVALS
The Lessee must at its sole cost and expense obtain, maintain and
comply with all Approvals which from time to time may be necessary or
appropriate for:
(a) the Land; or
(b) the use or occupation of the Land,
regardless of whether the Approval requires compliance by either or
both of the Lessee and the Director or any other person.
9.7 ACCREDITATION
(a) Without limiting the generality of clauses 9.4 and 9.6, the
Lessee must at all times ensure that it has the necessary
Accreditation.
(b) If the Lessee ceases to have Accreditation as a manager of the
Railway Infrastructure or if that Accreditation is suspended,
for the period until the Lessee regains that Accreditation the
Lessee must subcontract the performance of its obligations
under this Lease to an Operator or other person which has the
necessary Accreditation.
No such sub-contract will release the Lessee from any of its
obligations or liabilities under this Lease.
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9.8 NATIVE TITLE CLAIMS
(a) The Lessee acknowledges that neither the Director, the
Director's Associates nor any other person has made any
representation, given any advice or given any warranty as to
the existence or otherwise of any native title in respect of
any of the Land.
(b) Despite anything to the contrary contained in this Lease, as
between the Director and the Lessee:
(i) the Director is responsible for dealing with any
claim made under any Native Title Law in respect of
any part of the Land; and
(ii) the Director will be responsible for the payment of
any compensation or other moneys required to be paid
to the native title holders of any part of the Land
pursuant to a valid claim made under any Native Title
Law by those native title holders.
(c) The Director will not be liable to the Lessee for any loss,
damage, cost or expense which the Lessee suffers or incurs as
a result of a claim being threatened or made under any Native
Title Law in respect of any part of the Land.
(d) The Lessee must, at the Director's cost, provide all
assistance reasonably required by the Director in connection
with dealing with any claim made under any Native Title Law in
respect of any part of the Land (including giving the Director
and the Director's Associates access to that part of the Land
when reasonably required by the Director for that purpose).
9.9 ACCESS TO HERITAGE GROUPS
The Lessee must provide non-profit heritage rail organisations with an
aggregate of up to 30,000 train km per annum free access to the Railway
Infrastructure on reasonable terms and conditions, provided that:
(a) the heritage organisations will not be entitled to priority in
access;
(b) the Lessee is not obliged to provide access at times which
would materially interfere with the Lessee's use of the
Railway Infrastructure for or in connection with Railway
Operations; and
(c) the Lessee may deny access to a heritage organisation if that
organisation cannot adequately insure (or receive an indemnity
from the Director or other Government Agency) for costs
incurred by the Lessee due to accidents or breakdowns
involving Rolling Stock operated by that organisation.
9.10 PROVISION OF ACCOUNTS
(a) The Lessee must maintain true, up to date and complete
financial and business records and accounts in respect of the
conduct of Railway Operations under this Lease.
(b) As part of its obligations under clause 9.10(a), the Lessee
must (unless otherwise notified by the Director):
(i) keep separate records and accounts in respect of:
(A) the maintenance cost on passenger Lines
attributable to freight operations;
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(B) the maintenance cost on passenger Lines
attributable to passenger operations;
(C) the maintenance cost on freight Lines
attributable to freight operations; and
(D) the aggregate maintenance cost on passenger
Lines attributable to freight and passenger
operations where it is not reasonably
practicable to separate the maintenance cost
between freight and passenger operations;
and
(ii) provide the Director not later than 60 days after the
end of each 12 month period from the Commencement
Date with copies of the records and accounts audited
by the Lessee's external auditors.
(c) The records and accounts referred to in clauses 9.10(a) and
9.10(b) must be kept in accordance with the reasonable
requirements of the Director, as notified from time to time.
(d) The Lessee must, on reasonable notice, make available for
inspection, and, if reasonably requested, provide additional
copies of, the records and accounts referred to in clauses
9.10(a) and 9.10(b) to the Director.
10. REPAIR AND MAINTENANCE
10.1 GENERAL OBLIGATIONS
Upon the expiration or earlier determination of this Lease, the Lessee
must return the Railway Infrastructure to the Director:
(a) in any event:
(i) in respect of Railway Infrastructure which is not
situated on a Minimum Maintenance Line, in a
condition no worse than Minimum Condition;
(ii) in respect of Railway Infrastructure which is
situated on a Minimum Maintenance Line which has been
used by an Operator for the provision of passenger
services during the Term. in a condition no worse
than Minimum Condition; or
(iii) in respect of Railway Infrastructure which is
situated on a Minimum Maintenance Line which has not
been used by an Operator for the provision of
passenger services during the Term, in a condition no
worse than the condition that Railway Infrastructure
was in at the Commencement Date; and
(b) if within the period of 180 days prior to that expiration or
determination there is either:
(i) an Access Agreement in effect in relation to any Line
or any part of a Line; or
(ii) an Access Determination in effect in relation to any
Line or any part of a Line,
in a condition which immediately after that expiration or determination
satisfies any condition requirements specified in that Access Agreement
or Access Determination (as the case may be) and would permit the
Operator under that Access Agreement or Access Determination (as the
case may be) to continue operating Rolling Stock on that Line or that
part of that Line in accordance
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with the operational criteria specified in that Access Agreement or
Access Determination (as the case may be).
10.2 SEYMOUR RAILWAY HERITAGE CENTRE
In addition to its obligations under clause 10.1, the Lessee must at
its own cost maintain and repair the tracks, points and signalling to
the Seymour Railway Heritage Centre in a condition which allows Rolling
Stock to access the Intrastate Track from the Seymour Railway Heritage
Centre.
10.3 LEVEL CROSSINGS
The Lessee must at its own cost maintain that part of a level crossing
which extends 2.44 metres either side from the outside running rail of
the Intrastate Track together with the land which lies between the
outside running rails and any pedestrian crossing which forms part of
the level crossing.
10.4 BRIDGES
(a) With the exception of those bridges listed in Section 1 of
Schedule 11, all rail-over-road bridges erected or situated
upon the Railway Corridors and the Station Grounds from time
to time together with all rail-over-road bridges erected or
situated upon the Shared Corridors from time to time which
only carry Intrastate Track form part of the Railway
Infrastructure for the purposes of this Lease.
(b) The Lessee must, unless otherwise agreed with the Roads
Corporation, maintain those road-over-rail bridges (including
bridge substructures and associated structures retaining the
track formation but excluding the materials forming the road
surface on those bridges) listed in Section 2 of Schedule 11
in a sound and safe condition.
10.5 PLATFORMS
Where the Intrastate Track is directly adjacent to a platform which is
leased by the Director to a third party, the Lessee's obligations under
this Lease extend to the platform face and platform coping of that
platform. The Lessee must, unless otherwise agreed with the Director,
ensure that rights of access and of way which at the date of this Lease
are exercised by VLP and its employees, contractors and customers
continue to be exercisable by those persons.
10.6 VQI TESTING
The Lessee acknowledges that the VQI Tests (as defined in the VLP
Access Agreement) are used in the VLP Access Agreement as a measure of
ride quality. The Lessee covenants that it will work with the Director
and VLP throughout the Term to develop, identify and agree on
appropriate additional or alternative measures of ride quality if at
any time requested to do so by either the Director or VLP.
11. MAINTENANCE PLAN
11.1 LESSEE TO SUBMIT MAINTENANCE PLAN
If:
(a) the Lessee elects not to exercise its option to renew the
Lease for the First Further Term, then not earlier than six
years and not later than five years prior to the Completion
Date;
(b) the Lessee has exercised its option to renew the Lease for the
First Further Term but elects not to exercise its option to
renew the Lease for the Second Further Term, then not
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earlier than six years and not later than five years prior to
the expiration of the First Further Term; or
(c) the Lessee has exercised its options to renew the Lease for
the First Further Term and the Second Further Term, then not
earlier than six years and not later than five years prior to
the expiration of the Second Further Term,
the Lessee must submit to the Director a costed plan for the repair,
maintenance and renewal of the Railway Infrastructure upon the Land for
the five year period to the Completion Date, the expiration of the
First Further Term or the expiration of the Second Further Term
(whichever is applicable).
11.2 FORM OF MAINTENANCE PLAN
The Maintenance Plan must:
(a) outline in reasonable detail the repair, maintenance and
renewal works which the Lessee proposes to undertake each year
during the five year period to which the Maintenance Plan
relates to ensure that the Railway Infrastructure upon the
Land will, at the expiration of the Lease, be returned to the
Director in the condition required pursuant to clause 10; and
(b) itemise the cost of the repair, maintenance and renewal works
which the Lessee proposes to undertake each year.
11.3 APPROVAL OF MAINTENANCE PLAN
(a) The Director must within 60 days of receipt of the Maintenance
Plan notify the Lessee in writing whether the Director accepts
the Maintenance Plan.
(b) If the Director does not accept the Maintenance Plan, the
Director's notice must outline in reasonable detail the
changes that the Director proposes should be made to the
Maintenance Plan and the Director and the Lessee must meet to
attempt to agree on a Maintenance Plan which is acceptable to
both the Director and the Lessee. If the Director and the
Lessee have not reached agreement on a Maintenance Plan within
30 days of the Director giving notice under clause 11.3(a)
that it does not accept the Maintenance Plan, either party may
refer the issues in dispute to be determined by an independent
expert in accordance with clause 31.5.
11.4 OBLIGATION TO COMPLY WITH MAINTENANCE PLAN
The Lessee must undertake the repair, maintenance and renewal works
detailed in the Maintenance Plan as agreed under clause 11.3 or as
determined under clause 31.5.
11.5 ESCROW ACCOUNT
(a) The Lessee must ensure that the amount spent in each 12 month
period by the Lessee in complying with the Maintenance Plan is
not less than the amount prescribed in the Maintenance Plan
for that period.
(b) Within 45 days after the end of each 12 month period from the
commencement of the five year period to which the Maintenance
Plan relates, the Lessee must provide to the Director an
audited statement giving details of the amount spent by the
Lessee in respect of the Maintenance Plan in that 12 month
period. The audited statement must be audited by the Lessee's
external auditors or a firm of accountants approved by the
Director and be in a form approved by the Director.
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(c) If the amount disclosed by that statement as having been spent
by the Lessee in respect of the Maintenance Plan in that 12
month period is less than the amount prescribed in the
Maintenance Plan for that period, the difference between the
amount spent (as disclosed by that statement) and the amount
prescribed in the Maintenance Plan must be paid by the Lessee
into the Escrow Account within 14 days of receipt of the
audited statement under clause 11.5(b).
(d) The whole or any part of the moneys paid into the Escrow
Account pursuant to clause 11.5(c) may be applied by the
Lessee to the cost of the repair, maintenance and renewal
works undertaken by the Lessee pursuant to this Lease if, and
only if, the Director approves of the application of the money
in the manner proposed by the Lessee (which approval must not
be unreasonably withheld).
(e) If at the expiration or earlier determination of this Lease:
(i) part of the Railway Infrastructure is in a condition
worse than the condition in which the Lessee is
required to return that part of the Railway
Infrastructure to the Director pursuant to clause 10,
the Director may withdraw the money remaining in the
Escrow Account, including all interest which has
accrued, to undertake works necessary to bring the
Railway Infrastructure to a condition no worse than
the required condition. Any money remaining in the
Escrow Amount following the completion of any such
works will be paid to the Lessee; or
(ii) the Railway Infrastructure is in a condition no worse
than the condition in which the Lessee is required to
return the Railway Infrastructure to the Director
pursuant to clause 10, any money remaining in the
Escrow Account, including all interest which has
accrued, will be paid to the Lessee.
(f) Where:
(i) at the expiration or earlier determination of this
Lease part of the Railway Infrastructure is in a
condition worse than the condition in which the
Lessee is required to return that part of the Railway
Infrastructure to the Director pursuant to clause 10;
(ii) the Director undertakes the works necessary to bring
the Railway Infrastructure to a condition no worse
than the required condition; and
(iii) there is insufficient money in the Escrow Account to
meet the cost of those works,
then the costs incurred by the Director in
undertaking the works over and above the amount
withdrawn from the Escrow Account pursuant to clause
11.5(e)(i) will be a debt due and payable by the
Lessee to the Director upon demand.
(g) If there is a dispute between the parties as to the condition
of the Railway Infrastructure upon the Land at the expiration
or earlier determination of this Lease, then either party may
refer the issues in dispute to be determined by an independent
expert in accordance with clause 31.5.
12. LEASES
12.1 EXISTING LEASES
The Lessee acknowledges that:
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(a) the Lessee accepts the Land subject to the Existing Leases and
the rights the parties to the Existing Leases have under the
Existing Leases;
(b) copies of the Existing Leases have been made available to the
Lessee by the Director prior to the Commencement Date; and
(c) neither the Director, the Director's Associates nor any other
person has made any representation, given any advice or given
any warranty in respect of the Existing Leases or the rights
the parties to the Existing Leases have under the Existing
Leases.
12.2 CONCURRENT LEASE
For the purposes of the Existing Leases this Lease is a concurrent
lease, and on and from the Commencement Date until the expiration or
earlier determination of this Lease the Lessee will be entitled to all
of the Director's rights and responsible for all of the Director's
obligations under the Existing Leases as if the Lessee was the landlord
under the Existing Leases. The Lessee will be entitled to the receipt
of all rent payable by the tenants under the Existing Leases on and
from the Commencement Date until the expiration or earlier
determination of this Lease.
12.3 RELEASE AND INDEMNITY
The Lessee releases to the full extent permitted by law and indemnifies
and will keep indemnified the Director from all losses, damages,
liabilities, actions, suits, claims, demands, costs and expenses of
every kind in respect of or arising from a breach by the Lessee or the
Lessee's Associates of an Existing Lease except to the extent that
breach is caused by or results from an act or omission of the Director
or the Director's Associates.
12.4 GRANTING OF SUB-LEASES
The Lessee may from time to time during the Term grant sub-leases over
the Land provided that:
(a) the term of the sub-lease (including options) does not exceed
the balance of the Term then remaining;
(b) the sub-lease is for Railway Operations;
(c) the sub-lease will not reduce the Director's or the Lessee's
ability to comply with their obligations and will not reduce
the Director's ability to exercise rights under this Lease or
any Transaction Document and will not reduce VRTC's ability to
exercise the rights referred to in clauses 2.3 and 2.4; and
(d) the sub-lease will expire or determine automatically upon the
expiration or earlier determination of this Lease.
12.5 NO RELEASE OF LIABILITY
The Lessee acknowledges that the granting of a sub-lease pursuant to
this clause 12 will not release the Lessee from any of its obligations
or liabilities under this Lease.
13. LICENCES
13.1 EXISTING LICENCES
The Lessee acknowledges that:
(a) the Lessee accepts the Land subject to the Existing Licences
and the rights the parties to the Existing Licences have under
the Existing Licences;
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(b) copies of the Existing Licences have been made available to
the Lessee by the Director prior to the Commencement Date; and
(c) neither the Director, the Director's Associates nor any other
person has made any representation, given any advice or given
any warranty in respect of the Existing Licences or the rights
the parties to the Existing Licences have under the Existing
Licences.
13.2 EXCLUDED LICENCES
The Lessee acknowledges that VRTC retains all of VRTC's rights
(including the entitlement to the receipt of all licence fees and other
amounts payable by the licensees) and remains responsible for all of
VRTC's obligations under the Existing Licences listed in Part 1 of
Schedule 9.
13.3 INCLUDED LICENCES
(a) On and from the Commencement Date until the expiration or
earlier determination of this Lease the Lessee will be
entitled to all of the Director's rights and be responsible
for all of the Director's obligations under the Existing
Licences listed in Part 2 of Schedule 9 as if the Lessee was
the licensor under those Existing Licences.
(b) The Lessee will be entitled to the receipt of all licence fees
and any other amounts payable by the licensees under the
Existing Licences listed in Part 2 of Schedule 9 on and from
the Commencement Date until the expiration or earlier
determination of this Lease.
(c) The Lessee releases to the full extent permitted by law and
indemnifies and will keep indemnified the Director from and
against all losses, damages, liabilities, actions, suits,
claims, demands, costs and expenses of every kind arising out
of or in relation to the Existing Licences listed in Part 2 of
Schedule 9 on and from the Commencement Date except to the
extent that the loss, damage, liability, action, suit, claim,
demand, cost or expense is incurred as a result of the
negligent act or omission of the Director or the Director's
Associates.
13.4 LESSEE'S RIGHT TO GRANT NEW LICENCES
The Lessee may from time to time during the Term grant licences over
the Land provided that:
(a) the term of the licence (including options) does not exceed
the balance of the Term then remaining;
(b) the licence is for Railway Operations; and
(c) the licence will not reduce the Director's or the Lessee's
ability to Comply with their obligations and will not reduce
the Director's ability to exercise rights under this Lease or
any Transaction Document and will not reduce VRTC's ability to
exercise the rights referred to in clauses 2.3 and 2.4; and
(d) the licence will expire or determine automatically upon the
expiration or earlier determination of this Lease.
13.5 NO RELEASE OF LIABILITY
The Lessee acknowledges that the granting of a licence pursuant to this
clause 13 will not release the Lessee from any of its obligations or
liabilities under this Lease.
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14. INTERSTATE TRACK
Except to the extent that the Lessee otherwise has such rights, the
Director must endeavour to ensure that the Lessee at all times during
this Lease has sufficient rights of access across the Interstate Track
Land to those parts of the Land which are adjacent to the Interstate
Track Land for the purposes of exercising its rights and complying with
its obligations under this Lease. The Lessee will not be in breach of
its obligations under this Lease to extent that an act or omission
which otherwise would be a breach is a direct result of the Director
failing to comply with this clause.
15. ACCESS
15.1 DIRECTOR'S RIGHT OF ACCESS
When and so often as the Director reasonably requires the Director, the
Director's Associates or any other persons authorised by the Director
may enter the Land to:
(a) make reasonable investigations as the Director or those
authorised by the Director may deem necessary for the purpose
of ascertaining whether or not there has been any breach of
any of the terms, covenants or conditions expressed or implied
in this Lease or any other Transaction Document;
(b) carry out any repairs, alterations, additions or other work
necessary to comply with the Director's obligations under this
Lease, at law, or pursuant to the exercise by the Director of
any statutory functions;
(c) exercise any rights pursuant to clauses 2.3 and 2.4;
(d) access any New Works constructed pursuant to clause 5;
(e) access the Excluded Infrastructure;
(f) exercise any powers and rights of the Director or of any
person authorised by the Director for or in connection with
the Interstate Track Land; and
(g) exercise any other powers and rights of the Director pursuant
to this Lease or any other Transaction Document.
15.2 EXERCISE OF RIGHTS
In exercising its rights under clause 15.1 the Director must:
(a) minimise as far as may be practicable any inconvenience or
interruption to the Lessee's business; and
(b) give to the Lessee reasonable notice of its intention to enter
upon the Land (except in the case of an emergency when no
notice will be required).
16. PRE-EXISTING AND SUBSEQUENT CONTAMINATION
16.1 CLEAN-UP NOTICE
If a Clean-Up Notice relating to Contamination existing in, on, under
or emanating from the Land is served during the Term then:
(a) the party which receives the Clean-Up Notice must promptly
provide the other party with a copy of the Clean-Up Notice;
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(b) the Director and the Lessee must meet as soon as practicable
after service of the Clean-Up Notice to determine, to the
extent possible, whether and to what extent the Clean-Up
Notice relates to Pre-Existing Contamination and to what
extent to Subsequent Contamination;
(c) to the extent that the Clean-Up Notice relates solely to
Pre-Existing Contamination, the Director will at the
Director's sole cost and expense be responsible for complying
with the Clean-Up Notice to the extent necessary to enable the
Land to be used for Railway Operations;
(d) to the extent that the Clean-Up Notice relates solely to
Subsequent Contamination, the Lessee will at its sole cost and
expense be responsible for complying with the Clean-Up Notice;
(e) if the Clean-Up Notice relates to both Pre-Existing
Contamination and Subsequent Contamination, the Director and
the Lessee shall respectively be severally liable for
complying with the Clean-Up Notice to the extent specified in
clauses 16.1(c) and 16.1(d); and
(f) if the Director and the Lessee cannot agree within a
reasonable time to what extent the Clean-Up Notice relates to
Pre-Existing Contamination and to Subsequent Contamination,
either party may refer the matters in dispute to be determined
by an environmental auditor (being a person appointed to that
office by the Environment Protection Authority pursuant to the
Environmental Protection Act 1970 (Vic)) appointed as an
independent expert in accordance with clause 31.5.
16.2 INDEMNITY BY DIRECTOR
The Director indemnities and will keep indemnified the Lessee from and
against all losses, damages, liabilities, actions, suits, claims,
demands, costs and expenses of every kind arising from a failure by the
Director to comply with the Director's obligations under clause 16.1(c)
id 16.1(e) except to the extent that the failure is caused or
contributed to by a negligent act or omission of the Lessee or the
Lessee's Associates.
16.3 INDEMNITY BY LESSEE
Without limiting the generality of clause 27.1, the Lessee indemnifies
and will keep indemnified the Director from and against all losses,
damages, liabilities, actions, suits, claims, demands, costs and
expenses of every kind arising from a failure by the Lessee to comply
with its obligations under clause 16.1(d) and 16.1(e) except to the
extent that the failure is caused or contributed to by a negligent act
or omission of the Director or the Director's Associates.
16.4 COVENANT NOT TO CAUSE THE SERVICE OF A CLEAN-UP NOTICE
The Lessee and the Director covenant with each other that they will not
do anything with the intent, directly or indirectly, of causing or
assisting in causing the service of a Clean Up Notice provided that
neither party in complying with this clause shall be prevented from
complying with nor shall be taken to be in default of this clause in
complying with any Laws.
17. ENVIRONMENTAL REPORTS
17.1 ENVIRONMENTAL REPORT
The parties agree that, in respect of the Sites, the Contamination
existing as at the Commencement Date includes but is not necessarily
limited to the Contamination specified in the Environmental Report.
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17.2 RANDOM AUDIT
(a) The Director may from time to time at the Director's own cost
obtain an independent environmental audit of all or any part
of the Land to determine the extent of any Contamination in,
on, under or emanating from that Land. If the Director wishes
to rely on the audit for the purposes of clause 17.2(b) or
(c), the audit must be undertaken by or conducted under the
supervision of an environmental auditor appointed to that
office by the Environment Protection Authority pursuant to the
Environment Protection Act 1970 (Vic).
(b) If an audit undertaken pursuant to clause 17.2(a) discloses
Subsequent Contamination, then except to the extent that the
Subsequent Contamination has been caused or contributed to by
the negligent act or omission of the Director or the
Director's Associates, the Director may at the Director's
absolute discretion require the Lessee to undertake at the
Lessee's cost all steps necessary to remediate such Subsequent
Contamination to the extent necessary to enable the Land to be
used for Railway Operations.
(c) If an audit undertaken pursuant to clause 17.2(a) discloses
Subsequent Contamination, the Lessee must pay the costs of the
environmental auditor properly attributable to that part of
the audit which discloses the Subsequent Contamination.
17.3 FINAL AUDIT
(a) Not more than nine months and not less than six months prior
to the expiration of the Term, or if the Lease is terminated,
immediately upon termination, the Lessee must at its sole cost
and expense obtain an independent environmental audit of the
Sites to determine the extent of any Contamination.
(b) The Final Audit must be conducted by a person or firm approved
by the Director (which approval is not to be unreasonably
withheld) and must be commissioned for the joint benefit of
the parties.
(c) The Final Audit must detail:
(i) the Contamination existing in, on, under or emanating
from the Sites; and
(ii) by way of comparison the level of Contamination
existing in, on, under or emanating from the Sites in
contrast to the Contamination identified in the
Environmental Report.
(d) Upon completion of the Final Audit the Lessee must promptly
provide the Director with a copy of the Final Audit if one has
not been provided directly by the person or firm who conducted
the Final Audit.
(e) If the Final Audit discloses Subsequent Contamination, then
except to the extent that the Subsequent Contamination has
been caused or contributed to by the negligent act or omission
of the Director or the Director's Associates, the Director may
at the Director's absolute discretion require the Lessee to
undertake all steps necessary to remediate such Subsequent
Contamination to the extent necessary to enable the Land to be
used for Railway Operations. If the Lessee fails to do so the
Director may undertake all steps necessary to remediate the
Subsequent Contamination to the extent necessary to enable the
Land to be used for Railway Operations and the costs incurred
by the Director in undertaking those works will be a debt due
and payable by the Lessee to the Director upon demand.
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(f) The Lessee is responsible for all costs associated with the
remediation of the Subsequent Contamination to the extent
necessary to comply with its obligations under clause 17.3(e).
18. ENVIRONMENTAL COMPLIANCE
18.1 LESSEE'S OBLIGATIONS
During the Term the Lessee covenants:
(a) not to use the Land or allow the Land to be used so that:
(i) any Industrial Waste or potentially Hazardous
Substance is abandoned or dumped on the Land; or
(ii) any Industrial Waste or potentially Hazardous
Substance is handled in a manner which is likely to
cause an Environmental Hazard;
(b) not to install any underground pipes or underground storage
tanks within any part of the Land or reinstate the use of any
abandoned or unused underground pipes or underground storage
tanks within the Land without prior written consent of the
Director (which will not be unreasonably withheld); and
(c) without limiting the generality of clauses 9.4 and 9.5, and
except to the extent that the Director is required to comply
with any Law or notice pursuant to clause 16.1, to comply with
all Environmental Laws and to obtain and maintain in full
force and effect and to comply with the terms of all permits
and licences required in order to release or emit anything
from the Land into the air or water or on to the ground or
otherwise into the Environment or to emit any substantial
noise.
18.2 INDEMNITY BY LESSEE
Without limiting the generality of clause 27.1, the Lessee indemnities
and will keep indemnified the Director from and against all losses,
damages, liabilities, actions, suits, claims, demands, costs and
expenses of every kind arising from a failure by the Lessee to comply
with its obligations under clause 18.1 except to the extent that the
failure is caused or contributed to by a negligent act or omission of
the Director or the Director's Associates.
18.3 INDEMNITY BY DIRECTOR - NOISE
The Director indemnifies and will keep indemnified the Lessee for a
period of 10 years commencing on the Commencement Date (up to a limit,
in aggregate over the 10 year period, of $1,000,000) for and against
the cost of complying with the requirements of a legally valid Noise
Control Notice issued by the Environment Protection Authority ordering
the Lessee to abate noise caused by operational practices current at
the Commencement Date at the Tottenham Yard, provided that the cost of
the abatement required by any legally valid Noise Control Notice
exceeds $50,000.
19. ASBESTOS
19.1 ASBESTOS REPORT
The Lessee acknowledges that:
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(a) on the instructions of the State the Asbestos Report was
prepared detailing parts of the Railway Infrastructure that
contain asbestos and providing an asbestos register for each
of the sites in the report;
(b) while the Director believes the Asbestos Report is accurate,
the Director does not warrant that the Asbestos Report is an
accurate or exhaustive list of all parts of the Railway
Infrastructure that contain asbestos;
(c) the Lessee has had an opportunity to inspect the Asbestos
Report and the Railway Infrastructure and has relied on its
own judgment in entering into this Lease; and
(d) the Lessee will not be entitled to claim any compensation as a
result of asbestos being present in the Railway
Infrastructure.
19.2 OBLIGATIONS OF LESSEE
Without limiting the generality of clauses 9.4 and 9.5, the Lessee
covenants that during the Term it will, at its own cost, comply with or
procure compliance with all Asbestos Legislation (including all notices
and orders served pursuant to any Asbestos Legislation) which relates
to the Railway Infrastructure, including all Asbestos Legislation which
relates to any repairs, improvements, demolition or other structural
work undertaken by the Lessee.
19.3 INDEMNITY BY LESSEE
Without limiting the generality of clause 27.1, the Lessee indemnities
and will keep indemnified the Director from and against all losses,
damages, liabilities, actions, suits, claims, demands, costs and
expenses of every kind arising from a failure by the Lessee to comply
with its obligations under clause 19.2 except to the extent that the
failure is caused or contributed to by a negligent act or omission of
the Director or the Director's Associates.
20. LESSEE'S OBLIGATIONS - STORMWATER CONTAMINATION
20.1 OBLIGATIONS OF LESSEE
Without limiting the generality of clauses 9.4 and 9.5, the Lessee
covenants that during the Term it will, at its own cost, comply with
all Environmental Laws (including all notices and orders served in
relation to Environmental Laws) which relate to stormwater leaving the
Land.
20.2 INDEMNITY BY LESSEE
Without limiting the generality of clause 27.1, the Lessee indemnities
and will keep indemnified the Director from and against all losses,
damages, liabilities, actions, suits, claims, demands, costs and
expenses of every kind arising from a failure by the Lessee to comply
with its obligations under clause 20.1 except to the extent that the
failure is caused or contributed to by a negligent act or omission of
the Director or the Director's Associates.
21. RENT
21.1 LESSEE TO PAY RENT
(a) For each year of the Term the Lessee must pay the Rent to the
Director.
(b) Rent payable for the first year of the Initial Term must be
paid by the Lessee to the Director prior to or on the
Commencement Date. Rent payable for each subsequent year of
the Term must be paid by the Lessee to the Director prior to
or on the day which is 30 days after the first day of that
year of the Term.
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(c) Rent must be paid by the Lessee without demand from the
Director and without any deduction or set off.
(d) Any payment of Rent made by way of cheque will be deemed not
to have been received or accepted by the Director until the
cheque has been cleared and credited in full to the Director's
account.
21.2 ADJUSTMENT OF RENT
(a) On each anniversary of the Commencement Date (in each case,
the REVIEW DATE) the Rent will be adjusted in accordance with
this clause 21.2.
(b) On each review date the Rent payable for the 12 month period
commencing on the review date will be calculated as follows:
A
Rent = Rent payable immediately prior to review date x ---
B
where -
A = the All Groups Consumer Price Index Number for Melbourne
published by the Australian Bureau of Statistics in
respect of the latest concluded quarter immediately
preceding the review date; and
B = the All Groups Consumer Price Index Number for Melbourne
published by the Australian Bureau of Statistics in
respect of the latest concluded quarter immediately
preceding the Commencement Date (in the case of the first
anniversary of the Commencement Date) or the immediately
preceding review date (in the case of each subsequent
anniversary of the Commencement Date).
(c) If the same index is not current on both dates referred to in
clause 21.2(b) or if a substantial change takes place in the
method or basis of calculating the index, then the fraction to
be applied in order to calculate the adjustment to the Rent
will be the fraction agreed by the parties or, if no agreement
is reached within seven days after the relevant review date,
the fraction determined by an independent expert appointed at
the request of either party in accordance with clause 31.5.
(d) As from each review date this Lease will be read and construed
as if the adjusted Rent fixed or determined pursuant to this
clause 21.2 were substituted for the Rent payable immediately
prior to that review date.
21.3 NO ABATEMENT
During the Term the payment of Rent by the Lessee under this Lease will
not abate for any reason.
21.4 SECURITY
(a) The Lessee must:
(i) prior to or on the Commencement Date; and
(ii) at all times thereafter during the Term and for a
period of six months after the expiration or earlier
determination of the Term,
provide to the Director a Letter of Credit which satisfies the
requirements of clause 21.4(b).
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(b) The Letter of Credit provided by the Lessee for the purposes
of clause 21.4(a) must at all times:
(i) specify the Director as sole beneficiary;
(ii) specify the Lessee as sole account party;
(iii) be in effect immediately it is provided;
(iv) have a period remaining prior to its expiry, or prior
to the time at which there may be any reduction of
the issuer's liability under or in respect of it, of
not less than three years;
(v) vest in the Director a right to require payment at
any time prior to its expiry upon demand being made
at an office of the issuer in Melbourne on any
Business Day;
(vi) entitle the Director to make multiple claims under
it;
(vii) provide for a maximum liability of the issuer to be
determined as follows:
Maximum A x (1 - (1 + DR)-B) A x (1 - (1 + DR)-M)
Liability = -------------------- -- --------------------
DR DR
where:
A = the Rent then payable by the Lessee;
B = that part (expressed as a whole number of
years, but excluding the then current year if
Rent for that year has been paid) of the Initial
Term, the First Further Term and the Second
Further Term then remaining unexpired (assuming
the Lessee has exercised its option to renew
this Lease for both the First Further Term and
the Second Further Term);
DR = the discount rate of 0.04; and
M = that part (expressed as a whole number of
years) of the Initial Term, the First Further
Term and the Second Further Term then remaining
unexpired (assuming the Lessee has exercised its
option to renew this Lease for both the First
Further Term and the Second Further Term) for
which Rent has been prepaid;
(viii) be issued by an issuer which, at the time of issue,
has a credit rating of A minus (Moody's) or better
and otherwise maintains a credit rating of B plus
(Moody's) or better; and
(ix) otherwise, be in a form approved by the Director from
time to time (such approval not to be unreasonably
withheld).
(c) The Director may claim or draw down on the Letter of Credit
if:
(i) the Director considers the Lessee is in breach of any
of its obligations under clause 21.1 or 21.4(a); or
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(ii) this Lease is not renewed in accordance with clause
28 for the First Further Term or, if applicable, the
Second Further Term; or
(iii) this Lease is terminated prior to the expiry of its
Term.
(d) A claim or draw down by, or payment to, the Director under the
Letter of Credit does not prevent the Director from seeking
alternative or additional remedies or from claiming from the
Lessee any loss, damage, cost or expense in excess of the
amount claimed, drawn down or paid.
22. RATES, TAXES AND CHARGES
22.1 RATES AND TAXES
(a) Where Rates and Taxes are assessed in respect of the Land:
(i) to the extent that Rates and Taxes are separately
assessed, the Lessee must pay the relevant
Governmental Agency, or reimburse to the Director on
demand if paid by the Director, all Rates and Taxes;
and
(ii) to the extent that Rates and Taxes are not separately
assessed the Lessee must pay the relevant
Governmental Agency, or reimburse to the Director on
demand if paid by the Director, a proportion of the
Rates and Taxes equal to the area that part of the
Land bears to the total area assessed.
(b) During the Term the payment of Rates and Taxes by the
Lessee under this Lease will not abate for any
reason.
(c) As part of its obligations under clause 22.1(a) the
Lessee must pay all land tax (whether State or
Federal) assessed in respect of all or any part of
the Land, provided that to the extent land tax is
payable under the Land Tax Act 1958 (Vic), as in
force at the Commencement Date, in respect of the
Railway Corridors and the Intrastate Corridors, the
Director will pay that land tax or, if paid by the
Lessee, reimburse the Lessee on demand for that land
tax.
22.2 GST
(a) Any amount payable under this Lease is exclusive of GST.
(b) Any party who receives or is deemed to receive any goods or
services under this Lease must pay to the supplier or deemed
supplier of those goods or services any GST payable, when
payment for the goods or services to which the GST relates is
due.
(c) Each party agrees to do all things, including providing
invoices or other documentation containing stipulated
information, that may be necessary or desirable to enable or
assist the other party to claim any credit, set off, rebate or
refund in relation to any GST included in any payment made
under this Lease.
22.3 CHARGES FOR SERVICES
The Lessee must pay all charges (including service charges) for
electricity, gas, water, drainage, sewerage, oil and any other source
or type of energy or fuel, telephone and other utilities and services
to or from the Land, together with any costs charged or levied by the
service provider in respect of the repair or maintenance of the
infrastructure which provides or supplies those services exclusively to
the Land.
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22.4 SEPARATE METERING
Where part of the Land is not separately metered to measure the
consumption by the Lessee of the services referred to in clause 22.3,
then:
(a) the Director and the Lessee may agree to install separate
meters to measure the consumption by the Lessee of those
services, the cost of which is to be agreed by the Director
and the Lessee; or
(b) if the Director and the Lessee do not agree to install
separate meters to measure the consumption by the Lessee of
those services, the Lessee must, in respect of each service,
pay or reimburse the Director a proportion of the charge for
that service equal to the proportion which the number of
outlets for that service within that part of the Land bears to
the total number of outlets for that service within the
assessed area.
22.5 PAYMENT BY DIRECTOR
If the Lessee defaults in the payment of any charges referred to in
clause 22.3, the Director may (without limiting any other rights and
remedies of the Director) pay the amount owing and the Lessee must on
demand reimburse the Director the amount so paid with Interest in
accordance with clause 29.7.
22.6 SHARED SERVICES
Where the infrastructure which provides or supplies any of the services
referred to in clause 22.3 provides or supplies those services not only
to part of the Land but also to other land owned by or leased to the
Director, the Lessee must pay or reimburse the Director a proportion of
any costs charged or levied by the service provider in respect of the
repair or maintenance of that infrastructure, such proportion to be
calculated as follows:
(a) in respect of the infrastructure relating to the provision or
supply of electricity, gas, water, sewerage, oil and any other
source or type of energy or fuel, telephone and other
utilities and services, the proportion will be the proportion
which the number of outlets for the relevant service within
that part of the Land serviced by that infrastructure bears to
the total number of outlets for that service within the total
area of the land owned by or leased to the Director which is
serviced by that infrastructure; and
(b) in respect of drainage, the proportion will be the proportion
which the area of that part of the Land which is serviced by
the relevant drain bears to the total area of the land owned
by or leased to the Director which is serviced by that drain.
22.7 ACCESS ROADS
Where an access road or track is situated on land owned by or leased or
licensed to the Director, and that road or track services not only part
of the Land but also another area owned by or leased to the Director,
then the Lessee must pay or reimburse the Director a proportion of the
ongoing repair and maintenance costs in respect of that road or track
equal to the proportion which the area of that part of the Land which
is serviced by the road or track bears to the total area of the land
owned by or leased or licensed to the Director which is serviced by
that road or track.
23. QUIET ENJOYMENT
If the Lessee duly and punctually observes and performs the terms,
covenants and conditions in this Lease on the part of the Lessee to be
observed and performed, the Lessee may peaceably possess and enjoy the
Land for the Term without any interruption or disturbance from the
Director or any other person or persons lawfully claiming by from or
under the Director save only where
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an interruption or disturbance results from the exercise by the
Director or VRTC of any right of the Director or VRTC in this Lease
expressly or impliedly conferred or reserved.
24. INTELLECTUAL PROPERTY
24.1 GRANT OF LICENCE
The Director grants to the Lessee a non-exclusive, non-transferrable,
royalty-free licence to use, reproduce, modify, adapt, develop and
otherwise exploit the Licensed Rights to the extent necessary to permit
the Lessee to conduct Railway Operations in accordance with this Lease.
This licence commences on the Commencement Date and will expire on the
expiration or earlier determination of the Term (provided that, in
respect of Licensed Rights not owned solely by the Director, the
licence will expire on the first to occur of the expiration or earlier
determination of the Director's licence in respect of those Licensed
Rights and the expiration or earlier determination of the Term).
24.2 IMPROVEMENTS
(a) With respect to all Improvements made by or on behalf of the
Lessee or any related body corporate (as defined in the
Corporations Law) of the Lessee or any controlled entity
during the Term, the Lessee:
(i) must, upon the Director's request, promptly disclose
such Improvements to the Director in such detail as
the Director may reasonably require;
(ii) must hold and procure that its related bodies
corporate (as defined in the Corporations Law) and
controlled entities hold such Improvements in strict
confidence and not disclose those Improvements to any
other party directly or indirectly (including by way
of the supply of products or materials constituted by
that Improvement) without the prior written consent
of the Director or as strictly necessary in order for
it to conduct Railway Operations in accordance with
this Lease;
(iii) acknowledges that the Director will own all
Intellectual Property rights subsisting in such
Improvements;
(iv) assigns, and will ensure that each of its related
bodies corporate (as defined in the Corporations
Law), controlled entities, employees, servants and
agents assigns, to the Director all rights, title and
interest in and to the Intellectual Property
subsisting in such Improvements with effect from the
date of creation of the Improvement; and
(v) must do all things necessary and execute all
documents as reasonably requested from time to time
by the Director to give effect to the provision of
this clause 24.2.
(b) With effect from the date of creation of an Improvement, the
Director grants to the Lessee a licence to the Improvement on
the terms stated in clause 24.1 with respect to the Licensed
Rights.
24.3 DIRECTOR'S RIGHT TO LICENSE IMPROVEMENTS
Where, in the reasonable opinion of the Director, the granting to a
Metropolitan Franchisee or Passenger Rail Corporation of a licence in
respect of an Improvement:
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(a) is necessary for that Metropolitan Franchisee or Passenger
Rail Corporation to conduct its business (including in a
manner that complies with the terms of any applicable
agreement with the Secretary, the Director, VRTC or PTC); and
(b) does not result in any material commercial disadvantage to the
Lessee,
the Director may grant to that Metropolitan Franchisee or Passenger
Rail Corporation a non-exclusive, royalty-free, transferable licence to
exercise the Intellectual Property subsisting in that Improvement to
the extent necessary for that Metropolitan Franchisee or Passenger Rail
Corporation to conduct its business. The Director may not otherwise
grant licences in respect of the Intellectual Property rights
subsisting in an Improvement during the term of the Lessee's licence in
respect of those rights.
24.4 LICENCE OF LESSEE'S INTELLECTUAL PROPERTY
(a) To the extent that the Lessee makes use of any Intellectual
Property rights (other than Intellectual Property rights in
Improvements) which are owned by the Lessee in connection with
conducting Railway Operations, the Lessee hereby grants to the
Director a perpetual, irrevocable, non-exclusive, transferable
licence (with the right to sub-licence) to exercise all such
Intellectual Property rights for the purposes of conducting
Railway Operations from time to time. The licence granted
under this clause 24.4(a) commences with effect from the date
the relevant Intellectual Property rights were first used in
connection with conducting the Railway Operations
(b) The licence granted in clause 24.4(a) is royalty free unless
the Lessee notified the Director in writing of its intention
to charge a royalty for the licence of those Intellectual
Property rights prior to the Intellectual Property rights
being used in connection with the conduct of Railway
Operations and the Director gives its written approval to the
Lessee's use on those terms.
24.5 USE OF THIRD PARTY INTELLECTUAL PROPERTY RIGHTS AND INDEMNITY
(a) To the extent that the Lessee makes use, in connection with
conducting Railway Operations, of any Intellectual Property
rights which are not owned by the Lessee, the Lessee must,
prior to commencing such use, ensure that upon the expiration
or earlier determination of this Lease it will be able to
either:
(i) grant the Director a perpetual, irrevocable,
non-exclusive, transferable sub-licence (with the
right to grant sub-sub-licences) to those
Intellectual Property rights; or
(ii) procure the grant to the Director of a perpetual,
irrevocable, non-exclusive, transferable licence
(with the right to grant sub-licences) from the owner
of those Intellectual Property rights.
(b) Upon the expiration or earlier determination of this Lease,
the Lessee must promptly grant a sub-licence, or procure the
grant of a licence, in accordance with clause 24.5(a)(i) or
24.5(a)(ii) of all Intellectual Property rights which are not
owned by the Lessee and which were used by the Lessee in
connection with conducting Railway Operations immediately
prior to such expiration or earlier determination. The
sub-licence or licence granted in accordance with this clause
24.5(b) must be royalty free unless the Lessee had notified
the Director in writing prior to the Intellectual Property
rights being used in connection with the conduct of Railway
Operations that a royalty would be charged for the licence of
those Intellectual Property rights and the Director had given
its written approval to the Lessee's use on those terms.
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(c) The Lessee must indemnify and hold the Director harmless
against all actions, claims, losses, damages, costs, expenses
or other liability arising out of or in connection with the
Director's exercise of the licences or sub-licences granted
under clauses 24.4(a) or in accordance with clause 24.5(b)
infringing any third party Intellectual Property rights or the
Lessee not complying with its obligations under clauses
24.5(a) and 24.5(b).
24.6 EXPRESS WARRANTIES WITH RESPECT TO INFRINGEMENT OF INTELLECTUAL
PROPERTY RIGHTS
Each party warrants that:
(a) it is not aware of any of the Intellectual Property rights
licensed or assigned by that party under this clause 24
infringing any third party's Intellectual Property rights; and
(b) it has the right to grant the licences granted by it under
this clause 24.
24.7 NO IMPLIED WARRANTIES
All implied warranties, terms and conditions binding on the parties in
relation to the assignments and licences granted pursuant to this
clause 24 which would otherwise be implied in this Lease are excluded
to the maximum extent permitted by law and each party (the
ACKNOWLEDGING PARTY) acknowledges and agrees that:
(a) no other party to this Lease, nor any person acting on their
behalf, has made any representation or given any warranty in
relation to the Intellectual Property rights of those other
parties (including any representation or warranty as to
whether the Acknowledging Party's use of any such Intellectual
Property rights would infringe the rights of any third
person); and
(b) the Acknowledging Party has made, and relies upon, its own
searches, investigations and enquiries in respect of the
Intellectual Property rights of the other party.
24.8 SUB-LICENCES
The Lessee may grant sub-licences to use the Licensed Rights to third
parties engaged from time to time during the Term to perform services
for the Lessee in connection with the Lessee's conduct of Railway
Operations, provided that:
(a) any such sub-licence authorises the third party to use the
Licensed Rights solely for the purpose of performing those
services; and
(b) any such sub-licence expires no later than the day upon which
the Term expires or is terminated.
The rights of the Lessee under this clause 24.8 will not be taken to
affect the Lessee's obligations under clause 36 of this Lease.
25. INSURANCE
25.1 RISK
The Lessee bears the risk of loss or damage to the Railway
Infrastructure from the Commencement Date until the expiration or
earlier determination of the Lease.
25.2 OBLIGATION TO INSURE RAILWAY INFRASTRUCTURE
The Lessee must effect and maintain insurance (in the joint names of
VRTC, the Director and the Lessee) to cover the Railway Infrastructure:
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(a) against loss, destruction or damage for an amount not less
than $300,000,000 for any one claim; and
(b) with cover which extends to include claim contingencies
covering removal of debris/demolition costs and professional
fees.
25.3 OBLIGATION TO INSURE FOR PUBLIC LIABILITY
The Lessee must effect and maintain insurance (in the joint names of
VRTC, the Director and the Lessee), with a limit of not less than
$250,000,000 for any one occurrence to cover:
(a) Personal Injury; and
(b) loss, destruction or damage to any property (other than the
Railway Infrastructure).
The Lessee must ensure that the public liability insurance policy
provides that all conditions, agreements and endorsements (with the
exception of limits of liability) operate as if there was a separate
policy of insurance covering each of the insured.
25.4 OBLIGATION TO INSURE AGAINST PROFESSIONAL NEGLIGENCE
The Lessee must effect and maintain professional indemnity insurance
(in the joint names of VRTC, the Director and the Lessee) with a limit
of indemnity of not less than $20,000,000:
(a) which indemnities the Lessee for a breach of professional
duty, whether owed in contract or otherwise, by reason of any
act, error or omission by the Lessee or the Lessee's
Associates which results from the discharge of professional
responsibilities relating to any works undertaken by the
Lessee pursuant to this Lease; and
(b) which includes cover for breach of trade practices and/or fair
trading laws, loss of documents and libel and slander, and
provides one automatic reinstatement of the limit of
indemnity.
25.5 OBLIGATION TO INSURE FOR WORKERS' COMPENSATION
The Lessee must effect and maintain workers' compensation insurance
covering any liability, loss, claim or proceedings whatsoever, whether
arising by virtue of any statute relating to workers' compensation
insurance, accident compensation legislation, employer's liability, or
at common law, by any person employed by the Lessee. The insurance must
include a condition stating cover extends to indemnify the Director as
contract principal.
25.6 OBLIGATION TO INSURE FOR MOTOR VEHICLE LIABILITIES
The Lessee must effect and maintain motor vehicle liability insurance
covering any liability for personal injury to, or the death of, any
person, and for loss or damage to property, caused by the Lessee's
ownership or use of any motor vehicle in connection with the Land.
Unless otherwise limited by statute:
(a) the cover provided by this insurance must be for an amount of
not less than $20,000,000 for any one occurrence which is
indemnifiable thereunder; and
(b) the insurance must include a condition stating cover extends
to indemnify the Director as contract principal.
25.7 PERIODS OF INSURANCE
The insurances referred to in this clause must be:
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(a) in force at the Commencement Date; and
(b) maintained effective:
(i) in relation to insurance maintained pursuant to
clause 25.4, until 10 years after the expiration or
earlier determination of this Lease; and
(ii) in relation to all other insurances, until the
expiration or earlier determination of this Lease.
25.8 Insurers and policies
(a) The Lessee must effect or procure and maintain or procure the
maintenance of the insurances required under this clause:
(i) with insurers approved by the Director, which
approval must not be unreasonably withheld or
delayed; and
(ii) in full force and effect for the relevant periods
described in clause 25.7-,
(b) The Lessee must, in relation to each of the insurances
required under this clause:
(i) deposit with the Director, from the Commencement
Date, certificates evidencing the currency of the
required insurances and, if required by the Director,
certified copies of the policy documents; and
(ii) for any insurance subject to renewal or extension
throughout the term of this Lease, deposit with the
Director a certificate of currency evidencing the
renewal or extension thereof, not later than 30 days
after the renewal or extension has been effected.
(c) If the Lessee fails to comply with clause 25.8(a) or 25.8(b),
the Director may effect any insurance to which such failure
relates and the premiums payable will be a debt due and
payable by the Lessee to the Director on demand.
(d) The Lessee must ensure that each policy of insurance effected
under this clause contains a provision requiring the insurer
to inform the Director in writing if a notice of cancellation
in respect of the policy has been given to the Lessee.
(e) The Lessee must not materially alter any insurance policy
required under this clause 25 during the Term unless the prior
agreement to do so has been obtained from the Director (such
agreement not to be unreasonably withheld or delayed).
(f) The Director reserves the right to require the Lessee to
effect and maintain additional insurance from time to time
during the Term where a reasonable requirement to do so can be
demonstrated and such insurance is available in the commercial
insurance market on commercially reasonable terms and
conditions.
25.9 LESSEE TO SATISFY ITSELF
The Lessee must take responsibility itself for deciding whether to
insure any risks which have not been covered by the policies referred
to in this clause 25 or to cover any exclusions, conditions or excesses
in the policies which it may wish to insure against or cover.
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25.10 INSURANCE POLICIES IN JOINT NAMES
The Lessee must ensure that each policy of insurance effected and
maintained pursuant to clauses 25.2, 25.3 and 25.4 provides that:
(a) the insurer waives all rights, remedies or relief to which it
might become entitled by way of subrogation against either of
the parties comprising the insured; and
(b) failure by one insured to observe and fulfill the terms of the
policy will not prejudice the insurance cover provided to the
other insureds.
25.11 REVIEW OF INSURANCES
(a) The amount of insurance cover effected pursuant to this clause
25 must be reviewed by the Lessee prior to the time of renewal
of each of those insurances during each year of the Term.
(b) In its review the Lessee must consider the sums insured based
on the following principles:
(i) in the case of Personal Injury insurance,
professional indemnity insurance, insurance against
claims arising out of or in any way connected with
Railway Infrastructure and workers' compensation
insurance, damages generally awarded for the risks
covered by the insurances will be compared against
those values and level of damages at the date this
Lease was entered into or, if later, the date of the
most recent review of the insurance cover; and
(ii) in the case of insurance to cover loss, destruction
or damage to Railway Infrastructure, adjustments to
sums insured will reflect relative variations in
reinstatement and replacement cost as compared with
those costs at the date this Lease was entered into
or, if later, the date of the most recent review of
the insurance cover.
(c) The Lessee must inform the Director of the results of its
review and the extension of cover proposed (if any) pursuant
to clause 25.11(b) no later than 21 days prior to the renewal
date of the insurance policy (REVIEW NOTICE). If the Director
does not agree with the amount of the cover proposed by the
Lessee in the Review Notice, the Director may give notice of
its disagreement to the Lessee within 14 days of receipt of
the Review Notice (RESPONSE PERIOD). If the Director does not
respond to the Review Notice within the Response Period the
Director shall be taken as having agreed to the proposal in
the Review Notice. If the Director gives notice to the Lessee
within the Response Period that the Director does not agree
with the amount of cover proposed by the Lessee in the Review
Notice and the parties are unable to reach agreement within
seven days after the expiry of the Response Period, then the
matter shall be determined in accordance with clause 31 (other
than clause 31.2) of this Lease. Pending resolution of the
dispute the Lessee must maintain insurance cover as required
by this clause 25 for the sums most recently agreed or
determined under this clause.
25.12 NO LIMITATION
This clause 25 does not detract from any of the Lessee's obligations
under this Lease.
25.13 JOINT INSURANCE ARRANGEMENTS
(a) Despite any other provision of this Lease, the Director from
time to time may give notice to the Lessee requiring the
Lessee to participate in joint insurance arrangements with one
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or more of VRTC, the Director, any train operator or tram
operator (as defined in the Rail Corporations Act 1996 (Vic))
and any other person notified by the Director to the Lessee,
with respect (but not necessarily limited) to all or any of
the risks for which the Lessee is required to effect and
maintain insurance pursuant to clauses 25.2, 25.3, 25.4, 25.5
and 25.6 (MANDATED RISKS).
(b) The Lessee must comply with the requirements of the Director
as set out in a notice given by the Director pursuant to this
clause unless the Lessee establishes to the reasonable
satisfaction of the Director that:
(i) participation by the Lessee in those joint insurance
arrangements would result in the premiums (or amounts
in respect of premiums) payable by the Lessee in
respect of such of the mandated risks as are risks
insured under those joint insurance arrangements
being more than the premiums that otherwise would be
payable by the Lessee to effect and maintain
insurance in respect of those mandated risks in
accordance with clauses 25.2 to 25.12; or
(ii) the terms and conditions of the insurances for such
of the mandated risks as are the subject of those
joint insurance arrangements are more
disadvantageous, taken as a whole, to the Lessee than
the terms and conditions that would apply in respect
of those mandated risks if the Lessee were to effect
and maintain insurance in respect of those mandated
risks in accordance with clauses 25.2 to 25.12.
(c) The Lessee will not be in breach of any of clauses 25.2 to
25.12 to the extent the Lessee complies with the requirements
of the Director as set out in a notice given by the Director
pursuant to this clause.
(d) If the Lessee fails to comply with this clause 25.13, the
Director on behalf of the Lessee may do all things (including
paying premiums (or amount in respect of premiums) payable by
the Lessee) and execute all deeds, instruments and other
documents as may be reasonably required to give full effect to
the provisions of this clause 25.13 and the reasonable costs
of so doing (including premiums (or amounts in respect of
premiums) payable by the Lessee and paid by the Director) will
be a debt due and payable by the Lessee to the Director on
demand.
26. DAMAGE AND DESTRUCTION
26.1 DESTRUCTION
If during the Term any part of the Railway Infrastructure is wholly or
partly damaged or destroyed or becomes unfit for or incapable of use or
occupation then the Lessee must, unless otherwise agreed in writing by
the Director, reinstate or repair the damage within a reasonable time
of the damage occurring. The Lessee must apply all proceeds of the
insurance referred to in clause 25.2 towards the cost of reinstatement
or repair.
26.2 NO RIGHT TO DAMAGE
The Lessee will not have any right, action or claim for loss, damage or
compensation against the Director as a result of damage to or
destruction of any part of the Railway Infrastructure except to the
extent that:
(a) the damage or destruction is caused or contributed to by a
negligent act or omission of the Director or the Director's
Associates; and
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(b) the damage or destruction is, as a direct result of that
negligent act or omission, not insured.
27. INDEMNITY AND RELEASE
27.1 INDEMNITY
The Lessee indemnities and must keep indemnified the Director from and
against all losses, damages, liabilities, actions, suits, claims,
demands, costs and expenses of every kind in respect of or arising
from:
(a) the occupation and use of the Land by the Lessee or the
Lessee's Associates;
(b) any act, omission or neglect on the part of the Lessee or the
Lessee's Associates;
(c) a Default Event;
(d) the discharge, release or emission of any Contaminant or
Pollutant into the Environment by the Lessee or the Lessee's
Associates;
(e) any Contamination or Pollution caused by the Lessee or the
Lessee's Associates;
(f) any infringement of any Intellectual Property right; and
(g) any claim relating to the Land made under Part 2A of the
Wrongs Act 1958 (Vic).
This indemnity will not apply to the extent that the loss, damage,
liability, action, suit, claim, demand, cost or expense is caused
directly by a negligent act or omission of the Director.
This indemnity will not exclude any other right of the Director to be
indemnified by the Lessee.
27.2 RELEASE
The Lessee releases to the full extent permitted by law the Director
from all losses, damages, liabilities, actions, suits, claims, demands,
costs and expenses of every kind which arise from the use or occupation
of the Land or the performance of this Lease (including any claim made
under Part 2A of the Wrongs Act 1958 (Vic)). This release will not
apply to the extent that any loss, damage, liability, action, suit,
claim, demand, cost or expense is caused directly by a negligent act or
omission of the Director.
27.3 DISCLAIMER
The Lessee acknowledges that:
(a) neither the Director, the State, VRTC, PTC, VLF or a Passenger
Rail Corporation or any person acting on behalf of or
associated with the Director, the State, VRTC, PTC, VLF or a
Passenger Rail Corporation has made any representation or
undertaking or given any advice or warranty of any kind
whatsoever to the Lessee or the Lessee's Associates in
relation to or in connection with this Lease or any
transaction or arrangement contemplated under this Lease or
any other matter relevant to the Lessee's decision to enter
into this Lease;
(b) the Disclosed Information and all intellectual property rights
in the Disclosed Information will remain the property of the
Director, the State, VRTC, PTC, VLF or a Passenger Rail
Corporation (as the case may be) at all times;
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(c) the Disclosed Information did not constitute an invitation,
offer or recommendation by or on behalf of the Director, the
State, VRTC, PTC, VLF or a Passenger Rail Corporation;
(d) the purpose of the Disclosed Information was to provide the
Lessee with information to assist it in preparing and lodging
a bid;
(e) the Disclosed Information did not purport to contain all of
the information that the Lessee required for the purpose of
preparing and lodging a bid or making the decision to enter
into this Lease and did not purport to have been prepared
having regard to the Lessee's business objectives, financial
situation or particular needs;
(f) neither the Director, the State, VRTC, PTC, VLF or a Passenger
Rail Corporation nor any other person acting on behalf of or
associated with the Director, the State, VRTC, PTC, VLF or a
Passenger Rail Corporation has verified the accuracy,
reliability or completeness of the Disclosed Information;
(g) neither the Director, the State, VRTC, PTC, NILF or a
Passenger Rail Corporation nor any other person acting on
behalf of or associated with the Director, the State, VRTC,
PTC, VLF or a Passenger Rail Corporation has made any
representation or warranty either express or implied as to the
accuracy, reliability or completeness of the Disclosed
Information;
(h) the Lessee has not relied in any way on the skill or judgment
of the Director, the State, VRTC, PTC, VLF or a Passenger Rail
Corporation nor any other person acting on behalf of or
associated with the Director, the State, VRTC, PTC, VLF or a
Passenger Rail Corporation and has entered into this Lease
based entirely on its own enquiries, investigations,
inspections and independent advice;
(i) the Lessee has carried out all relevant investigations and has
examined and acquainted itself concerning:
(A) the contents, correctness and sufficiency of
the Disclosed Information;
(B) all information which is relevant to the
risks, contingencies and other circumstances
which could affect its decision to enter
into this Lease; and
(C) all amounts payable between the parties to
this Lease;
(j) on the basis that the Disclosed Information has, to the
knowledge and belief of the Director, the State, VRTC, PTC,
VLF and the Passenger Rail Corporations been given in good
faith and that neither the Director, the State, VRTC, PTC, VLF
nor the Passenger Rail Corporations has any knowledge that any
part of the Disclosed Information is misleading or deceptive
(but acknowledging that neither the Director, the State, VRTC,
PTC, VLF nor the Passenger Rail Corporations is under any
obligation to make enquiries to verify that state of
knowledge), any statement, representation, term, warranty,
condition, promise or undertaking made, given or agreed to by
the Director, the State, VRTC, PTC, VLF or a Passenger Rail
Corporation or any person acting on behalf of or associated
with the Director, the State, VRTC, PTC, VLF or a Passenger
Rail Corporation in any prior negotiation, arrangement,
understanding or agreement has no effect except to the extent
expressly set out or incorporated in this Lease; and
(k) the acknowledgments under this clause 27.3 are in addition to
and do not replace the terms and conditions already agreed to
or accepted by the Lessee when receiving the Disclosed
Information.
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27.4 YEAR 2000 RISK
The Lessee acknowledges that no representation or warranty is made by
the Director, the State, VLF, VRTC, PTC or any Passenger Rail
Corporation (nor has the Director, the State, VLF, VRTC, PTC or any
Passenger Rail Corporation any liability whatsoever to the Lessee) in
relation to any defects in the computer hardware, software, networks,
data storage devices, peripherals, data stored in electronic form and
other information technology forming part of or used in the Railway
Infrastructure, including any defect due to the problem commonly known
as the Year 2000 problem.
28. FURTHER TERMS
28.1 OPTION
The Lessee has options to renew this Lease for:
(a) the First Further Term upon and subject to the same terms and
conditions as are contained in this Lease; and
(b) provided the Lessee exercises its option to renew the Lease
for the First Further Term, the Second Further Term upon and
subject to the same terms and conditions as contained in this
Lease.
28.2 EXERCISE OF FIRST OPTION
At any time not more than six years and not less than five years prior
to the Completion Date the Lessee may exercise its option to renew this
Lease for the First Further Term by giving to the Director a written
notice which states that:
(a) the notice is given pursuant to clause 28.2 of this Lease; and
(b) the Lessee requires the Director to renew this Lease for the
First Further Term.
Any notice which purports to be a notice given under this clause will
not be effective if it is given more than six years or less than five
years prior to the expiration of the Term.
28.3 EXERCISE OF SECOND OPTION
Provided that the Lessee has exercised its option to renew the Lease
for the First Further Term, at any time not more than six years and not
less than five years prior to the expiration of the First Further Term
the Lessee may exercise its option to renew this Lease for the Second
Further Term by giving to the Director a written notice which states
that:
(a) the notice is given pursuant to clause 28.3 of this Lease; and
(b) the Lessee requires the Director to renew this Lease for the
Second Further Term.
Any notice which purports to be a notice given under this clause will
not be effective if it is given more than six years or less than five
years prior to the expiration of the First Further Term.
28.4 GRANTING OF NEW LEASE
Subject to clause 28.5:
(a) if the Lessee gives the Director written notice in accordance
with clause 28.2, then upon the expiration of the Term this
Lease will automatically be renewed for the First Further
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Term upon and subject to the same terms and conditions as are
contained in this Lease but excluding in the renewed Lease the
option for the First Further Term; and
(b) if the Lessee gives the Director written notice in accordance
with clause 28.3, then upon the expiration of the First
Further Term this Lease will automatically be renewed for the
Second Further Term upon and subject to the same terms and
conditions as are contained in this Lease but excluding in the
renewed Lease the option for the First Further Term and the
Second Further Term.
28.5 DIRECTOR'S RIGHT OF REFUSAL
The Director will be entitled to refuse to renew the Lease for the
First Further Term or the Second Further Term (as the case may be) if:
(a) in the five year period immediately preceding the expiration
of the Initial Term or the First Further Term (as the case may
be) the Lessee has been in repeated material breach of:
(i) its obligations under one or more Access Agreements;
or
(ii) its obligations under one or more Access
Determinations;
(b) during the current Term the Lessee has committed a breach of
its obligations under clause 5.4 which has a material adverse
effect on the Director's ability to exercise its rights under
clause 5.1;
(c) during the current Term the Lessee has committed a breach of
its obligations under clause 6.3 which has a material adverse
effect on the Director's ability to exercise its rights under
clause 6.1;
(d) during the current Term the Lessee has committed a breach of
its obligations under clause 8.5 which has a material adverse
effect on the Director's ability to exercise its rights under
clause 8.1; or
(e) at the time of renewal of this Lease the Director is entitled
to terminate the Lease pursuant to clause 29.6(a) and has not
waived its rights to do so.
The Lessee will not be entitled to any compensation if the Director
refuses to renew the Lease for the First Further Term or the Second
Further Term (as the case may be) pursuant to this clause 28.5.
28.6 GUARANTEE OF OBLIGATIONS IN RENEWED LEASE
Where upon the execution of this Lease guarantees, indemnities or
covenants were or are provided securing the obligations of the Lessee,
similar guarantees, indemnities or covenants executed by the same
parties must be provided securing the obligations of the Lessee under
any renewed lease entered into under this clause. The Director will be
entitled to refuse to renew this Lease if such guarantees, indemnities
or covenants are not provided.
28.7 ADDITIONAL FURTHER TERMS
If the Lessee gives notice to the Director in accordance with clause
28.3 and the Director does not refuse to renew the Lease for the Second
Further Term, then the parties will enter into discussions in good
faith to establish whether the Director is prepared to grant any
further options to the Lessee to renew the Lease, and if so, on what
terms and conditions. Nothing in this clause will require the Director
to grant any further options to renew to the Lessee.
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29. DEFAULT
29.1 OCCURRENCE OF DEFAULT EVENT
If a Default Event occurs the Director may give the Lessee a notice in
writing specifying that:
(a) a Default Event has occurred;
(b) setting out reasonable details of the event or circumstance
constituting the Default Event; and
(c) specifying a Cure Period for that Default Event.
29.2 CURE PLAN
Within 14 days of receipt of a Default Notice in respect of a Default
Event which is not a Financial Default, the Lessee must provide to the
Director a Cure Plan in respect of the Default Event specified in the
Default Notice.
29.3 CURE PERIOD
Following receipt of a Default Notice, the Lessee will be permitted to
cure the Default Event within the Cure Period and, if applicable, in
accordance with the Cure Plan. The Lessee may only cure a Default Event
which is a Financial Default by payment of the amount then owing in
respect of the Default Event. The Director must give the Lessee written
notice once a Default Event has been cured to the Director's
satisfaction.
29.4 EXTENSION TO CURE PERIOD
(a) If the Lessee requires an extension to the Cure Period (other
than for a Financial Default) it must, as soon as possible
(but no later than the expiration of the current Cure Period)
provide to the Director:
(i) a revised Cure Plan; and
(ii) evidence that:
(A) the Lessee has diligently pursued and is
continuing to diligently pursue a feasible
and practicable programme of rectification;
and
(B) the Default Event cannot, with reasonable
diligence, be cured within the current Cure
Period.
(b) The Director must not unreasonably refuse to grant an
extension of the Cure Period where the Lessee has satisfied
the requirements of this clause 29.4.
(c) Unless otherwise agreed by the Director (which agreement must
not be unreasonably withheld), the Lessee may only apply once
for an extension of the Cure Period in respect of the Default
Event specified in a Default Notice.
(d) Irrespective of whether the Director grants any request by the
Lessee for an extension of a Cure Period, the Lessee must
diligently pursue implementation of each Cure Plan.
(e) The Lessee is not entitled to apply for an extension to the
Cure Period for a Financial Default.
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29.5 REMEDIES FOR DEFAULT EVENT
(a) If the Lessee commits a Default Event and the Default Event is
not cured within the Cure Period then, subject to clause
29.5(b), the Lessee's failure to Cure that Default Event
within that Cure Period will not itself entitle the Director
to terminate this Lease, but the Director will be entitled to
exercise all other legal and equitable rights and remedies
available to the Director in respect of that Default Event
(whether under this Lease or otherwise).
(b) If the Lessee fails to cure a Default Event within the Cure
Period for that Default Event, then the Director will be
entitled to exercise its rights under clause 29.6 if, but only
if, the Default Event is:
(i) a Financial Default;
(ii) a breach by the Lessee at any time during the Second
Further Term of its obligations under clause 5.4
which has a material adverse effect on the Director's
ability to exercise its rights under clause 5.1;
(iii) a breach by the Lessee at any time during the Second
Further Term of its obligations under clause 6.3
which has a material adverse effect on the Director's
ability to exercise its rights under clause 6.1;
(iv) a breach by the Lessee at any time during the Second
Further Term of its obligations under clause 8.5
which has a material adverse effect on the Director's
ability to exercise its rights under clause 8.1;
(v) a breach by the Lessee of its obligations under
clause 9.7(b);
(vi) a breach by the Lessee of its obligations to effect
and maintain insurance under clause 25; or
(vii) a Financial Breach (as defined in the Direct
Agreement) by the Lessee under the Direct Agreement.
29.6 REMEDIES FOR TERMINATION EVENT
If a Termination Event occurs or if clause 29.5(b) applies, then the
Director will be entitled to:
(a) terminate this Lease immediately by written notice to the
Lessee; and
(b) exercise all legal and equitable rights and remedies available
to the Director (whether under this Lease or otherwise).
29.7 INTEREST ON FINANCIAL DEFAULT
(a) The Lessee must pay to the Director Interest on any amount
which is the subject of a Financial Default until that amount
is paid to the Director.
(b) Interest will accrue daily at the Default Rate for each day
from the date on which the amount became due and payable until
such amount (and all Interest accrued on it) is paid in full,
and is payable on the date payment of the amount is made.
(c) The right to require payment of Interest under this clause is
without prejudice to any other rights and remedies of the
Director in respect of the Financial Default.
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(d) If a liability under this Lease becomes merged in an order or
judgment of a court of competent jurisdiction, the Lessee must
pay Interest to the Director on the amount of that liability
as an independent obligation. This Interest accrues from the
date the liability becomes due for payment (after or at the
time of the order or judgment) until it is paid, at a rate
that is the higher of the rate payable under the order or
judgment and the Default Rate.
29.8 WAIVER
If this Lease is lawfully terminated by the Director, the Lessee waives
any rights it might otherwise have to pursue a claim of restitution of
any kind including, without limitation, a claim of unjust enrichment.
29.9 EQUITABLE RELIEF
The Lessee acknowledges that damages may not be an adequate remedy for
any breach by the Lessee of, or failure by the Lessee to comply with,
this Lease. The Lessee agrees that without limiting any other right,
remedy or action open to the Director in connection with any actual or
threatened breach or failure to comply with this Lease, the Director is
entitled to seek equitable relief (including specific performance or
injunctive or declaratory relief) to restrain any actual or threatened
breach or failure to comply and that the Lessee must not oppose the
granting of such relief on the basis that no actual loss or damage has
been or will be sustained by the Director.
30. OBLIGATIONS ON EXPIRATION OR TERMINATION
30.1 TRANSITIONAL PERIOD
The Lessee must co-operate with the Director to ensure that upon the
expiration or earlier determination of this Lease the Director will be
in a position to operate, or to permit others to operate, Rolling Stock
on the Intrastate Track in accordance with the operational criteria for
that Rolling Stock existing immediately prior to the expiration or
earlier determination, and to comply with any Access Agreements or
Access Determinations continuing in effect after that expiration or
earlier determination. Without limiting the generality of the
foregoing, the Lessee must do everything, both before and after the
expiration or earlier determination of the Lease, as the Director may
reasonably require to assist and advise the Director or any subsequent
operator in using the Land for or in connection with Railway
Operations,
30.2 NOVATION OF AGREEMENTS
Upon the expiration or earlier determination of this Lease the Lessee
must, upon the request of the Director, novate or assign to the
Director or the Director's nominee without payment:
(a) any service or maintenance agreement relating to the Railway
Infrastructure (or any part of it) or the benefit of any such
agreement;
(b) any other agreement relating to the Land (or any part of it)
or the benefit of any such agreement; and
(c) any Access Agreement or Access Determination.
Nothing in this clause 30.2 requires the Director to request the
novation or assignment of any agreement.
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30.3 RETURN OF MAINTENANCE RECORDS
Upon, or as soon as practicable following, the expiration or the
earlier determination of this Lease, the Lessee must deliver to the
Director or the Director's nominee all books, records and other
material kept by or on behalf of the Lessee or the Lessee's Associates
which relate to the maintenance, repair and renewal of the Railway
Infrastructure (including all operating and maintenance plans,
technical information and data, specifications, manuals, drawings,
tracings, calculations, computer programs, computer disks and reports).
Prior to such delivery the Lessee must provide the Director with access
to all such books, records and other material upon demand.
30.4 POWER OF ATTORNEY
The Lessee, for the purposes of executing any deed of cancellation or
surrender of the Lease (or any part of it) or any novation or
assignment under clause 30.2 or of doing any act or thing necessary or
desirable in connection with such cancellation or surrender or such
novation or assignment, irrevocably appoints the Director as its
attorney with full power and authority to execute any such deed of
cancellation or surrender or novation or assignment, and to do any such
act or thing, on behalf of and in the name of the Lessee.
30.5 COMPENSATION
If either:
(a) this Lease is not renewed in accordance with clause 28 for the
First Further Term or, if applicable, the Second Further Term;
or
(b) this Lease is terminated prior to the expiry of its Term,
upon expiry or earlier determination of this Lease the Lessee must pay
to the Director by way of compensation an amount calculated as follows:
A x (1 - (1 + DR)-B) A x (1 - (1 + DR)-M)
Compensation = -------------------- -- --------------------
DR DR
where:
A = the Rent payable in respect of the year during which the
expiration or earlier determination of the Lease occurs;
B = that part (expressed as a number of years, but excluding
the then current year if Rent for that year has been paid)
of the Initial Term, the First Further Term and the Second
Further Term remaining unexpired at the expiration or
earlier determination of the Lease (assuming the Lessee
has exercised its option to renew this Lease for both the
First Further Term and the Second Further Term);
DR the discount rate of 0.04; and
M that part (expressed as a whole number of years) of the
Initial Term, the First Further Term and the Second
Further Term then remaining unexpired (assuming the Lessee
has exercised its option to renew this Lease for both the
First Further Term and the Second Further Term) for which
Rent has been prepaid.
The Lessee acknowledges that this is a genuine pre-estimate of the loss
and damage the Director will incur if either of the events contemplated
by clause 30.5(a) and 30.5(b) occurs and is not a
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penalty. The Lessee also acknowledges that the Director's rights if the
Lease is terminated prior to the expiry of its Term are not limited to
its rights under this clause 30.5.
30.6 SET OFF
The Lessee irrevocably authorises the Director, upon expiry or earlier
determination of this Lease, to apply all or any part of any amount due
and payable by the Lessee to the Director under this Lease (including
all or any part of any amount that becomes due and payable by the
Lessee to the Director upon expiry or earlier determination of this
Lease) in or towards satisfaction of all or any part of any amount due
or payable by the Director to the Lessee upon expiry or earlier
determination of this Lease.
31. DISPUTE RESOLUTION
31.1 PROCEDURE TO SETTLE DISPUTES
(a) If there is a dispute between the parties relating to or
arising out of this Lease, the parties must use reasonable
endeavours acting in good faith to settle the dispute as soon
as practicable.
(b) Unless otherwise expressly provided in this Lease, the
procedure that is to be followed to settle a dispute arising
under this Lease is as follows:
(i) first, negotiation of the dispute under clause 31.2;
(ii) second, mediation of the dispute under clause 31.3;
and
(iii) third, determination of the dispute under clause
31.4,
unless the parties agree that the dispute is best resolved by an
independent expert in accordance with clause 31.5 or clause 31.5
otherwise applies.
(c) A party may not commence court proceedings in relation to a
dispute arising in connection with this Lease until it has
exhausted the procedures in this clause 31 unless the party
seeks to enforce payment due under the Lease or seeks urgent
injunctive or other urgent interlocutory relief or seeks
appropriate injunctive or other interlocutory relief to
preserve property or rights or to avoid losses that are not
compensable in damages.
31.2 NEGOTIATION
If there is a dispute between the parties relating to or arising out of
this Lease (other than a dispute to which clause 31.5 applies), then
within 14 days (or if another period is prescribed by this Lease, that
other period) of a party notifying the other party of a dispute, a
senior representative of the Lessee must meet with a senior
representative of the Director and use reasonable endeavours acting in
good faith to resolve the dispute by joint discussions.
31.3 MEDIATION
If a dispute relating to or arising under this Lease is not resolved
under clause 31.2 within 14 days of notification of the dispute under
clause 31.2, the parties will, if mutually agreed within that period,
submit the matter to mediation on the following terms:
(a) the mediator will be chosen by the parties within 21 days of
notification of the dispute under clause 31.2 and appointed
within a further seven days;
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(b) in the absence of agreement by the parties as to the mediator
within 14 days after the end of the period prescribed by
clause 31.2, the mediator will be appointed on the application
of either party by the president or other senior office bearer
for the time being of LEADR within 14 days of the application;
(c) the parties must endeavour to procure that a mediator
appointed under clause 31.3(a) or (b):
(i) assists the parties to reach a resolution of the
dispute by agreement;
(ii) acts impartially and ensures that each party has a
clear understanding of the other party's points of
view to enable proposals to be formulated for
settlement of the dispute;
(iii) does not make his or her personal or professional
views known to the parties or give any professional
advice to a party;
(iv) is entitled to terminate the mediation if, after
consultation with the parties, the mediator forms the
view that the mediation process is exhausted; and
(v) does not impose a solution on the parties and any
suggestion made during the course of the mediation by
the mediator will not be binding on a party;
(d) each party may appoint a person, including a legally qualified
person, to represent it or assist it in the mediation;
(e) each party will bear its own costs relating to the preparation
for and attendance at the mediation;
(f) the costs of the mediator will be borne equally between the
parties; and
(g) the mediation process will cease if the dispute has not been
settled within 30 days of the mediator being appointed, or
such longer time as may be agreed by the parties.
31.4 ARBITRATION
(a) Subject to clause 31.5, if a dispute between the parties
relating to or arising out of this Lease is not settled by
mediation under clause 31.3 (or if no agreement is reached to
refer the dispute to mediation within 21 days of notification
of the dispute under clause 31.2), either party may by written
notice to the other refer the dispute to arbitration for
determination on the following terms:
(i) the arbitrator will be chosen by the parties but in
the absence of an agreement by the parties as to the
arbitrator within 14 days of the notice referring the
matter to arbitration, the arbitrator will be
appointed on the application of either party by the
president or other senior office bearer for the time
being of the Institute of Arbitrators Australia;
(ii) the Victorian Commercial Arbitration Act 1984 (Vic)
will apply to the arbitration and the arbitration
will be conducted and held in accordance with, and
subject to, the Institute of Arbitrators Australia
Expedited Commercial Arbitration Rules except that
Rule 19 will not apply;
(iii) each party may be represented at the arbitration by a
qualified legal practitioner;
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(iv) the arbitrator must hand down a decision within 60
days after notice referring the dispute to
arbitration or such longer period as may be mutually
agreed between the parties or in the absence of
agreement such longer period as is reasonably
considered appropriate by the arbitrator in all the
circumstances; and
(v) the decision of the arbitrator with regard to the
dispute will be binding upon the parties.
(b) Where this clause 31.4 applies to a dispute arising under this
Lease, no issues relating to that dispute may be referred to
an independent expert under clause 31.5, unless the parties
otherwise agree.
31.5 INDEPENDENT EXPERT
(a) Where this Lease expressly provides for a dispute to be
resolved in accordance with clause 31.5, or the parties
otherwise agree that a dispute is best resolved by an
independent expert, the parties will submit to the following
procedure to resolve the dispute:
(i) the parties will choose and appoint an independent
expert;
(ii) in the absence of agreement by the parties as to the
independent expert within five days (or, if another
period is prescribed by this Lease, that other
period) of one party giving the other party notice of
a dispute, the independent expert will be appointed
on the application of either party by:
(A) in respect of a dispute under clauses 5.9,
8.8, 11.3(b) or 11.5(f), the president or
other senior office bearer for the time
being of the Institution of Engineers,
Australia;
(B) in respect of a dispute under clause 21.2,
the president or other senior office bearer
for the time being of the Institute of
Chartered Accountants in Australia
(Victorian Branch); and
(C) in all other cases, unless otherwise agreed,
the president or other senior office bearer
for the time being of the Institute of
Arbitrators Australia;
(iii) the independent expert must make a determination or
finding on the issues in dispute as soon as
practicable and in any event within 21 days, or such
longer period as may be agreed between the parties;
(iv) the independent expert will act as an expert and not
as an arbitrator and may adopt such procedures as he
or she sees fit;
(v) in the absence of manifest error, the independent
expert's decision will be final and binding on the
parties; and
(vi) the costs of the independent expert will be borne by
the parties equally or as the independent expert may
otherwise determine and each party will bear its own
costs relating to the independent expert's decision.
(b) Where this clause 31.5 applies to a dispute arising under this
Lease, no issues relating to that dispute may be referred to
arbitration under clause 31.4, unless the parties otherwise
agree.
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31.6 AMALGAMATION OF DISPUTES
The parties may by agreement permit a dispute being dealt with under
this clause 31 to be amalgamated with any other dispute or disputes
involving one or both parties.
31.7 CONTINUE TO PERFORM
Notwithstanding the existence of a dispute, each party must continue to
perform its obligations under this Lease.
32. REPRESENTATIONS AND WARRANTIES
32.1 LESSEE'S REPRESENTATIONS AND WARRANTIES
The Lessee represents and warrants to the Director that each of the
following statements is true and correct.
(a) (STATUS) It is a corporation duly incorporated and validly
existing under the laws of the place of its incorporation
specified in this Lease.
(b) (POWER) It has the power to enter into and perform its
obligations under this Lease, to carry out the transactions
contemplated by this Lease and to carry on its business as now
conducted or contemplated.
(c) (CONSTITUTION) Its constitution (produced to the Director at
the date of this Lease and signed by a director and secretary
of the Lessee for the purposes of identification) is its
constitution including all resolutions affecting it.
(d) (CORPORATE AUTHORISATIONS) It has taken all necessary
corporate action to authorise the entry into and performance
of this Lease and to carry out the transactions contemplated
by this Lease.
(e) (DOCUMENT BINDING) This Lease creates valid and binding
obligations and is enforceable in accordance with its terms,
subject to any necessary stamping and registration.
(f) (TRANSACTIONS PERMITTED) The execution and performance by the
Lessee of this Lease and each transaction contemplated under
this Lease does not and will not violate in any respect a
provision of:
(i) a law or treaty or a judgment, ruling, order or
decree of a Governmental Agency binding on it;
(ii) its constitution; or
(iii) any other document or agreement that is binding on it
or its assets.
(g) (LEGAL PROCEEDINGS)
(i) No suit, cause of action, proceeding, application,
claim or investigation is current, or, as far as it
is aware, pending, threatened or in prospect against
it which may have a material effect on its
performance of its obligations under this Lease.
(ii) No resolution ha been passed for its winding up.
(iii) No resolution has been passed for the appointment of
an administrator to it.
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(iv) There is no unsatisfied judgment against it which may
have a material effect on its performance of its
obligations under this Lease.
(v) There are no facts, matters or circumstances that
give any person the right to apply to wind it up or
to appoint a controller within the meaning of section
9 of the Corporations Law or an administrator or an
inspector under the Corporations Law in respect of it
or any part of its undertaking or assets or income or
to take any analogous or equivalent step in any other
jurisdiction.
(h) (AUTHORISATIONS) Each Authorisation that is required in
relation to:
(i) the execution, delivery and performance by it of this
Lease and the transactions contemplated by this
Lease;
(ii) the validity and enforceability of this Lease; and
(iii) its business as now conducted or contemplated to be
conducted and that is material (including under the
Transport Act 1983 (Vic) and under any Environmental
Law),
has been obtained or effected and is in full force and effect, or, in
the case of Accreditation, will be obtained and in full force and
effect at the Commencement Date. It has paid all applicable fees for
each of them.
(i) (STATUTORY REQUIREMENTS)
(i) There are no notices of any Governmental Agency that
are or may be material to its business outstanding
against it.
(ii) All permits, licences and registrations necessary for
the conduct of its business are validly subsisting
and are held by it.
(iii) It has duly observed and complied in all respects
with the provisions of all Laws and all orders,
notices, awards and determinations made by any
Governmental Agency in any way relating to or binding
on it or any of its Subsidiaries or any property
owned or occupied by it.
(j) (NO MISREPRESENTATION) All information provided by it to the
Director is true in all material respects at the date of this
Lease or, if later, when provided. Neither that information
nor its conduct and the conduct of anyone on its behalf in
relation to the transactions contemplated by this Lease was or
is or will be misleading, by omission or otherwise.
(k) (COPIES OF DOCUMENTS) All copies of documents (including its
latest audited accounts and all Authorisations) given by it or
on its behalf to the Director are true and complete copies.
Those Authorisations all are in full force and effect.
32.2 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
All representations and warranties in this Lease survive the execution
and delivery of this Lease and the completion of transactions
contemplated by it.
32.3 NOTIFICATION OF CHANGE
The Lessee must immediately notify the Director upon becoming aware
that a representation or warranty given by the Lessee under this clause
has become untrue.
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32.4 RELIANCE ON REPRESENTATIONS AND WARRANTIES
The Lessee acknowledges that the Director has entered into this Lease
in reliance on the representations and warranties in this clause.
33. CONFIDENTIALITY
33.1 GENERAL OBLIGATIONS
The parties to this Lease must keep confidential and not allow, make or
cause any disclosure of or in relation to:
(a) any Disclosed Information;
(b) the terms of this Lease (including any written or oral
agreements, negotiations or information in relation to this
Lease) and the Transaction Documents; and
(c) any documents which are or information which is confidential
under this Lease,
(the CONFIDENTIAL INFORMATION) without the prior written consent of the
other party.
33.2 EXCEPTIONS
The parties' obligations in clause 33.1 do not apply to disclosures to
the extent that the disclosure is:
(a) by a party to its legal and other professional advisers,
auditors or other consultants (CONSULTANTS) or employees of
that party or that party's related bodies corporate requiring
the information for the purposes of this Lease or any other
Transaction Document (or any transactions contemplated by any
of them) or for the purposes of advising that party in
relation thereto; or
(b) of information which is at the time lawfully in the possession
of the proposed recipient of the information through sources
other than a party; or
(c) required by law or by a lawful requirement of any Governmental
Agency having jurisdiction over a party or its related bodies
corporate; or
(d) required by a lawful requirement of any stock exchange having
jurisdiction over a party or its related bodies corporate; or
(e) required in connection with legal proceedings, arbitration or
expert determination relating to this Lease or any Transaction
Document or for the purpose of advising a party in relation
thereto; or
(f) of information which is at the time generally and publicly
available other than as a result of breach of confidence by
the party wishing to disclose the information it discloses;
(g) necessary or commercially desirable to an existing or bona
fide proposed or prospective financier, however, the party
wishing to disclose the information must, if requested by the
other party, procure that the proposed recipient of the
information executes a confidentiality deed in favour of the
other party prior to the disclosure of the confidential
information;
(h) by the Director to the Crown in right of the State of Victoria
or any minister, officer, employee, agent, adviser or
consultant of the State or any of its Governmental Agencies or
instrumentalities; or
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<PAGE> 74
(i) by the Director to a proposed or prospective lessee or
licensee of the Land (or any part of it) either following the
expiration or earlier determination of this Lease or in bona
fide contemplation of such expiration or earlier
determination.
33.3 DISCLOSURE FOR PURPOSES OF THIS LEASE
Each party must take all steps reasonably necessary to ensure that
Confidential Information is disclosed only to such of its officers,
employees, agents or subcontractors as require that knowledge in order
to carry out their duties in accordance with this Lease.
33.4 OTHER CONFIDENTIAL INFORMATION
The Lessee covenants with the Director that it will not misuse
confidential information obtained by the Lessee in the course of its
activities as an access provider.
34. NOTICES
Any notice, demand, consent or other communication (the NOTICE) given
or made under this Lease:
(a) must be in writing and signed by a person duly authorised by
the sender;
(b) must be delivered to the intended recipient by prepaid post
(if posted to an address in another country, by registered
airmail) or by hand or fax to the address or fax number below
or the address or fax number last notified by the intended
recipient to the sender:
(i) to the Director: 80 Collins Street
Melbourne Vic 3000
Attention: Director of Public
Transport
Fax No: 965 58598
(ii) to the Lessee: Freight Victoria Limited
Level 1
140 King Street
Melbourne Vic 3000
Attention: Chief Executive Officer
Fax No: (03) 9827 8464; and
(c) will be taken to be duly given or made:
(i) in the case of delivery in person, when delivered;
(ii) in the case of delivery by post, two business days
after the date of posting (if posted to an address in
the same country) or seven business days after the
date of posting (if posted to an address in another
country); and
(iii) in the case of fax, on receipt by the sender of a
transmission control report from the despatching
machine showing the relevant number of pages and the
correct destination fax machine number or name of
recipient and indicating that the transmission has
been made without error,
but if the result is that a Notice would be taken to be given
or made on a day that is not a business day in the place to
which the Notice is sent or is later than 4.00pm (local time)
it will be taken to have been duly given or made at the
commencement of business on the next business day in that
place.
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35. ENTIRE AGREEMENT
This Lease contains the entire agreement between the parties
with respect to its subject matter and supersedes all prior
agreements and understandings between the parties in
connection with it.
36. ASSIGNMENT
36.1 Assignment by Lessee
(a) Subject to clauses 36.1(b) and clauses 12 and 13, the Lessee
must not assign, sub-lease, declare a trust or become a
trustee of, transfer, delegate, encumber, pledge or otherwise
dispose of or deal with any of its rights or obligations under
this Lease, or attempt or purport to do so, without the prior
written consent of the Director.
(b) The Lessee may sub-contract the performance of any of its
obligations under this Lease but no such sub-contracting will
release the Lessee from any of its obligations or liabilities
under this Lease.
36.2 ASSIGNMENT BY DIRECTOR
The Director may assign, declare a trust or become a trustee
of, transfer, encumber, pledge or otherwise dispose of or deal
with any of the Director's rights or obligations under this
Lease at any time.
36.3 NEGATIVE PLEDGE
The Lessee must not create or permit to exist, and must ensure
that none of its related bodies corporate (as defined in the
Corporations Law) or controlled entities create or permit to
exist, any Security Interest over the Land other than a
Permitted Security Interest.
36.4 EXCLUSION OF SECTION 144 OF PROPERTY LAW ACT
The operation of Section 144 of the Property Law Act 1958
(Vic) is expressly excluded from this Lease.
36.5 CHANGE OF CONTROL
For the purposes of this clause 36, and without limiting the meaning of
the word TRANSFER, the Lessee will be taken to have transferred or to
have attempted or purported to transfer its rights and obligations
under this Lease if at any time the power (whether formal or informal,
whether or not having legal or equitable force and whether or not based
on legal or equitable rights):
(a) to exercise or control the right to vote attached to 50% or
more of the issued shares or stock (whether fully, partly or
nil paid) in the Lessee;
(b) to dispose of or exercise a right of disposal in respect of
50% or more of the issued shares or stock (whether fully,
partly or nil paid) in the Lessee; or
(c) to dominate or control the Lessee or the financial and
operating policies or management of the Lessee (whether alone
or in concert with others, and whether by any act or omission
or otherwise),
resides with any persons other than those holding that power on the
Commencement Date.
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37. AMENDMENT
No amendment or variation of this Lease is valid or binding on a party
unless made in writing and executed by both parties.
38. NO WAIVER
No failure to exercise nor any delay in exercising any right, power or
remedy by a party operates as a waiver. A single or partial exercise of
any right, power or remedy does not preclude any other or further
exercise of that or any other right, power or remedy. A waiver is not
valid or binding on the party granting that waiver unless made in
writing.
39. SEVERABILITY
To the extent that any part of this Lease may be invalid, illegal or
unenforceable, it is intended that the remaining parts, insofar as
possible and reasonable, must be effective and enforceable.
40. FURTHER ASSURANCES
Each party agrees to do all things and execute all deeds, instruments,
transfers or other documents as may be necessary or desirable to give
full effect to the provisions of this Lease and the transactions
contemplated by it.
41. NO MERGER
The rights and obligations of the parties will not merge on the
completion of any transaction contemplated by this Lease. They will
survive the execution and delivery of any assignment or other document
entered into for the purpose of implementing any such transaction.
42. RIGHTS CUMULATIVE
Subject to any express provision in this Lease to the contrary, the
rights of a party under this Lease are cumulative and are in addition
to any other rights of that party.
43. COSTS AND STAMP DUTY
Each party must bear its own costs arising out of the negotiation,
preparation and execution of this Lease. Subject to clause 4.4 of the
Sale of Assets Agreement, all stamp duty (including fines, penalties
and interest) that may be payable on or in connection with this Lease
and any instrument executed under this Lease must be borne by the
Lessee.
44. GOVERNING LAW AND JURISDICTION
This Lease is governed by the laws of Victoria. Each party submits to
the non-exclusive jurisdiction of courts exercising jurisdiction there
in connection with matters concerning this Lease.
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<PAGE> 77
45. COUNTERPARTS
This Lease may be executed in any number of counterparts. All
counterparts together will be taken to constitute one instrument.
EXECUTED as a Deed in Melbourne.
SIGNED SEALED AND DELIVERED by THE ) /s/ John S. Taylor
DIRECTOR OF PUBLIC TRANSPORT on behalf ) ------------------------------
of the CROWN IN RIGHT OF THE STATE OF ) Signature of Director
VICTORIA in the presence of:
John S. Taylor
------------------------------
Print Name
/s/ R. O'Connor
- - -------------------------------
Signature of Witness
Rachel Louise O'Connor
- - -------------------------------
Print Name
THE COMMON SEAL OF FREIGHT VICTORIA ) /s/ M. Van Onselen
LIMITED was duly affixed in the presence of: ) ------------------------------
) Signature of Director
M. Van Onselen
------------------------------
Print Name
/s/ W. Graham Claytor
- - -------------------------------
Director/Secretary
/s/ W. Graham Claytor
- - -------------------------------
Print Name
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EXHIBIT 10.3
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
SENIOR SECURED LOAN FACILITY AND GUARANTY AGREEMENT
dated as of
April 30, 1999
among
FREIGHT VICTORIA LIMITED,
as Borrower
RAILAMERICA, INC.,
RAILAMERICA AUSTRALIA, INC.
and
RAILAMERICA AUSTRALIA PTY LTD.,
as Guarantors
The LENDERS named herein
and
BARCLAYS BANK PLC,
as Administrative Agent
---------------------------
BARCLAYS CAPITAL,
as Arranger
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
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TABLE OF CONTENTS
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ARTICLE I. DEFINITIONS................................................................................1
Section 1.1. Defined Terms............................................................................1
Section 1.2. Interpretation..........................................................................14
ARTICLE II. THE BRIDGE FACILITY.......................................................................14
Section 2.1. Commitments to Make Bridge Loans........................................................14
Section 2.2. Conversion to Term Loans; Term Loan Amortization........................................14
Section 2.3. Option to Exchange Term Loans for Exchange Notes........................................16
Section 2.4. Interest; Payment in Kind Option; Default Interest; Warrants............................16
Section 2.5. Mandatory Prepayment....................................................................18
Section 2.6. Optional Prepayment.....................................................................18
Section 2.7. Breakage Costs; Indemnity...............................................................18
Section 2.8. Effect of Notice of Prepayment..........................................................19
Section 2.9. Payments................................................................................19
Section 2.10. Taxes...................................................................................20
Section 2.11. Right of Set Off; Sharing of Payments, etc..............................................21
Section 2.12. Certain Fees............................................................................22
ARTICLE III. REPRESENTATIONS AND WARRANTIES............................................................22
Section 3.1. Transaction Documentation...............................................................22
Section 3.2. Organization; Powers....................................................................23
Section 3.3. Due Authorization and Enforceability....................................................23
Section 3.4. No Conflicts............................................................................23
Section 3.5. No Violations...........................................................................24
Section 3.6. Capital Stock; Subsidiaries.............................................................24
Section 3.7. Liens...................................................................................25
Section 3.8. No Violation of Regulations of Board of Governors of Federal Reserve
System..............................................................................25
Section 3.9. Governmental Regulations................................................................25
Section 3.10. Financial Statements; No Undisclosed Liabilities........................................25
Section 3.11. Full Disclosure.........................................................................26
Section 3.12. Private Offering; Rule 144A Matters.....................................................26
Section 3.13. Absence of Proceedings..................................................................26
Section 3.14. Taxes...................................................................................26
Section 3.15. Financial Condition; Solvency...........................................................27
Section 3.16. No Material Adverse Change..............................................................27
Section 3.17. Year 2000 Compliance....................................................................27
Section 3.18. Use of Proceeds.........................................................................27
Section 3.19. [Reserved.].............................................................................28
Section 3.20. Title to Properties.....................................................................28
Section 3.21. Environmental Matters; Australian Claims................................................28
Section 3.22. Intellectual Property...................................................................28
ARTICLE IV. COVENANTS OF THE BORROWER.................................................................28
Section 4.1. Financial Statements....................................................................28
Section 4.2. Certificates; Other Information.........................................................29
Section 4.3. [Reserved.].............................................................................29
Section 4.4. No Borrower Subsidiaries................................................................29
Section 4.5. Inspection of Property; Books and Records; Discussions..................................29
Section 4.6. Financial Condition Covenants of the Borrower...........................................29
Section 4.7. Limitation on Indebtedness..............................................................30
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Section 4.8. Limitation on Liens.....................................................................31
Section 4.9. Limitation on Guarantee Obligations.....................................................31
Section 4.10. Limitation on Fundamental Changes.......................................................31
Section 4.11. Limitation on Sale of Assets............................................................31
Section 4.12. Limitation on Restricted Payments.......................................................32
Section 4.13. Limitation on Capital Expenditures......................................................32
Section 4.14. Limitation on Investments, Loans and Advances...........................................32
Section 4.15. Limitation on Optional Payments and Modifications of Debt Instruments
and Organizational Documentation, etc...............................................33
Section 4.16. Limitation on Transactions with Affiliates..............................................33
Section 4.17. Limitation on Sales and Leasebacks and Operating Leases.................................33
Section 4.18. Limitation on Negative Pledge Clauses...................................................33
Section 4.19. Limitation on Lines of Business.........................................................34
Section 4.20. Change of Control.......................................................................34
Section 4.21. Limitation on Change of Fiscal Year.....................................................34
Section 4.22. Railroad Operating License..............................................................34
Section 4.23. Year 2000 Compliance....................................................................34
Section 4.24. Real Property Collateral located within New South Wales.................................34
ARTICLE V. COVENANTS OF THE PARENT...................................................................34
Section 5.1. Financial Statements....................................................................35
Section 5.2. Certificates; Other Information.........................................................35
Section 5.3. Inspection of Property; Books and Records; Discussions..................................36
Section 5.4. Limitation on Modification of Credit Facility and Consortium Junior
Subordinated Debt Documents.........................................................36
Section 5.5. Year 2000 Compliance....................................................................36
Section 5.6. Agreements with Respect to Ferronor.....................................................36
Section 5.7. Limitation on Change of Fiscal Year.....................................................37
Section 5.8. Limitation on Guarantee Obligations.....................................................37
Section 5.9. Limitation on Fundamental Changes.......................................................37
Section 5.10. Capital Contributions to the Borrower...................................................37
Section 5.11. Limitation on Indebtedness..............................................................37
Section 5.12. Limitation on Liens.....................................................................38
Section 5.13. Financial Condition Covenants of the Parent.............................................38
Section 5.14. Limitation on Restricted Payments.......................................................39
Section 5.15. Limitation on Transactions with Affiliates..............................................39
Section 5.16. Equipment Maintenance Agreement and Track Maintenance Agreement.........................39
Section 5.17. Credit Facility Covenants...............................................................39
ARTICLE VI COVENANTS OF THE BORROWER AND EACH GUARANTOR..............................................40
Section 6.1. Payment of Obligations..................................................................40
Section 6.2. Conduct of Business and Maintenance of Existence, etc...................................40
Section 6.3. Notices.................................................................................40
Section 6.4. Environmental Laws......................................................................41
Section 6.5. Maintenance of Property; Insurance......................................................41
Section 6.6. Further Assurances......................................................................42
Section 6.7. Delivery of Subordination Agreements....................................................42
ARTICLE VII. CONDITIONS................................................................................42
Section 7.1. Corporate and Other Proceedings.........................................................42
Section 7.2. Concurrent Transactions.................................................................43
Section 7.3. No Material Loss........................................................................43
Section 7.4. No Event of Default.....................................................................43
Section 7.5. No Changes in Financial Markets.........................................................43
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Section 7.6. Delivery of Opinions....................................................................44
Section 7.7. Solvency................................................................................44
Section 7.8. Payment of Fees.........................................................................44
Section 7.9. No Breach Under Engagement Letter or Fee Letter.........................................44
Section 7.10. Consents and Approvals..................................................................44
Section 7.11. Margin Regulations......................................................................45
Section 7.12. Absence of Certain Changes..............................................................45
Section 7.13. Net Capital.............................................................................45
Section 7.14. Business Plan; Pro Formas...............................................................45
Section 7.15. Filings, Registrations and Recordings...................................................45
Section 7.16. Railroad Operating License..............................................................46
Section 7.17. Consortium Junior Subordinated Debt.....................................................46
ARTICLE VIII. TRANSFER OF THE LOANS.....................................................................47
Section 8.1. Transfer of the Loans...................................................................47
Section 8.2. Registration of Transfer or Exchange....................................................47
Section 8.3. Register................................................................................47
ARTICLE IX. EVENTS OF DEFAULT.........................................................................48
Section 9.1. Events of Default.......................................................................48
Section 9.2. Rights and Remedies Cumulative..........................................................50
Section 9.3. Delay or Omission Not Waiver............................................................50
Section 9.4. Waiver of Past Defaults.................................................................50
Section 9.5. Rights of Lenders To Receive Payment....................................................50
ARTICLE X. PERMANENT SECURITIES......................................................................50
Section 10.1. Permanent Securities....................................................................50
ARTICLE XI. TERMINATION...............................................................................51
Section 11.1. Termination.............................................................................51
Section 11.2. Survival of Certain Provisions..........................................................51
ARTICLE XII. SUBORDINATION OF PARENT GUARANTY..........................................................51
Section 12.1. Agreement to Subordinate................................................................51
Section 12.2. Certain Definitions.....................................................................51
Section 12.3. Liquidation; Dissolution; Bankruptcy....................................................52
Section 12.4. Default on Designated Senior Debt.......................................................52
Section 12.5. When Distribution Must Be Paid Over.....................................................53
Section 12.6. Notice by the Parent....................................................................53
Section 12.7. Subrogation.............................................................................53
Section 12.8. Relative Rights.........................................................................53
Section 12.9. Subordination May Not Be Impaired by the Parent.........................................54
Section 12.10. Distribution or Notice to Representative................................................54
Section 12.11. Rights of Administrative Agent..........................................................54
Section 12.12 Authorization to Effect Subordination...................................................54
Section 12.13. Amendments..............................................................................54
Section 12.14. Collateral Not Affected.................................................................54
ARTICLE XIII GUARANTY..................................................................................54
Section 13.1. The Guaranty............................................................................54
Section 13.2. Limitation on Liability.................................................................56
Section 13.3. Stay of Acceleration....................................................................56
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ARTICLE XIV INDEMNITY.................................................................................56
Section 14.1. Indemnification.........................................................................56
Section 14.2. Indemnity not Available.................................................................56
Section 14.3. Settlement of Claims....................................................................57
Section 14.4. Indemnity for Taxes, Reserves and Expenses..............................................57
Section 14.5. Survival of Indemnification.............................................................58
Section 14.6. Liability Not Exclusive; Payments.......................................................58
ARTICLE XV. THE ADMINISTRATIVE AGENT..................................................................59
Section 15.1. Appointment.............................................................................59
Section 15.2. Delegation of Duties....................................................................59
Section 15.3. Exculpatory Provisions..................................................................59
Section 15.4. Reliance by the Administrative Agent....................................................59
Section 15.5. Notice of Default.......................................................................59
Section 15.6. Non-Reliance on the Administrative Agent, the Arranger and Other Lenders................60
Section 15.7. Indemnification.........................................................................60
Section 15.8. Administrative Agent, Arranger in their Individual Capacities...........................60
Section 15.9. Successor Administrative Agent..........................................................61
Section 15.10. Limitation of Duties....................................................................61
ARTICLE XVI. MISCELLANEOUS.............................................................................61
Section 16.1. Expenses; Documentary Taxes.............................................................61
Section 16.2. Notices.................................................................................61
Section 16.3. Consent to Amendments and Waivers.......................................................62
Section 16.4. Parties.................................................................................63
Section 16.5. NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY TRIAL..........................63
Section 16.6. [Reserved.].............................................................................63
Section 16.7 Marshalling; Recapture..................................................................64
Section 16.8. Limitation of Liability.................................................................64
Section 16.9. Independence of Covenants...............................................................64
Section 16.10. Currency Indemnity......................................................................64
Section 16.11. Waiver of Immunity......................................................................64
Section 16.12. Freedom of Choice.......................................................................64
Section 16.13. Successors and Assigns..................................................................65
Section 16.14. Merger..................................................................................65
Section 16.15. Severability Clause.....................................................................65
Section 16.16. Representations, Warranties and Agreements To Survive Delivery..........................65
Section 16.17. Confidentiality.........................................................................65
EXHIBIT(S)
Exhibit A.........Form of Assignment and Acceptance
Exhibit B.........Form of Warrant Agreement
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<PAGE> 6
SENIOR SECURED LOAN FACILITY AND GUARANTY AGREEMENT
THIS SENIOR SECURED LOAN FACILITY AND GUARANTY AGREEMENT,
dated as of April 30, 1999 (as amended, restated and/or otherwise modified from
time to time, this "AGREEMENT"), is by and among FREIGHT VICTORIA LIMITED (ACN
075 295 644), a company incorporated in the Australian Capital Territory (the
"BORROWER"), RAILAMERICA, INC., a Delaware corporation, RAILAMERICA AUSTRALIA,
INC., a Florida corporation, and RAILAMERICA AUSTRALIA PTY LTD. (ACN 079 392
993), a company incorporated in New South Wales, as Guarantors (each a
"Guarantor" and, collectively, the "GUARANTORS"), the Lenders (as defined in
ARTICLE I) and BARCLAYS BANK PLC, as Administrative Agent.
The parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
Section 1.1. DEFINED TERMS. As used in this Agreement, the following
terms have the meanings specified below:
"A$" means lawful money of the Commonwealth of Australia.
"ACQUISITION" means the transactions contemplated by the
Acquisition Documentation.
"ACQUISITION AGREEMENT" means the Sale of Assets Agreement
between the Seller and the Borrower dated as of February 22, 1999.
"ACQUISITION DOCUMENTATION" means, collectively, the
Acquisition Agreement and the Infrastructure Lease and all exhibits, schedules
and annexes thereto in each case as amended, supplemented or otherwise modified
from time to time in accordance with SECTION 4.15.
"ADMINISTRATIVE AGENT" means Barclays Bank PLC, in its
capacity as administrative agent for the Lenders hereunder, or any successor or
replacement Administrative Agent, acting in such capacity.
"AFFECTED PARTY" means any Lender, any beneficial owner of
any Lender, and their respective successors and assigns.
"AFFILIATE" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this Agreement, "control" of a
Person means the power, directly or indirectly, either to (a) vote 5% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person, whether through the ownership of voting securities, by contract
or otherwise. Neither the Lenders, the Arranger, the Administrative Agent, the
Security Trustee nor any of their respective Affiliates will be treated as an
Affiliate of the Borrower, Holdco or any Guarantor for purposes of this
Agreement or any other Loan Document.
"AGREEMENT" has the meaning specified in the preamble to this
Agreement.
"APPLICABLE MARGIN" means 500 basis points at all times
through and including the date that is 90 days subsequent to the Closing Date,
increasing by an additional 50 basis points on the last day of each 90-day
period (including the first such 90-day period) for so long as any Loans are
outstanding, and subject to further increase pursuant to the provisions of
SECTION 2.4(G) and subject to SECTIONS 2.4(D) and (E).
"ARRANGER" means Barclays Capital, the investment banking
division of Barclays Bank PLC.
<PAGE> 7
"ASSET SALE" means the sale, lease, conveyance or other
disposition of any assets or rights (including, without limitation, by way of a
sale and leaseback) other than sales of inventory in the ordinary course of
business consistent with past practices but in any event on an arm's length
basis.
"ASSIGNMENT AND ACCEPTANCE" means an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent, in the form of EXHIBIT A or such other form as shall be
approved by the Administrative Agent.
"BANKRUPTCY LAW" means (i) Chapter 5 of the Corporations Law
of Australia, (ii) Title 11 of the U.S. Code or (iii) any other law of the
United States, any political subdivision thereof, Australia, any state or
territory thereof or any other jurisdiction relating to bankruptcy, insolvency,
winding up, liquidation, reorganization or relief of debtors.
"BENEFICIAL OWNER" and "BENEFICIAL OWNERSHIP" each has the
meaning defined in Rule 13d-3 and Rule 13d-5 under the Exchange Act.
"BOARD" means the Board of Governors of the Federal Reserve
System of the United States of America or any successor thereto.
"BOCA RATON PROPERTY" means that certain real estate
constituting an office building located in Boca Raton, Florida and owned on the
Closing Date by Plainview Terminal Company, a Wholly Owned Subsidiary of the
Parent.
"BORROWER" has the meaning specified in the preamble to this
Agreement.
"BORROWER TAXES" means all taxes, assessments, fees,
withholdings and other governmental charges payable by any Guarantor, the
Borrower or Holdco (and any affiliated group of which any such party is now or
has been members) in respect of their incomes, franchises, businesses,
properties or otherwise.
"BORROWER TAX LIENS" means Liens for Borrower Taxes other
than Liens for current taxes not yet due and payable.
"BRIDGE LOAN" means a loan made by any Lender to the Borrower
pursuant to SECTION 2.1.
"BUSINESS DAY" means any day that is not a Saturday, Sunday
or other day on which commercial banks in New York City, New York, London,
England, Sydney, New South Wales or a place of payment are authorized or
required by law to remain closed and on which banks are open for dealings in
dollar deposits in the London interbank market.
"CAPITAL EXPENDITURES" means, for any period, with respect to
any Person, the aggregate of all expenditures by such Person and its
subsidiaries for the acquisition or leasing (pursuant to a Financing Lease) of
fixed or capital assets or additions to equipment (including replacements and
improvements during such period) which should be capitalized under GAAP on a
consolidated balance sheet of such Person and its subsidiaries.
"CAPITAL LEASE OBLIGATIONS" means as to any Person, the
obligations of such Person to pay rent or other amounts under any Financing
Lease, and, for the purposes of this Agreement, the amount of such obligations
at any time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL MARKETS TRANSACTION" has the meaning specified in
SECTION 2.5(A).
"CAPITAL STOCK" means any and all shares of capital stock of
a corporation, and any and all equivalent ownership interests in a Person
(other than a corporation) including, without limitation, options, warrants and
similar rights with respect to shares of capital stock of a corporation.
2
<PAGE> 8
"CAPITALIZED INFRASTRUCTURE COSTS" means all costs relating
to infrastructure (railroad ties and tracks) which are permitted to be
capitalized pursuant to GAAP.
"CAPITALIZED MAINTENANCE COSTS" means all maintenance costs
related to rolling stock which are permitted to be capitalized pursuant to
GAAP.
"CARRY OVER AMOUNT" has the meaning specified in SECTION
4.13(B).
"CASH EQUIVALENTS" means (a) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition; (b) demand deposits, certificates of deposit, time deposits,
eurodollar time deposits or overnight bank deposits having maturities of twelve
months or less from the date of the acquisition issued by any Lender or by any
commercial bank organized under the laws of the United States or Australia or
any state thereof whose unsecured long term indebtedness is rated A or better
by S&P; (c) commercial paper of (i) an issuer rated at least A-1 by S&P or P-1
by Moody's, or carrying an equivalent ratings by a nationally recognized rating
agency, if both of the two named rating agencies cease publishing ratings of
commercial paper issuers generally or (ii) the holding company of any Lender,
and, in either case, maturing within twelve months from the date of
acquisition; and (d) money market funds the assets of which consist primarily
of obligations of the types referred to in clauses (a) through (c) above.
"CASH INTEREST EXPENSE" means, for any period with respect to
any Person, total interest expense payable in cash (including that attributable
to Capital Lease Obligations payable in cash) of such Person and its
subsidiaries on a consolidated basis for such period with respect to all
outstanding Indebtedness of such Person and its subsidiaries on a consolidated
basis, determined in accordance with GAAP, net of cash interest income of such
Person and its subsidiaries on a consolidated basis for such period (determined
in accordance with GAAP).
"CHANGE OF CONTROL" means the acquisition of ownership,
directly or indirectly, beneficially or of record, by any Person or group
(within the meaning of the Exchange Act and the rules of the SEC thereunder as
in effect on the date hereof), of shares representing more than 20% of the
Voting Stock of the Parent.
"CHANGE OF CONTROL OFFER" has the meaning specified in
SECTION 4.20(A).
"CHANGE OF CONTROL PAYMENT" has the meaning specified in
SECTION 4.20(A).
"CHANGE OF CONTROL PAYMENT DATE" has the meaning specified in
SECTION 4.20(A).
"CLOSING DATE" means the date on which the Bridge Loans are
funded and the conditions set forth in ARTICLE VII are satisfied or waived by
the Administrative Agent.
"CODE" means the Internal Revenue Code of 1986, as amended
from time to time, and any regulation promulgated thereunder.
"COLLATERAL" means all assets of any Guarantor, the Borrower
and Holdco, now owned or hereafter acquired, upon which a Lien is purported to
be created by any Collateral Document.
"COLLATERAL DOCUMENTS" means the collective reference to the
(i) Share Pledge Agreement (Prenda Mercantil de Acciones) by and between the
Parent and the Security Trustee, dated on or about the Closing Date, and
relating to the pledge of shares in Holdco, (ii) RailAmerica Deed of Security
by and between the Borrower and the Security Trustee, dated on or about the
Closing Date, (iii) RailAmerica Equitable Mortgage of Shares by and among
RailAmerica Florida, RailAmerica Pty and the Security Trustee, dated on or
about the Closing Date, (iv) Security Trust Deed RailAmerica Security Trust by
and between the Borrower, the Guarantors and the Security Trustee, dated on or
about the Closing Date, (v) the several Deeds of Trust and (vi) the
Subordination Agreements; as each such document in (i) through (vi) above may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.
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"COMMITMENT" means, with respect to any Lender, the amount
set forth opposite such Lender's signature on the signature pages of this
Agreement.
"COMMITMENT LETTER" means the Bridge Commitment Letter
(including the exhibits thereto and incorporated by reference therein), dated
April 12, 1999, as amended, by and among the Borrower, the Parent and Barclays
Bank PLC.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, which is under common control with the Parent or the Borrower
within the meaning of Section 4001 of ERISA or is part of a group which
includes the Parent or the Borrower and which is treated as a single employer
under Section 414 of the Code.
"CONSOLIDATED" or "CONSOLIDATED" means when used in respect
of any subsidiary or any financial statements or financial term relating to the
Parent and its Subsidiaries, refers to the Parent and the subsidiaries of the
Parent whose accounts are consolidated with the Parent's accounts in accordance
with GAAP.
"CONSORTIUM MEMBERS" means, collectively, Macquarie Bank
Limited, ABB Engineering Construction Pty Ltd. and A. Goninan and Co. Ltd.
"CONSORTIUM JUNIOR SUBORDINATED DEBT AGREEMENTS" means,
collectively, (a) those certain Convertible Mezzanine Debt Facility Agreements,
dated on or about the Closing Date (or shortly thereafter if funds are provided
on the Closing Date pursuant to commitment or similar agreements requiring
further documentation between the parties following the Closing Date as
described below), between the Borrower and each of ABB Engineering Construction
Pty Ltd. and A. Goninan and Co. Ltd. or their respective Affiliates pursuant to
which each such Person has advanced A$3,000,000 to the Borrower on a basis
fully subordinated to the Lenders, and any commitment or similar letters or
agreements relating thereto pursuant to which funds are advanced to the
Borrower by either such Person or their respective Affiliates on or about the
Closing Date (which commitment or similar letters may provide for the
negotiation, execution and delivery of additional loan documents satisfactory
to the Administrative Agent shortly after the Closing Date), (b) the
agreements, notes and other documentation (including binding term sheets,
commitment letters and the like) relating to the loan made on the Closing Date
by Macquarie Bank Ltd. or its Affiliates to the Parent in the amount of
A$4,000,000 in the form of convertible subordinated notes, and (c) the
agreements, notes or other documentation relating to the subordinated
intercompany loan made on or about the Closing Date by the Parent to the
Borrower in the amount of A$4,000,000. With respect to the agreements,
documents and transactions described (a), (b) and (c), each of the Borrower and
each Guarantor hereby represents and warrants to the Administrative Agent and
the Lenders that (i) the loans described above have been fully funded on the
Closing Date, (ii) neither interest nor principal shall be payable while any
Obligations are outstanding, (ii) the terms of such loans provide that events
of default may not be declared or remedies or action taken against the relevant
obligor to enforce any of such obligor's obligations thereunder while the
Obligations are outstanding, (iii) the terms of such loans prohibit any
optional or mandatory prepayment thereof, (iv) the terms of such loans do not
provide for any guarantee by any Affiliate of the Parent, and no such guarantee
has been provided, (v) each of the Parent, the Borrower and such lenders will
enter into valid, binding and enforceable Subordination Agreements within 21
days after the Closing Date in a form satisfactory to the Administrative Agent
and the Lender.
"CONSORTIUM JUNIOR SUBORDINATED DEBT DOCUMENTS" means,
collectively, the Consortium Junior Subordinated Debt Agreements and the
Subordination Agreements.
"CONTRACTUAL OBLIGATION" means as to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its property is bound.
"CONVERSION DATE" means the date, if any, on which the Bridge
Loans convert to Term Loans in accordance with SECTION 2.2.
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<PAGE> 10
"CONVERSION DEFAULT" means the occurrence of any Default or
Event of Default under SECTIONS 9.1(A), 9.1(D)(I), 9.1(D)(II) or 9.1(E).
"CONVERSION FEE AMOUNT" means two percent (2%) of the
principal amount of the Bridge Loan being converted to a Term Loan pursuant to
SECTION 2.2.
"CREDIT FACILITY" means the Amended and Restated Loan
Agreement, dated as of March 30, 1999, among the Parent, certain subsidiaries
of the Parent (excluding the Borrower), National Bank of Canada, as agent and
as lender, and each other financial institution which becomes a party thereto
from time to time in accordance with the terms thereof.
"CUSTODIAN" means any receiver, interim receiver, receiver
and manager, trustee, assignee, liquidator, sequestrator, custodian or similar
official under any Bankruptcy Law.
"DEEDS OF CHARGE" means, collectively, the (i) Chargees Deed
of Covenant, dated on or about the Closing Date, between the Security Trustee
and the Director of Public Transport, (ii) Chargees [Counterparty Deed of
Covenant], dated on or about the Closing Date, between the Security Trustee and
Met Train 1, (iii) Chargees [Counterparty] Deed of Covenant, dated on or about
the Closing Date, between the Security Trustee and the Public Transport
Corporation, (iv) Chargees [Counterparty] Deed of Covenant, dated on or about
the Closing Date, between the Security Trustee and V/Line Freight, (v) Chargees
[Counterparty] Deed of Covenant, dated on or about the Closing Date, between
the Security Trustee and Met Train 2, (vi) Chargees [Counterparty] Deed of
Covenant, dated on or about the Closing Date, between the Security Trustee and
the Director of Public Transport, (vii) Chargees [Counterparty] Deed of
Covenant, dated on or about the Closing Date, between the Security Trustee and
Victorian Rail Track and (viii) Chargees [Counterparty] Deed of Covenant, dated
on or about the Closing Date, between the Security Trustee and V/Line Passenger
Corporation.
"DEFAULT" means any event that, with the passage of time, the
giving of notice or both, would constitute an Event of Default.
"DOLLARS" or "$" means lawful money of the United States of
America.
"EBITDA" means with respect to any Person for any period, Net
Income of such Person for such period PLUS, without duplication and to the
extent reflected as a charge in the statement of such Net Income for such
period, the sum of (a) total income tax expense, (b) Cash Interest Expense, (c)
depreciation and amortization expense and (d) amortization of intangibles
(including, but not limited to, goodwill) and organization costs, MINUS, to the
extent included in the statement of such Net Income for such period, the sum of
(a) interest income, (b) any extraordinary income or gains and (c) any other
noncash income, all as determined on a consolidated basis.
"ENGAGEMENT LETTER" means the engagement letter, dated as of
April 12, 1999, by and between the Parent and Barclays Capital.
"ENVIRONMENT" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, the workplace or as otherwise defined in any
Environmental Law.
"ENVIRONMENTAL LAWS" means any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any foreign
government, Australia, the United States, or any state, local, municipal or
other Governmental Entity, regulating, relating to or imposing liability or
standards of conduct concerning protection of the environment, natural
resources, or health and safety matters, as has been, is now, or at any time
hereafter is, in effect.
"ENVIRONMENTAL PERMITS" means any and all permits, licenses,
registrations, approvals, notifications, exemptions and any other authorization
required under any Environmental Law.
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<PAGE> 11
"EQUIPMENT MAINTENANCE AGREEMENT" means that certain
agreement to be entered into between the Borrower and A. Goninan and Co. Ltd.
substantially in accordance with the terms of that certain Heads of Agreement
relating to such Equipment Maintenance Agreement delivered by the Borrower to
the Administrative Agent and the Lenders on the Closing Date, as accepted by
the Administrative Agent in accordance with SECTION 5.16, such Equipment
Maintenance Agreement to be reasonably acceptable to the Administrative Agent,
together with the referenced Heads of Agreement and the Asset Sale Deed between
the Borrower and A. Goninan and Co. Ltd. dated as of the Closing Date.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any regulation promulgated thereunder.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that, together with the Parent or any of its subsidiaries is
treated as a single employer under Section 414(b) or (c) of the Code, or solely
for purposes of Section 302 of ERISA and Section 412 of the Code, is treated as
a single employer under Section 414 of the Code.
"EVENT OF DEFAULT" means any of the events specified in
SECTION 9.1.
"EXCESS CASH FLOW" means, for any fiscal year of the
Borrower, (a) Net Operating Cash Flow, MINUS (b) the sum of (i) optional
prepayments of the Loans and (ii) scheduled principal payments on the Term
Loans.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.
"EXCHANGE NOTE INDENTURE" means the indenture relating to the
Exchange Notes as contemplated by SECTION 2.3(A).
"EXCHANGE NOTES" means those certain notes of the Borrower,
guaranteed by each Guarantor, which may be issued in exchange for certain Term
Loans pursuant to SECTION 2.3.
"FEE LETTER" means that certain funding fee letter, dated
April 27, 1999, by and among the Borrower, the Parent and Barclays Bank PLC.
"FERRONOR" means Empresa de Transporte Ferroviario S.A., a
company incorporated and existing pursuant to the laws of the Republic of
Chile.
"FINANCING LEASE" means any lease (or other similar
arrangement conveying the right to use) of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"FIXED INTEREST RATE" means the interest rate applicable to
any Fixed Rate Loan.
"FIXED RATE LOAN" means any Term Loan as to which any Lender
has exercised its fixed rate option pursuant to SECTION 2.4(B).
"FIXED RATE PREMIUM PERCENTAGE" means (i) at any time on or
prior to the fourth anniversary of the Conversion Date, the product of fifty
percent (50%) and the Fixed Interest Rate on the Loans being prepaid, (ii) at
any time after the fourth anniversary of the Conversion date through the fifth
anniversary of the Conversion Date, the product of thirty-seven and one-half
percent (37.5%) and the Fixed Interest Rate on the Loans being prepaid, (iii)
at any time after the fifth anniversary of the Conversion Date through the
sixth anniversary of the Conversion Date, the product of twenty-five percent
(25%) and the Fixed Interest Rate on the Loans being prepaid, (iv) at any time
after the sixth anniversary of the Conversion Date through the seventh
anniversary of the Conversion Date, the product of twelve and one-half percent
(12.5%) and the Fixed Interest Rate on the Loans being prepaid, and (v) at any
time after the seventh anniversary of the Conversion Date, zero.
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<PAGE> 12
"GAAP" means with respect to the financial statements or
other financial information of any Person, generally accepted accounting
principles in the United States of America which are in effect from time to
time.
"GOVERNMENTAL ENTITY" means the government of the United
States of America, any other nation (including, but not limited to, the
government of Australia or any state or territory thereof) or any political
subdivision thereof, whether state or local, and any agency, authority,
instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GUARANTEE" of or by any Person (the "GUARANTOR") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having
the economic effect of guaranteeing any Indebtedness or other obligation
(including, without limitation, indemnification obligations with respect to
performance or surety bonds) of any other Person (the "PRIMARY OBLIGOR") and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay
such Indebtedness or other obligation or (d) as an account party in respect of
any letter of credit or letter of guaranty issued to support such Indebtedness
or obligation; PROVIDED, that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business.
"GUARANTIED OBLIGATIONS" has the meaning specified in SECTION
13.1.
"GUARANTORS" has the meaning specified in the preamble to
this Agreement.
"GUARANTY" means the guarantee by each of the Guarantors
pursuant to ARTICLE XIII hereof.
"HOLDCO" means RailAmerica de Chile S.A., a company
incorporated and existing pursuant to the laws of the Republic of Chile.
"INDEBTEDNESS" of any Person means, without duplication, (a)
all obligations of such Person for borrowed money or with respect to deposits
or advances of any kind held by it or for its account, (b) all obligations of
such Person evidenced by bonds, debentures, notes or similar instruments, (c)
all obligations of such Person upon which interest charges are customarily
paid, (d) all obligations of such Person under conditional sale or other title
retention agreements relating to property acquired by such Person, (e) all
obligations of such Person in respect of the deferred purchase price of
property or services (excluding current accounts payable incurred in the
ordinary course of business), (f) all Indebtedness of others secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien on property owned or acquired by such
Person, whether or not the Indebtedness secured thereby has been assumed, (g)
all guarantees by such Person of Indebtedness of others, (h) all Capital Lease
Obligations of such Person, (i) all obligations, contingent or otherwise, of
such Person as an account party in respect of letters of credit and letters of
guaranty and (j) all obligations, contingent or otherwise, of such Person in
respect of bankers' acceptances. Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such
Person is a general partner) to the extent such Person is liable therefor as a
result of such Person's ownership interest in or other relationship with such
entity, except to the extent the terms of such Indebtedness provide that such
Person is not liable therefor.
"INDEMNIFIED PARTY" has the meaning specified in SECTION
14.1.
"INDEMNIFYING PARTY" has the meaning specified in SECTION
14.1.
"INFRASTRUCTURE LEASE" means the Primary Infrastructure Lease
dated on or about the Closing Date, as amended by a letter agreement dated on
or about the Closing Date, between the Seller and the Borrower.
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<PAGE> 13
"INSOLVENCY" means, with respect to any Multiemployer Plan,
the condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INTEREST COVERAGE RATIO" means for any period with respect
to any Person, the ratio of (a) EBITDA of such Person and its subsidiaries on a
consolidated basis for such period to (b) Cash Interest Expense of such Person
and its subsidiaries on a consolidated basis for such period.
"INTEREST PAYMENT DATE" means (i) a Scheduled Interest
Payment Date and (ii) the date of any prepayment of all or any portion of the
principal of the Loans.
"INTEREST PERIOD" means (i) with respect to any Loan other
than a Fixed Rate Loan, the period commencing on and including the Closing Date
or the last day of the prior Interest Period, as the case may be, and ending on
the numerically corresponding date in the third month thereafter, or such
shorter period as may be acceptable to the Administrative Agent, PROVIDED,
HOWEVER, that if any interest period would end on a day other than a Business
Day, such Interest Period shall be extended until the next succeeding Business
Day unless the next Business Day would fall in the next quarterly period, in
which case such Interest Period shall end on the next preceding Business Day
and (ii) with respect to any Fixed Rate Loan, the period commencing on and
including the last day of the prior Interest Period and ending on the
numerically corresponding date in the sixth month thereafter. Notwithstanding
the foregoing, no Interest Period may extend beyond the Maturity Date and each
Interest Period that would otherwise commence before and end after the Maturity
Date shall end on the Maturity Date.
"INTEREST RATE" means the sum of (i) LIBOR and (ii) the
Applicable Margin.
"LENDERS" means (a) each financial institution that has
executed a counterpart to this Agreement (other than any such financial
institution that has ceased to be a party hereto pursuant to an Assignment and
Acceptance) and (b) any financial institution that has become a party hereto
pursuant to an Assignment and Acceptance.
"LEVERAGE RATIO" means, on the date of any determination
thereof with respect to any Person, the ratio of (a) Indebtedness of such
Person and its subsidiaries on a consolidated basis on such date to (b) EBITDA
of such Person and its subsidiaries on a consolidated basis for the four full
fiscal quarters ending on such date (except during fiscal year 2000, in which
case EBITDA shall be annualized as set forth in SECTION 4.6(C)(I) or SECTION
5.13(B)(I), as the case may be).
"LIBOR" means, the rate per annum appearing on Page 3750 of
the Telerate Service (or on any successor or substitute page of such Service,
or any successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service, as
determined by the Administrative Agent from time to time for purposes of
providing quotations of interest rates applicable to dollar deposits in the
London interbank market) at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of the applicable Interest Period, as the rate
for dollar deposits with a three-month maturity period or such shorter Interest
Period as may be acceptable to the Administrative Agent. In the event that such
rate is not available at such time for any reason, then "LIBOR" for such
Interest Period shall be the rate (rounded upwards, if necessary, to the next
1/16 of 1%) at which dollar deposits of $5,000,000 and for a three-month
maturity (or such shorter period as may be acceptable to the Administrative
Agent) are offered by the principal London office of the Administrative Agent
in immediately available funds in the London interbank market at approximately
11:00 a.m., London time, two Business Days prior to the commencement of such
Interest Period.
"LIEN" means, with respect to any asset, (a) any mortgage,
deed of trust, lien, pledge, hypothecation, encumbrance, charge or security
interest in, on or of such asset, (b) the interest of a vendor or a lessor
under any conditional sale agreement, capital lease or title retention
agreement (or any Financing Lease having substantially the same economic effect
as any of the foregoing) relating to such asset and (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities.
"LOAN" means a Bridge Loan or a Term Loan.
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<PAGE> 14
"LOAN DOCUMENTS" means this Agreement, the Collateral
Documents and the Fee Letter.
"LOAN LIABILITIES" means all direct or indirect debts,
liabilities and other obligations of the Borrower or any Guarantor of any and
every type and description at any time arising under or in connection with this
Agreement or any other Loan Document to the Administrative Agent, the Security
Trustee, the Arranger, to any Lender or to any Indemnified Party or their
respective successors, transferees or assigns, whether or not the right of such
Person to payment in respect of such obligations and liabilities is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured and whether or not
such claim is discharged, stayed or otherwise affected by any bankruptcy case
or insolvency or liquidation proceeding, and shall include all liabilities for
principal of and interest on the Loans and all other liabilities of the
Borrower or any Guarantor under the Loan Documents for any fees, costs, taxes,
expenses, indemnification and other amounts payable thereunder.
"LOAN REGISTER" means the register maintained by the
Administrative Agent on behalf of the Borrower pursuant to SECTION 8.3.
"MAJORITY LENDERS" means, at any time, Lenders holding at
least a majority of the then aggregate unpaid principal balance of the Loans
or, if no such principal amount is then outstanding, Lenders having at least a
majority of the total Commitments; PROVIDED that for purposes hereof, neither
the Borrower nor any of its Affiliates shall be included in (i) the Lenders
holding such amount of the Loans or having such amount of the Commitments or
(ii) determining the aggregate unpaid principal amount of the Loans or the
total Commitments.
"MARGIN STOCK" has the meaning assigned in Regulation U
issued by the Board.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the Acquisition, (b) the business, assets, operations, prospects or
condition, financial or otherwise, of any Guarantor, Holdco, Ferronor or the
Borrower, (c) the ability of any Guarantor, Holdco or the Borrower to perform
any of their respective obligations under this Agreement or any other Loan
Document or (d) the validity or enforceability of this Agreement or any other
Loan Document or the rights of or benefits available to the Administrative
Agent, the Security Trustee or the Lenders under this Agreement.
"MATERIAL CONTRACTS" has the meaning specified in SECTION
3.4(A).
"MATERIAL ENVIRONMENTAL AMOUNT" means an amount payable by
any Guarantor, Holdco, Ferronor or the Borrower under any Environmental Law in
excess of $1,000,000 for remedial costs, compliance costs, compensatory
damages, punitive damages, fines, penalties or any combination thereof.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactive materials, and any other substances of any kind,
whether or not any such substance is defined as hazardous or toxic under any
Environmental Law or that could give rise to liability under any Environmental
Law.
"MATURITY DATE" means the date that is one year after the
Closing Date unless such date is extended in accordance with SECTION 2.2.
"MOODY'S" means Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS" means the aggregate cash proceeds
received (including any cash and Cash Equivalents and cash payments received by
way of deferred payment of principal pursuant to a note, an installment
receivable or otherwise), from any Capital Markets Transaction, net, (i) in the
case of an Asset Sale, of attorneys' fees, accountants' fees, investment
banking fees, brokers' and underwriters' commissions paid to third parties,
amounts required to be applied to the repayment of Indebtedness secured by a
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<PAGE> 15
Lien expressly permitted hereunder on any asset which is the subject of the
Asset Sale (other than any Lien in favor of the Security Trustee for the
benefit of the Lenders) and other customary fees and expenses actually incurred
in connection therewith and net of taxes paid as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements with any Person) and (ii) in connection with any issuance or sale
of Capital Stock or debt securities or instruments or the incurrence of
Indebtedness, the cash proceeds received from such issuance or incurrence, net
of attorneys' fees, investment banking fees, accountant's fees, underwriting
discounts and commissions and other customary fees and expenses actually
incurred in connection therewith.
"NET INCOME" means with respect to any Person for any period,
the net income (or loss) of such Person for such period, determined in
accordance with GAAP.
"NET OPERATING CASH FLOW" means with respect to the Borrower,
for any period of determination, (a) net cash from operating activities
calculated in accordance with GAAP MINUS (b) net cash used in operating
activities calculated in accordance with GAAP.
"NET WORTH" means at a particular date, as to the Borrower,
the sum of (i) the amount which would be included under stockholders' equity on
a consolidated balance sheet of the Borrower determined on a consolidated basis
in accordance with GAAP, (ii) Permitted Subordinated Indebtedness and (iii)
preferred stock of the Borrower not otherwise included under (i) above.
"OBLIGATIONS" means all now existing and hereafter arising
obligations and liabilities of any of the Borrower and the Guarantors to any
and all of the Lenders, the Arranger, the Security Trustee and the
Administrative Agent arising under or in connection with the Loan Documents,
whether absolute or contingent, and whether for principal, interest, penalties,
premium, fees, indemnifications, reimbursements, damages (including liquidated
damages), or otherwise and specifically including post-petition interest
(whether or not an allowable claim).
"OFFERING DOCUMENTS" means an offering memorandum or
prospectus together with such other documents, instruments and agreements as
the Arranger may request pursuant to the terms of the Engagement Letter in
connection with the issuance of the Permanent Securities.
"OFFICER" means, with respect to any Person, the chairman of
the board, the chief executive officer, the president, the chief operating
officer, the chief financial officer, a director, the treasurer, any assistant
treasurer, the controller, the secretary or any vice president of such Person.
"OFFICERS' CERTIFICATE" means a certificate signed on behalf
of either the Borrower or any Guarantor by an Officer of the Borrower or any
Guarantor, as the case may be, who must be the principal executive officer, a
vice chairman, the principal financial officer, the treasurer or the principal
accounting officer of the Borrower or any Guarantor, as the case may be.
"OTHER TAXES" has the meaning specified in SECTION 2.10(B).
"PARENT" means RailAmerica, Inc., a Delaware corporation.
"PARTICIPANT" has the meaning specified in SECTION 8.1(B).
"PARTICIPATIONS" has the meaning specified in SECTION 8.1(B).
"PAYMENT BLOCKAGE NOTICE" has the meaning specified in
SECTION 12.4.
"PBGC" means the Pension Benefit Guaranty Corporation
referred to and defined in ERISA and any successor entity performing similar
functions.
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"PERMANENT SECURITIES" means (1) the Senior Subordinated
Notes or (2) any Capital Stock or other equity interests of any Guarantor, any
Guarantor Subsidiary or the Borrower issued after the Closing Date.
"PERMITTED JUNIOR SECURITIES" has the meaning specified in
SECTION 12.2.
"PERMITTED BORROWER LIENS" means liens described in clauses
(a) through (e) of SECTION 4.8.
"PERMITTED PARENT LIENS" means liens described in clauses (a)
through (e) of SECTION 5.12.
"PERMITTED SUBORDINATED INDEBTEDNESS" means Indebtedness of
the Parent or its Subsidiaries which is subordinated to the Obligations in a
manner satisfactory to the Majority Lenders, including the Indebtedness
incurred pursuant to the Consortium Junior Subordinated Debt Agreements.
"PERSON" means any natural person, corporation, limited
liability company, trust, joint venture, association, company, partnership,
Governmental Entity or other entity.
"PLAN" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 307 of ERISA, and in respect of which the Parent or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PREPAYMENT DATE" has the meaning specified in SECTION 2.8.
"PRO FORMA BORROWER BALANCE SHEET" has the meaning specified
in SECTION 3.10(A).
"PRO FORMA PARENT BALANCE SHEET" has the meaning specified in
SECTION 3.10(A).
"PROJECTED BORROWER BALANCE SHEET" has the meaning specified
in SECTION 3.10(A).
"PROJECTED PARENT FINANCIAL STATEMENTS" has the meaning
specified in SECTION 3.10(A).
"PROJECTIONS" has the meaning specified in SECTION 5.2(C).
"RAILAMERICA FLORIDA" means RailAmerica Australia, Inc., a
Florida corporation.
"RAILAMERICA PTY" means RailAmerica Australia Pty Ltd., a
company incorporated in New South Wales.
"RAILROAD OPERATING LICENSE" means accreditation as an (a)
operator of rolling stock and a manager of access/infrastructure under Division
3 of Part VI of the Transport Act 1983 (Vic.) and (b) operator in New South
Wales under the Rail Safety Act 1993 (NSW).
"REGULATION D" means Regulation D promulgated by the SEC, as
the same may be amended or supplemented from time to time.
"REORGANIZATION" means, with respect to any Multiemployer
Plan, the condition that such plan is in reorganization within the meaning of
Section 4241 or ERISA.
"REPORTABLE EVENT" means any of the events set forth in
Section 4043(c) of ERISA.
"REPRESENTATIVE" has the meaning specified in SECTION 12.2.
"REQUEST" has the meaning specified in SECTION 10.1(B).
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"REQUIREMENT OF LAW" means as to any Person, the certificate
of incorporation and by-laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Entity, in each case applicable to
or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
"RESPONSIBLE OFFICER" of any corporation shall mean any
executive officer or financial officer of such corporation.
"S&P" means Standard & Poor's Corporation.
"SCHEDULED INTEREST PAYMENT DATE" means the last day of an
Interest Period.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as
amended.
"SECURITY TRUSTEE" means Barclays Bank PLC, acting through
its Sydney branch, or any successor or replacement Security Trustee, acting in
such capacity.
"SELLER" means V/Line Freight Corporation, a statutory
corporation formed by the government of the State of Victoria, Australia.
"SENIOR DEBT" has the meaning specified in SECTION 12.2.
"SENIOR OBLIGATIONS" has the meaning specified in SECTION
12.2.
"SENIOR SUBORDINATED NOTES" means securities of the Parent
having terms and conditions generally not materially adverse to the Parent as
compared with the terms and conditions outlined in the Engagement Letter,
PROVIDED that the pricing of the Senior Subordinated Notes shall be determined
based upon prevailing market conditions and the creditworthiness of the Parent
and its Subsidiaries, each as of the date of issuance of the Senior
Subordinated Notes.
"SINGLE EMPLOYER PLAN" means any Plan which is covered by
Title IV of ERISA, but is not a Multiemployer Plan.
"SOLVENT", when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount of
all "liabilities of such Person, contingent or otherwise", as of such date, as
such quoted terms are determined in accordance with applicable federal and
state laws governing determinations of the insolvency of debtors, (b) the
present fair saleable value of the assets of such Person will, as of such date,
be greater than the amount that will be required to pay the liability of such
Person on its debts as such debts become absolute and matured, (c) such Person
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, (d) such Person will be able to pay its debts as
they mature and (e) is not insolvent under administration or insolvent (each as
defined in the Australian Corporations Law ("CORPORATIONS LAW")), has not had a
Controller (as defined in the Corporations Law) appointed and is not (i) in
receivership, (ii) in receivership and management, (iii) in liquidation, (iv)
in provisional liquidation, (v) under administration, (vi) wound up, (vii)
subject to any arrangement, assignment or composition, (viii) protected from
creditors under any statute, or (ix) dissolved (other than to carry out a
reconstruction while solvent and with the approval of the Lenders). For
purposes of this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is reduced
to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a right
to payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured.
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"STATED MATURITY" means, with respect to any installment of
interest or principal on any series of Indebtedness, the date on which such
payment of interest or principal was scheduled to be paid in the original
documentation governing such Indebtedness, and shall not include any contingent
obligations to repay, redeem or repurchase any such interest or principal prior
to the date originally scheduled for the payment thereof.
"SUBORDINATION AGREEMENTS" means those certain Deeds of
Subordination, dated on or about the Closing Date, among the Borrower, each
Guarantor and the Consortium Members providing for subordination of the
Indebtedness represented by the Consortium Junior Subordinated Debt Agreements
to the Obligations, and other terms satisfactory to the Agent in its sole
discretion.
"SUBSIDIARY" means, with respect to any Person (the "PARENT")
at any date, any corporation, limited liability company, partnership,
association or other entity the accounts of which would be consolidated with
those of the parent in the parent's consolidated financial statements if such
financial statements were prepared in accordance with GAAP as of such date, as
well as any other corporation, limited liability company, partnership,
association or other entity (a) of which securities or other ownership
interests representing more than 50% of the equity or more than 50% of the
ordinary voting power or, in the case of a partnership, more than 50% of the
general partnership interests are, as of such date, owned, controlled or held,
or (b) that is, as of such date, otherwise controlled, by the parent or one or
more subsidiaries of the parent or by the parent and one or more subsidiaries
of the parent.
"SUBSIDIARY" means any subsidiary, direct or indirect, of the
Parent. For the avoidance of doubt, the Borrower shall be deemed to be a
subsidiary of the Parent for all purposes of this Agreement and the other Loan
Documents.
"TAXES" has the meaning specified in SECTION 2.10(A).
"TERM LOAN" means a loan deemed made on the Conversion Date,
if any, by a Lender to the Borrower pursuant to SECTION 2.2 to refinance a
Bridge Loan.
"TRACK MAINTENANCE AGREEMENT" means that certain agreement to
be entered into between the Borrower and ABB Engineering Construction Pty Ltd.
substantially in accordance with the terms of that certain Heads of Agreement
relating to such Track Maintenance Agreement delivered by the Borrower to the
Administrative Agent and the Lenders on the Closing Date, as accepted by the
Administrative Agent in accordance with SECTION 5.16, such Track Maintenance
Agreement to be reasonably acceptable to the Administrative Agent, together
with the referenced Heads of Agreement and the Asset Sale Deed between the
Borrower and ABB Engineering Construction Pty Ltd. dated as of the Closing
Date.
"TRANSACTIONS" means, collectively, the Acquisition, the
related financing transactions and each of the other transactions contemplated
by the Transaction Documents.
"TRANSACTION DOCUMENTS" means the Loan Documents, the
Acquisition Documentation, the Consortium Junior Subordinated Debt Documents,
the Equipment Maintenance Agreement and the Track Maintenance Agreement.
"TRANSFEREE" has the meaning specified in SECTION 16.17.
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939,
as amended.
"VOTING STOCK" means, with respect to any Person at any time,
the Capital Stock of such Person that is at such time entitled to vote in the
election of the board of directors of such Person.
"WHOLLY OWNED SUBSIDIARY" of any Person means a Subsidiary of
such Person, 100% of the Capital Stock and other equity interests of which are
owned directly or indirectly by such Person (other than directors or qualifying
shares).
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"WITHDRAWAL LIABILITIES" means liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
"YEAR 2000 COMPLIANT" has the meaning specified in SECTION
3.17.
"YEAR 2000 PROBLEM" has the meaning specified in SECTION
3.17.
Section 1.2. INTERPRETATION. In this Agreement, the singular includes
the plural and the plural includes the singular; words implying any gender
include the other genders; references to any section, exhibit or schedule are
to sections, exhibits or schedules hereto unless otherwise indicated;
references to statutes are to be construed as including all statutory
provisions consolidating, amending or replacing the statute referred to;
references to "writing" include printing, typing, lithography and other means
of reproducing words in a visible form; "including" following a word or phrase
shall not be construed to limit the generality of such word or phrase; and an
account term not otherwise defined has the meaning assigned to it in accordance
with GAAP.
ARTICLE II.
THE BRIDGE FACILITY
Section 2.1. COMMITMENTS TO MAKE BRIDGE LOANS. In reliance upon the
representations and warranties of the Borrower and each Guarantor set forth
herein and subject to the terms and conditions herein set forth, each of the
Lenders severally agrees to make a Bridge Loan to the Borrower on the Closing
Date in the amount of such Lender's Commitment. The proceeds of each Bridge
Loan shall be disbursed by wire transfer prior to 4:00 p.m. (Sydney time) on
the Closing Date as provided in written instructions delivered by the Borrower
to the Administrative Agent three Business Days prior to the Closing Date. The
Administrative Agent shall give each Lender prompt notice by telephone or
facsimile transmission of the Borrower's instructions with respect to each
Bridge Loan. The Commitment of each Lender shall be reduced to zero immediately
after the making of a Bridge Loan by such Lender on the Closing Date. Each
Bridge Loan will mature on the Maturity Date. The unpaid principal balance of
the Bridge Loans, together with all accrued and unpaid interest thereon, shall
become due and payable on the Maturity Date unless the Conversion Date occurs,
in which case the unpaid principal balance of the Term Loans, together with all
accrued and unpaid interest thereon, shall become due and payable on the date
that is ten years after the Closing Date.
Section 2.2. CONVERSION TO TERM LOANS; TERM LOAN
AMORTIZATION.
(a) If, on the Maturity Date: (i) no Conversion Default
exists and is continuing, (ii) the Administrative Agent receives an Officers'
Certificate from the Borrower certifying to the foregoing and requesting a
conversion of the Bridge Loans to Term Loans and (iii) the Borrower shall have
paid to the Administrative Agent for the pro rata account of each Lender a fee
in immediately available funds equal to the Conversion Fee Amount, which fee
shall be nonrefundable and earned on the Conversion Date, each of the Lenders
hereby commits that, on the Maturity Date, such Lender will convert its
outstanding amount of Bridge Loans (including, without limitation, any Bridge
Loans resulting from the capitalization of interest pursuant to SECTION 2.4(E)
below), to a Term Loan maturing on the date that is ten years after the Closing
Date (and the Maturity Date shall be deemed to have been automatically extended
to the date that is ten years after the Closing Date).
(b) If on the Maturity Date a Conversion Default exists as to
which a cure period is applicable under SECTION 9.1 but has not then expired,
the Maturity Date shall be automatically deemed extended until the earlier to
occur of:
(i) the expiration of such cure period without cure
of such Conversion Default (in which case all Obligations shall become
immediately due and payable on the last day of such cure period), or
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(ii) the cure of such Conversion Default on or
before the last day of the applicable cure period and delivery by the Borrower
to the Administrative Agent on or prior to such day of an Officers' Certificate
certifying that no Conversion Default exists and is continuing and requesting a
conversion of the Bridge Loans to Term Loans (in which case the Conversion Date
shall be deemed to have occurred).
(c) On and after the Conversion Date (if any) the Majority
Lenders may on any Interest Payment Date, upon written notice to the Borrower,
require that all payments under this Agreement and the other Loan Documents
thereafter required to be made by the Borrower or any Guarantor be made in
Australian dollars. If the Majority Lenders so elect, the Administrative Agent,
the Lenders, the Borrower and each Guarantor shall negotiate in good faith
towards promptly reaching an agreement with respect to implementing the
election of the Majority Lenders pursuant to the preceding sentence.
(d) If the Conversion Date shall occur, the Company shall
repay the Term Loans on each date set forth below as follows:
DATE TERM LOAN PAYMENT
------------------ -----------------
July 31, 2000 $1,500,000
October 31, 2000 $1,500,000
January 31, 2001 $1,500,000
April 30, 2001 $1,500,000
July 31, 2001 $1,750,000
October 31, 2001 $1,750,000
January 31, 2002 $1,750,000
April 30, 2002 $1,750,000
July 31, 2002 $2,000,000
October 31, 2002 $2,000,000
January 31, 2003 $2,000,000
April 30, 2003 $2,000,000
July 31, 2003 $2,250,000
October 31, 2003 $2,250,000
January 31, 2004 $2,250,000
April 30, 2004 $2,250,000
July 31, 2004 $3,500,000
October 31, 2004 $3,500,000
January 31, 2005 $3,500,000
April 30, 2005 $3,500,000
July 31, 2005 $3,500,000
October 31, 2005 $3,500,000
January 31, 2006 $3,500,000
April 30, 2006 $3,500,000
July 31, 2006 $3,500,000
October 31, 2006 $3,500,000
January 31, 2007 $3,500,000
April 30, 2007 $3,500,000
July 31, 2007 $3,500,000
October 31, 2007 $3,500,000
January 31, 2008 $3,500,000
April 30, 2008 $3,500,000
July 31, 2008 $3,500,000
October 31, 2008 $3,500,000
January 31, 2009 $3,500,000
April 30, 2009 $3,500,000
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with an additional final payment on the Maturity Date equal to the then
aggregate outstanding principal amount, if any, of the Term Loans.
Section 2.3. OPTION TO EXCHANGE TERM LOANS FOR EXCHANGE NOTES.
(a) On any Business Day on or after the Conversion Date (if
any), subject to the prior written consent of the Administrative Agent, any
Lender may elect to exchange all or any portion of its Term Loan for Exchange
Notes for the purpose of transferring such Exchange Notes to a Person other
than a Person who was a Lender on the Maturity Date by giving not less than
thirty days prior irrevocable written notice of such election to the Borrower
and the Administrative Agent specifying the principal amount of its Term Loan
to be exchanged (which shall be integral multiples of $1,000); PROVIDED, that
in no event shall the aggregate principal amount of the Term Loans initially
exchanged pursuant to this SECTION 2.3(A) be less than $10,000,000 or such
smaller amount as may be approved by the Administrative Agent. The Exchange
Notes shall be guaranteed by all of the Guarantors. Upon receipt of the
irrevocable written notice of exchange from a Lender as provided above, the
Borrower and each Guarantor shall do all things necessary and desirable to
facilitate the exchange of the requested amount of such Lender's Term Loans for
Exchange Notes, including without limitation (i) executing an Exchange Note
Indenture relating to the Exchange Notes acceptable to the Administrative Agent
and the Borrower, which Exchange Note Indenture shall contain terms, conditions
and covenants similar to those contained in respect of high yield debt
securities issued for cash in the then prevailing market, (ii) appointing a
trustee reasonably satisfactory to the Administrative Agent and the Borrower to
serve as trustee under the Exchange Note Indenture, (iii) executing an
agreement which provides for customary registration rights relating to the
Exchange Notes, including without limitation, a registered exchange offer or,
if not permitted by applicable law to effect an exchange offer, demand
registration rights and (iv) executing and delivering all other documents,
instruments (including the Exchange Notes and guarantees by each Guarantor) and
certificates necessary or desirable in connection with the exchange of the Term
Loans for the Exchange Notes. The interest rate on the Exchange Notes shall be
fixed two Business Days prior to the date the exchange of Term Loans for the
Exchange Notes is to occur and shall be established based upon then-prevailing
market conditions and giving effect to the creditworthiness of the Borrower and
the Guarantors at such time.
(b) In connection with the exchange of Term Loans for
Exchange Notes as contemplated by SECTION 2.3(A), each Lender shall upon
authentication and delivery to it of the applicable Exchange Notes deliver to
the Administrative Agent the original promissory note or notes to be exchanged
(if such Lender shall have previously requested that the Borrower issue such
Lender a promissory note). Upon consummation of the exchange of Term Loans for
Exchange Notes, the Administrative Agent shall cancel each such note so
delivered to it and, if requested, the Borrower shall issue a replacement
promissory note to such Lender in an amount equal to the principal amount of
such Lender's Term Loan that is not being exchanged, or the Administrative
Agent shall make a notation on the surrendered notes to the effect that a
portion of the Term Loan represented thereby has been repaid.
(c) Accrued interest on Term Loans exchanged pursuant to this
SECTION 2.3 shall be paid by the Borrower on the date of the exchange. The
Exchange Notes received in such transfer shall bear interest from and including
the date of the exchange.
(d) Without limiting the provisions of SECTION 16.1, (i) all
reasonable costs and expenses incurred by the Administrative Agent, the
Security Trustee or any Lender arising as a result of the exchange contemplated
by this SECTION 2.3 and (ii) all reasonable fees, costs and expenses of the
security trustee for the holders of the Exchange Notes, shall in each case be
paid by the Borrower on demand.
Section 2.4. INTEREST; PAYMENT IN KIND OPTION; DEFAULT INTEREST;
WARRANTS.
(a) INTEREST RATE APPLICABLE TO LOANS. Subject to SECTIONS
2.4(B), (D), (E), (F) AND (G), the unpaid principal balance of the Loans shall
bear interest until paid at a rate per annum equal to LIBOR PLUS the Applicable
Margin.
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(b) LENDER FIXED RATE OPTION. At any time after the
Conversion Date, any Lender may elect, upon irrevocable written notice to the
Administrative Agent and the Borrower, to have its Term Loans bear a fixed rate
of interest until paid at a rate per annum equal to the Interest Rate then in
effect PLUS fifty basis points. Any such election shall be irrevocable and
shall be effective as of the next Scheduled Interest Payment Date.
(c) BASIS OF COMPUTATION OF INTEREST; PAYMENT OF INTEREST.
All interest shall be calculated for actual days elapsed on the basis of a
360-day year and shall be payable in arrears by the Borrower not later than
11:00 a.m. (Sydney time) on each Interest Payment Date by wire transfer of
immediately available funds in accordance with SECTION 2.9.
(d) MAXIMUM INTEREST RATE. Notwithstanding anything contained
in SECTIONS 2.4(A) or (B), but subject to SECTIONS 2.4(F) and (G), in no event
shall the interest rate on the Loans for any Interest Period exceed an annual
rate equal to the lesser of (i) 18% and (ii) the maximum interest rate
permitted by law.
(e) OPTION TO PAY INTEREST IN KIND. Subject to SECTIONS
2.4(D), (F) and (G), to the extent that the interest rate on the Loans for any
Interest Period exceeds a rate equal to 16% per annum, the Borrower shall have
the option to pay all or a portion of the interest payable for such Interest
Period in excess of 16% per annum by adding such excess amount to the principal
amount outstanding under such Loans. The Borrower shall give the Administrative
Agent an irrevocable notice that it will exercise such right at least three
Business Days prior to any Interest Payment Date as to which such right is to
be exercised.
(f) DEFAULT INTEREST. (i) If the Borrower shall default in
the payment of the principal of or interest on any Loan by acceleration or
otherwise, the Borrower shall on demand from time to time pay interest, to the
extent permitted by law, on such defaulted amount to but excluding the date of
actual payment (after as well as before judgment) to the extent lawful, at a
rate per annum equal to 200 basis points in excess of the otherwise applicable
interest rate on the Loans. The Borrower shall pay such default interest and
all interest accruing on any overdue Obligation in cash on demand from time to
time.
(g) CREDIT RATING ADJUSTMENT. During any period in which the
Parent's long-term debt receives a credit rating equal to or less than CCC+ by
S&P or a rating equal to or less than Caa1 by Moody's, the interest rates and
interest rate caps set forth in SECTIONS 2.4(A), (B), (D) and (E) shall
increase by 150 basis points.
(h) WARRANTS. As further consideration to the Lenders for the
Lenders' Commitments, each of the Parent and the Borrower unconditionally agree
that (i) on the first anniversary of the Closing Date and if any of the Loans
remain outstanding on such date, the Parent shall, and the Borrower shall cause
the Parent to, issue to the Lenders, on a pro rata basis, warrants to acquire
ten percent (10%) of the outstanding common stock of the Parent on such
anniversary date on a fully diluted basis at an exercise price per share equal
to the closing price of the Parent's common stock on the last trading day prior
to such anniversary date as quoted on a NASDAQ or, if not quoted on NASDAQ,
such other nationally-recognized United States exchange on which the Parent's
common stock shall then be trading (or if the Parent's common stock is not
publicly traded at such time, at the fair market value per share of the
Parent's common stock on such anniversary date on a fully diluted basis) and
(ii) on the second anniversary of the Closing Date and if any of the Loans
remain outstanding on such date, the Parent shall, and the Borrower shall cause
the Parent to, issue the Lenders, on a pro rata basis, warrants to acquire an
additional ten percent (10%) of the outstanding common stock of the Parent on
such second anniversary date on a fully diluted basis at an exercise price per
share equal to the closing price of the Parent's common stock on the last
trading day prior to such anniversary date as quoted on NASDAQ or, if not
quoted on NASDAQ, such other nationally-recognized United States exchange on
which the Parent's common stock shall then be trading (or if the Parent's
common stock is not publicly traded at such time, at the fair market value per
share of the Parent's common stock on such anniversary date on a fully diluted
basis). The warrants will be issued pursuant to the Warrant Agreement, such
Warrant Agreement to be substantially in the form attached hereto as EXHIBIT B.
In connection with the issuance of the warrants provided for in this SECTION
2.4(H), the Parent shall deliver to each Lender an opinion of counsel as to
matters pertaining to the warrants and the issuance thereof, such counsel and
opinion to be reasonably satisfactory to the Administrative Agent.
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Section 2.5. MANDATORY PREPAYMENT.
(a) CAPITAL MARKETS TRANSACTIONS; PREPAYMENT OF LOANS AND
EXCHANGE NOTES. The Borrower shall prepay the Loans ratably in accordance with
the aggregate outstanding principal balances thereof, with the Net Cash
Proceeds of: (i) any direct or indirect public offering or private placement of
Permanent Securities of any Guarantor, the Borrower or any Guarantor Subsidiary
and (ii) any Asset Sale by any Guarantor, the Borrower or any Guarantor
Subsidiary after the Closing Date (each of the transactions in the foregoing
clauses (i) and (ii), a "CAPITAL MARKETS TRANSACTION"). The Borrower shall, not
later than the second Business Day following the receipt of Net Cash Proceeds
by any Guarantor, the Borrower or any Guarantor Subsidiary with respect to any
Capital Markets Transaction, apply or cause to be applied such Net Cash
Proceeds to prepay the Loans pursuant to this SECTION 2.5 by paying to each
Lender an amount equal to 100% of such Lender's pro rata share of the aggregate
principal amount of the Loans to be prepaid, PLUS accrued and unpaid interest
thereto to the Prepayment Date. In addition, the Loans shall be prepaid PARI
PASSU with any prepayment required under any Exchange Note in an amount pro
rata with the principal amount paid under the Exchange Note Indenture (pro rata
in accordance with the principal amount outstanding on the Loans and the
Exchange Notes).
(b) CHANGE OF CONTROL. Subject to and in accordance with
SECTION 4.27, in the event of any Change of Control, the Borrower shall offer
to prepay the Loans pursuant to SECTION 4.27.
(c) EXCESS CASH FLOW. As soon as determinable and in any
event on or before April 30, 2001, the Borrower shall pay to the Administrative
Agent for the benefit of the Lenders an amount equal to fifty percent (50%) of
the Excess Cash Flow, if any, during the Borrower's fiscal year 2000. In
addition, as soon as determinable and in any event on or before April 30 of
each year thereafter, the Borrower shall pay to the Administrative Agent for
the benefit of the Lenders an amount equal to seventy five percent (75%) of the
Excess Cash Flow, if any, during the Borrower's immediately preceding fiscal
year. Each such Excess Cash Flow payment will be applied by the Administrative
Agent on the next Scheduled Interest Payment Date as a partial prepayment of
the Loans. Excess Cash Flow prepayments with respect to Fixed Rate Loans shall
be without premium.
Section 2.6. OPTIONAL PREPAYMENT. The Borrower may, upon three
Business Days prior written notice to the Administrative Agent, prepay the
Loans at any time, in whole or in part, on a pro rata basis, by paying to each
applicable Lender such Lender's pro rata share of the aggregate principal
amount of Loans to be prepaid, plus accrued and unpaid interest thereon to the
Prepayment Date; PROVIDED, that the Borrower provides the Administrative Agent
with an Officers' Certificate at the time of prepayment certifying that, after
giving effect to such prepayment, (i) no Default or Event of Default exists and
(ii) in the reasonable opinion of the Majority Lenders, debt restrictions
applicable to the Parent and the capital structure of the Parent permit the
Parent to issue Permanent Securities in a principal amount of at least
$100,000,000. In connection with any prepayments made by the Borrower with
respect to any Fixed Rate Loan, the Borrower shall pay each Lender having such
a Fixed Rate Loan a prepayment premium equal to the Fixed Rate Premium
Percentage MULTIPLIED BY the principal amount of the Fixed Rate Loan being
prepaid.
Section 2.7. BREAKAGE COSTS; INDEMNITY. The Borrower agrees to
indemnify and hold each Affected Party harmless from and against any loss or
expense which such Affected Party sustains or incurs as a consequence of:
(a) the failure by the Borrower to borrow Loans on the
Closing Date after the Borrower has given a notice with respect thereof in
accordance with SECTION 2.4,
(b) default by the Borrower in making any prepayment after
the Borrower has given a notice thereof in accordance with the provisions of
SECTION 2.5 or 2.6, as applicable, or
(c) the mandatory or optional prepayment of Loans on a day
that is not the last day of an Interest Period.
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Such indemnification may include an amount equal to the greater of (i) such
Affected Party's actual loss and expenses incurred (including currency
conversion or hedging expenses and expenses relating to interest rate hedging
but excluding lost profits) in connection with, or by reason of, any of the
foregoing events and (ii) the excess, if any of (A) the amount of interest that
would have accrued on the principal amount of Bridge Loans not so made or the
principal amount of Loans so prepaid from the date of such proposed issuance,
in the case of a failure by the Borrower to borrow Loans on the Closing Date,
or a default by the Borrower in making any such prepayment, to and including
the last day of the Interest Period that would have commenced on the proposed
date of funding, or, in the case of any such prepayment, to the last day of the
Interest Period in which such prepayment occurred, in each case at the
applicable rate of interest for such Loans provided for herein over (B) the
amount of interest (as reasonably determined by such Affected Party) which
would have accrued to such Affected Party on such amount by placing such amount
on deposit for a period comparable to such Interest Period with leading banks
in the interbank Eurodollar market. A certificate as to any amounts payable
pursuant to this SECTION 2.7 submitted to the Borrower by any Affected Party
shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the other
Obligations.
Section 2.8. EFFECT OF NOTICE OF PREPAYMENT. The Borrower shall notify
the Administrative Agent in writing of any date set for prepayment (each such
day, a "PREPAYMENT DATE") of Loans. Once such notice is sent or mailed, the
Loans to be prepaid shall become due and payable on the Prepayment Date set
forth in such notice. Such notice shall be irrevocable.
Section 2.9. PAYMENTS.
(a) WIRE TRANSFER. Except as provided in SECTION 2.4(E) with
respect to the payment of certain interest by capitalizing it and adding it to
the principal of outstanding Loans, the principal of, fees, premium, if any,
and interest on each Loan and all other Obligations arising under the Loan
Documents shall be payable by wire transfer in immediately available funds (in
dollars) to the Administrative Agent for the respective accounts of the Lenders
set forth below their signatures on the signature pages of this Agreement or
otherwise designated in the Loan Register from time to time to the Borrower by
the Administrative Agent at least three Business Days prior to the due date
therefor.
(b) PAYMENTS ON BUSINESS DAYS. If any payment to be made
hereunder or under any Loan shall be due on a day other than a Business Day,
such payment shall be made on the next succeeding Business Day (and such
extension of time shall be included in computing interest in connection with
such payment); PROVIDED, HOWEVER, that if such succeeding Business Day falls in
the next calendar month or quarter, as applicable, such payment shall be made
on the next preceding Business Day.
(c) PARTIAL PREPAYMENTS AND REDEMPTIONS. All partial
prepayments and redemptions of the outstanding principal balance of the Loans
shall be made ratably amongst the applicable Lenders in accordance with their
respective shares of the aggregate outstanding principal balance of the Loans
eligible for prepayment or redemption.
(d) NO DEFENSE. To the fullest extent permitted by law, the
Borrower and each Guarantor shall make all payments hereunder and under the
other Loan Documents regardless of any defense (other than the defense of
payment) or counterclaim.
(e) ALLOCATION. Any money paid to, received by, or collected
by the Administrative Agent, the Security Trustee or any Lender pursuant to
this Agreement or any other Loan Document, shall be applied in the following
order, at the date or dates fixed by the Administrative Agent:
FIRST: to any unpaid fees and reimbursement or
unpaid expenses of the Administrative Agent and the Security
Trustee hereunder and under the Fee Letter and any unpaid
fees and reimbursement or unpaid expenses due under the
Collateral Documents;
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SECOND: to the payment of all costs, expenses, other
fees, commissions and taxes owing to any Lender hereunder;
THIRD: to the indefeasible payment of all accrued
interest to the date of such payment or collection;
FOURTH: to the indefeasible payment of the amounts
then due and unpaid tinder this Agreement or any other Loan
Document for principal, in respect of which or for the
benefit of which such money has been paid or collected,
ratably, without preference or priority of any kind,
according to the amounts due and payable on the Loans for
principal; and
FIFTH: the balance, if any, to the Borrower or any
other Person lawfully entitled thereto.
(f) INTEREST, FEES AND PREMIUM. Any prepayment of principal
on the Loans shall be accompanied by the payment of accrued and unpaid interest
and any applicable premium and fees with respect to such principal.
(g) PAYMENTS UNCONDITIONAL. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan on the Maturity Date.
Section 2.10. TAXES.
(a) TAXES. Any and all payments by the Borrower and each
Guarantor hereunder or under any other Loan Document shall be made, in
accordance with SECTION 2.9 or the other applicable provision of the applicable
Loan Document, free and clear of and without deduction or withholding for or on
account of any and all present or future taxes, levies, imports, deductions,
charges or withholdings additions to tax, interest, penalties and all other
liabilities with respect thereto, excluding (i) income, franchise or similar
taxes imposed or levied on the Administrative Agent, the Security Trustee or
the Lenders as a result of a present or former connection between the
Administrative Agent, the Security Trustee or the Lenders and the jurisdiction
of the governmental authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from the Administrative Agent, the Security Trustee or such Lenders
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement) and (ii) any withholding taxes imposed on
any Lender with respect to such payments which would not have been imposed if
such Lender had made its Loan available through or from a permanent
establishment located in Australia (all such non-excluded taxes, levies,
imports, deductions, charges, withholdings and liabilities being hereinafter
referred to as "TAXES"). If the Borrower or any Guarantor shall be required by
law to deduct or withhold any Taxes from, or in respect of, any sum payable
hereunder or under any other Loan Document to the Administrative Agent, the
Security Trustee or the Lenders or any of their respective Affiliates who may
become a Lender: (i) the sum payable thereunder shall be increased as may be
necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this SECTION 2.10) the Administrative Agent, the Security Trustee or the
Lenders or any of their respective Affiliates receives an amount equal to the
sum it would have received had no such deductions or withholdings been made;
(ii) the Borrower or such Guarantor, as the case may be, shall make such
deductions or withholdings; and (iii) the Borrower or such Guarantor, as the
case may be, shall pay the full amount deducted to the relevant tax authority
or other authority in accordance with applicable laws.
(b) OTHER TAXES. In addition, the Borrower agrees to pay any
present or future stamp, mortgage recording or documentary taxes or any other
excise or property taxes, charges or similar levies which arise from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement or
the other Loan Documents (hereinafter referred to as "OTHER TAXES") and hold
the Administrative Agent, the Security Trustee and each Lender harmless from
and against any and all liabilities with respect to or resulting from any delay
or omission (other than to the extent attributable to such Lender) to pay such
Other Taxes. Each Lender represents that, to the best of its knowledge, except
for any such Other Taxes that may be imposed under the federal, state or local
laws of the United States or Australia (or any state, territory or political
subdivision thereof), it is not aware of any such stamp, mortgage recording or
documentary taxes or any other excise or property taxes, charges or similar
levies.
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(c) INDEMNITY. The Borrower will indemnify the Administrative
Agent, the Security Trustee and any Lender for the full amount of Taxes or
Other Taxes arising in connection with payments made under this Agreement or
any other Loan Document (including, without limitation, any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this SECTION 2.10)
paid by the Administrative Agent, the Security Trustee or any Lender or any of
their respective Affiliates and any liability (including penalties, additions
to tax, interest and expenses) arising therefrom or with respect thereto.
Payment under this indemnification shall be made within fifteen days from the
date the Administrative Agent, the Security Trustee or any Lender or any of
their respective Affiliates makes written demand therefor; PROVIDED, HOWEVER,
that the Borrower shall not be obligated to make payment to the Lender, the
Security Trustee or the Administrative Agent (as the case may be) pursuant to
this SECTION 2.10(C) in respect of penalties, interest and other liabilities
attributable to any Taxes or Other Taxes, if (i) written demand therefor has
not been made by such Lender, the Security Trustee or the Administrative Agent
within 30 days from the date on which such Lender or the Administrative Agent
received written notice of the imposition of Taxes or Other Taxes by the
relevant taxing or governmental authority, but only to the extent such
penalties, interest and other similar liabilities are attributable to such
failure or delay by the Administrative Agent, the Security Trustee or the
Lender in making such written demand, (ii) such penalties, interest and other
liabilities have accrued after the Borrower had indemnified or paid an
additional amount due as of the date of such payment pursuant to this SECTION
2.10(C) or (iii) such penalties, interest and other liabilities are directly
attributable to the negligence or misconduct of the Lender, the Security
Trustee or the Administrative Agent or such Affiliates. After the Lender, the
Security Trustee or the Administrative Agent (as the case may be) received
written notice of the imposition of the Taxes or Other Taxes which are subject
to this SECTION 2.10(C), such Lender, Security Trustee and Administrative Agent
will act in good faith to promptly notify the Borrower of its obligations
hereunder and the calculation thereof; PROVIDED, HOWEVER, that the failure to
so act shall not, standing alone, affect the rights of the Administrative
Agent, the Security Trustee or the Lenders under this SECTION 2.10(C).
(d) FURNISH EVIDENCE TO ADMINISTRATIVE AGENT. The Borrower
will make reasonable efforts to obtain certified copies of tax receipts
evidencing the payment of any Taxes deducted or withheld from each taxing
authority imposing such Taxes. The Borrower will furnish to the Administrative
Agent, within a reasonable period after the date the payment of any Taxes so
deducted or withheld is due pursuant to applicable law, original or certified
copies of tax receipts evidencing such payment by the Borrower or, if such
receipts are not obtainable, other evidence of such payments by the Borrower
reasonably satisfactory to the Administrative Agent.
(e) SURVIVAL. Without prejudice to the survival of any other
agreement of the Borrower or any Guarantor hereunder, the agreements and
obligations of the Borrower and each Guarantor contained in this SECTION 2.10
shall survive the payment in full of all amounts due hereunder and under the
other Loan Documents.
(f) MITIGATION. If the Borrower or any Guarantor (as the case
may be) is required to pay additional amounts to or for the account of any
Lender pursuant to this SECTION 2.10 as a result of a change in law or treaty
occurring after such Lender first became a party to this Agreement, then such
Lender will, at the request of the Borrower or such Guarantor, change the
jurisdiction in which its Loans are maintained if such change (i) will
eliminate or reduce any such additional payment which may thereafter accrue and
(ii) is, in such Lender's reasonable discretion, determined not to be
disadvantageous or cause hardship to such Lender.
Nothing in this SECTION 2.10 shall oblige any Lender to disclose to the
Borrower or any other Person any information regarding its tax affairs or tax
computations or interfere with the right of any Lender to arrange its tax
affairs in whatever manner it thinks fit and, in particular, no Lender shall be
under any obligation to claim relief from its corporate profits or similar tax
liability in credits or deductions available to it and, if it does claim, the
extent, order and manner in which it does so shall be at its absolute
discretion.
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Section 2.11. RIGHT OF SET OFF; SHARING OF PAYMENTS, ETC.
(a) RIGHT OF SET-OFF. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during, the continuance
of any Event of Default or if the Borrower ceases to be Solvent, the Borrower
authorizes each Lender at any time or from time to time, without presentment,
demand, protest or other notice of any kind to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final, whether or not collected or available) in any currency
and any other indebtedness at any time held or owing by such Lender or any of
its Affiliates (including, without limitation, by branches and agencies of such
Lender wherever located) to or for the credit or the account of the Borrower
against and on account of the Obligations of the Borrower to such Lender under
this Agreement or under any of the other Loan Documents, including, without
limitation, all interests in or participations in the Obligations purchased by
such Lender, and all other claims of any nature or description arising out of
or in connection with this Agreement or any other Loan Document, irrespective
of whether or not such Lender shall have made any demand hereunder. A Lender
may exercise such rights notwithstanding that the amounts concerned may be
expressed in different currencies and each Lender is authorized to effect any
necessary conversions at a market rate of exchange selected by it. A Lender
exercising its rights under this SECTION 2.11(A) shall provide prompt notice to
the Borrower following such exercise.
(b) SHARING. If any Lender shall obtain from the Borrower
payment of any principal of or interest on any Loan owing to it or payment of
any other amount under this Agreement or any other Loan Document held by it
though the exercise of any right of set-off, banker's lien or counterclaim or
similar right or otherwise (other than from the Administrative Agent as
provided herein) and, as a result of such payment, such Lender shall have
received a greater percentage of the principal of or interest on the Loans or
such other amounts then due to such Lender by the Borrower than the percentage
received by any other Lenders, it shall promptly purchase from such other
Lenders participation in (or, if and to the extent specified by such Lender,
direct interests in) the Loans or such other amounts, respectively, owing to
such other Lenders (or any interest due thereon, as the case may be) in such
amounts, and make such other adjustments from time to time as shall be
equitable, to the end that all the Lenders shall share the benefit of such
excess payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such excess payment) pro rata in accordance with the
unpaid principal of and/or interest on the Loans or such other amounts,
respectively, owing to each of the Lenders. To such end all of the Lenders
shall make appropriate adjustments among themselves (by the resale of
participation sold or otherwise) if such payment is rescinded or must otherwise
be restored.
(c) NO REQUIREMENT. Nothing in this Agreement shall require
any Lender to exercise any such right or shall affect the right of any Lender
to exercise, and retain the benefits of exercising, any such right with respect
to any other indebtedness or obligation of the Borrower. If, under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a set-off to which this SECTION 2.11 applies, such
Lender shall, to the extent practicable, exercise its rights in respect of such
secured claim in manner consistent with the rights of the Lenders entitled
under this SECTION 2.11 to share in the benefits of any recovery on such
secured claim.
Section 2.12. CERTAIN FEES. The Borrower agrees to pay to Barclays
Bank PLC, for its own account, the fees specified in the Fee Letter, amounts
for its expenses incurred hereunder and all other amounts owing under this
Agreement and the other Loan Documents.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
As of the date hereof and as of the Closing Date, the Borrower and each
Guarantor hereby jointly and severally agrees with, and represents and warrants
to, the Lenders, the Arranger and the Administrative Agent that each of the
following representations and warranties is true and will be true after giving
effect to the Transactions:
Section 3.1. TRANSACTION DOCUMENTATION. The Parent and the Borrower
have delivered to the Administrative Agent true, complete and correct copies of
the Transaction Documents (including all schedules, exhibits, annexes,
amendments, supplements, modifications and all other documents delivered
pursuant thereto or in connection therewith) which have been executed and
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delivered prior to the date hereof. The Transaction Documents as originally
executed and delivered by the parties thereto have not been amended, waived,
supplemented or modified without the consent of the Administrative Agent (and,
in the case of the Acquisition Documentation, such consent not to be
unreasonably withheld or delayed). Neither the Parent, the Borrower nor any
other party to any of the Transaction Documents is in default in the
performance of or compliance with any material provision under any such
document.
Section 3.2. ORGANIZATION; POWERS. Each Guarantor, the Borrower and
Holdco (a) is duly organized, in the case of the Parent and its United States
Subsidiaries, or has been incorporated as a company limited by shares in the
case of the Borrower and RailAmerica Pty, validly existing and in good standing
under the laws of the jurisdiction of its organization or incorporation, (b)
has all requisite power and authority to own its property and assets and to
carry on its business as now conducted and as proposed to be conducted, (c) is
qualified to do business in, and is in good standing in, every jurisdiction
where such qualification is required, except where the failure so to qualify
could not reasonably be expected to result in a Material Adverse Effect and (d)
if a party thereto, has the power and authority to execute, deliver and perform
its obligations under each of the Transaction Documents and each other
agreement or instrument contemplated hereby or thereby to which it is or will
be a party and, in the case of the Borrower, to borrow hereunder.
Section 3.3. DUE AUTHORIZATION AND ENFORCEABILITY.
(a) Each of the Transaction Documents: (i) has been (or, in
the case of Transaction Documents other than this Agreement, will be on the
Closing Date) duly authorized, executed and delivered by Parent and each of its
Subsidiaries (to the extent each is a party thereto), and (ii) constitutes (or,
in the case of Transaction Documents other than this Agreement, will constitute
on the Closing Date) a valid and binding obligation of Parent and each of its
Subsidiaries (to the extent each is a party thereto) enforceable against each
such Person in accordance with its terms, except as enforcement may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium and other
similar laws affecting the enforceability of creditors' rights generally and by
general principles of equity (whether arising under a proceeding at law or in
equity).
(b) The Loans have been duly authorized by the Borrower and
each of the Guaranties have been duly authorized by each Guarantor. Each of the
Loans and the Guaranties will be valid and binding obligations of the Borrower
and each Guarantor, as applicable, enforceable against it in accordance with
their terms, except as enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the enforceability of creditors' rights generally and by general
principles of equity (whether arising under a proceeding at law or in equity).
(c) (i) The provisions of each of the Collateral Documents
are effective to create in favor of the Security Trustee for the benefit of
itself and the Lenders, a legal, valid and enforceable first priority security
interest in all right, title and interest of each Guarantor, the Borrower and
Holdco in the collateral described therein, subject only to any Permitted
Liens.
(ii) Each Collateral Document when delivered and
registered (if necessary) will be effective to grant to the Security Trustee
for the benefit of itself and the Lenders a legal, valid and enforceable Lien
on all the right, title and interest of the mortgagor under such Collateral
Document in the mortgaged property described therein and is first ranking in
terms of priority in relation to all such property (subject only to statutory
priorities and any other interests affecting that property which take priority
by operation of law or which the Administrative Agent agrees has priority).
(d) All actions required under the Collateral Documents to
extend the benefit of the collateral security thereunder to the Loan
Liabilities at all times have been duly and effectually taken and completed.
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Section 3.4. NO CONFLICTS.
(a) Neither the execution and delivery of any of the
Transaction Documents nor the consummation of any of the transactions
contemplated hereby or thereby nor compliance with the terms and provisions
hereof or thereof (i) violates or will violate any material Requirement of Law
applicable to the Borrower, any Guarantor or Holdco or by which any of their
respective properties or assets may be bound, or (ii) conflicts with or will
result in the breach of, or constitutes a default under, any material contract,
lease, indenture, loan agreement (including, without limitation, the Credit
Facility), mortgage, deed of trust or other material agreement or instrument
(each, a "MATERIAL CONTRACT") to which the Borrower, any Guarantor or Holdco is
a party or to which any of them may be subject or by which any of them or any
of their respective assets is or may be bound.
(b) No consent, approval, authorization or order of, or any
registration or filing with, any Governmental Entity is or will be required in
connection with (i) the execution and delivery of any of the Transaction
Documents by the Parent or any of its Subsidiaries (to the extent each is a
party thereto) or the consummation of the transactions contemplated hereby or
thereby, or (ii) the issuance and delivery of the Exchange Notes by the
Borrower, other than (A) such authorizations, approvals, consents, exemptions,
registrations or filings as shall have been made or secured by the date hereof
(or, in the case of authorizations or approvals required to operate the
business contemplated by the Railroad Operating License, by the Closing Date)
and (B) the filings required to be made to perfect the Liens granted in the
Collateral Documents.
(c) No Default or Event of Default exists or would result
from the incurring of any Obligations by the Borrower, any Guarantor or Holdco
or from the grant or perfection of the Liens of the Security Trustee and the
Lenders on the Collateral.
Section 3.5. NO VIOLATIONS.
(a) There does not exist any violation of any Requirement of
Law applicable to the Parent or any of its Subsidiaries which could reasonably
be expected to have a Material Adverse Effect.
(b) Neither the Parent nor any of its Subsidiaries is a party
to any agreement or instrument or subject to any corporate or other restriction
that, individually or in the aggregate, has had or could reasonably be expected
to have a Material Adverse Effect.
Section 3.6. CAPITAL STOCK; SUBSIDIARIES.
(a) All outstanding shares of Capital Stock and other equity
interests of the Parent are duly authorized, validly issued, fully paid and
non-assessable. All outstanding shares of Capital Stock and other equity
interests of RailAmerica Pty, RailAmerica Florida, the Borrower and Holdco are
duly authorized, validly issued, fully paid and non-assessable and owned
directly or indirectly by the Parent beneficially and of record, free and clear
of any Lien other than the Liens to be created under the Collateral Documents.
Borrower, RailAmerica Florida, RailAmerica Pty and Holdco are Wholly Owned
Subsidiaries of the Parent. Holdco owns, directly, 55% of the Capital Stock of
Ferronor. All such outstanding shares of Capital Stock or other equity
interests are duly authorized, validly issued, fully paid and nonassessable and
owned by the Parent or its Subsidiaries, as the case may be, free and clear of
all Liens.
(b) Other than as set forth in the notes to the consolidated
audited financial statements of the Parent for the fiscal year ended December
31, 1998, there are (i) no outstanding subscriptions, warrants, options, calls
or commitments of any character related to or entitling any Person to purchase
or otherwise acquire any shares of the Capital Stock or other equity interests
of the Parent or any of its Subsidiaries, (ii) no obligations or securities
convertible into or exchangeable for shares of any Capital Stock or other
equity interests of the Parent or any of its Subsidiaries or any commitments of
any character relating to or entitling any Person to purchase or otherwise
acquire any such obligations or securities, and (iii) no preemptive or similar
rights to subscribe for or to purchase any Capital Stock or other equity
interests of the Parent or any of its Subsidiaries.
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(c) The Parent has on or prior to the date hereof funded a
non-interest bearing cash capital contribution to the Borrower in the amount of
at least A$30,000,000. Since the date of such capital contribution, neither the
Parent nor any of its Subsidiaries or Affiliates has received any payment of
any kind from the Borrower.
Section 3.7. LIENS. There are no Liens on any assets of any Guarantor,
the Borrower or Holdco except, with respect to assets of the Borrower,
Permitted Borrower Liens, and with respect to assets of any Guarantor, the
Permitted Parent Liens.
Section 3.8. NO VIOLATION OF REGULATIONS OF BOARD OF GOVERNORS OF
FEDERAL RESERVE SYSTEM. None of the transactions contemplated by this Agreement
(including without limitation the use of the proceeds from the Loans and
Permanent Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any rule or regulation issued pursuant thereto, including,
without limitation, Regulations T, U and X of the Board.
Section 3.9. GOVERNMENTAL REGULATIONS. None of the Parent or any of
its Subsidiaries is or will be subject to regulation under the Investment
Company Act of 1940, as amended. None of the Parent or any of its Subsidiaries
is subject to regulation under any Requirement of Law which limits its ability
to incur Indebtedness for borrowed money.
Section 3.10. FINANCIAL STATEMENTS; NO UNDISCLOSED LIABILITIES.
(a) Each of (i) the pro forma balance sheet of the Borrower
as at April 30, 1999 (the "Pro Forma Borrower Balance Sheet"), (ii) the pro
forma financial statements of the Borrower as of and for each of the eight
months ending December 31, 1999, (iii) the projected financial statements of
the Borrower as of and for each of the five fiscal years ended December 31,
2003 (the "Projected Borrower Financial Statements"), (iv) the pro forma
combined balance sheet of the Parent as at February 28, 1999 (the "Pro Forma
Parent Balance Sheet") and (v) the projected financial statements of the Parent
as of and for each of the five fiscal years ending December 31, 2003 (the
"Projected Parent Financial Statements"), copies of which have heretofore been
furnished to each Lender, has been prepared giving effect (as if such events
had occurred on such date) to (A) the consummation of the Acquisition and the
transactions contemplated thereby, (B) the Loans to be made hereunder and the
use of the proceeds thereof and (C) the payment of estimated fees and expenses
in connection with the foregoing. The Pro Forma Borrower Balance Sheet and the
Pro Forma Parent Balance Sheet have been prepared based on the best information
available to the Borrower and the Parent as of the date of delivery thereof and
based on such information present fairly in all material respects the estimated
consolidated financial position of the Parent as of February 28, 1999 and the
estimated financial position of the Borrower as of April 30, 1999, assuming
that the events specified in the preceding sentence had occurred. The financial
statements referred to in clause (ii), the Projected Borrower Financial
Statements and the Projected Parent Financial Statements include an income
statement, a statement of cash flow, a balance sheet and a calculation of
EBITDA statement for each of the periods presented, and have been prepared in
accordance with GAAP. Each of the financial statements referred to in clause
(ii), the Projected Borrower Financial Statements and the Projected Parent
Financial Statements have been prepared on the best information available to
the Borrower and the Parent as of the date of delivery thereof and based on
such information presents fairly in all material respects the financial
condition of the Parent and the Borrower and the EBITDA of the Parent and the
Borrower for each of the periods presented.
(b) The audited consolidated balance sheets of the Parent as
at December 31, 1998 and the related audited consolidated statements of income
and of cash flows for the fiscal year then ended, reported on by
PricewaterhouseCoopers LLP, copies of which have heretofore been furnished to
each Lender, are complete and correct and present fairly in all material
respects the consolidated financial condition of the Parent as at such dates,
and the consolidated results of operations and consolidated cash flows for the
fiscal years then ended.
(c) The draft unaudited consolidated balance sheet of the
Parent as at March 31, 1999 and the related unaudited consolidated statements
of income and of cash flows for the three month period then ended, copies of
which have heretofore been furnished to each Lender, is, to the best knowledge
of the Parent, complete and correct and present fairly in all material respects
the consolidated financial condition of the Parent as at such date, and the
consolidated results of operations and consolidated cash flow for the period
then ended.
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(d) All financial statements described in SECTIONS 3.10(B)
and (C), including the related schedules and notes thereto, if any, have been
prepared in accordance with GAAP applied consistently throughout the periods
involved and consistent with rules, regulations, policies and pronouncements of
the SEC. The Parent and its Subsidiaries had at the date of the most recent
audited balance sheet referred to above no material undisclosed liabilities,
material guarantees, material contingent liability or material liability for
taxes, nor any material long-term lease or material unusual forward or
long-term commitment, including, without limitation, any interest rate or
foreign currency swap or exchange transaction, which is not reflected in such
balance sheet or in the notes thereto. During the period from December 31, 1998
to and including the date hereof there has been no sale, transfer or other
disposition by the Parent or any of its Subsidiaries of any material part of
their business or property, except that a Subsidiary of the Parent is involved
in a proceeding which may deem that there has been a sale of certain assets of
Delaware Valley Railway Company.
Section 3.11. FULL DISCLOSURE. No information, report, financial
statement or certificate delivered or to be delivered to the Lenders in
connection with the Transactions contains or will contain as of the date
delivered any untrue statement of material fact or omitted or omits or will
omit to state a material fact necessary to make such statements, taken as a
whole, not misleading in light of the circumstances in which such statements
were made.
Section 3.12. PRIVATE OFFERING; RULE 144A MATTERS.
(a) The making of the Loans hereunder are and will be exempt
from the registration and prospectus delivery requirements of the Securities
Act. Neither the Borrower nor any Guarantor has issued or sold Loans to anyone
other than the Lenders. No securities of the same class as the Loans have been
issued or sold by the Borrower or any Guarantor within the six-month period
immediately prior to the date hereof. Each of the Borrower and each Guarantor
agrees that neither it, nor anyone acting on its behalf, will (i) offer the
Loans so as to subject the making, issuance and/or sale of the Loans to the
registration or prospectus delivery requirements of the Securities Act or (ii)
offer any similar securities for issuance or sale to, or solicit any offer to
acquire any of the same from, or otherwise approach or negotiate with respect
to the same with, anyone if the issuance or sale of the Loans and any such
securities would be integrated as a single offering for the purposes of the
Securities Act, including, without limitation, Regulation D thereunder, in a
manner as would require registration under the Securities Act thereof.
(b) In the case of each offer, sale or issuance of the Loans,
no form of general solicitation or general advertising was or will be used by
the Borrower or any Guarantor or their representatives, including, but not
limited to, advertisements, articles, notices or other communications published
in any newspaper, magazine or similar medium or broadcast over television or
radio, or any seminar or meeting whose attendees have been invited by any
general solicitation or general advertising.
Section 3.13. ABSENCE OF PROCEEDINGS. There is not pending or
threatened any action, suit or proceeding to which the Parent or any of its
Subsidiaries is a party, before or by any court or other Governmental Entity or
body (domestic or foreign), that, if adversely determined, could reasonably be
expected to cause a Material Adverse Effect.
Section 3.14. TAXES.
(a) The Parent and any affiliated group of which the Parent
is now or has been a member has timely filed (inclusive of any permitted
extensions) with the appropriate taxing authorities all returns (including
information returns) in respect of Borrower Taxes required to be filed through
the date hereof and will timely file (inclusive of any permitted extensions)
any such returns required to be filed on and after the date hereof. The
information filed is complete and accurate in all material respects. All
deductions taken by any Guarantor, Holdco and/or the Borrower as reflected in
such income tax returns have been taken in accordance with applicable laws and
regulations, except deductions that may have been disallowed but are being
challenged in good faith and for which adequate reserves have been made on the
books of the Parent, and if applicable, the Borrower, in accordance with GAAP.
Neither any Guarantor, Holdco nor the Borrower, nor any group of which any of
them are now or were members, has requested any extension of time within which
to file returns (including information returns) in respect of any Borrower
Taxes.
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(b) All Borrower Taxes in respect of periods beginning prior
to the date hereof, have been timely paid, or will be timely paid, or an
adequate reserve has been established therefor, as set forth in its financial
statements, and neither any Guarantor, Holdco nor the Borrower has any
liability for taxes in excess of the amounts so paid or reserves so
established.
(c) No deficiencies for Borrower Taxes have been claimed,
proposed or assessed by any taxing or other Governmental entity against any
Guarantor, Holdco or the Borrower and there are no Borrower Tax Liens. There
are no pending or threatened audits, investigations or claims for or relating
to any liability in respect of Borrower Taxes, and there are no matters under
discussion with any governmental authorities with respect to Borrower Taxes
which are likely to result in a material additional liability for Borrower
Taxes. Either the income tax returns of each Guarantor, Holdco and the Borrower
have been audited by the applicable Governmental Entity and such audits have
been closed, or the period during which any assessments may be made by the
applicable Governmental Entity has expired without waiver or extension, for all
years up to and including the last fiscal year for which such income tax
returns were required to be filed. No extension of a statute of limitations
relating to Borrower Taxes is in effect with respect to the Parent or its
Subsidiaries.
(d) Neither any Guarantor, Holdco nor the Borrower has any
obligation under any tax sharing agreement or other similar arrangement.
Section 3.15. FINANCIAL CONDITION; SOLVENCY.
(a) Each Guarantor, Holdco and the Borrower are, and after
giving effect to the consummation of the Transactions will be, Solvent.
(b) Neither the Borrower, Holdco nor any Guarantor intends to
incur debts beyond its ability to pay such debts as they mature, taking into
account the timing and amounts of cash to be received by it and the timing and
amounts of cash to be payable on or in respect of its Indebtedness.
Section 3.16. NO MATERIAL ADVERSE CHANGE. There has been no material
adverse change in the consolidated financial condition, business, operations,
assets, liabilities, management, prospects or value of any of the Parent and
its Subsidiaries since December 31, 1998.
Section 3.17. YEAR 2000 COMPLIANCE. Each of the Parent and the
Borrower has (i) initiated a review and assessment of all areas within its and,
with respect to the Parent, each of its Subsidiaries', businesses and
operations that could be adversely affected by the "YEAR 2000 PROBLEM" (that
is, the risk that computer applications used by such party (or suppliers,
vendors and customers) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. Based on the foregoing, each of the Parent and
the Borrower believes that all computer applications (including those of its
suppliers, vendors and customers) that are material to the business and
operations of the Parent and its Subsidiaries are reasonably expected on a
timely basis to be able to perform properly date-sensitive functions for all
dates before and after January 1, 2000 (that is, be "YEAR 2000 COMPLIANT").
Section 3.18. USE OF PROCEEDS. The Borrower shall use the proceeds of
the Loans, together with A$28,500,000 of the A$30,000,000 funded pursuant to
the Transaction Documentation and A$10,000,000 funded pursuant to the
Consortium Junior Subordinated Debt Agreements, to (i) fund the Acquisition (in
part) totaling A$163,100,000, (ii) pay related fees and expenses of
A$16,200,000 and (iii) for general corporate purposes of A$19,200,000.
Section 3.19. [RESERVED.]
Section 3.20. TITLE TO PROPERTIES. Neither the Borrower, any Guarantor
nor Holdco owns any real estate in fee. Each Guarantor and the Borrower has
valid leasehold interests in all real property used in the ordinary conduct of
its business, except for such defects in title as could not, individually or in
the aggregate, reasonably be expected to have a Material Adverse Effect and is
the beneficial owner of and has good title to all other property held by it or
on its behalf and all undertakings carried on by it. The property of each
Guarantor and the Borrower is subject to no Liens, other than, with respect to
the Borrower, Permitted Borrower Liens, and with respect to any Guarantor,
Permitted Parent Liens.
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Section 3.21. ENVIRONMENTAL MATTERS; AUSTRALIAN CLAIMS. Neither any
Guarantor, Holdco nor the Borrower (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any liability under any Environmental Law, (iii) has received notice of any
claim with respect to any liability under any Environmental Law, (iv) knows of
any basis for any liability under any Environmental Law or (v) is aware of any
caveats lodged or made, land claims, native title claims, sacred site
applications, Mabo claims, or claims of a similar nature lodged or made in
respect of its property.
Section 3.22. INTELLECTUAL PROPERTY. Each Guarantor, Holdco and the
Borrower owns, or is licensed to use, all trademarks, tradenames, copyrights,
patents and other intellectual property material to its business, and the use
thereof does not infringe upon the rights of any other Person, except for any
such infringements that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect.
ARTICLE IV.
COVENANTS OF THE BORROWER
So long as any Commitment shall remain outstanding or any
Obligation shall remain unpaid, the Borrower covenants and agrees with the
Lenders, the Arranger, the Security Trustee and the Administrative Agent as set
forth below:
Section 4.1. FINANCIAL STATEMENTS. The Borrower shall furnish to each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Borrower, a copy of the audited
balance sheet of the Borrower as at the end of such year and the related
audited consolidated statements of income and of cash flows for such year,
setting forth in each case in comparative form the figures for the previous
year (other than for fiscal year 1999), reported on without a "going concern"
or like qualification or exception, or qualification arising out of the scope
of the audit, by independent certified public accountants of nationally
recognized standing, prepared in accordance with GAAP; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited balance sheet of the Borrower as at the end
of such quarter and the related unaudited statements of income and of cash
flows of the Borrower for such quarter and the portion of the fiscal year
through the end of such quarter, setting forth in each case in comparative form
the figures for the previous year, certified by a Responsible Officer of the
Borrower as being fairly stated in all material respects (subject to normal
year-end audit adjustments); all such financial statements referred to in this
SECTION 4.1(B) shall be complete and correct in all material respects and shall
be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein and with prior periods,
subject to normal year-end adjustments.
Section 4.2. CERTIFICATES; OTHER INFORMATION. The Borrower shall
furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in SECTION 4.1(A), (i) a certificate of the independent
certified public accountants reporting on such financial statements stating
that the financial statements give a true and fair view of the accounts of the
Borrower, except as expressly set forth in the accountants' report and (ii)
copies of all reports or written communications providing advice,
recommendations or analysis to the management of the Borrower from such
independent certified public accountants with regard to their audit of the
financial statements referred to in SECTION 4.1(A) or the internal financial
controls and systems of the Borrower;
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(b) concurrently with the delivery of any financial statement
pursuant to SECTION 4.1, (x) a certificate of a Responsible Officer of the
Borrower stating that during such period (i) neither any Guarantor, Holdco nor
the Borrower has changed its name, its chief executive office, the location
where records concerning the Collateral are kept or the location of any
material item of tangible Collateral without complying with the requirements of
this Agreement and the Collateral Documents with respect thereto and (ii) each
Guarantor and the Borrower has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to which it is a party to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no knowledge
of any Default or Event of Default except as specified in such certificate, and
(y) in the case of quarterly or annual financial statements, a compliance
certificate containing all information and calculations reasonably necessary
for determining compliance by the Borrower with the provisions of this
Agreement as of the last day of such fiscal quarter or fiscal year of the
Borrower;
(c) at least seven days prior to the start of each fiscal
quarter of the Borrower, estimated monthly financial statements for the
Borrower for the next fiscal quarter (to include a balance sheet, income
statement, statement of cash flows and a statement of EBITDA which reconciles
Net Income to EBITDA), which financial statements shall in each case be
accompanied by a certificate of a Responsible Officer of the Borrower stating
that such financial statements are based on estimates, information and
assumptions believed by such Responsible Officer to be reasonable and that such
Responsible Officer has no reason to believe that such financial statements are
incorrect or misleading in any material respect; and
(d) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
Section 4.3. [RESERVED.]
Section 4.4. NO BORROWER SUBSIDIARIES. The Borrower shall not, at any
time, establish, form, invest in, create or otherwise have any subsidiaries.
Section 4.5. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
The Borrower shall keep proper books of records and account in which full, true
and correct entries in conformity with GAAP and all Requirements of Law, shall
be made of all dealings and transactions in relation to its business and
activities; and upon reasonable notice permit representatives of any Lender to
visit and inspect any of its properties and examine and make abstracts from any
of its books and records at any reasonable time and as often as may reasonably
be desired and to discuss the business, operations, properties and financial
and other condition of the Borrower with senior officers of the Borrower and
with its independent certified public accountants.
Section 4.6. FINANCIAL CONDITION COVENANTS OF THE BORROWER. The
Borrower shall not:
(a) INTEREST COVERAGE RATIO.
(i) Permit the Interest Coverage Ratio of the
Borrower for each of the fiscal quarters of the Borrower ending on March 31,
2000, June 30, 2000, September 30, 2000 and December 31, 2000 to be less than
2:1; PROVIDED, that in calculating the Interest Coverage Ratio for any such
period, EBITDA and Cash Interest Expense shall be annualized from January 1,
2000 (for example, EBITDA and Cash Interest Expense for the quarter ended March
31, 2000 shall be annualized by multiplying EBITDA and Cash Interest Expense
for the period January 1, 2000 through March 31, 2000, respectively, by four;
EBITDA and Cash Interest Expense for the quarter ended June 30, 2000 shall be
annualized by multiplying EBITDA and Cash Interest Expense for the period
January 1, 2000 through June 30, 2000, respectively, by two; and so on); and
(ii) for all fiscal quarters of the Borrower ending
after December 31, 2000, permit the Interest Coverage Ratio of the Borrower for
the latest four consecutive fiscal quarters of the Borrower ending after
December 31, 2000 to be less than 2:1.
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(b) NET WORTH. On and after December 31, 1999, permit the Net
Worth of the Borrower to be less than A$38,000,000, such amount increasing as
of December 31 of each year in an amount equal to 75% of the Net Income of the
Borrower for such year (without giving effect to Net Income in any fiscal year
in which Net Income is a negative number).
(c) LEVERAGE RATIO.
(i) Permit the Leverage Ratio of the Borrower for
each of the fiscal quarters of the Borrower ending on March 31, 2000, June 30,
2000, September 30, 2000 and December 31, 2000 to be more than 5:1; PROVIDED,
that in calculating the Leverage Ratio for any such period, EBITDA shall be
annualized from January 1, 2000 (for example, EBITDA for the quarter ended
March 31, 2000 shall be annualized by multiplying EBITDA for the period January
1, 2000 through March 31, 2000, respectively, by four; EBITDA for the quarter
ended June 30, 2000 shall be annualized by multiplying EBITDA for the period
January 1, 2000 through June 30, 2000, respectively, by two; and so on); and
(ii) for all fiscal quarters ending after December
31, 2000, permit the Leverage Ratio of the Borrower for the latest four
consecutive fiscal quarters of the Borrower ending after December 31, 2000 to
be more than 5:1.
Section 4.7. LIMITATION ON INDEBTEDNESS. The Borrower shall not
create, incur, assume or suffer to exist any Indebtedness, except:
(a) Indebtedness of the Borrower under the Loan Documents;
(b) Indebtedness constituting deposits to secure the
performance of trade contracts (other than for borrowed money), statutory
obligations, surety and appeal bonds and performance bonds and other
obligations of a like nature that are incurred in the ordinary course of
business, not to exceed A$5,000,000 in the aggregate at any time outstanding;
(c) Permitted Subordinated Indebtedness with payments terms
consistent with the requirements of SECTION 4.12;
(d) subject to SECTION 4.12, Indebtedness existing pursuant
to the Consortium Junior Subordinated Debt Agreements in an amount not to
exceed A$10,000,000 at any time; and
(e) Indebtedness of the Borrower incurred to finance the
acquisition or construction of fixed or capital assets, not to exceed
A$5,000,000.
Section 4.8. LIMITATION ON LIENS. The Borrower shall not create,
incur, assume or suffer to exist any Lien upon any of its property, assets or
revenues, whether now owned or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower in conformity with
GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 90 days or which are
being contested in good faith by appropriate proceedings and which, in any
case, do not encumber a material amount of the assets of the Borrower;
(c) Liens securing Indebtedness of the Borrower incurred to
finance the acquisition or construction of fixed or capital assets to the
extent such Indebtedness is permitted pursuant to SECTION 4.7(C), PROVIDED that
(i) such Liens shall be created at the time of the acquisition or construction
of such fixed or capital assets, (ii) such Liens do not at any time encumber
any property other than the property financed by such Indebtedness and proceeds
thereof, (iii) the principal amount of Indebtedness secured thereby is not
increased and (iv) the proceeds of the Indebtedness secured by any such Lien
shall not secure more than 100% of the original purchase price of such
property;
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(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Borrower; and
(e) Liens created pursuant to the Collateral Documents.
Section 4.9. LIMITATION ON GUARANTEE OBLIGATIONS. The Borrower shall
not create, incur, assume or suffer to exist any guarantee by the Borrower of
any Person.
Section 4.10. LIMITATION ON FUNDAMENTAL CHANGES. The Borrower shall
not enter into any merger, acquisition, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution).
Section 4.11. LIMITATION ON SALE OF ASSETS. Except as provided in the
Equipment Maintenance Agreement, the Track Maintenance Agreement or in
accordance with the Borrower's customary arrangements in the ordinary course
consistent with past practice relating to third-party vendors outsourcing
services to be provided to the Borrower, the Borrower shall not convey, sell,
lease, assign, transfer or otherwise dispose of any of its property, business
or assets (including, without limitation, receivables and leasehold interests),
whether now owned or hereafter acquired, except for the sale or other
disposition of surplus, obsolete or worn out ASSETS, PROVIDED that (i) the
assets are disposed of on an arm's length basis, (ii) the aggregate proceeds
are received in cash, (iii) with respect to Net Cash Proceeds received from the
disposition of surplus assets, such Net Cash Proceeds are applied, within three
Business Days, to the payment of principal on the Loans and (iv) so long as no
Default or Event of Default shall have occurred, with respect to Net Cash
Proceeds from the sale of obsolete or worn out assets, such Net Cash Proceeds
are applied, within 180 days, towards replacement assets in respect of such
obsolete or worn out equipment so disposed of or to the payment of principal on
the Loans (it being understood that upon the occurrence of a Default or Event
of Default, all Net Cash Proceeds shall be applied in all events to the payment
of principal on the Loans). To the extent the Majority Lenders waive the
provisions of this SECTION 4.11 with respect to the sale of any Collateral, or
any Collateral is sold as permitted by this SECTION 4.11, such Collateral in
each case shall be sold free and clear of the Liens in favor of the Security
Trustee created by the Collateral Documents, and the Security Trustee shall
take such actions as it deems appropriate in connection therewith or as may be
reasonably requested by the Borrower to evidence such Lien release, in each
case at the Borrower's expense.
Section 4.12. LIMITATION ON RESTRICTED PAYMENTS. The Borrower shall
not declare or pay any dividend (other than non-cash dividends payable solely
in common stock of the Borrower) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock (including but not limited to in respect of any
preferred Capital Stock outstanding or dividends accumulated thereon on the
Closing Date) or other equity interests of the Parent or any of its
Subsidiaries or any warrants or options to purchase any such Capital Stock or
any Permitted Subordinated Indebtedness, whether now or hereafter outstanding,
or make any other distribution in respect thereof or purchase any thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower. The Borrower shall not make any payment with respect to or on
account of, or purchase or otherwise acquire, any Permitted Subordinated
Indebtedness.
Section 4.13. LIMITATION ON CAPITAL EXPENDITURES.
(a) The Borrower shall not make or commit to make any
expenditure in respect of Capitalized Maintenance Costs or Capitalized
Infrastructure Costs except for expenditures in the ordinary course of business
not exceeding, in the aggregate during any of the fiscal years of the Borrower
set forth below, an amount equal to the amount set forth below opposite such
fiscal year:
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FISCAL YEAR ENDING AMOUNT
------------------ ------
December 31, 1999 A$10,000,000
December 31, 2000 A$15,000,000
and each fiscal year thereafter
(b) The Borrower shall not make or commit to make any Capital
Expenditure not constituting Capitalized Maintenance Costs or Capitalized
Infrastructure Costs (which costs shall be governed by SECTIONS 4.13(A)) except
for expenditures in the ordinary course of business not exceeding, in the
aggregate during any of the fiscal years of the Borrower set forth below, an
amount equal to the amount set forth below opposite such fiscal year:
FISCAL YEAR ENDING AMOUNT
------------------ ------
December 31, 1999 A$6,500,000
December 31, 2000 A$8,000,000
December 31, 2001 A$6,500,000
December 31, 2002 A$5,000,000
December 31, 2003 A$2,500,000
and each fiscal year thereafter
; PROVIDED that the amount of Capital Expenditures referenced above in this
SECTION 4.13(B) will be increased in any fiscal year by the amount (if any) by
which the Capital Expenditures limit specified above for the immediately
preceding fiscal year exceeds the actual amount of any Capital Expenditures
made or committed during such prior fiscal year (the "CARRY OVER AMOUNT"). For
purposes of measuring compliance herewith, the Carry Over Amount shall be
deemed to be the first amount spent on Capital Expenditures in such succeeding
fiscal year, and no Carry Over Amount may be carried over for more than one
fiscal year.
Section 4.14. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. The
Borrower shall not make any advance, loan, extension of credit or capital
contribution to, or purchase any stock, bonds, notes, debentures or other
securities of or any assets constituting a business unit of, or make any other
investment in, any Person, except:
(a) extensions of trade credit (but only items of trade
credit outstanding for less than 120 days) in the ordinary course of business;
(b) investments in Cash Equivalents;
(c) current trade and customer accounts receivable that are
for goods furnished or services rendered in the ordinary course of business and
that are payable in accordance with the Borrower's customary trade terms (but
only such receivables from Persons which are not Affiliates of the Borrower,
Holdco or any Guarantor outstanding for less than 120 days); and
(d) (i) extensions of trade credit in the ordinary course of
business which have been outstanding for 120 days or more and (ii) current
trade and customer accounts receivable that are for goods furnished or services
rendered in the ordinary course of business and that are payable in accordance
with the Borrower's customary trade terms (but only such receivables from
Persons which are not Affiliates of the Borrower, Holdco or any Guarantor)
which have been outstanding for 120 days or more, in an amount not to exceed
A$1,000,000 in the aggregate for (i) and (ii).
Section 4.15. LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF
DEBT INSTRUMENTS AND ORGANIZATIONAL DOCUMENTATION, ETC.
(a) The Borrower shall not make any optional payment or
optional prepayment on or redemption or purchase of any Indebtedness (other
than the Loans).
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(b) The Borrower shall not (i) amend, modify or change, or
consent or agree to any amendment, modification or change in any material
respect to any of the terms of the Acquisition Documents, the Consortium Junior
Subordinated Debt Documents, the Equipment Maintenance Agreement or the Track
Maintenance Agreement without the consent of the Majority Lenders, (ii) amend,
modify or change in any material respect, or consent or agree to any amendment,
modification, or change in any material respect to the terms of any of its
capitalization or organizational documents.
Section 4.16. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The Borrower
shall not enter into any transaction, including, without limitation, any
purchase, sale, lease or exchange of property or the rendering of any service,
with any Affiliate unless such transaction (a) is otherwise permitted under
this Agreement, and (b) is upon fair and reasonable terms no less favorable to
the Borrower than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate; PROVIDED, that, in the case of (a) and (b),
any such transaction involving more than A$500,000 must be approved by a
majority of the disinterested members of the Parent's Board of Directors.
Section 4.17. LIMITATION ON SALES AND LEASEBACKS AND OPERATING LEASES.
The Borrower shall not enter into any arrangement with any Person providing for
the leasing by the Borrower of real or personal property which has been or is
to be sold or transferred by the Borrower to such Person or to any other Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of the Borrower. In addition, the Borrower
shall not have obligations with respect to leases of property not constituting
Financing Leases in excess of an aggregate of A$500,000 per fiscal year.
Section 4.18. LIMITATION ON NEGATIVE PLEDGE CLAUSES. The Borrower
shall not enter into with any Person any agreement, other than (a) this
Agreement and the other Loan Documents and (b) any purchase money Liens
permitted by SECTION 4.8(C) or Financing Leases permitted by this Agreement (in
which cases, any prohibition or limitation shall only be effective against the
assets financed thereby) which prohibits or limits the ability of the Borrower
to create, incur, assume or suffer to exist any Lien upon any of its property,
assets or revenues, whether now owned or hereafter acquired.
Section 4.19. LIMITATION ON LINES OF BUSINESS. The Borrower shall not
enter into any business except for those businesses acquired pursuant to the
Acquisition Documentation.
Section 4.20. CHANGE OF CONTROL.
(a) Upon the occurrence of a Change of Control, each Lender
will have the right to require the Borrower to prepay all or any part of the
principal amount of such Lender's Loans pursuant to the offer described below
(the "CHANGE OF CONTROL OFFER") at a prepayment price in cash equal to 100% of
the aggregate principal amount thereof PLUS accrued and unpaid interest and any
other amount due hereunder thereon, to the date of prepayment (collectively,
the "CHANGE OF CONTROL PAYMENT"). Within 15 days following any Change of
Control, the Borrower will mail a notice to each Lender describing the
transaction or transactions that constituted the Change of Control and offer to
repay the Loans on the date specified in such notice, which date shall be no
earlier than 30 days and no later than 45 days from the date such notice is
mailed (the "CHANGE OF CONTROL PAYMENT DATE") pursuant to the procedures set
forth below.
(b) Notice of a Change of Control Offer shall be mailed by
the Borrower to the Lenders at their addresses set forth in the Register. The
Change of Control Offer shall remain open from the time of mailing until 5
Business Days prior to the Change of Control Payment Date. The notice shall be
accompanied by a copy of the most recent reports furnished pursuant to SECTIONS
4.1 and 5.1. The notice shall contain all instructions and materials necessary
to enable such Lenders to elect to be prepaid pursuant to the Change of Control
Offer.
(c) On the Change of Control Payment Date, the Borrower shall
(i) repay all Loans or portions thereof of each Lender that properly elected
repayment thereof pursuant to the Change of Control Offer and (ii) pay the
Change of Control Payment for each such Loan (or portion thereof) elected to be
repaid. The Borrower will notify the remaining Lenders of the results of the
Change of Control Offer on or as soon as practicable after the Change of
Control Payment Date.
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Section 4.21. LIMITATION ON CHANGE OF FISCAL YEAR. The Borrower shall
not change its fiscal year to end on a date other than December 31.
Section 4.22. RAILROAD OPERATING LICENSE. The Borrower shall cause the
Railroad Operating License to at all times be in full force and effect.
Section 4.23. YEAR 2000 COMPLIANCE. The Borrower will take all such
actions as are necessary to (i) assure that the Borrower is, at all times, Year
2000 Compliant and (ii) assure that the Year 2000 Problem will not have a
Material Adverse Effect.
Section 4.24. REAL PROPERTY COLLATERAL LOCATED WITHIN NEW SOUTH WALES.
Not later than the 366th day following the Closing Date, the Borrower shall
have taken all such actions as may be necessary or desirable with respect to
that portion of the real property Collateral located within New South Wales on
which the Administrative Agent on behalf of the Lenders did not have, with the
consent of the Administrative Agent on the Closing Date, a valid and perfected
first priority Lien. At all times on and after the 366th day following the
Closing Date, the Administrative Agent on behalf of the Lenders shall have a
valid and perfected first priority Lien on such real property, subject to no
Liens other than Permitted Borrower Liens.
ARTICLE V.
COVENANTS OF THE PARENT
So long as any Commitment shall remain outstanding or any
Obligation shall remain unpaid, the Parent covenants and agrees with the
Lenders, the Arranger, the Security Trustee and the Administrative Agent as set
forth below:
Section 5.1. FINANCIAL STATEMENTS. The Parent shall furnish to each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of the Parent, a copy of the audited
consolidated balance sheet of the Parent and its Subsidiaries as at the end of
such year and the related audited consolidated statements of income and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, reported on without a "going concern" or like
qualification or exception, or qualification arising out of the scope of the
audit, by independent certified public accountants of nationally recognized
standing, prepared in accordance with GAAP; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of the Parent, the unaudited consolidated balance sheet of the Parent and
its Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows of the Parent and its
Subsidiaries for such quarter and the portion of the fiscal year through the
end of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer of the Borrower as
being fairly stated in all material respects (subject to normal year-end audit
adjustments); all such financial statements referred to in this SECTION 5.1(B)
shall be complete and correct in all material respects and shall be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein and with prior periods, subject to normal
year-end adjustments.
Section 5.2. CERTIFICATES; OTHER INFORMATION. The Parent shall, and
shall cause each of its Subsidiaries to, furnish to each Lender:
(a) concurrently with the delivery of the financial
statements referred to in SECTION 5.1(A), (i) a certificate of the independent
certified public accountants reporting on such financial statements stating
that in making the examination necessary therefor no knowledge was obtained of
any Default or Event of Default, except as specified in such certificate and
(ii) copies of all reports or written communications providing advice,
recommendations or analysis to the management of the Parent or its Subsidiaries
from such independent certified public accountants with regard to their audit
of the financial statements referred to in SECTION 5.1(A) or the internal
financial controls and systems of the Parent and its Subsidiaries;
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(b) concurrently with the delivery of any financial statement
pursuant to SECTION 5.1, (x) a certificate of a Responsible Officer of the
Parent stating that during such period (i) neither any Guarantor, Holdco nor
the Borrower has changed its name, its chief executive office, the location
where records concerning the Collateral are kept or the location of any
material item of tangible Collateral without complying with the requirements of
this Agreement and the Collateral Documents with respect thereto and (ii) each
Guarantor and the Borrower has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this Agreement
and the other Loan Documents to which it is a party to be observed, performed
or satisfied by it, and that such Responsible Officer has obtained no knowledge
of any Default or Event of Default except as specified in such certificate, and
(y) in the case of quarterly or annual financial statements, a compliance
certificate containing all information and calculations reasonably necessary
for determining compliance by the Parent and its Subsidiaries with the
provisions of this Agreement as of the last day of such fiscal quarter or
fiscal year of the Parent;
(c) as soon as available, and in any event no later than the
end of each fiscal year of the Parent, projected financial statements of the
Parent and its Subsidiaries as of and for the following fiscal year, which
shall include a consolidated balance sheet of the Parent and its Subsidiaries
as of the end of the following fiscal year, and the related consolidated
statements of projected cash flow and projected income for the following fiscal
year, together with an operating budget with respect to the following fiscal
year, and, as soon as available, significant revisions, if any, of such
projections with respect to such fiscal year (collectively, the "PROJECTIONS"),
which Projections shall in each case be accompanied by a certificate of a
Responsible Officer of the Parent stating that such Projections are based on
estimates, information and assumptions believed by such Responsible Officer to
be reasonable and that such Responsible Officer has no reason to believe that
such Projections are incorrect or misleading in any material respect;
(d) within 45 days after the end of each fiscal quarter of
each fiscal year of the Parent, a narrative discussion and analysis of the
consolidated financial condition and results of operations of the Parent and
its Subsidiaries for such fiscal quarter and for the period from the beginning
of the then current fiscal year to the end of such fiscal quarter, as compared
to the portion of the Projections, as applicable, covering such periods and to
the comparable periods of the previous year;
(e) copies of any statement, report or certificate furnished
to National Bank of Canada or any other lender pursuant to the Credit Facility
(other than routine correspondence not required to be delivered thereunder) or
any amendment, restatement, renewal, successor, supplemental or replacement
credit facility of the Parent or any of its Subsidiaries, promptly upon
delivery of such copies to National Bank of Canada or such other lenders;
(f) within seven days after the same are filed, copies of all
financial statements and reports which the Parent may make to, or file with,
the SEC or any successor or analogous Governmental Entity of the United States
or any other jurisdiction; and
(g) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
Section 5.3. INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
The Parent shall, and shall cause each of its Subsidiaries to, keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law, shall be made of all dealings
and transactions in relation to its business and activities; and upon
reasonable notice permit representatives of any Lender to visit and inspect any
of its properties and examine and make abstracts from any of its books and
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Parent and its Subsidiaries with senior officers of the Parent and its
Subsidiaries and with its independent certified public accountants.
Section 5.4. LIMITATION ON MODIFICATION OF CREDIT FACILITY AND
CONSORTIUM JUNIOR SUBORDINATED DEBT DOCUMENTS. The Parent shall not, and shall
not permit any Subsidiary to, amend, modify or change, or consent or agree to
any amendment, modification or change to, any of the terms of the Credit
Facility (other than any such amendment or modification increasing the notional
amount available for drawing thereunder up to $100,000,000) or the Consortium
Junior Subordinated Debt Documents without the consent of the Majority Lenders.
Notwithstanding the foregoing, the Parent may enter into replacement facilities
to the Credit Facility (and such replacement facilities shall be deemed to be
the "Credit Facility" for all purposes of this Agreement) to create separate
facilities in the United States and Canada if such separate facilities, taken
together, are on terms and conditions consistent with the terms and provisions
contained in the original Credit Facility and not materially adverse to the
Lenders, PROVIDED that the documentation relating to such replacement Credit
Facility shall be subject to the approval of the Majority Lenders, such
approval not to be unreasonably withheld.
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Section 5.5. YEAR 2000 COMPLIANCE. The Parent will, and will cause
each of its Subsidiaries to, take all such actions as are necessary to (i)
assure that the Parent and its Subsidiaries are, at all times, Year 2000
Compliant and (ii) assure that the Year 2000 Problem will not have a Material
Adverse Effect.
Section 5.6. AGREEMENTS WITH RESPECT TO FERRONOR. The Parent shall
not, and shall not permit any Subsidiary (including without limitation Holdco)
to, pledge, sell, dispose of or transfer any Capital Stock or other equity
interests in Ferronor. Each of the Parent and the Borrower further covenant and
agree that the Capital Stock or other equity interests of Ferronor shall at all
times be free and clear of any Liens.
Section 5.7. LIMITATION ON CHANGE OF FISCAL YEAR. The Parent shall not
permit the fiscal year of the Parent or any Subsidiary to end on a date other
than December 31.
Section 5.8. LIMITATION ON GUARANTEE OBLIGATIONS. The Parent shall
not, and shall cause its Subsidiaries not to, create, incur, assume or suffer
to exist any guarantee by the Parent or any of its Subsidiaries of any Person,
except for unsecured guarantees issued by the Parent or any of its Subsidiaries
(excluding the Borrower) in favor of the Parent or a Subsidiary of the Parent
guaranteeing Indebtedness expressly permitted by SECTION 5.11(B).
Section 5.9. LIMITATION ON FUNDAMENTAL CHANGES. The Parent shall not,
and shall cause its Subsidiaries not to, enter into any merger, acquisition,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign,
transfer or otherwise dispose of, all or substantially all of its property,
business or assets, or make any material change in its present method of
conducting business.
Section 5.10. CAPITAL CONTRIBUTIONS TO THE BORROWER. The Parent
covenants and agrees, for the benefit of the Lenders, that at any time the
Borrower shall fail to have at least $500,000 of uncommitted cash or Cash
Equivalents on hand, the Parent shall immediately contribute capital, in cash,
to the Borrower sufficient to cause the Borrower to have at least $500,000 of
uncommitted cash or Cash Equivalents on hand.
Section 5.11. LIMITATION ON INDEBTEDNESS. The Parent shall not, and
shall cause its Subsidiaries not to, create, incur, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness of the Parent and its Subsidiaries under the
Credit Facility and the Loan Documents;
(b) Indebtedness constituting deposits to secure the
performance of trade contracts (other than for borrowed money), statutory
obligations, surety and appeal bonds and performance bonds and other
obligations of a like nature that are incurred in the ordinary course of
business, not to exceed $5,000,000 in the aggregate at any time outstanding;
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(c) Indebtedness of the Parent or any Subsidiary (other than
the Borrower) incurred to repay, in whole or in part, the Credit Facility,
together with the accrued and unpaid interest on the Loans so repaid; PROVIDED,
that the terms and conditions of any such Indebtedness used to prepay the Loans
in part are acceptable to the Administrative Agent in its sole discretion;
(d) subject to SECTION 5.14, Indebtedness existing pursuant
to the Consortium Junior Subordinated Debt Agreements in an amount not to
exceed A$10,000,000 at any time;
(e) Indebtedness relating to either (i) a sale/leaseback
transaction involving a sale of the Boca Raton Property to a Subsidiary of the
Parent, and a related lease of the Boca Raton Property from such Subsidiary to
the Parent or another Subsidiary of the Parent, having a purchase price not to
exceed the fair market value of such Boca Raton Property and providing for
lease rentals not to exceed the fair market rental value of such property as of
the date such transaction occurs or (ii) a conventional refinancing of the Boca
Raton Property in an amount not to exceed the lesser of (A) $5,000,000 or (B)
80% of the fair market value of such property;
(f) Permitted Subordinated Indebtedness with payment terms
consistent with the provisions of SECTION 5.14;
(g) Indebtedness of the Borrower incurred to finance the
acquisition or construction of fixed or capital assets, not to exceed
$5,000,000; and
(h) Indebtedness incurred by Ferronor which is nonrecourse to
the Parent and its Subsidiaries, which nonrecourse Indebtedness is incurred by
Ferronor in connection with project financing in a notional amount not to
exceed the fair market value of the assets so financed.
Section 5.12. LIMITATION ON LIENS. The Parent shall not, and shall
cause its Subsidiaries not to, create, incur, assume or suffer to exist any
Lien upon any of its property, assets or revenues, whether now owned or
hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Parent and its Subsidiaries
in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlord's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 90 days or which are
being contested in good faith by appropriate proceedings and which, in any
case, do not encumber a material amount of the assets of the Parent or its
Subsidiaries;
(c) Liens securing Indebtedness of the Parent and its
Subsidiaries incurred to finance the acquisition or construction of fixed or
capital assets to the extent such Indebtedness is permitted pursuant to SECTION
5.11(D), PROVIDED that (i) such Liens shall be created at the time of the
acquisition or construction of such fixed or capital assets, (ii) such Liens do
not at any time encumber any property other than the property financed by such
Indebtedness and proceeds thereof, (iii) the principal amount of Indebtedness
secured thereby is not increased and (iv) the proceeds of the Indebtedness
secured by any such Lien shall not secure more than 100% of the original
purchase price of such property;
(d) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or materially
interfere with the ordinary conduct of the business of the Parent or its
Subsidiaries; and
(e) Liens created pursuant to the Collateral Documents and
Liens in existence on the date hereof pursuant to the Credit Facility
documentation.
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Section 5.13. FINANCIAL CONDITION COVENANTS OF THE PARENT. The Parent
shall not:
(a) INTEREST COVERAGE RATIO.
(i) Permit the Interest Coverage Ratio of the Parent
and its Subsidiaries on a consolidated basis for each of the fiscal quarters of
the Parent ending on March 31, 2000, June 30, 2000, September 30, 2000 and
December 31, 2000 to be less than 2:1; PROVIDED, that in calculating the
Interest Coverage Ratio for any such period, EBITDA and Cash Interest Expense
shall be annualized from January 1, 2000 (for example, EBITDA and Cash Interest
Expense for the quarter ended March 31, 2000 shall be annualized by multiplying
EBITDA and Cash Interest Expense for the period January 1, 2000 through March
31, 2000, respectively, by four; EBITDA and Cash Interest Expense for the
quarter ended June 30, 2000 shall be annualized by multiplying EBITDA and Cash
Interest Expense for the period January 1, 2000 through June 30, 2000,
respectively, by two; and so on); and
(ii) for all fiscal quarters of the Parent ending
after December 31, 2000, permit the Interest Coverage Ratio of the Parent and
its Subsidiaries on a consolidated basis for the latest four consecutive fiscal
quarters of the Parent ending after December 31, 2000 to be less than 2:1.
(b) LEVERAGE RATIO.
(i) Permit the Leverage Ratio of the Parent and its
Subsidiaries on a consolidated basis for each of the fiscal quarters of the
Parent ending on March 31, 2000, June 30, 2000, September 30, 2000 and December
31, 2000 to be more than 5:1; PROVIDED, that in calculating the Leverage Ratio
for any such period, EBITDA shall be annualized from January 1, 2000 (for
example, EBITDA for the quarter ended March 31, 2000 shall be annualized by
multiplying EBITDA for the period January 1, 2000 through March 31, 2000,
respectively, by four; EBITDA for the quarter ended June 30, 2000 shall be
annualized by multiplying EBITDA for the period January 1, 2000 through June
30, 2000, respectively, by two; and so on); and
(ii) for all fiscal quarters of the Parent ending
after December 31, 2000, permit the Leverage Ratio of the Parent and its
Subsidiaries for the latest four consecutive fiscal quarters of the Parent
ending after December 31, 2000 to be more than 5:1.
Section 5.14. LIMITATION ON RESTRICTED PAYMENTS. The Parent shall not,
and shall not permit any of its Subsidiaries to, declare or pay any dividend
(other than non-cash dividends payable solely in common stock of the Parent or
its Subsidiaries, as applicable) on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for, the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock (including but not limited to in respect of any
preferred Capital Stock outstanding or dividends accumulated thereon on the
Closing Date) or other equity interests of the Parent or any of its
Subsidiaries or any warrants or options to purchase any such Capital Stock,
whether now or hereafter outstanding, or make any other distribution in respect
thereof or purchase any thereof, either directly or indirectly, whether in cash
or property or in obligations of the Parent or any Subsidiary. The Parent shall
not, and shall not permit any of its Subsidiaries to, make any payment with
respect to or on account of, or purchase or otherwise acquire, any Permitted
Subordinated Indebtedness.
Section 5.15. LIMITATION ON TRANSACTIONS WITH AFFILIATES. Except as
provided in SECTION 5.11(E), the Parent shall not, and shall not permit any of
its Subsidiaries to, enter into any transaction, including, without limitation,
any purchase, sale, lease or exchange of property or the rendering of any
service, with any Affiliate unless such transaction (a) is otherwise permitted
under this Agreement, and (b) is upon fair and reasonable terms no less
favorable to the Parent or any of its Subsidiaries than it would obtain in a
comparable arm's length transaction with a Person which is not an Affiliate;
PROVIDED, that, in the case of (a) and (b), any such transaction involving more
than $250,000 must be approved by a majority of the disinterested members of
the Parent's Board of Directors.
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Section 5.16. EQUIPMENT MAINTENANCE AGREEMENT AND TRACK MAINTENANCE
AGREEMENT. Not later than June 30, 1999, the Borrower shall execute and deliver
a definitive (i) Equipment Maintenance Agreement and (ii) Track Maintenance
Agreement, each of which shall reflect the terms and conditions set forth in
the Heads of Agreement delivered to the Administrative Agent and the Lenders on
the Closing Date and be in form and substance reasonably acceptable to the
Administrative Agent.
Section 5.17. CREDIT FACILITY COVENANTS.
(a) The covenants of the Parent and its applicable
Subsidiaries set forth in Sections 10.16(g), (k) and (l) of the Credit
Facility, as in effect on the date hereof without regard to any amendments,
modifications or waivers thereto subsequent to the date hereof, are hereby
incorporated by reference in their entirety and are hereby made by the Parent
for the benefit of the Lenders hereunder.
(b) The Parent covenants that it shall not, and shall not
permit any Subsidiary to, request or accept any Acquisition Advance (as such
term is defined in the Credit Facility as in effect on the date hereof without
regard to any amendments, modifications or waivers thereto subsequent to the
date hereof) or, without limiting any other provision of this Agreement,
consummate any acquisition in an amount in excess of $2,000,000 without the
consent of the Majority Lenders, such approval not to be unreasonably withheld.
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ARTICLE VI.
COVENANTS OF THE BORROWER AND EACH GUARANTOR
So long as any Commitment shall remain outstanding or any
Obligation shall remain unpaid, the Borrower and each Guarantor covenants and
agrees with the Lenders, the Arranger, the Security Trustee and the
Administrative Agent as set forth below:
Section 6.1. PAYMENT OF OBLIGATIONS. Each Guarantor and the Borrower
shall pay, discharge or otherwise satisfy at or before maturity or before they
become delinquent or (in the case of trade payables and obligations other than
for borrowed money) within 30 days after the due date, as the case may be, all
its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the Parent and, if applicable, the Borrower,
RailAmerica Florida or RailAmerica Pty.
Section 6.2. CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE, ETC.
Each Guarantor and the Borrower shall (a) continue to engage in business of the
same general type as now conducted by it (after taking into account the
Acquisition); (b) preserve, renew and keep in full force and effect its
existence and (c) take all commercially reasonable action to maintain all
rights, privileges, franchises, licenses, patents, trademarks and tradenames
necessary or desirable in the normal conduct of its business; and (c) comply
with all Contractual Obligations and Requirements of Law.
Section 6.3. NOTICES. Each Guarantor and the Borrower shall promptly
give written notice to the Administrative Agent of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under the Credit
Facility, (ii) any material default or event of default under any Contractual
Obligation of any Guarantor or the Borrower, (iii) litigation, investigation or
proceeding which may exist at any time between the Parent or any of its
Subsidiaries and any Governmental Entity, which in either case, if not cured or
if adversely determined, as the case may be, could reasonably be expected to
have a Material Adverse Effect or (iv) the institution against the Parent or
any Subsidiary of any other action, suit or proceeding in any court or before
any Governmental Entity which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect;
(c) the following events, as soon as possible and in any
event within 30 days after the Parent knows or has reason to know thereof: (i)
the occurrence or expected occurrence of any Reportable Event with respect to
any Plan, a failure to make any required contribution in a material amount to a
Plan, the creation of any Lien in a material amount in favor of the PBGC or a
Plan or any withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly Controlled
Entity or any Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan;
(d) (i) any release or discharge by any Guarantor or the
Borrower of any Materials of Environmental Concern required to be reported
under Environmental Laws to any Governmental Entity which could reasonably be
expected to result in the assessment or payment of a Material Environmental
Amount; (ii) any condition, circumstance, occurrence or event that could
reasonably be expected to result in the assessment or payment of a Material
Environmental Amount or could result in the imposition of any Lien or other
restriction on the title, ownership or transferability of any Mortgaged
Property; and (iii) any action to be taken by any Guarantor or the Borrower
that could reasonably be expected to subject the Parent or any of its
Subsidiaries to the assessment or payment of a Material Environmental Amount;
and
(e) any development or event which could reasonably be
expected to have a Material Adverse Effect.
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Each notice pursuant to this SECTION 6.3 shall be accompanied
by a statement of a Responsible Officer of the Parent setting forth details of
the occurrence referred to therein and stating what action the Parent or the
applicable Subsidiary proposes to take with respect thereto.
Section 6.4. ENVIRONMENTAL LAWS. Each Guarantor and the Borrower
shall:
(a) (i) comply with all Environmental Laws applicable to it,
and obtain, comply with and maintain any and all Environmental Permits
necessary for its operations as conducted and as planned; and (ii) take all
reasonable efforts to ensure that all of its tenants, subtenants, contractors,
subcontractors, and invitees comply with all applicable Environmental Laws, and
obtain, comply with and maintain any and all Environmental Permits, applicable
to any of them insofar as any failure to so comply, obtain or maintain
reasonably could be expected to have a have a Material Adverse Effect;
(b) promptly comply in all material respects with all orders
and directives of all Governmental Entities directed to it regarding
Environmental Laws, other than such orders and directives or parts thereof as
are being contested in good faith and by appropriate proceedings;
(c) prior to acquiring any ownership or leasehold interest in
real property, or other interest in any real property which could give rise to
material liability under any Environmental Law, obtain a written environmental
assessment report regarding the environmental condition of such real property
by a reputable independent environmental consulting firm. A copy of each such
environmental assessment report shall be delivered to the Administrative Agent
by the end of the calendar quarter in which the acquisition closed, together
with a list of all acquisitions of interests in real property by it in such
quarter. Pursuant to this SECTION 6.4(C), the Administrative Agent shall have
the right, but shall not have any duty, to obtain, review or discuss any such
report;
(d) develop and maintain an appropriate program for
compliance with Environmental Law; and
(e) not more than once annually (unless an Event of Default
shall have occurred, in which case the Lender's and the Administrative Agent's
rights under this SECTION 6.4(E) shall not be so limited), promptly upon the
Administrative Agent's request, permit an Environmental Consultant whom the
Administrative Agent in its discretion designates to perform an environmental
assessment (including, without limitation, reviewing documents; interviewing
knowledgeable persons; and sampling and analyzing soil, air, surface water,
groundwater, and/or other media in or about property owned or leased by the
Parent, or on which operations of the Borrower otherwise take place) with
respect to those properties of the Borrower where there may be an environmental
risk. Such environmental assessment shall be in form, scope, and substance
reasonably satisfactory to the Administrative Agent. Each Guarantor and the
Borrower shall cooperate fully in the conduct of such environmental assessment,
and shall pay the costs of such environmental assessment immediately upon
written demand by the Administrative Agent. Pursuant to this SECTION 6.4(E),
the Administrative Agent shall have the right, but shall not have any duty, to
request and/or obtain such environmental assessment and shall also have the
right, but shall not have the any duty, to obtain, review or discuss any such
report.
Section 6.5. MAINTENANCE OF PROPERTY; INSURANCE. Each Guarantor and
the Borrower shall (a) keep all material property useful and necessary in its
business in good working order and condition, ordinary wear and tear excepted;
(b) maintain with financially sound and reputable insurance companies insurance
(including without limitation property and liability insurance) in at least
such amounts and against at least such risks (but including in any event
general liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business and otherwise comply with
the Collateral Documents and the Infrastructure Lease; and (c) furnish to each
Lender, upon written request, full information as to the insurance carried.
Section 6.6. FURTHER ASSURANCES. Upon the request of the Security
Trustee, each Guarantor and the Borrower shall promptly perform or cause to be
performed any and all acts and execute or cause to be executed any and all
documents (including, without limitation, financing statements and continuation
statements) for filing under the provisions of the Uniform Commercial Code or
any other Requirement of Law which are necessary or advisable in the reasonable
judgment of the Security Trustee to maintain in favor of the Security Trustee,
for the benefit of the Lenders, Liens on the Collateral that are duly perfected
in accordance with all applicable Requirements of Law.
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Section 6.7. DELIVERY OF SUBORDINATION AGREEMENTS. Each of the
Borrower and each Guarantor covenants and agrees to use all best efforts to
cause each Consortium Member to execute and deliver the Subordination
Agreements, each in form and substance satisfactory to the Administrative Agent
and the Lenders, no later than 21 days after the Closing Date.
ARTICLE VII.
CONDITIONS
The obligation of each of the Lenders to make Bridge Loans is
subject to (i) the representations and warranties of the Borrower and each
Guarantor in ARTICLE III and the representations and warranties of the Parent
in the Credit Facility being true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of the Closing Date, (ii) on or prior to the Closing Date, the Borrower and
such Guarantor, as the case may be, having performed and complied with all
covenants and conditions to be performed and observed by it on or prior to the
Closing Date and (iii) the prior or concurrent satisfaction of each of the
following conditions:
Section 7.1. CORPORATE AND OTHER PROCEEDINGS. On or before the Closing
Date, all corporate and other proceedings taken or to be taken in connection
with the Transactions and all documents incidental thereto shall be
satisfactory in form and substance to the Administrative Agent, and the
Administrative Agent shall have received on behalf of the Lenders the following
items, each of which shall be in form and substance satisfactory to the
Administrative Agent and, unless otherwise noted, dated the Closing Date:
(a) a certified copy of the Borrower's, Holdco's and each of
the Guarantor's charter[s] and like constitutent documents, in each case
together with a certificate of status, compliance, good standing or like
certificate with respect to the Borrower, Holdco and each Guarantor issued by
the appropriate government officials (if available in the applicable
jurisdiction) of the respective jurisdiction of its formation and of each
jurisdiction in which the Borrower, Holdco or such Guarantor owns any material
assets or carries on any material business, each to be dated a recent date
prior to the Closing Date;
(b) a copy of the Borrower's, Holdco's and each of the
Guarantor's bylaws or similar document, in each case certified as of the
Closing Date by its respective Secretary or one of its Assistant Secretaries;
(c) resolutions of the Borrower's, Holdco's and each of the
Guarantor's Boards of Directors approving and authorizing the execution,
delivery and performance of this Agreement, each of the other Transaction
Documents and any other documents, instruments and certificates required to be
executed by the Borrower, Holdco or such Guarantor in connection herewith or
therewith, specifically confirming that the Transactions benefit such party,
and approving and authorizing the consummation of the Transactions, each
certified as of the Closing Date by its respective Secretary or one of its
Assistant Secretaries as being in full force and effect without modification or
amendment;
(d) signature and incumbency certificates of the Borrower's,
Holdco's and each of the Guarantor's Officers executing this Agreement and any
other documents executed in connection therewith;
(e) executed copies of this Agreement, the other Loan
Documents and delivery of all other ancillary documents which the
Administrative Agent may reasonably require in connection with the Collateral
Documents, including without limitation (i) evidence satisfactory to the
Administrative Agent and the Security Trustee that notices of assignment under
the Collateral Documents have been delivered and returned properly executed to
the Security Trustee and (ii) evidence that the Security Trustee has received
share transfer in blank and certificates for the shares in the Borrower;
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(f) an Officers' Certificate from the Borrower and each
Guarantor in form and substance satisfactory to the Administrative Agent to the
effect that (i) the representations and warranties in ARTICLE III and the
representations and warranties of the Borrower or such Guarantor, as the case
may be, in the Credit Facility are true, correct and complete in all material
respects on and as of the Closing Date to the same extent as though made on and
as of that date, (ii) on or prior to the Closing Date, the Borrower or such
Guarantor, as the case may be, has performed and complied with all covenants
and conditions to be performed and observed by it on or prior to the Closing
Date and (iii) all conditions to the consummation of the Transactions have been
satisfied on the terms set forth in the documentation relating thereto and have
not been waived or amended without the Administrative Agent's prior written
consent;
(g) true and correct copies of the final form of each of: (i)
the Acquisition Documentation, which shall not have been amended from the
version previously given to the Lenders, (ii) the Credit Facility, (iii) the
Equipment Maintenance Agreement and (iv) the Track Maintenance Agreement, each
of which shall be satisfactory in form and substance to each of the Lenders;
(h) true and correct copies of each of the other Transaction
Documents, each of which shall be satisfactory in form and substance to each of
the Lenders;
(i) a copy of all closing documents relating to the
Acquisition and all such counterpart originals or certified copies of such
documents, instruments, certificates and opinions as the Administrative Agent
may reasonably request; and
(j) all authorizations, consents and approvals required by
SECTION 7.10.
Section 7.2. CONCURRENT TRANSACTIONS. Either prior to or concurrently
with the making of the Bridge Loans by the Lenders:
(a) the terms and conditions of the Acquisition Documentation
shall not have been modified in a way which is not satisfactory to the Lenders;
(b) there shall not exist (pro forma for the Acquisition and
the financing thereof) any Default or Event of Default or any default or event
of default under the Credit Facility; and
(c) the capitalization and corporate and ownership structure
of the Parent and the Borrower before and after the Acquisition and the
financing thereof shall be satisfactory to the Lenders in all respects.
Section 7.3. NO MATERIAL LOSS. Neither the Borrower nor any Guarantor
shall have sustained any loss or interference with respect to its businesses or
properties from fire, flood, hurricane, accident or other calamity, whether or
not covered by insurance, or from any labor dispute or any legal or
governmental proceeding which could reasonably be expected to have a Material
Adverse Effect.
Section 7.4. NO EVENT OF DEFAULT. No event shall have occurred and be
continuing or would result from the consummation of the Transactions that would
constitute an Event of Default.
Section 7.5. NO CHANGES IN FINANCIAL MARKETS. There shall not have
occurred any of the following: (i) trading in securities generally on the New
York Stock Exchange or the Nasdaq Stock Market's National Market or in the
over-the-counter market shall have been suspended or materially limited, or
minimum prices shall have been established on such exchange by the SEC, or by
such exchange or by any other regulatory body or governmental authority having
jurisdiction, (ii) a banking moratorium shall have been declared by Federal or
state authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving the
United States or there shall have been declared a national emergency or war by
the United States (other than the current hostilities in Iraq and the former
Yugoslavia), (iv) a disruption or material adverse change in the financial or
capital markets generally, in the market for new issues of high yield debt or
equity securities in particular or (v) a material adverse change in the general
economic, political or financial conditions (or the effect of international
conditions on the financial markets in the United States or Australia shall be
such) as to make it, in the reasonable judgment of Majority Lenders,
impracticable or inadvisable to proceed with the funding of the Bridge Loans on
the Closing Date.
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Section 7.6. DELIVERY OF OPINIONS. The Administrative Agent shall have
received originally executed copies of the following legal opinions:
(a) the legal opinion of Shutts & Bowen LLP, New York counsel
to the Borrower and each Guarantor;
(b) the legal opinion of Minter Ellison, Australia counsel to
the Borrower and each Guarantor;
(c) the legal opinion of Cariola y Cia, Chile counsel to the
Borrower, Holdco and each Guarantor;
(d) the legal opinion of Greenberg Traurig Hoffman Lipoff
Rosen & Quentel, P.A., New York counsel to the Parent;
(e) the legal opinion of Skadden, Arps, Slate, Meagher & Flom
LLP, special counsel to the Administrative Agent, the Security Trustee and the
Lenders;
(f) the legal opinion of Mallesons Stephen Jaques, special
counsel to the Administrative Agent, the Security Trustee and the Lenders; and
(g) the legal opinion of Urenda, Rencoret, Orrego y Dorr,
Chile counsel to the Administrative Agent, the Security Trustee and the
Lenders.
Each such legal opinion shall be in form and substance reasonably satisfactory
to the Lenders and shall cover such matters incident to the transactions
contemplated by this Agreement and the other Loan Documents as the
Administrative Agent may reasonably require.
Section 7.7. SOLVENCY. The Administrative Agent shall have received a
satisfactory solvency analysis certified by the chief financial officer of the
Parent which shall document the solvency of the Parent and its Subsidiaries
after giving effect to the Acquisition and the other transactions contemplated
hereby.
Section 7.8. PAYMENT OF FEES. On or before the Closing Date, the
Parent and the Borrower shall have paid to Barclays Bank PLC and their
Affiliates the fees payable on the Closing Date pursuant to SECTION 2.12.
Section 7.9. NO BREACH UNDER ENGAGEMENT LETTER OR FEE LETTER. Neither
the Borrower nor any Guarantor shall be in breach or violation of any of its
obligations under the Engagement Letter or the Fee Letter and each of the
Engagement Letter and the Fee Letter shall be in full force and effect.
Section 7.10. CONSENTS AND APPROVALS. On or before the Closing Date,
all governmental, shareholder and third-party consents (including a consent
from the lenders under the Credit Facility but excluding consents under
ordinary course customer contracts relating to the Acquisition acceptable to
the Administrative Agent) and approvals necessary in connection with the
Transactions and the other transactions contemplated hereby shall have been
obtained; all such consents and approvals shall be in full force and effect;
and all applicable waiting periods shall have expired without any action being
taken by any authority that could restrain, prevent or impose any material
adverse conditions on the Transactions or such other transactions or that could
seek or threaten any of the foregoing.
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Section 7.11. MARGIN REGULATIONS. The making of the Bridge Loans in
the manner contemplated in this Agreement shall not violate the applicable
provisions of Regulation T, U or X of the Board or any other regulation of the
Board.
Section 7.12. ABSENCE OF CERTAIN CHANGES. No material adverse change
in the consolidated financial condition, results of operations, business,
assets, liabilities, management, prospects or value of the Parent and its
Subsidiaries (including any event which, in the opinion of the Lenders, is
likely to result in such a material adverse change) shall have occurred since
the date of the most recent audited financial statements that have been
delivered to the Lenders as of the date hereof as to make it, in the reasonable
judgment of the Administrative Agent, impractical or inadvisable to proceed
with the funding of the Loans on the Closing Date pursuant to the terms
contemplated herein. No material inaccuracy in such financial statements shall
exist. The Parent and its Subsidiaries shall have no material liabilities
except (i) those set forth on the most recent audited balance sheets of such
entities provided to the Lenders as of the date hereof and (ii) those incurred
in the ordinary course of business (and consistent with past practice) since
such date.
Section 7.13. NET CAPITAL. There shall not have occurred any change in
law or regulation (or interpretation thereof) that could result in any Lender's
commitment to provide, or any Lender's providing, the financing contemplated by
this Agreement being a charge to the net capital of such Lender's parent or
Affiliate.
Section 7.14. BUSINESS PLAN; PRO FORMAS. The Administrative Agent
shall have received the following, each in form and substance satisfactory to
the Administrative Agent and the Lenders:
(a) a business plan for the Borrower for the fiscal years
following the Closing Date reasonably requested by the Administrative Agent;
(b) a written analysis of the business and prospects of the
Borrower for the period from the Closing Date through the final maturity of the
Term Loans;
(c) the Pro Forma Borrower Balance Sheet;
(d) the Projected Borrower Financial Statements;
(e) the Pro Forma Parent Balance Sheet; and
(f) the Projected Parent Financial Statements.
Each of (c), (d), (e) and (f) shall be prepared in accordance with GAAP
consistently applied.
Section 7.15. FILINGS, REGISTRATIONS AND RECORDINGS. Each document
required by the Collateral Documents or under law or reasonably requested by
the Administrative Agent to be delivered to the Security Trustee or to be
filed, registered or recorded in order to create in favor of the Security
Trustee a perfected Lien on all Collateral, prior and superior in right to any
other Person (other than with respect to Liens expressly permitted by SECTIONS
4.8(A) through (E) and 5.12(A) through (E)), shall have been filed or be in
proper form for filing, registration or recordation in each jurisdiction in
which the filing, registration or recordation thereof is so required or
requested.
Section 7.16. RAILROAD OPERATING LICENSE. The Borrower shall have
obtained from the appropriate authorities a Railroad Operating License, such
license to be in form and substance satisfactory to the Administrative Agent
and its counsel.
Section 7.17. CONSORTIUM JUNIOR SUBORDINATED DEBT. Prior to the
Closing Date, the Consortium Members shall have funded at least A$10,000,000 to
the Borrower pursuant to the Consortium Junior Subordinated Debt Agreements,
and each of the Consortium Junior Subordinated Debt Documents shall be in form
and substance satisfactory to the Administrative Agent and the Lenders and
shall have been duly executed and delivered by the parties thereto.
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ARTICLE VIII.
TRANSFER OF THE LOANS
Section 8.1. TRANSFER OF THE LOANS.
(a) ASSIGNMENT BY LENDERS. Any Lender may assign to one or
more assignees all or a portion of its rights and obligations under this
Agreement without the consent of the Borrower, any Guarantor or any other
Lender, but in compliance with all applicable laws; PROVIDED, HOWEVER, that no
interest in any Loans may be sold, assigned or otherwise transferred except
with the prior consent of the Administrative Agent (which consent shall not be
unreasonably withheld or delayed). Except in the case of an assignment to a
Lender or an Affiliate of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Loans, the amount of the Loans of the
assigning Lender subject to each such assignment (determined as of the date the
Assignment and Acceptance with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless the Borrower
otherwise consents. Each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement. The parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance. Upon recording thereof
pursuant to SECTION 8.3, from and after the effective date specified in each
Assignment and Acceptance the assignee thereunder shall be a party hereto and,
to the extent of the interest assigned by such Assignment and Acceptance, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment and Acceptance, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all of the
assigning Lender's rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of SECTIONS 2.7, 2.10 and 2.11 and ARTICLE XIV). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this SECTION 8.1(A) shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with SECTION 8.1(B).
(b) PARTICIPATIONS. Any Lender may, without the consent of
any Person, sell participations to one or more banks or other entities (a
"PARTICIPANT") in all or a portion of such Lender's rights and obligations
under this Agreement, but in such event (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Borrower, each Guarantor and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement. An agreement or instrument
pursuant to which a Lender sells such a participation shall provide that such
Lender shall retain the sole right to enforce the Loan Documents and to approve
any amendment, modification or waiver of any provision of the Loan Documents,
except that such agreement or instrument may provide that such Lender will not,
without the consent of the Participant, agree to any amendment, modification or
waiver described in SECTION 16.3(B) that affects such Participant. The Borrower
and each Guarantor agree that each Participant shall be entitled to the
benefits of SECTIONS 2.7, 2.10 and 2.11 and ARTICLE XIV to the same extent as
if it were a Lender and had acquired its interest by assignment pursuant to
SECTION 8.1(A); PROVIDED that no Participant shall be entitled to receive any
greater amount pursuant to any such Section than the transferor Lender would
have been entitled to receive in respect of the amount of the participation
transferred by such transferor Lender to such Participant had no such transfer
occurred.
Section 8.2. REGISTRATION OF TRANSFER OR EXCHANGE. Against receipt of
evidence of cancellation, discharge or surrender of any notes by a Lender for
registration of transfer or exchange, the Borrower will execute and deliver in
exchange therefor a new note or notes of the same aggregate tenor and principal
amount if such Lender so requests. The Borrower will pay any stamp tax or
governmental charge imposed in respect of any such transfer.
Section 8.3. REGISTER. The Administrative Agent shall keep a copy of
each Assignment and Acceptance delivered to it and maintain a register of the
names and addresses of each Lender and the principal amount of the Loans owing
to it pursuant to the terms hereof from time to time (the "REGISTER"). Upon its
receipt of an Assignment and Acceptance executed by an assigning Lender and an
Assignee, the Administrative Agent shall (i) promptly accept such Assignment
and Acceptance and (ii) on the effective date determined pursuant thereto
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record the information contained therein in the Register and give notice of
such acceptance and recordation to the Lenders and the Borrower. No assignment
shall be effective for purposes of this Agreement unless it has been recorded
in the Register as provided in this SECTION 8.3(D). The entries in the Register
shall be rebuttably presumed to be correct, absent manifest error, and the
Administrative Agent, the Security Trustee, the Arranger, the Borrower, each
Guarantor and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower and any Lender, at any reasonable time
and from time to time upon reasonable prior notice.
ARTICLE IX.
EVENTS OF DEFAULT
Section 9.1. EVENTS OF DEFAULT. If any of the following events shall
occur and be continuing:
(a) (i) the Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms hereof; or the Borrower shall fail
to pay any interest on any Loan, or any other amount payable hereunder or under
any other Loan Document, within two Business Days after any such interest or
other amount becomes due in accordance with the terms hereof; or (ii) any
Guarantor shall fail to pay any amount payable hereunder or under any other
Loan Document within two Business Days after any such amount becomes due; or
(b) any representation or warranty made or deemed made by the
Borrower or any Guarantor herein or in any other Loan Document or which is
contained in any certificate, document or financial or other statement
furnished by it at any time under or in connection with this Agreement or any
such other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) the Borrower or any Guarantor shall default in the
observance or performance of any covenant or agreement contained in this
Agreement or any other Loan Document; or
(d) (i) the Borrower, any Guarantor or any other Subsidiary
of the Parent shall default in making any payment of any principal under the
Credit Facility; or (ii) the Borrower or any Guarantor shall default in making
any payment of any other Indebtedness of any Guarantor or the Borrower, if any
(including, without limitation, any Guarantee Obligation), on the scheduled or
original due date with respect thereto; or (iii) the Borrower or any Guarantor
shall default in making any payment of any interest on any Indebtedness beyond
the period of grace, if any, provided in the instrument or agreement under
which such Indebtedness was created; or (iv) the Borrower, any Guarantor or any
other Subsidiary of the Parent shall default in the observance or performance
of any other agreement or condition under the Credit Facility or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness under the Credit Facility (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; (v) the Borrower or
any Guarantor shall default in the observance or performance of any other
agreement or condition under any other Indebtedness of any Guarantor or the
Borrower, if any, or contained in any instrument or agreement evidencing,
securing or relating thereto, or any other event shall occur or condition
exist, the effect of which default or other event or condition is to cause, or
to permit the holder or beneficiary of such Indebtedness under such other
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity; PROVIDED that a default, event or condition
described in clause (i), (ii), (iii), (iv) and (v) of this paragraph (d) shall
not at any time constitute an Event of Default under this Agreement unless, at
such time, one or more defaults, events or conditions of the type described in
clauses (i), (ii), (iii), (iv) and (v) of this paragraph (d) shall have
occurred and be continuing with respect to Indebtedness under the Credit
Facility or such other Indebtedness the outstanding principal amount of which
exceeds in the aggregate $5,000,000; or
(e) the Borrower, Holdco or any Guarantor shall commence any
case, proceeding or other action (i) (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization or relief of debtors, seeking to have an order for relief
entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
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debts, or (B) seeking appointment of a receiver, administrator, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrower, any Guarantor or Holdco shall
make a general assignment for the benefit of its creditors; or (ii) there shall
be commenced against the Borrower, any Guarantor or Holdco any case, proceeding
or other action of a nature referred to in clause (i) above which (A) results
in the entry of an order for relief or any such adjudication or appointment or
(B) remains undismissed, undischarged or unbonded for a period of 30 days; or
(iii) there shall be commenced against the Borrower or any Guarantor, Holdco
any case, proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or any
substantial part of its assets which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within 30 days from the entry thereof, or (iv) the Borrower, any
Guarantor or Holdco shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth in
clause (i), (ii), or (iii) above; or (v) the Borrower, any Guarantor or Holdco
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(f) (i) any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect to any
Plan or any Lien in favor of the PBGC or a Plan shall arise on the assets of
any Guarantor, the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Majority Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) any Guarantor, the Borrower or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Majority Lenders
is likely to, incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan or (vi) any other event
or condition shall occur or exist with respect to a Plan; or
(g) one or more judgments or decrees shall be entered against
any Guarantor, Holdco or the Borrower involving in the aggregate a liability
(not paid or fully covered by insurance) of $1,000,000 or more and all such
judgments or decrees shall not have been vacated, discharged, stayed or bonded
pending appeal within 30 days from the entry thereof; or
(h) any of the Collateral Documents or any Guaranty shall
cease, for any reason, to be in full force and effect, or the Borrower or any
Guarantor or any Affiliate of either such Person shall so assert or otherwise
repudiate any Loan Document, or any Lien created by any of the Collateral
Documents shall cease to be enforceable and of the same effect and priority
purported to be created thereby or it shall be illegal for any Lender to
maintain its Loan or comply with any of its obligations hereunder; or
(i) any of the Borrower, RailAmerica Florida or RailAmerica
Australia shall cease to be a Wholly Owned Subsidiary of the Parent (directly
or indirectly);
then, and in any such event, (A) if such event is an Event of Default specified
in clause (e) above, the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents shall
immediately and automatically become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: with the consent of Majority Lender, the Administrative Agent may, or
upon the request of Majority Lenders; the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement and the other Loan Documents
to be due and payable forthwith, whereupon the same shall immediately become
due and payable. Except as expressly provided above in this SECTION 9.1,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
In addition to the foregoing, if the Parent or the Borrower
fails to comply with the provisions of SECTION 10.1(B) in any material respect
after a Request, then the Lenders shall be entitled to unilaterally amend the
provisions of this Agreement and the other Loan Documents relating to interest
rate, optional redemption, maturity, warrants and registration rights and other
terms and conditions so as to reflect the terms of the Permanent Securities
that would have been issued in accordance with SECTION 10.1(B) had the Parent
or the Borrower complied therewith.
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Section 9.2. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Lenders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to the extent
permitted by law, be cumulative and in addition to every other right and remedy
given hereunder or now or hereafter existing at law or in equity or otherwise.
The assertion or employment of any right or remedy hereunder, or otherwise,
shall not prevent the concurrent or subsequent assertion or employment of any
other appropriate right or remedy.
Section 9.3. DELAY OR OMISSION NOT WAIVER. No delay or omission by any
Lender to exercise any right or remedy accruing upon any Event of Default shall
impair any such right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy given by this
ARTICLE IX or by law to the Lenders may be exercised from time to time, and as
often as may be deemed expedient, by the Lenders.
Section 9.4. WAIVER OF PAST DEFAULTS. Subject to SECTION 16.3, the
Majority Lenders by written notice to the Borrower may rescind an acceleration
and its consequences if the rescission would not conflict with any judgment or
decree and if all existing Events of Default (except nonpayment of principal or
interest that has be come due solely because of the acceleration) have been
cured or waived.
Section 9.5. RIGHTS OF LENDERS TO RECEIVE PAYMENT. Notwithstanding
anything to the contrary contained in this Agreement, the right of any Lender
to receive payment of principal of, premium, if any, and interest on the Loans
held by such Lender, on or after the respective due dates expressed in this
Agreement, or to bring suit for the enforcement of any such payment on or after
such respective dates, shall not be impaired or affected without the consent of
such Lender.
ARTICLE X.
PERMANENT SECURITIES
Section 10.1. PERMANENT SECURITIES.
(a) The Borrower and each Guarantor shall do all things
required in the reasonable opinion of the Arranger in connection with the sale
of the Permanent Securities, including, but not limited to (i) immediately
following the Closing Date, commencing the preparation of a Rule 144A offering
memorandum or registration statement under the Securities Act with respect to
the Permanent Securities, and other documentation (including an indenture and
registration rights agreement), all as deemed necessary by the Arranger, to
effect the offering of Permanent Securities, (ii) as soon as practicable
following the Closing Date, delivering to the Arranger such unaudited
consolidated and pro forma financial information, projections as to future
operations and such other financial information relating to the Borrower and
the Parent and their respective businesses as may be reasonably requested by
the Arranger, (iii) as soon as practicable following the Closing Date,
finalizing the Offering Documents in form and substance reasonably satisfactory
to the Arranger, including, if applicable, filings of a registration statement
under the Securities Act, (iv) as soon as practicable following the Closing
Date, making appropriate Officers of the Parent and its Subsidiaries
(including, without limitation, the Borrower) available to the Arranger for
meetings with rating agencies and prospective purchasers of the Permanent
Securities and preparing and presenting to potential investors road show
material in a manner consistent with other new issuances of high yield debt
securities and (v) executing an underwriting or purchase agreement
substantially in the form of the Arranger's standard underwriting or purchase
agreement, as the case may be, modified as appropriate to reflect the terms of
the transactions contemplated thereby and containing such terms, covenants,
conditions, representations, warranties and indemnities as are customary in
similar transactions and providing for the delivery of legal opinions, comfort
levels, and Officers' Certificates, all in form and substance reasonably
satisfactory to the Arranger and its counsel, as well as such other terms and
conditions as the Arranger and its counsel may in their discretion consider
appropriate in light of then prevailing market conditions applicable to similar
financings or in light of any aspect of the transactions contemplated hereby
that requires such other terms or conditions. The proceeds from the issuance of
the Permanent Securities shall be used to prepay the Loans pursuant to SECTION
2.5.
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(b) Each of the Borrower and the Parent unconditionally
agrees that as soon as practicable following the request (a "REQUEST") from the
Arranger made at any time after the Closing Date, the Parent will, and the
Borrower shall cause the Parent to, deliver, issue and/or sell Permanent
Securities upon such terms and conditions as may be specified in such Request.
ARTICLE XI.
TERMINATION
Section 11.1. TERMINATION. If no Loans have been funded hereunder, any
Lender, by notice to the Borrower, may terminate this Agreement at any time
after the earlier of (i) the termination of the Acquisition Agreement and (ii)
5:00 p.m., Sydney time, on May 30, 1999. In addition, any Lender may terminate
this Agreement prior to the Closing Date upon the occurrence of a Default or
Event of Default or a breach by any Guarantor of its obligations under the
Guaranty (it being understood that the Lenders shall have all rights after the
Closing Date as provided elsewhere in this Agreement).
Section 11.2. SURVIVAL OF CERTAIN PROVISIONS. If this Agreement is
terminated pursuant to this ARTICLE XI, such termination shall be without
liability of any party to any other party, except that, whether or not the
transactions contemplated by this Agreement are consummated, (i) the
Obligations of the Borrower and each Guarantor to reimburse the Lenders for all
of their out-of-pocket expenses pursuant to SECTION 15.1 and the Engagement
Letter and (ii) the indemnity provisions contained in ARTICLE XIV shall, in
each case, remain operative and in full force and effect.
ARTICLE XII.
SUBORDINATION OF PARENT GUARANTY
Section 12.1. AGREEMENT TO SUBORDINATE. The Parent agrees, and each
Lender agrees, that the Guaranty of the Parent evidenced by ARTICLE XIII shall
be subordinated in right of payment, to the extent and in the manner provided
in this ARTICLE XII, to the prior payment in full in cash or Cash Equivalents
of all Senior Debt (whether outstanding on the date hereof or hereafter
created, incurred, assumed or guaranteed), and that the subordination is for
the benefit of and enforceable by the holders of Senior Debt. The Parent shall
not incur any Indebtedness that is subordinated or junior in right of payment
to the Senior Debt and senior in any respect in right of payment to its
Guaranty.
Section 12.2. CERTAIN DEFINITIONS.
"HOLDCO" means RailAmerica de Chile S.A., a company
incorporated and existing pursuant to the laws of the Republic of Chile.
PERMITTED JUNIOR SECURITIES" means Capital Stock or other
equity interests in the Parent or debt securities that are subordinated to all
Senior Debt (and any debt securities issued in exchange for Senior Debt) to a
greater extent than the Guaranty of the Parent is subordinated to Senior Debt
pursuant to this Agreement.
"RAILAMERICA PTY" means RailAmerica Australia Pty Ltd., a
company incorporated in New South Wales.
"Representative" means the agent or representative for the
Senior Debt.
"SENIOR DEBT" means (i) all Indebtedness under the Credit
Facility, whether outstanding on the date hereof or thereafter incurred and
(ii) all Senior Obligations with respect to any of the foregoing, up to a
maximum of $105,000,000 in the aggregate.
"SENIOR OBLIGATIONS" means any principal, premium (if any),
interest, penalties, fees, charges, expenses, indemnifications, reimbursement
obligations, damages, guarantees and other liabilities and amounts payable
under the documentation governing the Senior Debt or in respect thereto.
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Section 12.3. LIQUIDATION; DISSOLUTION; BANKRUPTCY. Subject to SECTION
12.14, upon any distribution to creditors of the Parent in a liquidation or
dissolution of the Parent or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Parent or its property
(other than with respect to the Capital Stock or other equity interests of the
Borrower, RailAmerica Pty or Holdco), in an assignment for the benefit of
creditors or any marshalling of the Parent's assets and liabilities (other than
with respect to the Capital Stock or other equity interests of the Borrower,
RailAmerica Pty or Holdco):
(a) holders of Senior Debt shall be entitled to receive
payment in full in cash of all Senior Obligations due in respect of such Senior
Debt (including interest after, or which would accrue but for, the commencement
of any such proceeding at the rate specified in the Senior Debt, whether or not
a claim for such interest would be allowed) before any Lender shall be entitled
to receive any payment with respect to the Guaranty of Parent hereunder (except
that Lenders may receive Permitted Securities); and
(b) until all Senior Obligations with respect to Senior Debt
(as provided in SUBSECTION (1) above) are paid in full in cash, any
distribution to which Lenders would be entitled but for this ARTICLE XII shall
be made to holders of Senior Debt (except that Lenders may receive Permitted
Junior Securities), as their interests may appear.
A distribution may consist of cash, securities or other
property, by set-off or otherwise.
Section 12.4. DEFAULT ON DESIGNATED SENIOR DEBT. Subject to SECTION
12.14, the Parent may not make any payment or distribution to the
Administrative Agent or any Lender in respect of any Obligations and may not
acquire from the Administrative Agent or any Lender any Loans for cash or
property (other than Permitted Junior Securities) until all Senior Debt shall
have been paid in full in cash if:
(a) a default in the payment of any principal or other Senior
Obligations with respect to Senior Debt occurs and is continuing beyond any
applicable grace period in the Credit Facility; or
(b) a default, other than a payment default, on Senior Debt
occurs and is continuing that permits holders of the Senior Debt to accelerate
its maturity and the Administrative Agent receives a notice of the default (a
"PAYMENT BLOCKAGE NOTICE") from a Person who may give it pursuant to SECTION
12.11 hereof. If the Administrative Agent receives any such Payment Blockage
Notice, no subsequent Payment Blockage Notice shall be effective for purposes
of this SECTION 12.4 unless and until (i) at least 360 days shall have elapsed
since the effectiveness of the immediately prior Payment Blockage Notice and
(ii) all scheduled payments of principal, premium, if any, and interest on the
Loans that have come due have been paid in full in cash. No nonpayment default
that existed or was continuing on the date of delivery of any Payment Blockage
Notice to the Administrative Agent shall be, or be made, the basis for a
subsequent Payment Blockage Notice unless such default shall have been waived
for a period of not less than 360 days.
The Parent may and shall resume payments on and distributions
in respect of its Guaranty upon the earlier of:
(1) the date upon which the default is cured or
waived by written notice to the Administrative Agent and the Parent from the
Person or Persons who gave such Payment Blockage Notice and, in the case of
Senior Debt that has been accelerated, such acceleration has been rescinded by
written notice to the Administrative Agent and the Parent, or
(2) in the case of a default referred to in SECTION
12.4(II) hereof, 179 days pass after notice is received if the maturity of such
Senior Debt has not been accelerated,
if this ARTICLE XII otherwise permits the payment, distribution or acquisition
at the time of such payment or acquisition.
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Section 12.5. WHEN DISTRIBUTION MUST BE PAID OVER. In the event that
the Administrative Agent or any Lender receives any payment under the Parent's
Guaranty at a time when the Administrative Agent or such Lender, as applicable,
has actual knowledge that such payment is prohibited by this ARTICLE XII, such
payment shall be held by the Administrative Agent or such Lender, in trust for
the benefit of, and shall be paid forthwith over and delivered to their
Representative, as their respective interests may appear, for application to
the payment of all Senior Obligations with respect to Senior Debt remaining
unpaid to the extent necessary to pay such Senior Obligations in full in
accordance with their terms, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Debt.
With respect to the holders of Senior Debt, the
Administrative Agent undertakes to perform only such obligations on the part of
the Administrative Agent as are specifically set forth in this ARTICLE XII, and
no implied covenants or obligations with respect to the holders of Senior Debt
shall be read into this Agreement against the Administrative Agent. The
Administrative Agent shall not be deemed to owe any fiduciary duty to the
holders of Senior Debt, and shall not be liable to any such holders if the
Administrative Agent shall pay over or distribute to or on behalf of Lenders,
the Parent or any other Person money or assets to which any holders of Senior
Debt shall be entitled by virtue of this ARTICLE XII, except if such payment is
made as a result of the willful misconduct or gross negligence of the
Administrative Agent.
Section 12.6. NOTICE BY THE PARENT. The Parent shall promptly notify
the Administrative Agent of any facts known to the Parent that would cause a
payment of any amounts under the Parent's Guaranty to violate this ARTICLE XII.
Section 12.7. SUBROGATION. The Lenders shall be subrogated to the
rights of holders of Senior Debt to receive distributions applicable to Senior
Debt to the extent that distributions otherwise payable to the Lenders have
been applied to the payment of Senior Debt. A distribution made under this
ARTICLE XII to holders of Senior Debt that otherwise would have been made to
the Lenders is not, as between the Parent, on one hand, and the Lenders, on the
other hand, a payment by the Parent on its Guaranty.
Section 12.8. RELATIVE RIGHTS. This ARTICLE XII defines the relative
rights of the Lenders and holders of Senior Debt. Nothing in this Agreement
shall:
(a) impair, as between the Parent, on one hand, and the
Lenders, on the other hand, the obligation of the Parent under its Guaranty,
which is absolute and unconditional;
(b) creditors of the Parent other than their rights in
relation to holders of Senior Debt; or
(c) prevent the Administrative Agent or any Lender from
exercising its available remedies upon a Default or Event of Default against
the Borrower or any Guarantor, subject to the rights of holders of Senior Debt
to receive distributions and payments from the Parent otherwise payable to the
Lenders.
If the Parent fails to perform in any manner under its
Guaranty because of this ARTICLE XII, such failure is still a breach of the
Parent's obligations under its Guaranty and a Default or Event of Default
hereunder.
Section 12.9. SUBORDINATION MAY NOT BE IMPAIRED BY THE PARENT. No
right of any holder of Senior Debt to enforce the subordination of the Parent's
Guaranty shall be impaired by any act or failure to act by the Parent or any
Lender or by the failure of the Parent or any Lender to comply with this
Agreement.
Section 12.10. DISTRIBUTION OR NOTICE TO REPRESENTATIVE. Whenever a
distribution is to be made or a notice given to holders of Senior Debt, the
distribution may be made and the notice given to their Representative. Upon any
payment or distribution of assets of the Parent referred to in this ARTICLE
XII, the Administrative Agent and the Lenders shall be entitled to rely upon
any order or decree made by any court of competent jurisdiction or upon any
certificate of such Representative or of the liquidating trustee or agent or
other Person making any distribution to the Administrative Agent or to the
Lenders for the purpose of ascertaining the Persons entitled to participate in
such distribution, the holders of the Senior Debt, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all
other facts pertinent thereto or to this ARTICLE XII.
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Section 12.11. RIGHTS OF ADMINISTRATIVE AGENT. Notwithstanding the
provisions of this ARTICLE XII or any other provision of this Agreement, the
Administrative Agent shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment or distribution by the
Administrative Agent, and the Administrative Agent may continue to make
payments with respect to the Parent's Guaranty, unless the Administrative Agent
shall have received at the address set forth in SECTION 16.2 hereof at least
five Business Days prior to the date of such payment written notice of facts
that would cause the payment of any Obligations through the application of the
Parent's Guaranty to violate this ARTICLE XII. Only the Parent or a
Representative may give the notice.
The Administrative Agent in its individual or any other
capacity may hold Senior Debt with the same rights it would have if it were not
Administrative Agent. Any agent may do the same with like rights.
Section 12.12. AUTHORIZATION TO EFFECT SUBORDINATION. Each Lender
authorizes and directs the Administrative Agent on such Lender's behalf to take
such action as may be necessary or appropriate to effectuate the subordination
as provided in this ARTICLE XII, and appoints the Administrative Agent to act
as such Lender's attorney-in-fact for any and all such purposes.
Section 12.13. AMENDMENTS. The provisions of this ARTICLE XII shall
not be amended or modified without the written consent of the holders of all
Senior Debt.
Section 12.14. COLLATERAL NOT AFFECTED. Notwithstanding anything to
the contrary contained in this ARTICLE XII, in no event shall the
Administrative Agent's, the Security Trustee's or the Lenders right with
respect to the Collateral be affected or impaired in any manner, and each such
Person has full rights with respect to the Collateral. The provisions of this
ARTICLE XII shall not prevent the Administrative Agent, the Security Trustee or
any Lender from receiving and retaining for its own benefit any distribution
from the Parent in respect of the Collateral.
ARTICLE XIII.
GUARANTY
Section 13.1. THE GUARANTY.
(a) Each Guarantor hereby absolutely, unconditionally and
irrevocably guarantees, as principal obligor and not surety, the full and
punctual payment (whether at Stated Maturity, upon acceleration or otherwise)
of the principal of and interest, fees and premium (if any) on the Bridge Loans
and the Terms Loans, and the full and punctual payment of all other Obligations
of the Borrower under this Agreement and the other Loan Documents, including
all reasonable costs of collection and enforcement thereof and interest thereon
which would be owing by the Borrower but for the effect of any Bankruptcy Code
(collectively, the "GUARANTIED OBLIGATIONS"). Each Guarantor understands,
agrees and confirms that each of the Lenders may enforce this Guaranty up to
the full amount Guarantied by each Guarantor hereunder against each Guarantor
without proceeding against any other obligor or against any security for the
Guarantied Obligations. All payments made by each Guarantor under this Guaranty
shall be paid at the place and in the manner specified in SECTION 2.9. Each
Guarantor further agrees that (i) this is a continuing Guaranty of payment and
not merely a Guaranty of collection and (ii) this Guaranty is independent of
the Borrower's obligations under this Agreement.
(b) The obligations of each Guarantor hereunder shall be
unconditional and absolute and, without limiting the generality of the
foregoing, shall not be released, discharged or otherwise affected by:
(i) any extension, renewal, settlement, compromise,
waiver or release in respect of any Obligation of the Borrower under this
Agreement or any other Loan Document, by operation of law or otherwise;
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(ii) any modification or amendment of or supplement
to this Agreement or any of the other Loan Documents;
(iii) any release, non-perfection or invalidity of
any direct or indirect security for, or any other Person's guaranty of, any of
the Guarantied Obligations;
(iv) any change in the corporate existence,
structure or ownership of the Borrower or any other guarantor of the Borrower's
Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower or any obligor or any of their respective
assets or any resulting release or discharge of any Obligation of the Borrower
contained in the Loan Documents;
(v) the existence of any claim, set-off or other
rights which any obligor (including any Guarantor) may have at any time against
the Borrower or any other Person, whether in connection herewith or with any
unrelated transactions, PROVIDED that nothing herein shall prevent the
assertion of any such claim by separate suit or compulsory counterclaim;
(vi) any invalidity or unenforceability relating to
or against the Borrower for any reason of this Agreement or any other Loan
Document, or any provision of applicable law or regulation purporting to
prohibit the payment by the Borrower of the principal of, interest, premium or
fees on the Loans or any other amount payable by the Borrower under this
Agreement or any of the other Loan Documents; or
(vii) any other act or omission to act or delay of
any kind by the Borrower or any other Person or any other circumstance
whatsoever which might, but for the provisions of this paragraph, constitute a
legal or equitable discharge of Guarantied Obligations hereunder.
(c) Each Guarantor hereby waives diligence, presentment,
demand of payment, filing of claims with a court in the event of insolvency or
bankruptcy of the Borrower, any right to require a proceeding first against the
Borrower or another obligor, protest, notice and all demands whatsoever and
covenants that, subject to this ARTICLE XIII, this Guaranty shall not be
discharged except by complete payment and performance of all Guarantied
Obligations.
(d) If any Lender is required by any court or otherwise to
return to the Borrower or any Guarantor, or any Custodian for the Borrower or
any of the other obligors or their respective assets, any amount paid to any
Lender, this Guaranty, to the extent of the amount so returned, shall be
reinstated in full force and effect.
(e) Each Guarantor agrees that it shall not be entitled to
any right of subrogation in relation to the Lenders in respect of any
Guarantied Obligations until payment in full of all Guarantied Obligations.
Each Guarantor further agrees that (i) the maturity of the Guarantied
Obligations may be accelerated as provided in SECTION 9.1 notwithstanding any
stay, injunction or other prohibition preventing such acceleration in respect
of the Guarantied Obligations and (ii) in the event of any declaration of
acceleration of such Guarantied Obligations as provided in SECTION 9.1, such
Guarantied Obligations (whether or not due and payable) shall forthwith become
due and payable by each Guarantor for the purpose of this Guaranty.
Section 13.2. LIMITATION ON LIABILITY.
(a) Each Guarantor and, by its acceptance of any Bridge Loan
or Term Loan, each Lender, hereby confirms that it is the intention of all such
parties that this Guaranty not constitute a fraudulent transfer or conveyance
for purposes of any Bankruptcy Code, the United States Uniform Fraudulent
Conveyance Act, the United States Uniform Fraudulent Transfer Act or any
similar Australian or other law to the extent applicable to this Guaranty. To
effectuate the foregoing intention, the Lenders and each Guarantor hereby
irrevocably agree that the Obligations of each Guarantor under this Guaranty
shall be limited to the maximum amount as will, after giving effect to such
maximum amount and all other contingent and fixed liabilities of each Guarantor
that are relevant under such laws, result in the Obligations of each Guarantor
under the Guaranty not constituting a fraudulent transfer or conveyance.
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(b) Notwithstanding anything to the contrary contained in
this ARTICLE XIII, RailAmerica Florida's liability under this Guaranty shall be
limited to the collateral owned by RailAmerica Florida and pledged to the
Security Trustee for the benefit of the Lenders pursuant to the Equitable
Mortgage of Shares, dated on or about the Closing Date, by and among
RailAmerica Florida, RailAmerica Pty and the Security Trustee, and the proceeds
thereof.
Section 13.3. STAY OF ACCELERATION. In the event that acceleration of
the time for payment of any Guarantied Obligation is stayed upon insolvency,
bankruptcy or reorganization of the Borrower, all such amounts otherwise
subject to acceleration under the terms of this Agreement shall nonetheless by
payable by each Guarantor forthwith on demand by any Lender.
ARTICLE XIV.
INDEMNITY
Section 14.1. INDEMNIFICATION. The Borrower (the "INDEMNIFYING PARTY")
agrees to indemnify and hold harmless each Lender, the Arranger, the Security
Trustee and the Administrative Agent and their respective controlling persons
and Affected Parties and each director, officer, employee, affiliate, advisor,
Counsel and agent thereof (each, an "INDEMNIFIED PARTY") from and against any
and all losses, claims, damages and liabilities, joint or several, to which any
Indemnified Party may become subject relating to or arising out of or in
connection with the transactions contemplated by this Agreement (including the
use of the proceeds of the Loans) or any related transaction (including the
Acquisition), and to reimburse each Indemnified Party, promptly upon demand,
for expenses (including reasonable counsel fees and expenses) as they are
incurred in connection with the investigation of, preparation for or defense of
any pending or threatened loss, claim, damage or liability, or any litigation,
proceeding or other action in respect thereof, including any amount paid in
settlement of any litigation, proceeding or other action (commenced or
threatened) to which the Indemnifying Party shall have consented in writing
(such consent not to be unreasonably withheld) whether or not any Indemnified
Party is a party and whether or not liability resulted; PROVIDED, HOWEVER, that
the indemnity contained in this SECTION 14.1 will not apply to any Indemnified
Party with respect to losses, claims, damages, liabilities or related expenses
arising from the willful misconduct or gross negligence of such Indemnified
Party.
Section 14.2. INDEMNITY NOT AVAILABLE. If indemnification were for
reason of public policy not to be available, the Indemnifying Party, on the one
hand, and the Lenders, on the other hand, agree to contribute (in proportion to
their respective Commitments in the case of the Lenders to the losses, claims,
damages, liabilities or expenses (or any investigation, claim, litigation,
proceeding or other action (collectively, an "Action") in respect thereof) for
which such indemnification is held unavailable in such proportion as is
appropriate to reflect the relative benefits to the Indemnifying Party, on the
one hand, and the Lenders, on the other hand, in connection with the matter
giving rise to such losses, claims, damages, liabilities or expenses (or
actions in respect thereof). The Borrower agrees that for the purposes of this
SECTION 14.2 the relative benefits to the Borrower, on the one hand, and the
Indemnified Parties on the other hand, of the transactions contemplated by this
Agreement, including, without limitation, the Loans and the other transactions
contemplated by any of the Loan Documents in any way relating to any Loan,
including the use of the proceeds of the Loans, shall be deemed to be in the
same proportion that the proceeds of all Loans made or to be made to the
Borrower bears to the interest and fees paid or to be paid to the Lenders in
connection with the Loans. The foregoing contribution agreement shall be in
addition to any rights that any Indemnified Party may have at common law or
otherwise. No investigation or failure to investigate by any Indemnified Party
shall impair the foregoing indemnification and contribution agreement or an
right an Indemnified Party may have.
Section 14.3. SETTLEMENT OF CLAIMS. The Borrower agrees that it will
not settle, compromise or consent to the entry of any judgment in any pending
or threatened claim, action or proceeding in respect of which indemnification
or contribution could be sought under SECTION 14.1 or 14.2 (whether or not any
Indemnified Party is an actual or potential party to such claim, action or
proceeding) without the prior written consent of the Indemnified Parties,
unless such settlement, compromise or consent includes an unconditional release
of each Indemnified Party from all liability arising out of such claim, action
or proceeding, which consent shall not be unreasonably withheld.
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Section 14.4. INDEMNITY FOR TAXES, RESERVES AND EXPENSES. If, after
the date hereof, the adoption of any law or guideline or any amendment or
change in the administration, interpretation or application of any existing or
future law or guideline by any Governmental Entity charged with the
administration, interpretation or application thereof, or the compliance with
any request or directive of any Governmental Entity (whether or not having the
force of law):
(a) subjects any Affected Party to any tax of any kind with
respect to this Agreement or the Loans or changes the basis of taxation of
payments of amounts due hereunder or thereunder or with respect to this
Agreement or any of the other Loan Documents (including, without limitation,
any sales, gross receipts, general corporate, personal property, privilege or
license taxes, and including claims, losses and liabilities arising from any
failure to pay or delay in paying any such tax (unless such failure or delay
results solely from such Affected Party's negligence or willful misconduct),
but excluding (i) federal, state or local taxes based on net income incurred by
such Affected Party arising out of or under this Agreement or any of the other
Loan Documents) and (ii) Taxes, Other Taxes and any taxes, levies, imposts,
deductions, charges or withholding specifically excluded under SECTION 2.10(A);
(b) imposes, modifies or deems applicable any reserve
(including, without limitation, any reserve imposed by the Board), special
deposit or similar requirement against assets of the Borrower or any Guarantor
held by, credit to the Borrower or any Guarantor extended by, deposits of the
Borrower or any Guarantor with or for the account of, or other acquisition of
funds of the Borrower or any Guarantor by, any Affected Party;
(c) shall change the amount of capital maintained or
requested or directed to be maintained by an Affected Party; or
(d) imposes upon an Affected Party any other condition or
expense (including without limitation, (i) loss of margin and (ii) attorneys'
fees and expenses incurred by officers or employees of an Affected Party (or
any successor thereto) and expenses of litigation or preparation therefor in
contesting any of the foregoing) with respect to this Agreement or an of the
other Loan Documents or the purchase, maintenance or funding of the Loans by an
Affected Party,
and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, reduce the rate of return on capital of, or impose any
expense (including loss of margin) upon, an Affected Party with respect to this
Agreement, any of the other Loan Documents, the Obligations hereunder or
thereunder or the funding of the Loans hereunder, the Affected Party may notify
the Indemnifying Party of the amount of such increase, reduction, or
imposition, and the Indemnifying Party hereby agrees to pay to the Affected
Party the amount the Affected Party deems necessary to compensate the Affected
Party for such increase, reduction or imposition which determination shall be
conclusive absent manifest error. Such amounts shall be due and payable by the
Indemnifying Party 15 days after such notice is given.
Section 14.5. SURVIVAL OF INDEMNIFICATION. The provisions contained in
this ARTICLE XIV shall remain in full force and effect whether or not any of
the transactions contemplated hereby are consummated and notwithstanding the
termination of this Agreement or the payment in full of all Obligations
hereunder.
Section 14.6. LIABILITY NOT EXCLUSIVE; PAYMENTS. The agreements of the
Indemnifying Party in this ARTICLE XIV shall be in addition to any liability
that each may otherwise have. All amounts due under this ARTICLE XIV shall be
payable as incurred upon written demand therefor.
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ARTICLE XV.
THE ADMINISTRATIVE AGENT
Section 15.1. APPOINTMENT. Each Lender hereby irrevocably designates
and appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, to take such action on
its behalf under the provisions of this Agreement and the other Loan Documents
and to exercise such powers and perform such duties as are expressly delegated
to the Administrative Agent by the terms of this Agreement and the other Loan
Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall have no duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against the Administrative Agent.
Section 15.2. DELEGATION OF DUTIES. The Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to the advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents
or attorneys in-fact selected by it with reasonable care.
Section 15.3. EXCULPATORY PROVISIONS. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its own gross negligence or willful misconduct)
or (ii) responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by the Borrower or any officer
thereof contained in this Agreement or any other Loan Document or in any
certificate, report, statement, opinion or other document referred to or
provided for in, or received by the Administrative Agent under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or for any failure of the Borrower to perform its
obligations hereunder or thereunder. The Administrative Agent shall not be
under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of the Parent or any of its Subsidiaries (including the
Borrower).
Section 15.4. RELIANCE BY THE ADMINISTRATIVE AGENT. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any notes, writing, resolution, notice, consent, certificate, affidavit,
letter, facsimile, telex or teletype message, statement, order or other
document or conversation believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Parent or the Borrower), independent accountants and other experts selected by
the Administrative Agent. The Administrative Agent may deem and treat the payee
of the Loans as the owner thereof for all purposes unless a written notice of
assignment, negotiation or transfer thereof shall have been filed with the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement or any other Loan
Document unless it shall first receive such advice or concurrence of the
Majority Lenders as it deems appropriate or it shall first be indemnified to
its satisfaction by the Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action. The Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Majority Lenders, and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders and all future holders of the Loans.
Section 15.5. NOTICE OF DEFAULT. The Administrative Agent shall not be
deemed to have knowledge due or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received notice
from a Lender, a Guarantor or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default." In the event that the Administrative Agent receives such a
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notice, the Administrative Agent shall give notice thereof to the Lenders. The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Majority Lenders;
PROVIDED that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders.
Section 15.6. NON-RELIANCE ON THE ADMINISTRATIVE AGENT, THE ARRANGER
AND OTHER LENDERS. Each Lender expressly acknowledges that neither the
Administrative Agent, the Arranger nor any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates has made any
representations or warranties to it and that no act by the Administrative Agent
or the Arranger hereafter taken, including any review of the affairs of the
Borrower, shall be deemed to constitute any representation or warranty by the
Administrative Agent or the Arranger to any Lender. Each Lender represents to
the Administrative Agent and the Arranger that it has, independently and
without reliance upon the Administrative Agent, the Arranger or any other
Lenders, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition, prospects and credit
worthiness of the Borrower and each Guarantor and made its own decision to make
its Loans hereunder and enter into this Agreement. Each Lender confirms that it
is a qualified institutional buyer within the meaning of Rule 144A under the
Securities Act. Each Lender also represents that it will, independently and
without reliance upon the Administrative Agent, the Arranger or any other
Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition,
prospects and credit worthiness of the Borrower and each Guarantor. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder, neither the Administrative Agent
nor the Arranger shall have any duty or responsibility to provide any Lender
with any credit or other information concerning the business, operations,
property, financial or other condition, prospects or credit worthiness of the
Parent or any of its Subsidiaries which may come into the possession of the
Administrative Agent, the Arranger or any of their respective officers,
directors, employees, agents, attorneys-in-fact or Affiliates.
Section 15.7. INDEMNIFICATION. The Lenders agree to indemnify the
Administrative Agent and the Arranger in their respective capacities (to the
extent not reimbursed by the Borrower or any Guarantor and without limiting the
obligation of the Borrower and any Guarantor to do so), ratably according to
their respective Commitments in effect on the date on which indemnification is
sought, from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (include, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Administrative Agent or the Arranger in any way relating to or
arising out of, the Commitments, this Agreement, any other Loan Document or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing, PROVIDED
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements resulting solely from the
Administrative Agent's or the Arranger's gross negligence or willful
misconduct. The agreements in this subsection shall survive the payment of the
Loans and all other Obligations payable hereunder.
Section 15.8. ADMINISTRATIVE AGENT, ARRANGER IN THEIR INDIVIDUAL
CAPACITIES. The Administrative Agent, the Arranger and their respective
Affiliates may make loans to, accept deposits from and generally engage in any
kind of business with the Borrower or any Guarantor as though the
Administrative Agent or the Arranger, as the case may be, were not acting in
such capacities hereunder and under the other Loan Documents. With respect to
the Loans made or renewed by them, each of the Administrative Agent and the
Arranger shall have the same rights and powers under this Agreement and the
other Loan Documents as any Lender and may exercise the same as though it were
not the Administrative Agent or the Arranger, as the case may be, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
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<PAGE> 64
Section 15.9. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 30 days notice to the Lenders. If the
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents then the Majority Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (PROVIDED
that, so long as no Default or Event of Default shall have occurred, it shall
have been approved by the Borrower, such approval not to be unreasonably
withheld), shall succeed to the rights, powers and duties of the Administrative
Agent, hereunder. Effective upon such appointment and approval (if approval is
necessary), the term "Administrative Agent" shall mean and include such
successor agent, and the former Administrative Agent's rights, powers and
duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent any of the
parties to this Agreement or any holders of the Loans. After any retiring
Administrative Agent's resignation as Administrative Agent the provisions of
this Article XV shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent under this Agreement and
the other Loan Documents.
Section 15.10. LIMITATION OF DUTIES. The Arrangers, in their capacity
as such, shall have no duties or responsibilities, and shall incur no
liabilities, under this Agreement or the other Loan Documents.
ARTICLE XVI.
MISCELLANEOUS
Section 16.1. EXPENSES; DOCUMENTARY TAXES. The Borrower agrees to pay
(a) all reasonable out-of-pocket expenses (including, without limitation,
expenses incurred in connection with due diligence of the Lenders) associated
with the preparation, execution and delivery, administration, waiver,
enforcement or modification and enforcement of the documentation contemplated
hereby and (b) the reasonable fees and disbursements of legal counsel to the
Lenders in connection with the transactions contemplated herein, including in
each case those incurred prior to the date hereof, regardless of whether the
transactions contemplated hereby are consummated. The Borrower agrees to
indemnify the Lenders against any transfer taxes, documentary taxes,
assessments or charges made by any Governmental Entity by reason of the
execution and delivery, or the terms, of this Agreement or any of the other
Loan Documents.
Section 16.2. NOTICES. All notices and other communications pertaining
to this Agreement or any Loan shall be in writing and shall be delivered (a) in
Person (with receipt acknowledged), (b) by facsimile (confirmed immediately in
writing by a copy mailed by registered or certified mail, return receipt
requested, postage prepaid, addressed as hereafter set forth), (c) by
registered or certified mail, return receipt requested, postage prepaid, or (d)
by overnight courier, addressed as follows:
(i) If to the Administrative Agent, to it at:
Barclays Bank PLC Australian Branch
Level 24
400 George Street
Sydney NSW 2000
Australia
Attention: Richard Palmer/Alex York
Facsimile No.: 011 61 2 9220 6090
with a copy to:
Barclays Bank PLC
222 Broadway
New York, New York 10038
Attention: Graham McGahen/Jim McCarthy
Facsimile No.: (212) 412-1466
59
<PAGE> 65
(ii) If to any Lender, to it at its address set
forth on the signature pages hereto;
(iii) If to the Borrower or any Guarantor, to it at:
Freight Victoria Limited
c/o RailAmerica, Inc.
301 Yamato Road, Suite 1190
Boca Raton, Florida 33431
Attention: Gary O. Marino
Chief Executive Officer
Facsimile No.: (561) 994-3929
with copies to:
Freight Victoria Limited
140 King Street
Melbourne, Victoria
3000 Australia
Attention: Chief Financial Officer
Facsimile No.: 61 3 9614 4801
Minter Ellison
Rialto Towers
525 Collins Street
Melbourne Victoria
3000 Australia
Attention: Kerry C. H. Duncan
Facsimile No.: 61 3 9229 2666
Shutts & Bowen LLP
250 Australian Avenue South
Suite 500
West Palm Beach, Florida 33401
Attention: Scott G. Williams
Facsimile No.: (561) 650-8530
or to such other Person or address as shall be furnished in writing delivered
to the other parties in compliance with this SECTION 16.2.
Section 16.3. CONSENT TO AMENDMENTS AND WAIVERS.
(a) Subject to SECTION 12.13 and except as provided in
SECTION 16.3(B), this Agreement may be amended or supplemented with the consent
of the Borrower, each Guarantor and the Majority Lenders and any existing
default or compliance with any provision of this Agreement may be waived with
the consent of the Majority Lenders. Loans held by the Borrower or any of its
Affiliates will not be deemed to be outstanding for purposes of this SECTION
16.3.
(b) Notwithstanding the provisions of SECTION 16.3(A),
without the consent of each Lender directly affected thereby, an amendment or
waiver may not: (i) reduce the principal amount of any Loan, (ii) change the
fixed maturity of any Loan, (iii) reduce the rate of or change the time for
payment of interest on any Loan, (iv) waive a Default or Event of Default in
the payment of principal of, or premium, fees or interest, if any, on the Loans
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<PAGE> 66
or any other amounts payable under any of the Loan Documents, (v) except as
provided in SECTION 2.2(C), make any Loan payable in money other than that
stated in the applicable Loan, (vi) make any change in the provisions of this
Agreement relating to the rights of Lenders to receive (A) prepayments on, or
(B) payments of principal of, premium, if any, or fees or interest on, the
Loans, (vii) make any change to the provisions of ARTICLE IX that would
adversely affect the rights of any Lender, or (viii) make any change in the
foregoing amendment and waiver provisions. Notwithstanding the provisions of
SECTION 16.3(A), the provisions of ARTICLE XV shall not be amended or
supplemented without the consent of the Administrative Agent.
(c) Neither Guarantor shall permit any of its Subsidiaries
to, directly or indirectly, pay or cause to be paid any consideration, whether
by way of interest, fee or otherwise, to any Lender for or as an inducement to
any consent, waiver or amendment permitted by SECTION 16.3(A) unless such
consideration is offered to be paid and is paid to all Lenders that consent,
waive or agree to amend in the time frame set forth in the solicitation
documents relating to such consent, waiver or amendment.
Section 16.4. PARTIES. This Agreement shall inure to the benefit of
and be binding upon the Borrower, each Guarantor, the Affected Parties, the
Arranger and each of their respective successors and assigns. Except as
expressly in this Agreement, nothing expressed or mentioned in this Agreement
is intended or shall be construed to give any other Person any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. Except as expressly provided in this Agreement,
this Agreement and all conditions and provisions hereof are intended to be for
the sole and exclusive benefit of the Affected Parties (including without
limitation the Arranger) and their respective successors and assigns, and for
the benefit of no other Person.
Section 16.5. NEW YORK LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK (AFTER GIVING EFFECT TO SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK BUT WITHOUT REGARD TO ANY
CONFLICTS OF LAW PROVISIONS THEREOF WHICH WOULD REQUIRE THE APPLICATION OF THE
LAW OF ANY OTHER JURISDICTION). EACH PARTY HEREBY SUBMITS TO THE NONEXCLUSIVE
JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
NEW YORK AND OF ANY NEW YORK STATE COURT SITTING IN NEW YORK CITY (EACH, A "NEW
YORK COURT") FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TRANSACTIONS
CONTEMPLATED HEREBY. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
LAYING OF THE VENUE OF ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT AND ANY
CLAIM THAT ANY SUCH PROCEEDING BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. EACH PARTY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY
JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 16.6. [Reserved.]
Section 16.7. MARSHALLING; RECAPTURE. Neither the Administrative Agent
nor any Lender shall be under any obligation to marshall any assets in favor of
the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent any Lender receives any payment by or on behalf of
the Borrower, which payment or any part thereof is subsequently invalidated,
declared to be fraudulent or preferential, set aside or required to be repaid
to the Borrower or its estate, trustee, receiver, custodian or any other party
under any Bankruptcy Law, state or federal law, common law or equitable cause,
then, to the extent of such payment or repayment, the obligation or part
thereof which has been paid, reduced or satisfied by the amount so repaid and
shall be included within the liabilities of Borrower to such Lender as of the
date such initial payment, reduction or satisfaction occurred.
Section 16.8. LIMITATION OF LIABILITY. No claim may be made by the
Borrower, any Guarantor or any other Person against the Administrative Agent,
the Security Trustee, the Arranger or any Lender or the Affiliates, directors,
officers, employees, attorneys or agents of any of them for any special,
indirect, consequential or punitive damages in respect of any claim for breach
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<PAGE> 67
of contract or any theory of liability arising out of or related to the
transactions contemplated by this Agreement or the other Loan Documents, or any
act, omission or event occurring in connection therewith; and the Borrower and
each Guarantor hereby waive, release and agree not to sue and shall cause each
of its respective Subsidiaries to waive, release or agree not to sue (if
required), upon any claim for any such damages, whether or not accrued and
whether or not known or suspected to exist in its favor.
Section 16.9. INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Default or Event of Default if such action is
taken or condition exists.
Section 16.10. CURRENCY INDEMNITY. The Borrower acknowledges and
agrees that this is a credit transaction where specification of dollars is of
the essence and dollars shall be the currency of account and payment in all
events except as provided in SECTION 2.2(C). If, pursuant to a judgment or for
any other reason, payment shall be made in another currency and such payment,
after prompt conversion to dollars and transfer to New York City in accordance
with normal banking procedures, falls short of the sum due the Lenders in
dollars, the Borrower shall pay the Lender such shortfall and the Lenders shall
have a separate cause of action for such amount.
Section 16.11. WAIVER OF IMMUNITY. To the extent that the Borrower or
any Guarantor has or hereafter may acquire any immunity from:
(a) the jurisdiction of any court of (i) any jurisdiction in
which the Borrower or any Guarantor owns or leases property or assets
including, without limitation, Australia and the States of New South Wales and
Victoria or (ii) the United States, the State of New York or any political
subdivision thereof; or
(b) from any legal process (whether through service of
notice, attachment prior to judgment, attachment in aid of execution, execution
or otherwise) with respect to itself or its property and assets, this
Agreement, any Loan Document or actions to enforce judgments in respect of any
thereof,
it hereby irrevocably waives such immunity in respect of its Obligations under
the above- referenced documents.
Section 16.12. FREEDOM OF CHOICE. The submission to the jurisdiction
of the courts referred to in this ARTICLE XVI shall not (and shall not be
construed so as to) limit the right of any Lender to take proceedings against
the Borrower or any Guarantor in the courts of any country in which the
Borrower or such Guarantor has assets (including, without limitation,
Australia) or in any other court of competent jurisdiction nor shall the taking
of proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction (whether concurrently or not) if and to
the extent permitted by applicable law.
Section 16.13. SUCCESSORS AND ASSIGNS. Whenever in this Agreement any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party; and all covenants and agreements of
the Borrower and each Guarantor in this Agreement shall bind their respective
successors and assigns. Neither the Borrower nor any Guarantor may assign or
transfer any of its rights or obligations hereunder (by operation of law or
otherwise) without the prior written consent of the Majority Lenders.
Section 16.14. MERGER. This Agreement and the other documents executed
in connection therewith constitutes the entire contract among the parties
relating to the subject matter hereof and supersedes any and all previous
agreements among the parties relating to the subject matter hereof, except for
those provisions in the Fee Letter and the Engagement Letter that are in
addition to the provisions contained herein. The Commitment Letter shall be
deemed to have terminated as of the date of this Agreement, except for the
Borrower's and the Parent's obligations under the exclusivity paragraph of
Section 1, Section 5 and Annex A, and the Borrower's obligations under Section
10 of the Commitment Letter, which shall survive forever.
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<PAGE> 68
Section 16.15. SEVERABILITY CLAUSE. In case any provision in this
Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby and such provision shall be ineffective
in such jurisdiction only to the extent of such invalidity, illegality or
unenforceability.
Section 16.16. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE
DELIVERY. All representations, warranties and agreements contained in or
incorporated into this Agreement, or contained in Officers' Certificates
submitted pursuant hereto, shall remain operative and in full force and effect
until all Obligations under all of the Loan Documents have been repaid in full,
regardless of any investigation made by or on behalf of the Lenders or any
controlling Person of the Lenders, or by or on behalf of the Borrower or any
controlling Person of the Borrower.
Section 16.17. CONFIDENTIALITY. Each of the Arranger, the
Administrative Agent and the Lenders agrees to keep confidential all non-public
information provided to it by the Borrower or any Guarantor pursuant to this
Agreement or any other Loan Documents; PROVIDED that nothing herein shall
prevent the Arranger, the Administrative Agent or any Lender from disclosing
any such information (a) to the Arranger, the Administrative Agent, any other
Lender or any affiliate of any Lender, (b) to any assignee of any Lender or any
Participant (each, a "Transferee") or prospective Transferee which agrees to
comply with the provisions of this SECTION 16.17, (c) any of its employees,
directors, agents, attorneys, accountants and other professional advisors, (d)
upon the request or demand of any Governmental Entity having jurisdiction over
it, (e) in response to any order of any court or other Governmental Entity or
as may otherwise be required pursuant to any statute, rule, law or regulation,
(f) if requested or required to do so in connection with any litigation or
similar proceeding, (g) which has been publicly disclosed other than in breach
of this SECTION 16.17, (h) to any nationally recognized rating agency that
requires access to information about a Lender's investment portfolio in
connection with ratings issued with respect to such Lender or (i) in connection
with the exercise of any remedy hereunder or under any other Loan Document.
[signature pages follow]
63
<PAGE> 69
IN WITNESS WHEREOF, the parties hereto have duly executed
this Agreement as of the date first above written.
FREIGHT VICTORIA LIMITED
By: /s/ GARY. O. MARINO
----------------------------------------
Name: Gary O. Marino
Title: Director
By: /s/ DONALD D. REDFEARN
----------------------------------------
Name: Donald D. Redfearn
Title: Director
RAILAMERICA, INC.
By: /s/ GARY O. MARINO
----------------------------------------
Name: Gary O. Marino
Title: Chairman and Chief Executive
Officer
RAILAMERICA AUSTRALIA PTY LTD.
By: /s/ GARY O. MARINO
----------------------------------------
Name: Gary O. Marino
Title: Director
By: /s/ DONALD D. REDFEARN
----------------------------------------
Name: Donald D. Redfearn
Title: Director
RAILAMERICA AUSTRALIA, INC.
By: /s/ GARY O. MARINO
----------------------------------------
Name: Gary O. Marino
Title: President and Chief
Executive Officer
BARCLAYS BANK PLC AUSTRALIAN BRANCH,
as Administrative Agent
By: / / RICHARD J. PALMER
----------------------------------------
Name: Richard J. Palmer
Title: Associate Director
<PAGE> 70
Lenders:
Commitment Amount:
$100,000,000.00 BARCLAYS BANK PLC
AUSTRALIAN BRANCH
(ARBN 062 449 585), as a Lender
By: /s/ RICHARD J. PALMER
----------------------------------------
Name: Richard J. Palmer
Title: Associate Director
Payment Instructions:
Name of Bank: Barclays Bank PLC New York
CHIPS: 244419
Account No. 280890041
For the account of: Barclays Bank
PLC Australian Branch
Ref: Freight Victoria
<PAGE> 71
EXHIBIT A
[WHEN SIGNED IN AUSTRALIA, NOT TO BE SIGNED
OUTSIDE OF NEW SOUTH WALES OR THE
AUSTRALIAN CAPITAL TERRITORY]
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Senior Secured Loan Facility and
Guaranty Agreement, dated as of April 30, 1999 (as amended, supplemented or
otherwise modified from time to time, the "LOAN AGREEMENT"), by and among
Freight Victoria Limited, a company incorporated in the Australian Capital
Territory (the "BORROWER"), the Guarantors party thereto, the Lenders party
thereto and Barclays Bank PLC, as Administrative Agent (in such capacity, the
"ADMINISTRATIVE AGENT"). Unless otherwise defined herein, terms defined in the
Loan Agreement and used herein shall have the meanings given to them in the
Loan Agreement.
1. The Assignor identified on Schedule I hereto (the "ASSIGNOR") and
the Assignee identified on Schedule I hereto (the "ASSIGNEE") agree as follows:
2. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the percentage interest described in
Schedule I hereto (the "ASSIGNED INTEREST") in and to the Assignor's rights and
obligations under the Loan Agreement (the "ASSIGNED FACILITIES"), in a
principal amount for the Assigned Facilities as set forth on Schedule I hereto.
3. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Loan Agreement or with respect to the
execution, legality, validity, enforceabilility, genuineness, sufficiency or
value of the Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any Guarantor or any Guarantor
Subsidiary or any other obligor or the performance or observance by the
Borrower or any Guarantor or any other obligor of any of their respective
obligations under the Loan Agreement or any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; and (c) attaches
any notes, if any, held by it evidencing the Assigned Facilities and (i)
requests that the Administrative Agent, upon request by the Assignee, exchange
the attached notes for a new note or notes payable to the Assignee and (ii) if
the Assignor has retained any interest in the Assigned Facility, requests that
the Administrative Agent exchange the attached notes, if any, for a new note or
notes, if any, payable to the Assignor, in each case in amounts which reflect
the assignment being made hereby (and after giving effect to any other
assignments which are effective on the Effective Date).
4. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Loan Agreement, and all schedules and exhibits
thereto together with copies of the financial information delivered pursuant to
Section 4.1 thereof and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (c) agrees that it will, independently and without
reliance upon the Assignor, the Administrative Agent or any other Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Loan Agreement, the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Loan Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agent by the terms thereof, together with such
powers as are incidental thereto; (e) agrees that it will be bound by the
provisions of the Loan Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Loan Agreement are required to be
performed by it as a Lender; (f) agrees that it shall have no recourse against
the Assignor with respect to any matters relating to the Loan Agreement, the
other Loan Documents or any others instrument or documents furnished pursuant
hereto or thereto; and (g) agrees that it will be bound by the provisions of
the RailAmerica Security Trust Deed in its capacity as a beneficiary under that
trust.
<PAGE> 72
5. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule I hereto (the "EFFECTIVE
DATE"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Administrative Agent for acceptance by it and recording by the
Administrative Agent pursuant to Section 6.2 of the Loan Agreement, effective
as of the Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agent, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agent).
6. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agent shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignor for amounts which have accrued to the Effective Date
and to the Assignee for amounts which have accrued subsequent to the Effective
Date. The Assignor and the Assignee shall make all appropriate adjustments in
payments by the Administrative Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.
7. From and after the Effective Date, (a) the Assignee shall be a
party to the Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under
the other Loan Documents and shall be bound by the provisions thereof and (b)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Loan
Agreement.
8. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
A-2
<PAGE> 73
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed as of this __ day of ______, ____ by
their respective duly authorized officers on Schedule I hereto.
[ASSIGNOR]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[ASSIGNEE]
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
A-3
<PAGE> 74
Schedule I
to Assignment and Acceptance
Name of Assignor:
Name of Assignee:
Effective Date of Assignment:
Principal Commitment Commitment Percentage(1)
Amount Assigned Assigned
-------------------- ------------------------
$_____________ ______ . _____ %
- - --------
(1) Calculate the Commitment Percentage that is assigned to at least 9
decimal places and show as a percentage of the aggregate commitments
of all Lenders
