EXHIBIT 4.1
CO-ORDINATION AGREEMENT
Sale of Pacific Brands
[LOGO OF FREEHILLS]
000 Xxxxxxx Xxxxxx Xxxxxxxxx Xxxxxxxx 0000 Xxxxxxxxx
Telephone 00 0 0000 0000 Facsimile 61 3 9288 1567
xxx.xxxxxxxxx.xxx.xx DX240 Melbourne
SYDNEY MELBOURNE PERTH CANBERRA BRISBANE HANOI HO CHI MINH CITY SINGAPORE
Correspondent Offices JAKARTA KUALA LUMPUR
Liability limited by the Solicitors' Limitation of Liability Scheme, approved
under the Professional Standards Xxx 0000 (NSW)
Reference BAE
Co-ordination agreement
TABLE OF CONTENTS
Clause Page
1 Definitions and Interpretation 1
1.1 Definitions 1
1.2 Interpretation 10
1.3 Business Day 11
1.4 Paramountcy 11
2 Conditions precedent 11
2.1 Conditions 11
2.2 Best endeavours 11
2.3 Notice 12
2.4 Waiver 12
2.5 Cut-off date 12
3 Purchase Price 12
3.1 Calculation of Purchase Price 12
3.2 Payment of Purchase Price 13
3.3 Payment at Completion 13
3.4 Final Payment 13
3.5 Complete discharge 13
4 Completion 14
4.1 Date for Completion 14
4.2 Interdependency 14
4.3 Secondary Consents 14
4.4 ITO Services Agreement 16
4.5 Tax Indemnity Deed 17
5 Completion Statement 17
5.1 Stocktake 17
5.2 Completion Accounts, Completion Statement, Apportionment
Statement and EBIT Statement 17
5.3 Valuer 20
5.4 Effect of Matters In Dispute 21
6 Warranties and Indemnities 22
6.1 Accounts 22
6.2 Management Accounts 22
6.3 Application of the Seller's Warranties 22
6.4 [Not used] 23
6.5 Time of Warranties 23
6.6 Disclosure 23
6.7 Matters of public record 23
6.8 Environmental Indemnity 23
6.9 Litigation Indemnity 25
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7 Limitations on liability 26
7.1 Limitation to Claims under this agreement 26
7.2 Awareness 26
7.3 Limitation for insurance 26
7.4 Limitation for provisions 27
7.5 Limitation for future events 27
7.6 Time limits 27
7.7 Monetary limits 28
7.8 Maximum amount of Warranty Claims 28
7.9 Buyer Group Companies' obligations 28
7.10 Right to reimbursement 29
7.11 All Warranty Claims 29
8 Foreign Exchange Contracts 29
8.1 Financial adjustments 29
8.2 Interest 30
8.3 Indemnity 30
8.4 Prior to Completion 30
9 Strategic Investment Programme 30
9.1 Entitlements 30
9.2 Payment 30
9.3 Interest 31
9.4 Acknowledgment 31
9.5 Indemnity 31
10 Acknowledgements 31
10.1 Xxxxx Contract 31
10.2 Inter Group Debts 31
10.3 Restructuring Provision 32
10.4 General Provision 32
10.5 Restructuring 32
11 Announcements and confidentiality 33
11.1 Legal requirements 33
11.2 Disclosure to Officers, employees and professional advisers 33
11.3 Further publicity 33
11.4 Confidentiality 33
11.5 Return of information and documents 33
12 Duties, costs and expenses 34
12.1 Duties 34
12.2 Costs and expenses 34
12.3 Costs of performance 34
13 General 34
13.1 Notices 34
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13.2 Governing law and jurisdiction 35
13.3 Prohibition and enforceability 35
13.4 Waivers 36
13.5 Variation 36
13.6 Assignment 36
13.7 Survival of certain provisions 36
13.8 Default interest 36
13.9 Further assurances 37
13.10 Entire agreement 37
13.11 Non-merger 37
13.12 Counterparts 37
13.13 Attorneys 37
14 Incorporation by reference 37
14.1 Linked Transaction Agreements 37
14.2 References to group companies 37
15 Guarantee and indemnity - Seller 39
15.1 Guarantee 39
15.2 Indemnity 39
15.3 Extent of guarantee and indemnity 39
15.4 Continuing guarantee and indemnity 39
15.5 Warranties of the Guarantor 40
15.6 Rights 40
15.7 Ansell 40
16 Guarantee and indemnity - Buyer 40
16.1 Guarantee 40
16.2 Indemnity 41
16.3 Extent of guarantee and indemnity 41
16.4 Continuing guarantee and indemnity 41
16.5 Warranties of the Guarantor 41
16.6 Rights 42
17 Speeds Receivable 42
Schedule 1 - Parties 43
Schedule 2 - Consents 45
Schedule 3 - Completion Statement 47
Schedule 4 - Notes for preparation of Completion Statement 49
Schedule 5 - Notes for preparation of the Apportionment Statement 51
Schedule 6 - Accounts 53
Schedule 7 - Bid Accounts 54
Schedule 8 - Senior Management 55
Schedule 9 - Earn Out 56
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1 During Earn Out Period 57
1.1 Seller Nominee and information 57
1.2 Excluded Costs 57
1.3 Included Revenue 58
1.4 Determination 58
1.5 Covenants by Buyer 58
2 Early Termination of Earn Out Period 59
2.1 Early termination 59
2.2 Early payment 59
3 Earn Out Calculation 59
3.1 Review by Seller's Accountant 59
3.2 Attempt to resolve 59
3.3 Valuer 59
4 Earn out 60
4.1 Earn out amounts 60
4.2 Determination of earn out amount 60
4.3 Payment of earn out amount 60
Annexure A - ITO Services Agreement
Annexure B - Tax Indemnity Deed
Annexure C - Data Room
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THIS CO-ORDINATION AGREEMENT
is made on 2001 between the parties specified in schedule 1.
RECITALS
A. The parties have agreed that the Seller Group Companies will sell
the assets and shares more particularly described in the Linked
Transaction Agreements to the Buyer Group Companies on the terms
of those agreements.
B. In order to coordinate the transactions the subject of the Linked
Transaction Agreements, the parties wish to record in a single
document certain matters that have overarching effect on those
transactions such as, without limitation:
(a) the conditions precedent to Completion occurring;
(b) the payments due from the Buyer Group Companies;
(c) the giving of a warranty in relation to the Accounts;
(d) the preparation and finalisation of the Completion
Statement; and
(e) the giving of warranties generally and the limitations on
liability that apply in respect of such warranties.
C. The Guarantor has agreed to guarantee the performance by the
Seller Group Companies of their obligations under this agreement.
D. The Buyer Guarantor has agreed to guarantee the performance by
the Buyer Group Companies of their obligations under this
agreement.
THE PARTIES AGREE
in consideration of, among other things, the mutual promises contained
in this agreement:
1 DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In this agreement:
Accounting Standards means:
(a) accounting standards (as defined in section 9 of the Corporations
Act) nominated in the notes to the Accounts; and
(b) generally accepted Australian accounting principles,
in each case as applied by PDL in the preparation of the Accounts;
Accounts means the special purpose consolidated audited statement of
net assets of the Pacific Brands Business (other than the Non-Hyperion
Business) as at the Accounts Date and the special purpose consolidated
audited profit and loss
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statement of the Pacific Brands Business (other than the Non-Hyperion
Business) for the year ended on the Accounts Date together with any
notes attached to and forming part of those financial statements, all
as set out in schedule 6;
Accounts Date means 30 June 2001;
Affected Shares has the meaning given to that term in clause
4.3(b)(3);
Affected Shares Agreements means each of the Shares Agreements
identified in part B of schedule 2 in respect of which all relevant
Secondary Consents have not been obtained by Completion;
Agreed Accounting Principles means the accounting principles and
practices used by PDL in the preparation of the Accounts, consistently
applied and assuming continuity of operation of the Pacific Brands
Business, except:
(a) that:
(1) freehold property; and
(2) plant and equipment,
as those terms are defined in the relevant Assets Agreement or
Shares Agreement will be valued at the values given in the
Accounts adjusted only for accounting depreciation applying rates
consistently applied and amounts attributable to acquisitions and
disposals;
(b) no restructuring provisions additional to those contained in the
Accounts may be raised;
(c) the asset amount contained in the Bid Accounts relating to the
Xxxxx Contract is the agreed carrying value of that asset;
(d) to the extent that any item is not dealt with by the Agreed
Accounting Principles then generally accepted Australian
accounting principles will apply;
Agreed Adjustments means the adjustments to be made to the Completion
Accounts in order to derive the Completion Statement, as described in
Part A of schedule 4;
Ansell means Xxxxxx Healthcare Products Inc;
Apportionment Statement means the statement to be prepared pursuant to
clause 5.2(f);
Assets Agreement Australia means the Business Sale Agreement executed
on the same day as this agreement by certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to the
Pacific Brands Business carried on by certain of the Seller Group
Companies in Australia (excluding the Bonds Industries Business);
Assets Agreement New Zealand means the Business Sale Agreement
executed on the same day as this agreement by certain of the Seller
Group Companies and certain of the Buyer Group Companies in relation
to the Pacific Brands Business carried on by certain of the Seller
Group Companies in New Zealand;
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Assets Agreements means the Assets Agreement Australia and the Assets
Agreement New Zealand;
Australia Assets Purchase Price has the meaning given to the term
Purchase Price in the Assets Agreement Australia;
Australia Share Purchase Price has the meaning given to that term in
the Shares Agreement Australia;
Australia Assets Completion has the meaning given to the term
Completion in the Assets Agreement Australia;
Australia Shares Completion has the meaning given to the term
Completion in the Shares Agreement Australia;
Authorisation means any certificate, licence, approval, permit,
authority or exemption from, by or with a Governmental Agency
necessary to carry on the Business as currently operated;
Bid Accounts means the statement set out in schedule 7 which
disclosed, as at the Accounts Date, the consolidated net assets of the
Pacific Brands Business as derived from the Accounts following
specific adjustments as set out in schedule 7;
Bonds Industries Business means that part of the Pacific Brands
Business carried on by Bonds Industries Pty Ltd;
Business Day means a day on which banks are open for business in
Melbourne, Sydney and Auckland excluding a Saturday, Sunday or public
holiday;
Buyer Group Companies means the entities listed in part 2 of schedule
1;
Buyer Guarantor means PB Holdings NV;
Buyer's Warranties means the:
(a) warranties set out in part 1 of schedule 1 of the Assets
Agreements; and
(b) warranties set out in part 1 of schedule 2 of the Shares
Agreements;
Claim means any claim or cause of action (including, but not limited
to, in contract, in tort or under statute) in respect of this
agreement or any of the Linked Transaction Agreements;
Completion means each of:
(a) the Australia Assets Completion;
(b) the Australia Shares Completion;
(c) the New Zealand Completion;
(d) the UK Completion;
(e) the USA Completion;
(f) the Indonesia Completion;
(g) the Fiji Completion;
(h) the Hong Kong Completion;
(i) the Malaysia Completion; and
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(j) the Novare Completion;
Completion Accounts means the special purpose consolidated audited
statement of net assets of the Pacific Brands Business (other than the
Non-Hyperion Businesses) to be prepared as at the Effective Time, in
accordance with the Agreed Accounting Principles and in the same form
as the Accounts, pursuant to clause 5.2;
Completion Date means the date on which Completion occurs;
Completion Statement means the statement to be prepared as at the
Effective Time pursuant to clause 5.2 and in the form set out in
schedule 3;
Conditions means that each Key Consent must be obtained;
Current Speeds Receivable means the net receivable relating to Speeds
as at the Effective Time as contained in the Completion Accounts
(which is to be eliminated as an Agreed Adjustment to derive the
Completion Statement), less the Non Current Speeds Receivable;
Data Room means the data room made available by the Seller Group
Companies for inspection by the Buyer containing the documents
described in the indices attached as Annexure C;
Disclosure Schedule means each of:
(a) schedule 2 of the Assets Agreement Australia;
(b) schedule 3 of the Shares Agreement Australia;
(c) schedule 2 of the Assets Agreement New Zealand;
(d) schedule 3 of the Shares Agreement UK;
(e) schedule 3 of the Shares Agreement USA;
(f) schedule 3 of the Shares Agreement Indonesia;
(g) schedule 3 of the Shares Agreements Fiji;
(h) schedule 3 of the Shares Agreement Hong Kong;
(i) schedule 3 of the Shares Agreement Malaysia; and
(j) schedule 3 of the Novare Shares Agreement;
Dollars, A$ and $ means Australian dollars, unless otherwise
specified;
Earn Out Amount has the meaning given in schedule 9;
EBIT Statement means the statement to be prepared pursuant to clause
5.2, setting out the First Period EBIT;
Effective Time means, in the jurisdiction in which it is necessary to
determine it, 11.59 pm on Friday, 30 November 2001;
Environment means all or any of the following media, namely the air,
water and land including within man-made or other natural structures
either above or below ground;
Environmental Law means any applicable law (whether civil, criminal or
administrative), common law, statute, statutory instrument, treaty or
by-law which
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relates to the pollution or protection of the Environment and which
law has effect as at Completion;
Environmental Liability or Loss means any damage, loss, claim,
liability, action, obligation, expense, penalty, order or fine under
an Environmental Law which is imposed upon or suffered by any of the
Buyer Group Companies, the Pacific Brands Foreign Entities and the
Pacific Brands Foreign Entity Subsidiaries or any occupier in
possession of the Properties;
Escrow Account means an interest bearing account with Westpac Banking
Corporation opened in the joint names of the Pacific Brands Holdings
Pty Ltd and PDL and with terms and conditions of operation including
that the account may only be operated jointly by those parties;
Escrow Amount means that part of the Purchase Price allocated to the
Affected Shares in the Apportionment Statement;
Estimate means $8,892,500, being the estimate of the Escrow Amount
agreed by the parties, made up as follows:
(1) for the Shares Agreement Fiji, $317,000;
(2) for the Shares Agreement Indonesia, $1,535,000;
(3) for the Shares Agreement Malaysia, $5,189,500,
less the amount specified in (1), (2) or (3) above as appropriate, if
the Secondary Consents relevant to that Shares Agreement are obtained
prior to Completion;
Fiji Completion has the meaning given to the term Completion in the
Shares Agreement Fiji;
First Period EBIT has the meaning given to that term in schedule 9;
Foreign Exchange Contracts means all foreign exchange contracts
entered into by PDL which relate exclusively to the Pacific Brands
Business which remain current as at Completion, details of which will
be provided to the Principal Buyer at the date of this Agreement and
at Completion;
Freehold Properties means any freehold property to be transferred to
any of the Buyer Group Companies under the Assets Agreement Australia
and the Assets Agreement New Zealand;
General Provision means the general provision of $10,000,000 contained
in the Bid Accounts;
Governmental Agency means any government or any governmental,
semi-governmental, administrative, fiscal or judicial body,
department, commission, authority, tribunal, agency or entity;
Guarantor means PDL;
Hong Kong Completion has the meaning given to the term Completion in
the Shares Agreement Hong Kong;
ITO Services Agreement means the agreement in the form attached as
Annexure A, to be entered into by the Principal Buyer and the
Partnership in accordance with clause 4.4;
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Immediately Available Funds means cash or bank cheque;
Indonesia Completion has the meaning given to the term Completion in
the Shares Agreement Indonesia;
Inter Group Debts means any amount owing (including trade accounts
payable and receivable):
(a) by a member of the PDL Group in its capacity as an entity
carrying on part of the Pacific Brands Business to a member of
the PDL Group (except in that member's capacity as an entity
carrying on any part of the Pacific Brands Business); or
(b) by a member of the PDL Group (except in that member's capacity as
an entity carrying on any part of the Pacific Brands Business) to
a member of the PDL Group in its capacity as an entity carrying
on any part of the Pacific Brands Business;
Interest Rate means the average rate displayed on the Reuters Page
BBSW for 90 day bank bills at 10:10 am Melbourne time applicable to
each Business Day on which amounts are outstanding as confirmed by
Westpac Banking Corporation and on the basis that for a day other than
a Business Day the rate applicable to the last preceding Business Day
will apply;
Xxxxx Contract means the Bonded Underlay Agreement between Xxxxx
Corporation Limited and PDL dated 16 August 1994, as amended by its
partial assignment by Xxxxx Corporation Limited to Permanent Trustee
Company Limited (as trustee) under a Deed of Assignment between them
and PDL dated 20 August 1996;
Key Consents means the consents, permissions or waivers described in
part A of schedule 2;
Linked Transaction Agreements means each of the Assets Agreements and
the Shares Agreements;
Loss includes any damage, loss, claim, action, liability, cost,
expense, penalty, outgoing or payment;
LSM means PD Shared Services LSM Pty Ltd, ABN 75 092 811 080, being
the company the shares in which are transferred under the Novare
Shares Agreement;
Malaysia Completion has the meaning given to the term Completion in
the Shares Agreement Malaysia;
Management Accounts means the unaudited management accounts prepared
by PDL in respect of the Pacific Brands Business for July to October
2001 and, to the extent that such accounts are in existence, each
subsequent month until Completion;
Matters In Dispute has the meaning given in clause 5.2(i);
Net Assets means the aggregate net assets of the Pacific Brands
Business as shown in Part A of the Completion Statement;
New Zealand Completion has the meaning given to the term Completion in
the Assets Agreement New Zealand;
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Non-Hyperion Business means the parts of the Pacific Brands Business
being Pacific Dunlop Holdings (Hong Kong) Limited and the businesses
described in the Agreed Adjustments as items 9 (Philippines
investments) and 11 (Bonds Spinning), which, in each case, are not
included in the Accounts but will be included in the Bid Accounts and
the Completion Statement;
Non Current Speeds Receivable means the net receivable of $16,846,154
relating to Speeds as set out in column 4 of the eliminations to the
Accounts in the Bid Accounts;
Novare Shares Agreement means the share sale agreement executed on the
same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to
shares in the capital of LSM;
Novare Completion has the meaning given to the term Completion in the
Novare Shares Agreement;
Officers means, in relation to a body corporate, a director or
secretary of that body corporate;
Pacific Brands Business means the business carried on by the Seller
Group Companies (except for PD Shared Services Holdings Pty Ltd) and
the Pacific Brands Foreign Entities in Xxxxxxxxx, Xxx Xxxxxxx, Xxxxxx
Xxxxxxx, Xxxxxx Xxxxxx of America, Indonesia, China, the Philippines,
Fiji, Hong Kong, Malaysia and Singapore comprising the manufacture,
marketing, sale and distribution of:
(a) clothing and related apparel including socks, underwear and
intimate and outerwear garments;
(b) foam, polyester fibre, mattresses and bedding accessories and
products;
(c) footwear; and
(d) sporting and leisure equipment, related apparel and footwear and
workwear;
Pacific Brands Foreign Entities means:
(a) Pacific Brands (UK) Ltd;
(b) PacBrands USA Inc;
(c) PT Berlei Indonesia;
(d) Pacific Brands (Fiji) Limited;
(e) Pacific Dunlop Holdings (Hong Kong) Limited; and
(f) Restonic (M) Sdn Bhd;
Pacific Brands Foreign Entity Subsidiaries means:
(a) Grosby (China) Limited;
(b) Pacific Dunlop Brands (Asia) Limited;
(c) Pacific Brands Marketing (Hong Kong) Limited;
(d) Dunlop Slazenger (Philippines) Inc;
(e) Eurocoir Products Sdn Bhd;
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(f) Dream Products Sdn Bhd;
(g) Dream Crafts Sdn Bhd;
(h) Dreamland Spring Manufacturing Sdn Bhd;
(i) Dreamland (Singapore) Pte Ltd;
(j) Dreamland Corporation (M) Sdn Bhd; and
(k) Sleepmaker Sdn Bhd;
Partnership has the meaning given to that term in the Novare Shares
Agreement;
Payment Date means the fifth Business Day after the Completion
Statement has been finalised or is deemed to be finalised in
accordance with clause 5.2;
PDL means Pacific Dunlop Limited ABN 89 004 085 330 (also one of the
Seller Group Companies);
PDL Group means PDL and its Related Corporations immediately before
Completion;
Principal Buyer means PB Holdings NV;
Property Leases means the leases of real property listed in schedule 7
of both the Assets Agreement Australia and Assets Agreement
New Zealand;
Properties means all Freehold Properties and all properties the
subject of the Property Leases and all freehold and leasehold
properties of the Pacific Brands Foreign Entities or Pacific Brands
Foreign Entity Subsidiaries;
Purchase Price means the amount calculated pursuant to clause 3.1(a);
Receivables has the meaning given in the Assets Agreement Australia;
Related Corporation means a "Related Body Corporate" as that
expression is defined in the Corporations Act;
Residual Provision means any balance of the General Provision
remaining after the application of clause 5.2(c);
Restructuring Provision means $27,969,845 less any amount expended up
to Completion which relates to the restructuring associated with the
acquisition of Xxxx Xxx Apparel;
Secondary Consents means the consents, permissions or waivers
described in part B of schedule 2;
Seller's Accountant means KPMG, Melbourne;
Seller Group Companies means the entities listed in part 1 of schedule
1;
Seller's Warranties means the:
(a) warranties set out in clauses 6.1(b) and 6.2;
(b) warranties set out in part 2 of schedule 1 of the Assets
Agreements; and
(c) warranties set out in part 2 of schedule 2 of the Shares
Agreements;
Senior Management means those persons listed in schedule 8;
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Shares Agreement Australia means the Share Sale Agreement executed on
the same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to the
shares in the capital of Bonds Industries Pty Ltd;
Shares Agreement Fiji means the Share Sale Agreement executed on the
same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to
shares in the capital of Pacific Brands (Fiji) Limited;
Shares Agreement Hong Kong means the Share Sale Agreement executed on
the same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to
shares in the capital of Pacific Dunlop Holdings (Hong Kong) Limited;
Shares Agreement Indonesia means the Share Sale Agreement executed on
the same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to
shares in the capital of PT Berlei Indonesia;
Shares Agreement Malaysia means the share sale agreement referred to
in the letter executed on the same day as this agreement between
certain of the Seller Group Companies and certain of the Buyer Group
Companies in relation to 50% of the shares in the capital of Restonic
(M) Sdn Bhd;
Shares Agreement UK means the Share Sale Agreement executed on the
same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to
shares in the capital of Pacific Brands (UK) Ltd;
Shares Agreement USA means the Share Sale Agreement executed on the
same day as this agreement between certain of the Seller Group
Companies and certain of the Buyer Group Companies in relation to
shares in the capital of PacBrands USA Inc;
Shares Agreements means the Shares Agreement Australia, the Shares
Agreement Indonesia, the Shares Agreement Fiji, the Shares Agreement
Hong Kong, the Shares Agreement Malaysia, the Shares Agreement UK, the
Shares Agreement USA and the Novare Shares Agreement;
SIP Excess means the amount (if any) by which the aggregate total of
any receivables relating to the SIP Scheme as shown in the Completion
Accounts, exceeds $5,000,000;
SIP Registrations means each of the registrations of Pacific Dunlop
Limited, Bonds Industries Pty Ltd and Union Knitting Xxxxx Pty Ltd for
the financial years ended 2001 and 2002 and of Boydex International
Pty Ltd for the financial year ended 2001, under the SIP Scheme;
SIP Scheme means the Textile, Clothing and Footwear Strategic
Investment Program Scheme 1999 made under section 8 of the Textile,
Clothing and Footwear Strategic Investment Program Act 1999 (Cwth);
Speeds means Speeds Shoes Australia Pty Ltd ACN 005 230 802 and its
subsidiaries;
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Speeds Receivable means the Current Speeds Receivable and the Non
Current Speeds Receivable;
Stock means the stock of the Pacific Brands Business owned by the
Seller Group Companies, the Pacific Brands Foreign Entities and the
Pacific Brands Foreign Entity Subsidiaries as at the Effective Time
and includes, but is not limited to, any stock in transit, raw
materials, components, work-in-progress, finished goods, packaging
materials, promotional materials and consumables;
Stocktakes means the stocktakes to be carried out pursuant to clause
5.1(a);
Target Date has the meaning given in clause 5.2(g);
Tax Indemnity Deed means the agreement in the form attached as
Annexure B, to be entered into by the relevant Buyer Group Companies
and Seller Group Companies in accordance with clause 4.5;
UK Completion has the meaning given to the term Completion in the
Shares Agreement UK;
USA Completion has the meaning given to the term Completion in the
Shares Agreement USA;
Valuer means the accounting firm, Ernst & Young or, if the appointment
is not accepted by Ernst & Young, a top tier Australian accounting
firm independent of and agreed by PDL on behalf of the Seller Group
Companies and the Principal Buyer on behalf of the Buyer Group
Companies;
Warranties means the Seller's Warranties and the Buyer's Warranties;
and
Warranty Claim means any claim or cause of action in respect of any
breach of the Warranties.
1.2 INTERPRETATION
In this agreement, headings and boldings are for convenience only and
do not affect the interpretation of this agreement and, unless the
context otherwise requires:
(a) words importing the singular include the plural and vice versa;
(b) words importing a gender include any gender;
(c) other parts of speech and grammatical forms of a word or phrase
defined in this agreement have a corresponding meaning;
(d) a reference to any thing (including, but not limited to, any
right) includes a part of that thing but nothing in this clause
1.2(d) implies that performance of part of an obligation
constitutes performance of the obligation;
(e) a reference to a clause, party, annexure, exhibit or schedule is
a reference to a clause of, and a party, annexure, exhibit and
schedule to, this agreement and a reference to this agreement
includes any annexure, exhibit and schedule;
(f) a reference to a statute, regulation, proclamation, ordinance or
by-law includes all statutes, regulations, proclamations,
ordinances or by-laws amending, consolidating or replacing it,
whether passed by the same or
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another Governmental Agency with legal power to do so, and a
reference to a statute includes all regulations, proclamations,
ordinances and by-laws issued under that statute;
(g) a reference to a document includes all amendments or supplements
to, or replacements or novations of, that document;
(h) a reference to a party to a document includes that party's
successors and permitted assigns;
(i) no provision of this agreement will be construed adversely to a
party solely on the ground that the party was responsible for the
preparation of this agreement or that provision;
(j) if a covenant, undertaking, representation, warranty, indemnity
or agreement is made or given by two or more parties, that
covenant, undertaking, representation, warranty, indemnity or
agreement is made or given and binds those parties jointly and
severally;
(k) if a party comprises two or more persons, a covenant,
undertaking, representation, warranty, indemnity or agreement
made or given by that party binds those persons jointly and
severally;
(l) a reference to 'best endeavours' is an obligation imposed on a
party but does not require that party to pay any money or enter
into any unreasonably onerous undertakings or obligations.
1.3 BUSINESS DAY
Where the day on or by which any thing is to be done is not a
Business Day, that thing must be done on or by the next Business
Day.
1.4 PARAMOUNTCY
To the extent that any inconsistency arises between the
provisions of this agreement and the provisions of a Linked
Transaction Agreement, the provisions of this agreement prevail
to the extent of the inconsistency.
2 CONDITIONS PRECEDENT
2.1 CONDITIONS
Completion will not proceed unless each of the Conditions has been
satisfied, or waived in accordance with clause 2.4.
2.2 BEST ENDEAVOURS
The Buyer Group Companies and the Seller Group Companies must each use
their best endeavours to satisfy the Conditions.
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2.3 NOTICE
(a) The Buyer Group Companies and the Seller Group Companies must
each promptly notify the other in writing if any of them discover
that any Condition is satisfied or becomes incapable of being
satisfied.
(b) At Completion, the Principal Buyer will deliver to the Principal
Seller a letter confirming that all Conditions have been
satisfied or waived.
2.4 WAIVER
The Conditions (other than the Key Consent set out in schedule 2 in
respect of approval by the Foreign Investment Review Board) may only
be effectively waived in writing by each party entitled to the benefit
of any Condition being waived and will be effective only to the extent
specifically set out in that waiver.
2.5 CUT-OFF DATE
(a) Subject to clause 2.5(c), if any Condition is not waived in
accordance with clause 2.4 or satisfied on or before 30 November
2001, then either PDL or the Principal Buyer may at any time
before Completion occurs, by written notice to the other,
terminate this agreement and the Linked Transaction Agreements.
(b) A written notice given by PDL pursuant to clause 2.5(a) binds
each Seller Group Company and a written notice given by the
Principal Buyer pursuant to clause 2.5(a) binds each Buyer Group
Company.
(c) If any Seller Group Company has not complied with its obligations
pursuant to clause 2.2 then PDL must not and is not entitled to
give a notice pursuant to clause 2.5(a). If any Buyer Group
Company has not complied with its obligations pursuant to clause
2.2 then the Principal Buyer must not and is not entitled to give
a notice pursuant to clause 2.5(a).
3 PURCHASE PRICE
3.1 CALCULATION OF PURCHASE PRICE
(a) The Purchase Price payable for the assets transferred under the
Assets Agreements and the shares transferred under the Shares
Agreements (not including the Novare Shares Agreement) is the
amount calculated in accordance with the formula set out in
paragraph 1 of Part B of schedule 3, together with the Earn Out
Amount payable under schedule 9.
(b) For the avoidance of doubt, the purchase price payable for the
shares transferred under the Novare Shares Agreement is not
included in the Purchase Price and is dealt with separately in
the Novare Shares Agreement.
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3.2 PAYMENT OF PURCHASE PRICE
The Purchase Price is payable in accordance with clauses 3.3 and 3.4,
and in the case of the Earn Out Amount, in accordance with schedule 9.
3.3 PAYMENT AT COMPLETION
(a) At Completion the Principal Buyer on behalf of the Buyer Group
Companies must pay $572,942,000 to PDL on behalf of the Seller
Group Companies (or as otherwise directed by it) in Immediately
Available Funds.
(b) In addition to the amount payable under clause 3.3(a), the
Principal Buyer on behalf of the Buyer Group Companies who are
parties to the Assets Agreement Australia must, at Completion,
pay $156,658,000 to PDL on behalf of the Seller Group Companies
who are parties to the Assets Agreement Australia (or as
otherwise directed by it) in Immediately Available Funds on
account of the receivables payment due under clause 7.3(a)(1) of
that agreement.
3.4 FINAL PAYMENT
(a) On the Payment Date, the Buyer Group Companies or the Seller
Group Companies, as appropriate, must pay to the other any net
amount referred to in clause 5.2(e) in Immediately Available
Funds, plus interest on the amount to be paid at the Interest
Rate from and including the Completion Date up to and including
the date the amount is paid.
(b) If the Buyer Group Companies must make a payment pursuant to
clause 3.4(a) then the Principal Buyer on behalf of the Buyer
Group Companies must pay the relevant amount to PDL on behalf of
Seller Group Companies or as otherwise directed by PDL.
(c) If the Seller Group Companies must make a payment pursuant to
clause 3.4(a) then PDL on behalf of the Seller Group Companies
must pay the relevant amount to the Principal Buyer on behalf of
the Buyer Group Companies.
(d) The Buyer must pay the Earn Out Amount to the Seller in
accordance with the requirements of paragraph 4 of schedule 9.
3.5 COMPLETE DISCHARGE
(a) A payment made by the Principal Buyer under this agreement on
behalf of a Buyer Group Company is deemed to constitute a full
and complete discharge, as between each Seller Group Company and
each Buyer Group Company, of the relevant Buyer Group Company's
obligation to make the payment under a Linked Transaction
Agreement.
(b) A payment made by PDL under this agreement on behalf of a Seller
Group Company is deemed to constitute a full and complete
discharge, as between each Buyer Group Company and each Seller
Group Company, of the relevant Seller Group Company's obligation
to make the payment under a Linked Transaction Agreement.
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Co-ordination agreement
4 COMPLETION
4.1 DATE FOR COMPLETION
Completion must take place at Xxxxx 00, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx,
Xxxxxxxx at 11.00am Australian Eastern Standard Time on 30 November
2001 or if the last of the Conditions has not been satisfied or waived
by that date, another date agreed in writing by the parties.
4.2 INTERDEPENDENCY
Subject always to clause 4.3:
(a) notwithstanding any provision of a Linked Transaction Agreement,
the obligations of the parties to the Linked Transaction
Agreements in respect of the Australian Assets Completion, the
Australian Shares Completion, the New Zealand Completion, the UK
Completion, the USA Completion, the Indonesia Completion, the
Fiji Completion, the Hong Kong Completion, the Malaysia
Completion and the Novare Completion are interdependent; and
(b) all actions at the Australian Assets Completion, the Australian
Shares Completion, the New Zealand Completion, the UK Completion,
the USA Completion, the Indonesia Completion, the Fiji
Completion, the Hong Kong Completion, the Malaysia Completion and
the Novare Completion will take place simultaneously and no
delivery or payment will be deemed to have been made until all
deliveries and payments under the Linked Transaction Agreements
due to be made at Completion have been made.
4.3 SECONDARY CONSENTS
(a) Each of the parties must use all reasonable endeavours to obtain
the Secondary Consents before or to the extent permissible by law
as soon as practicable after Completion.
(b) In the event that a Secondary Consent is not obtained by
Completion, the parties acknowledge that:
(1) the amount payable under clauses 3.3 and 3.4 will not be
adjusted or affected except as specified in this clause4.3;
(2) part of the amount payable under clause 3.3 will be payable
into the Escrow Account in accordance with clause 4.3(c);
(3) the shares which cannot be sold as a result (being shares to
be sold under the Affected Shares Agreements) (Affected
Shares), will not be sold at Completion but will be sold by
the relevant Seller Group Company to the relevant Buyer
Group Company without any further payment by the relevant
Buyer Group Company on the same terms and conditions as set
out in the relevant Affected Shares Agreement, as soon as
practical after the Secondary Consents relevant to those
Affected Shares are obtained;
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Co-ordination agreement
(4) to the extent permitted by law, the Seller Group Company
which owns the Affected Shares must hold the benefit
(including without limitation any dividend or other payment
rights and any voting rights) of any Affected Shares not
sold on the Completion Date for the Buyer Group Companies
and the Buyer Group Companies must properly perform to the
extent possible the obligations of the relevant Seller Group
Company with respect to such Affected Shares on behalf of
that Seller Group Company;
(5) the relevant Seller Group Company must declare a trust in
favour of the relevant Buyer Group Company with respect to
any dividends referred to in clause 4.3(b)(4) to the extent
necessary to pass the benefit of those dividends under any
applicable local law and comply with any written voting or
disposal instructions from that Buyer Group Company with
respect to any such Affected Shares;
(6) the Principal Buyer indemnifies PDL against any liability or
loss arising with respect to any of the Affected Shares as a
result of any act or omission of the Buyer Group Companies
from the Effective Time.
(c) If a Seller Group Company is unable to transfer title of Affected
Shares to the relevant Buyer Group Company at Completion due to
any relevant Secondary Consent not being obtained, then:
(1) on Completion, a portion of the amount payable under clause
3.3(a) by the Principal Buyer to PDL which is equal to the
Estimate, will instead be paid into the Escrow Account;
(2) within 2 Business Days of any Affected Shares being
transferred under clause 4.3(b)(3) due to any relevant
Secondary Consents being obtained, the parties will procure
that the amount in the Escrow Account relating to those
Affected Shares is paid to PDL, together with any accrued
interest on that amount;
(3) as soon as practicable after the Apportionment Statement has
been agreed or determined in accordance with clause 5.2(h),
(j) or (k), PDL will ascertain the Escrow Amount for each of
the Affected Shares Agreements, based on the figures
contained in the Apportionment Statement;
(4) if funds remain in the Escrow Account (excluding interest
accrued to that date on the Estimate) (Escrow Balance) at
the time the Escrow Amount for each Affected Shares
Agreement is determined, and the Escrow Balance:
(A) is lower than the Escrow Amount relating to the
Affected Shares which have not yet been transferred,
PDL will pay the difference between those 2 amounts
into the Escrow Account, together with interest equal
to the interest that would have been earned on that
amount had it been on deposit in the Escrow Account
from Completion;
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Co-ordination agreement
(B) is higher than the Escrow Amount relating to the
Affected Shares which have not yet been transferred,
the parties will procure that the difference between
those 2 amounts is withdrawn from the Escrow Account
and paid to PDL, together with any interest accrued on
that amount;
within 2 Business Days of the Escrow Amount being
determined.
(d) If:
(1) the law does not permit compliance with clauses 4.3(b)(4)
and (b)(5); or
(2) a Secondary Consent is not obtained by the first anniversary
of Completion or becomes incapable of being satisfied,
in relation to the particular Affected Shares:
(3) an adjustment will be made to the Purchase Price recognising
that those Affected Shares will not be sold to the Buyer
Group Companies, such adjustment to be equal to the portion
of the Escrow Amount for such Affected Shares ;
(4) the parties will procure that the Escrow Amount in the
Escrow Account, together with interest accrued, is paid to
the Principal Buyer, subject to clause 4.3(e);
(5) any benefit received by the Buyer Group Companies in
relation to the relevant Affected Shares after Completion,
will be returned to the relevant Seller Group Company; and
(6) all costs incurred in the ordinary course of business of the
relevant company (in which the Affected Shares are issued)
by the Buyer Group Companies after Completion, will be
reimbursed to the relevant Buyer Group Company by the
relevant Seller Group Company.
(e) If the Escrow Amount has not been determined by the time of any
refund becoming due to the Principal Buyer under clause
4.3(d)(4), then that refund will be made provided that it is
subject to adjustment using the same principles as set out in
clause 4.3(c)(4), as soon as practicable after the Escrow Amount
has been determined. If any adjustment becomes payable, the party
paying the additional amount will also pay interest equal to the
interest that would have been earned on that amount had it been
on deposit in the Escrow Account from Completion.
4.4 ITO SERVICES AGREEMENT
(a) On the date of this agreement, the Principal Buyer will execute
and PDL will procure that the Partnership executes the ITO
Services Agreement.
(b) For the period during which the ITO Services Agreement is in
operation, PDL will not and will procure that the Partnership
does not take any action which would prevent LSM from being able
to obtain services from Hewlett
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Co-ordination agreement
Packard through the Partnership as contemplated by the ITO
Services Agreement.
4.5 TAX INDEMNITY DEED
On the date of this agreement, the relevant Buyer Group Companies and
Seller Group Companies will execute the Tax Indemnity Deed.
5 COMPLETION STATEMENT
5.1 STOCKTAKE
(a) The Seller Group Companies and the Pacific Brands Foreign
Entities must, commencing on or before the start of business on
29 November 2001 and ending on 2 December 2001, carry out a
stocktake of the Stock (not including the stock of Dunlop
Slazenger (Philippines) Inc, Restonic M Sdn Bhd, Dream Products
Sdn Bhd, Dream Crafts Sdn, Bhd, Dreamland Spring Manufacturing
Sdn Bhd, Dreamland (Singapore) Pte Ltd, Dreamland Corporation (M)
Sdn Bhd and Sleepmaker Sdn Bhd) as at the Effective Time with the
Stock to be valued in accordance with the Agreed Accounting
Principles.
(b) Representatives of the Buyer Group Companies may attend the
Stocktakes.
(c) On conclusion of the Stocktakes, representatives of the Buyer
Group Companies and the Seller Group Companies must agree and
initial the stock lists which must then be used in preparing the
Completion Accounts.
(d) PDL will ensure that the Principal Buyer receives at least 5
Business Days notice of all Stocktakes.
5.2 COMPLETION ACCOUNTS, COMPLETION STATEMENT, APPORTIONMENT STATEMENT AND
EBIT STATEMENT
(a) Promptly after the Effective Time and in any event not later than
40 Business Days after the Completion Date, PDL must:
(1) cause to be prepared a draft of the Completion Accounts, in
accordance with the Agreed Accounting Principles and using
the same form as the form of the Accounts;
(2) deliver the draft Completion Accounts to the Seller's
Accountant and instruct the Seller's Accountant to audit
those accounts;
(3) instruct the Seller's Accountant to prepare a draft of the
Completion Statement in accordance with the requirements set
out in clause 5.2(b), (c) and (e), a draft of the
Apportionment Statement in accordance with the requirements
set out in clause 5.2(f) and a draft of the EBIT Statement
setting out the First Period EBIT (calculated in accordance
with the requirements set out in the definition of 'First
Period EBIT' contained in schedule 9), promptly
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Co-ordination agreement
after the Effective Time and in any event not later than 40
Business Days after the Completion Date; and
(4) deliver the Completion Accounts, the draft Completion
Statement, the draft Apportionment Statement and the draft
EBIT Statement to the Principal Buyer.
(b) The Completion Statement:
(1) must be prepared in the form set out in schedule 3; and
(2) will be the same as the Completion Accounts except that the
Agreed Adjustments will be made to the Completion Accounts
in order to derive the Completion Statement (also having
regard to clause 5.2(c)).
(c) To the extent that the Completion Accounts reflect any write down
in the value of any current assets, which write down exceeds the
value of a provision (if any) for that category of current asset
contained in the Accounts (Relevant Provision), the amount of the
General Provision will be reduced, for the purposes of preparing
the Completion Statement, by:
(1) the amount of that write down; or
(2) if there is a Relevant Provision, the excess of that write
down over the Relevant Provision.
(d) The Principal Buyer must give PDL all reasonable assistance that
PDL requires including, without limitation, by making the
employee and business records of the:
(1) Buyer Group Companies;
(2) Pacific Brands Foreign Entities; and
(3) Pacific Brands Foreign Entities Subsidiaries,
(to the extent relevant to the Pacific Brands Business),
available to PDL and the Seller's Accountants during normal
business hours to assist in the preparation of the Completion
Accounts and the draft Completion Statement provided that neither
PDL nor any Buyer Group Company shall be required to do anything
that is likely to cause unreasonable disruption to the conduct of
its business and its employees.
(e) The Completion Statement must set out, as at the Effective Time,
the net amount payable by the Buyer Group Companies to the Seller
Group Companies or by the Seller Group Companies to the Buyer
Group Companies to be calculated in accordance with Part B of
schedule 3, having regard to the Purchase Price, the Receivables
and the amounts already paid by the Buyer Group Companies under
clause 3.3.
(f) The allocation of Purchase Price to be contained in the
Apportionment Statement will be based on the following:
(1) in respect of each entity being sold under the Shares
Agreements (not including the Shares Agreement Australia and
the Novare
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Shares Agreement), the value attributed or ascribed to that
entity for the purposes of the preparation of the Completion
Accounts;
(2) in respect of the businesses being transferred under the
Assets Agreements, the value attributed or ascribed to those
businesses for the purposes of the preparation of the
Completion Accounts and having regard to the principles set
out in schedule 5;
in each case, having regard to the Agreed Adjustments and
standard consolidation eliminations where not already taken into
account;
(3) in respect of the entity being sold under the Shares
Agreement Australia, $175,000,000; and
(4) after the allocation of the Purchase Price referred to in
paragraphs (1), (2) and (3) above:
(A) to the extent any of the Purchase Price remains
unallocated (including any Earn Out Amount), that
amount of the Purchase Price will be allocated to the
goodwill transferred under the Assets Agreement
Australia;
(B) to the extent that the amount allocated is greater than
the Purchase Price, the excess will be deducted from
the allocation to the assets transferred under the
Assets Agreement Australia.
(g) The Principal Buyer on behalf of the Buyer Group Companies and
PDL on behalf of the Seller Group Companies must confer and use
all reasonable endeavours to agree on the Completion Statement,
the Apportionment Statement and the EBIT Statement within 20
Business Days after a draft is provided to the Buyer Group
Companies (Target Date). PDL will procure that the Principal
Buyer and its representatives are allowed reasonable access to
all personnel involved in and records relating to (including,
without limitation, audit work papers) the preparation of the
Completion Accounts, draft Completion Statement, the draft
Apportionment Statement and the draft EBIT Statement.
(h) If the contents of the draft Completion Statement, the draft
Apportionment Statement and the draft EBIT Statement are agreed
between the Principal Buyer and PDL, those drafts will constitute
the Completion Statement, the Apportionment Statement and the
EBIT Statement and will be final and binding on the parties.
(i) Subject to clause 5.2(j) if the Principal Buyer disputes that the
draft Completion Statement, the draft Apportionment Statement or
the draft EBIT Statement has been prepared in accordance with
this agreement and does not resolve the matters in dispute with
PDL by the Target Date, the Principal Buyer may at any time
before the date which is 10 Business Days after the Target Date
(Dispute Date) elect to refer the matters in dispute to the
Valuer for determination in accordance with clause 5.3 by giving
written notice to that effect to PDL including full details of
the matters in dispute (Matters In Dispute).
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Co-ordination agreement
(j) The Principal Buyer acknowledges (including on behalf of the
Buyer Group Companies) that:
(1) the Residual Provision contained in the draft Completion
Statement (in accordance with clause 5.2(c)), must be taken
into account to address any matters which the Principal
Buyer would otherwise dispute in relation to the draft
Completion Statement;
(2) it will take the matters referred to in clause 5.2(j)(1)
into account when seeking to agree the draft Completion
Statement with PDL under clause 5.2(g);
(3) the Principal Buyer and PDL, when instructing the Valuer
under clause 5.3(a), will include in their instructions that
any determination made by the Valuer must:
(i) take into account the assumption that the Residual
Provision will be utilised by the Buyer Group Companies
to the extent possible; and
(ii) deduct a corresponding amount from any claim made by
the Principal Buyer as part of the Matters in Dispute.
(k) If the Principal Buyer and PDL do not agree on:
(1) the Completion Statement by the Target Date and no election
to make a referral is made under clause 5.2(i) by the
Dispute Date, the values determined by PDL in the draft
Completion Statement will be final and binding on the
parties;
(2) the Apportionment Statement by the Dispute Date and no
election to make a referral is made under clause 5.2(i) by
the Target Date, the Apportionment Statement will be final
and binding on the parties, except to the extent the
Completion Statement remains subject to dispute;
(3) the EBIT Statement by the Dispute Date and no election to
make a referral is made under clause 5.2(i) by the Target
Date, the EBIT Statement will be final and binding on the
parties.
5.3 VALUER
(a) The Principal Buyer and PDL must jointly instruct the Valuer
within 10 Business Days after a referral under clause 5.2(h) and
on the basis that the Valuer agrees to make a determination in
relation to the Matters In Dispute and any consequential
adjustments to the Completion Statement (Valuer's Adjustments) no
later than 50 Business Days after the Referral Date as defined in
clause 5.3(b)(1).
(b) The procedures to be used by the Valuer in determining the
Valuer's Adjustments shall be as follows:
(1) PDL and the Principal Buyer will together provide to the
Valuer copies of this agreement, the Completion Accounts,
the draft Completion Statement, the draft Apportionment
Statement, the
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draft EBIT Statement and the notice of Matters In Dispute as
provided to PDL under clause 5.2(i). The date upon which the
Valuer receives such documents is referred to in this clause
as the Referral Date.
(2) Each of the Principal Buyer and PDL may make a single
submission to the Valuer in relation to the Matters In
Dispute which submission will not exceed 25 A4 pages in
length, within 15 Business Days after the Referral Date.
(3) The Principal Buyer and PDL will be permitted to deliver to
the Valuer a response to the submission of the other party
described in sub-clause 5.3(b)(2) above, which shall not
exceed 5 A4 pages in length. The responses contemplated by
this clause 5.3(b)(3) will be delivered, if at all, within
15 Business Days after receipt of the other party's
submission described in clause 5.3(b)(2) above.
(4) The Valuer must review the documents submitted by the
parties and have the opportunity to ask specific written
questions of or request specific historical documents from
either party to clarify its understanding of the
submissions. In relation to questions asked of one party,
the other party may submit to the Valuer written dissent to
any response submitted by the first party to the Valuer.
(5) Copies of any submission, response or document submitted to
or by the Valuer by or to a party as contemplated in this
clause will be submitted by the Valuer to the other party
simultaneously or as soon as received, as the case may be.
(6) The Valuer will deliver its determination of the Matters In
Dispute and the Valuer's Adjustments within 50 Business Days
following the Referral Date. The Valuer's determination is
final and binding on the parties.
(7) The fees and expenses of the Valuer will be shared equally
by PDL and the Principal Buyer.
(8) In making its determination the Valuer acts as an expert and
not as an arbitrator and the Valuer's decision will be final
and binding.
5.4 EFFECT OF MATTERS IN DISPUTE
(a) If the Completion Statement has not been finalised by the Dispute
Date due to Matters In Dispute having not been resolved, then:
(1) for the purpose of clause 3.4(a), the Payment Date is the
day which is 5 Business Days after the Dispute Date (Revised
Payment Date);
(2) on the Revised Payment Date, the Buyer Group Companies or
the Seller Group Companies, as appropriate, must pay to the
other the estimated net amount described in clause 5.2(e)
less the amount the subject of the unresolved Matters In
Dispute in Immediately Available Funds, plus interest on the
amount to be paid at the
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Interest Rate from and including the Completion Date up to
and including the date the amount is paid (subject always to
clause 5.4(b));
(3) clause 3.4(a) will apply following determination of the
unresolved Matters In Dispute in accordance with clause 5.3,
having regard, for the purpose of clause 5.2(e), to the
amount paid by the Buyer Group Companies or the Seller Group
Companies under clause 5.4(a)(2).
(b) If the amount of the subject of the unresolved Matters In Dispute
is more than the estimated net amount described in clause 5.2(e),
then despite the operation of clause 5.4(a)(2), no party will be
required to make any payment on the Revised Payment Date.
(c) For the avoidance of doubt, if the Apportionment Statement or the
EBIT Statement has not been finalised by the Target Date due to
the Matters in Dispute having not been resolved, this will not
result in any change to the obligation to make any payment due on
the Payment Date.
6 WARRANTIES AND INDEMNITIES
6.1 ACCOUNTS
(a) Subject to clauses 6.6 and 6.7, the Seller Group Companies give
the warranties set out in clauses 6.1(b) and 6.2 in favour of the
Buyer Group Companies as at the date of this agreement and as at
Completion.
(b) The Accounts:
(1) have been prepared in accordance with the Accounting
Standards and with due care and attention;
(2) show a true and fair view of the financial position of the
Pacific Brands Business at the Accounts Date and of the
profit and loss of the operations of the Pacific Brands
Business for the year ended on the Accounts Date.
6.2 MANAGEMENT ACCOUNTS
The Management Accounts, in all material respects:
(a) have been be prepared with due care and attention and on a basis
consistent with the management accounts from which the Accounts
were derived and past practices;
(b) accurately disclose the financial position and material assets
and liabilities of the Pacific Brands Business and the income,
expenses and results of the operations of the Pacific Brands
Business for the relevant financial period.
6.3 APPLICATION OF THE SELLER'S WARRANTIES
Each of the Seller's Warranties:
(a) remains in full force and effect after Completion; and
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(b) is separate and independent and is not limited by reference to
any other of the Seller's Warranty or any other provision of this
agreement.
6.4 [NOT USED]
6.5 TIME OF WARRANTIES
Subject to clauses 6.6 and 6.7:
(a) the Buyer Group Companies give the Buyer's Warranties in favour
of the Seller Group Companies; and
(b) the Seller Group Companies give the Seller's Warranties in favour
of the Buyer Group Companies,
as at the date of this agreement and as at Completion.
6.6 DISCLOSURE
The Warranties are given subject to those matters fairly disclosed in,
and a party must not claim that any fact renders any of the Warranties
untrue or misleading or causes them to be breached if that fact has
been fairly disclosed in:
(a) a Linked Transaction Agreement; or
(b) in the case of the Seller's Warranties, the Disclosure Schedule
or the Data Room.
6.7 MATTERS OF PUBLIC RECORD
A party must not claim that any fact renders any of the Warranties
untrue or misleading or causes them to be breached if that fact would
have been revealed at the date of this agreement by searches of:
(a) in the case of the Buyer's Warranties, any public register kept
by the Australian Securities and Investments Commission under the
Corporations Act in relation to the Buyer Group Companies; or
(b) in the case of the Seller's Warranties, any public register kept
by the Australian Securities and Investments Commission (or
similar register in the jurisdictions in which any of the Seller
Group Companies, Pacific Brands Foreign Entities or Pacific
Brands Foreign Entities Subsidiaries are incorporated), any trade
xxxx registry, land registry or court in relation to the Seller
Group Companies, the Pacific Brands Foreign Entities or the
Pacific Brands Foreign Entities Subsidiaries or the assets and
shares sold pursuant to the Linked Transaction Agreements.
6.8 ENVIRONMENTAL INDEMNITY
(a) Subject to clause 6.8(c) and providing the condition of the
Environment which is the cause of the Environmental Liability or
Loss existed up to and including the Completion Date, PDL agrees
to indemnify the Buyer on demand against any Environmental
Liability or Loss for a period of 4 years from the Completion
Date, all such Environmental Liability or Loss being referred to
in this clause as 'Environmental Costs'.
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Co-ordination agreement
(b) Notwithstanding any clause to the contrary in this agreement, it
is further agreed that the environmental indemnity in clause
6.8(a) shall be limited as follows:
(1) the Buyer must bear the first $2,000,000 of Environmental
Costs;
(2) the Buyer and PDL shall share equally the next $13,000,000
of Environmental Costs; and
(3) PDL shall bear any Environmental Costs in excess of
$15,000,000;
(c) PDL's liability to the Buyer under clause 6.8(a) shall be reduced
to the extent if any that the Environmental Costs arise or are
increased as a result of a failure by the Buyer to comply with
the following obligations:
(1) The Buyer must take no action that is likely to have the
effect of encouraging or provoking a relevant Government
Agency to issue a demand, notice or order under any
Environmental Law in respect of a Property except where:
(i) necessary to obtain or as a condition of the grant of
an Authorisation necessary for the continued conduct
of the Business or any renewal or variation of any
such Authorisation in the ordinary course of the
Business; or
(ii) necessary to be in a position to properly defend or
respond to an action or proceeding against the Buyer
by a third party; or
(iii) it is reasonable to conclude that:
(aa) there is a real risk to the health of persons or
damage to property; or
(bb) there is an obligation to investigate or
remediate under an Environmental Law.
(2) The Buyer must keep PDL informed of any matter which it
believes may give rise to a claim under clause 6.8(a) and,
if there is a dispute as to:
(i) whether the matter concerned falls within the
provisions of clause 6.8(a): or
(ii) as to the nature or extent of works to be undertaken
or Environmental Costs to be incurred by the Buyer,
either party may request in writing to the other that the
matter be referred to a firm of environmental engineers
acceptable to both parties ('Expert') on the basis of a
joint appointment by the Buyer and PDL within 5 Business
Days. The parties shall direct the Expert to take
independent legal advice in relation to legal issues arising
in relation to the dispute. The decision of the Expert as to
the matters in dispute shall be final and binding on the
parties and his costs shall be borne equally by PDL and
Buyer.
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(3) The Buyer must make no statement or admission to a third
party Claim for which PDL may be in part responsible under
this clause 6.8 without the prior consent of PDL which must
not be unreasonably withheld or delayed.
(4) The Buyer agrees to comply with clause 7.9 in relation to
any Claim to which this clause 6.8 may apply.
(d) The Buyer agrees that:
(1) its sole remedy against PDL in respect of any Environmental
Costs is under this clause 6.8;
(2) PDL's Warranties do not apply to the matters referred to in
this clause 6.8; and
(3) the indemnity in clause 6.8(a) will not apply in relation to
a particular Property to the extent that any Environmental
Liability or Loss affecting that Property is crystallised or
increased as a result of that particular Property no longer
being used for a commercial or industrial purpose similar to
that for which it is used at Completion.
(e) References in this clause 6.8 to 'the Buyer' include each Buyer
Group Company, Pacific Brands Foreign Entity and Pacific Brands
Foreign Entity Subsidiary on the basis that:
(1) the aggregate liability of PDL to all such entities in as
set out in clause 6.8(b);
(2) each Buyer Group Company agrees with PDL to ensure
compliance with this clause by each Pacific Brands Foreign
Entity and each Pacific Brands Foreign Entity Subsidiary;
and
(3) where a Buyer Group Company directly or indirectly owns,
immediately after Completion, less than 100% of any such
other entity, PDL shall only be liable for the percentage of
the Environmental Costs corresponding to that percentage
ownership interest.
(f) Notwithstanding any clause to the contrary in this agreement or
any of the Linked Transaction Agreements, it is agreed that the
environmental indemnity in clause 6.8(a) shall only be limited by
clauses 6.8(b)-(e).
6.9 LITIGATION INDEMNITY
(a) Subject to clause 6.9(b) PDL agrees and undertakes to indemnify
and hold harmless the Buyer Group Companies from and against 50%
of any and all direct or indirect losses incurred by Restonic (M)
Sdn Bhd and/or its subsidiaries or for which they may become
liable in connection with the claim made by Perabot Ekomoni
against Dreamland Corporation (M) Sdn Bhd in respect of the
termination of Perabot Ekomoni's appointment as Dreamland
Corporation (M) Sdn Bhd's sole agent in the district of Kluang
(Ekomoni Claim).
(b) The Buyer Group Companies:
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(1) will use their best endeavours to mitigate any loss which
PDL may suffer as a result of giving the indemnity set out
in clause 6.9(a); and
(2) acknowledge the indemnity does not apply in relation to the
first of $300,000 of the Ekomoni Claim.
7 LIMITATIONS ON LIABILITY
7.1 LIMITATION TO CLAIMS UNDER THIS AGREEMENT
The Buyer Group Companies acknowledge that they have not relied on,
and that the Seller Group Companies are not liable to the Buyer Group
Companies for, any Claim arising from or relating to any statement,
representation, warranty, promise, undertaking or agreement in
connection with the sale of the Pacific Brands Business or the shares
under the Novare Shares Agreement:
(a) made by any person; or
(b) resulting from or implied by conduct made in the course of
communications or negotiations in connection with the sale of the
Pacific Brands Business including, without limitation, the sale
of the assets and shares pursuant to the Linked Transaction
Agreements,
except for the Seller's Warranties and other obligations of the Seller
Group Companies arising under the Linked Transaction Documents
(Excluded Representations). The Buyer Group Companies now waive and
release the Seller Group Companies, their Related Corporations, the
Pacific Brands Foreign Entities, the Pacific Brands Foreign Entities
Subsidiaries and any person acting or purporting to act on behalf of
the Seller Group Companies or a Related Corporation of the Seller
Group Companies, the Pacific Brands Foreign Entities or the Pacific
Brands Foreign Entities Subsidiaries from any and all liability in
respect of any Excluded Representation to the fullest extent permitted
by law.
7.2 AWARENESS
Where the Seller's Warranties or any provisions of this agreement are
qualified by reference to the awareness or knowledge of the relevant
Seller Group Company, the Buyer Group Companies acknowledge that the
awareness or knowledge of the relevant Seller Group Company is limited
to matters now within the actual knowledge of the senior management
staff specified in Part B of the Disclosure Schedule after due and
careful enquiry of the senior management staff specified in the
relevant Disclosure Schedule.
7.3 LIMITATION FOR INSURANCE
The Seller Group Companies are not liable to the Buyer Group Companies
for any Warranty Claim for Loss which is recovered (net of any tax
payable) by a Buyer Group Company, LSM, a Pacific Brands Foreign
Entity or a Pacific Brands Foreign Entity Subsidiary or any of them
under a policy of insurance.
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7.4 LIMITATION FOR PROVISIONS
(a) The Seller Group Companies are not liable to the Buyer Group
Companies for any Warranty Claim:
(1) in respect of the stock of the Pacific Brands Business,
except (subject to this clause 7) to the extent that the
amount finally adjudicated or agreed as being payable in
respect of all such Warranty Claims exceeds the provision
for slow moving, obsolete and damaged stock taken into
account in the Completion Statement; or
(2) in respect of any matter, except (subject to this clause 7)
to the extent that the amount finally adjudicated or agreed
as being payable in respect of the Warranty Claim exceeds
any understatement of the value of any asset and any
unutilised provisions for liabilities taken into account in
the Completion Statement.
(b) The Seller Group Companies are not liable to the Buyer Group
Companies for any Warranty Claim in respect of the shares being
sold under the Shares Agreements except (subject to this clause
7) to the extent that the amount finally adjudicated or agreed as
being payable in respect of the Warranty Claim exceeds any
understatement of the value of any asset and any unutilised
provisions for liabilities taken into account in the Completion
Statement.
7.5 LIMITATION FOR FUTURE EVENTS
The Seller Group Companies are not liable to the Buyer Group Companies
for any Warranty Claim to the extent that the cause of action is
attributable to:
(a) anything done or not done after Completion by or on behalf of the
Buyer Group Companies or a Related Corporation, LSM or a Pacific
Brands Foreign Entity; or
(b) the enactment of any legislation after the date of this agreement
including, but not limited to, legislation which has a
retrospective effect.
7.6 TIME LIMITS
The Seller Group Companies are not liable to the Buyer Group Companies
for any Warranty Claim unless:
(a) in the case of a Warranty Claim under the Assets Agreement
Australia or the Assets Agreement New Zealand, the Buyer Group
Companies give notice to the Seller Group Companies setting out
specific details of the Warranty Claim within 2 years after the
Completion Date;
(b) in the case of a Warranty Claim under Seller's Warranty 22 (Tax)
of the Shares Agreements, the Buyer Group Companies give notice
to the Seller Group Companies setting out specific details of the
Warranty Claim within 7 years after the Completion Date;
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(c) in the case of a Warranty Claim under the Shares Agreements to
which clause 7.6(b) does not apply, the Buyer Group Companies
give notice to the Seller Group Companies setting out specific
details of the Warranty Claim within 2 years after the Completion
Date; and
(d) the Warranty Claim is agreed, compromised or settled or the Buyer
Group Companies issue and serve legal proceedings against the
Seller Group Companies in respect of the Warranty Claim within 6
months after giving notice in respect of the Warranty Claim under
clause 7.6(a) to 7.6(c).
7.7 MONETARY LIMITS
The Seller Group Companies are not liable to the Buyer Group Companies
for any Warranty Claim unless:
(a) the amount finally adjudicated or agreed as being payable in
respect of the Warranty Claim exceeds $100,000 (one hundred
thousand dollars); and
(b) then only if the aggregate amount finally adjudicated or agreed
as being payable in respect of all Warranty Claims which may be
recovered under clause 7.7(a) exceeds 1 percent of the aggregate
of the Purchase Price and the amount payable in respect of the
Receivables pursuant to the Assets Agreement Australia. For the
avoidance of doubt, under this clause 7.7(b), the Seller Group
Companies' liability is not limited to the amount by which the
above threshold is exceeded.
7.8 MAXIMUM AMOUNT OF WARRANTY CLAIMS
The maximum aggregate amount which the Buyer Group Companies may
recover from the Seller Group Companies in respect of all Warranty
Claims is the aggregate of the Purchase Price and the amount payable
in respect of the Receivables pursuant to the Assets Agreement
Australia.
7.9 BUYER GROUP COMPANIES' OBLIGATIONS
(a) Within 30 Business Days after becoming aware of any matter, claim
or demand which may reasonably be expected to lead to the Seller
Group Companies being liable under any Warranty Claim, the Buyer
Group Companies must give notice to the Seller Group Companies
setting out full details of the matter, claim or demand.
(b) The Buyer Group Companies must not deal and must procure that LSM
the Pacific Brands Foreign Entities and the Pacific Brands
Foreign Entities Subsidiaries do not deal with, compromise or
accept any matter, claim or demand which may lead to the Seller
Group Companies being liable under any Warranty Claim without the
Seller Group Companies' prior written approval.
(c) On receiving from the Seller Group Companies an indemnity against
all Loss which may result, the Buyer Group Companies must take
and must procure that the Pacific Brands Foreign Entities and the
Pacific Brands Foreign Entities Subsidiaries take any action and
provide any assistance the Seller Group Companies reasonably
require to deal with, contest or
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compromise any matter, claim or demand which may lead to the
Seller Group Companies being liable under any Warranty Claim,
provided that none of the Seller Group Companies, the Pacific
Brands Foreign Entities or the Pacific Brands Foreign Entities
Subsidiaries shall be required to do anything that is likely to
cause a material disruption to the conduct of its business or its
employees or is likely to harm the goodwill or reputation of its
business.
(d) The Seller Group Companies are not liable to the Buyer Group
Companies for any claim arising from a matter, claim or demand to
the extent to which the Seller Group Companies' liability arises
as a result of or is increased by a failure by the Buyer Group
Companies to comply with this clause 7.9.
7.10 RIGHT TO REIMBURSEMENT
The Buyer Group Companies must reimburse to the Seller Group Companies
an amount equal to any sum paid by the Seller Group Companies in
respect of any Warranty Claim which is subsequently recovered by or
paid to the Buyer Group Companies (net of any tax payable) or
recovered by or paid to LSM, the Pacific Brands Foreign Entities or
the Pacific Brands Foreign Entities Subsidiaries (net of any tax
payable) by any third party (including, but not limited to, any
insurer).
7.11 ALL WARRANTY CLAIMS
The limitations on the liability of the Seller Group Companies
specified in this clause 7 apply to all Warranty Claims made by a
Buyer Group Company pursuant to this agreement or a Linked Transaction
Agreement.
8 FOREIGN EXCHANGE CONTRACTS
8.1 FINANCIAL ADJUSTMENTS
Following Completion:
(a) in relation to the Foreign Exchange Contracts:
(1) on the Business Day before the due date for a payment to be
made by PDL under a Foreign Exchange Contract, the Principal
Buyer will pay that amount in accordance with the directions
of PDL (which may include directions as to the recipient of
the funds, the currency in which the payment is to be made
and the method of payment);
(2) subject to clause 8.1(b), on the day of settlement of a
Foreign Exchange Contract by or on behalf of PDL, PDL will
pay to the Principal Buyer or as directed by the Principal
Buyer, any amount received by PDL under that Foreign
Exchange Contract, in the currency and in the form in which
that payment was received;
(b) PDL will not be required to make any payment in relation to a
particular Foreign Exchange Contract under clause 8.1(a)(2), and
that payment will not become due, until such time as the
Principal Buyer has satisfied its
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obligations under clause 8.1(a)(1) in relation to that Foreign
Exchange Contract.
8.2 INTEREST
If the Principal Buyer or PDL does not make a payment as required by
clause 8.1(a)(1) or 8.1(a)(2), as applicable, by the due date for
payment, that party will be required to pay to the other party
interest on the amount owing at a rate equal to the Interest Rate plus
2%, calculated and payable on a daily basis until such time as the
principal amount is paid in full.
8.3 INDEMNITY
The Principal Buyer indemnifies PDL in relation to any Loss suffered
by the Seller Group Companies, as a result of a breach by the
Principal Buyer of its obligations under this clause 8 and PDL
indemnifies the Principal Buyer in relation to any Loss suffered by
the Principal Buyer as a result of a breach by PDL of its obligations
under this clause 8.
8.4 PRIOR TO COMPLETION
PDL agrees that it will not, between the date of this Agreement and
the Completion Date, without the prior written consent (such consent
not to be unreasonably withheld) of the Principal Buyer, enter into or
agree to enter into any new foreign exchange contract with a value of
more than $100,000 which relates to the Pacific Brands Business or
extend the maturity date of any existing foreign exchange contract
which relates to the Pacific Brands Business.
9 STRATEGIC INVESTMENT PROGRAMME
9.1 ENTITLEMENTS
The parties acknowledge (as between them), subject to Completion
occurring, in relation to any amounts which are received by the holder
of any SIP Registration under the SIP Scheme:
(a) for a SIP Registration for the year ended 30 June 2001:
(1) the Principal Buyer is entitled to the first $5,000,000
received;
(2) PDL is entitled to any amount received in excess of
$5,000,000;
(b) for a SIP Registration for the year ended 30 June 2002, the
Principal Buyer is entitled to any amount received.
9.2 PAYMENT
To the extent an amount is received by the holder of a SIP
Registration as described in clause 9.1:
(a) before Completion, PDL will procure that any portion of that
amount to which the Principal Buyer is entitled under clause 9.1,
is paid to the Principal Buyer on the Payment Date in Immediately
Available Funds;
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(b) after Completion, the Principal Buyer will procure that any
portion of that amount to which PDL is entitled under clause 9.1,
is paid to PDL within 5 Business Days of receipt in Immediately
Available Funds.
9.3 INTEREST
If the Principal Buyer does not make a payment as required by clause
9.2(b) by the due date for payment, the Principal Buyer will be
required to pay to PDL interest on the amount owing at a rate equal to
the Interest Rate plus 5%, calculated and payable on a daily basis
until such time as the principal amount is paid in full.
9.4 ACKNOWLEDGMENT
Until such time as PDL has received all amounts to which it may become
entitled as described in clause 9.1 (PDL Entitlements), the Principal
Buyer agrees to procure that PDL is:
(a) kept informed as to the progress of claims relating to the PDL
Entitlements;
(b) given reasonable access to employees or contractors engaged by
the Buyer Group Companies to progress claims relating to the PDL
Entitlements; and
(c) given access to any records or documentation reasonably requested
by PDL to allow it to monitor the progress of claims relating to
the PDL Entitlements.
9.5 INDEMNITY
The Principal Buyer indemnifies PDL in relation to any Loss suffered
by the Seller Group Companies as a result of a breach by the Principal
Buyer of its obligations under this clause 9.
10 ACKNOWLEDGEMENTS
10.1 XXXXX CONTRACT
For the avoidance of doubt, the parties acknowledge that the Bid
Accounts and the Completion Statement will both contain a matching
asset and liability in relation to the Xxxxx Contract and that the
Buyer Group Companies will become entitled to an asset as a result of
the transfer of the Xxxxx Contract under the Assets Agreement
Australia.
10.2 INTER GROUP DEBTS
For the avoidance of doubt, the parties acknowledge that:
(a) all Inter Group Debts are intended to be eliminated from the
Completion Accounts in order to derive the Completion Statement
and are not intended to be transferred to the Buyer Group
Companies; and
(b) to the extent that any Inter Group Debt is inadvertently
transferred to or remains with the Buyer Group Companies as a
result of the operation of
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the Shares Agreements or Assets Agreements and has not been
eliminated to derive the Completion Statement as referred to in
clause 10.2(a), the parties will negotiate in good faith an
appropriate method for dealing with that Inter Group Debt, such
that neither party receives a windfall gain or suffers a loss as
a result of such transfer.
10.3 RESTRUCTURING PROVISION
The Buyer Group Companies acknowledge that the Restructuring Provision
as at Completion will be included in the Completion Statement, net of
any associated future income tax benefit at the rate of 30%.
10.4 GENERAL PROVISION
The Buyer Group Companies acknowledge that the General Provision
included in the Completion Statement (as adjusted under clause 5.2(c))
will be included net of any associated future income tax benefit at
the rate of 30%.
10.5 RESTRUCTURING
(a) The Buyer Group Companies and the Seller Group Companies
acknowledge and agree that:
(1) certain restructuring has occurred within the PDL Group
involving the companies being sold under the Share Sale
Agreements and their subsidiaries (Companies) post 30 June
2001, which has been disclosed to the Buyer Group Companies
(Restructuring);
(2) no provision for Tax will be booked in relation to the
Restructuring in the Completion Accounts (except to the
extent stamp duty has been provided for) and the Seller's
Accountant will be so instructed;
(3) none of the Buyer Group Companies or their subsidiaries
(post Completion), including but not limited to the
Companies, will self assess in relation to matters arising
from the Restructuring, but any Tax assessment made against
any of these entities in relation to those Restructuring
matters will be capable of claim under the Tax Indemnity
Deed.
(b) The Seller Group Companies acknowledge that they do not believe
that any Tax liability will arise as a result of the
Restructuring, except to the extent stamp duty has been paid or
provided for in the Completion Accounts.
(c) For the purposes of this clause 10.5, "Tax" has the same meaning
as in the Tax Indemnity Deed.
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11 ANNOUNCEMENTS AND CONFIDENTIALITY
11.1 LEGAL REQUIREMENTS
A party may disclose anything in respect of this agreement or the
terms of the sale transaction the subject of this agreement as
required by:
(a) applicable law; or
(b) any recognised stock exchange on which its shares are listed,
but to the extent possible, it must consult with and obtain the prior
written consent of PDL and the Principal Buyer before making the
disclosure and use its best endeavours to agree on the form and
content of the disclosure.
11.2 DISCLOSURE TO OFFICERS, EMPLOYEES AND PROFESSIONAL ADVISERS
A party may disclose anything in respect of this agreement or the
terms of the sale transaction the subject of this agreement to its
Officers, employees, professional advisers, its Related Corporations,
its bankers and their employees and professional advisers, to any
potential purchaser of any of the assets or shares which are to be
sold to the Buyer Group Companies under the Linked Transaction
Agreements (to the extent relevant to the sale transaction proposed to
be entered) or any receiver or administrator which is appointed in
respect of any Buyer Group Company but it must use its best endeavours
to ensure all matters disclosed are kept confidential.
11.3 FURTHER PUBLICITY
Subject to clause 11.1, no party may disclose the provisions of this
agreement or the terms of the sale transaction the subject of this
agreement without the written consent of PDL and the Principal Buyer.
11.4 CONFIDENTIALITY
Subject to clause 11.1, the Buyer Group Companies must not before
Completion disclose any information or documents which have been
disclosed or provided to them or any person acting on their behalf in
accordance with this agreement or in the course of communications or
negotiations in connection with the sale transaction the subject of
this agreement.
11.5 RETURN OF INFORMATION AND DOCUMENTS
If this agreement is rescinded or terminated, the Buyer Group
Companies must:
(a) cease using the information and documents referred to in clause
11.4 for their own purposes; and
(b) return to the Seller Group Companies all documents (and return or
destroy all copies of the documents) referred to in clause 11.4.
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12 DUTIES, COSTS AND EXPENSES
12.1 DUTIES
The Buyer Group Companies must pay any stamp duty (including any
interest, penalty or like charge) in respect of the execution,
delivery and performance of:
(a) this agreement; and
(b) any agreement or document entered into or signed under this
agreement (including but not limited to the Linked Transaction
Agreements).
12.2 COSTS AND EXPENSES
Subject to clause 12.1, each party must pay its own costs and expenses
in respect of the negotiation, preparation, execution, delivery,
stamping and registration of this agreement and any other agreement or
document described in clause 12.1.
12.3 COSTS OF PERFORMANCE
Any action to be taken by the Buyer Group Companies or the Seller
Group Companies in performing their obligations under this agreement
must be taken at its own cost and expense unless otherwise provided in
this agreement.
13 GENERAL
13.1 NOTICES
(a) Any notice or other communication including, but not limited to,
any request, demand, consent or approval, to or by a party to
this agreement:
(1) must be in legible writing and in English addressed as shown
below:
(A) if to the Seller Group Companies:
Address: c/o Pacific Dunlop Limited
Xxxxx 0, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxx Xxx 0000
Attention: Company Secretary
Facsimile: (00) 0000 0000; and
(B) if to the Buyer Group Companies:
Address: c/- Pacific Brands Holdings Pty Ltd
Attention: Xxxxxx Xxxx
Facsimile: (00) 0000 0000
or as specified to the sender by any party by notice;
(2) where the sender is a company, must be signed by an Officer
or under the common seal of the sender;
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(3) is to be regarded as having been given by the sender and
received by the addressee:
(A) if by delivery in person, when delivered to the
addressee;
(B) if by post, 3 Business Days from and including the date
of postage; or
(C) if by facsimile transmission when a legible
transmission is received (or regarded as received) by
the addressee,
but if the delivery or receipt is on a day which is not a
Business Day or is after 4.00 pm (addressee's time), it is
regarded as having been received at 9.00 am on the following
Business Day; and
(4) can be relied on by the addressee and the addressee is not
liable to any other person for any consequences of that
reliance if the addressee believes it to be genuine, correct
and authorised by the sender.
(b) A facsimile transmission is to be regarded as legible unless the
addressee telephones the sender within 2 hours after the
transmission is received or regarded as received under clause
13.1(a)(3) and informs the sender that it is not legible.
(c) In this clause 13.1, a reference to an addressee includes a
reference to an addressee's Officers, agents or employees.
(d) A notice or other communication referred to in clause 13.1(a)
will be deemed to be sent by and to all Seller Group Companies if
sent by or to PDL and will be deemed to be sent by and to all
Buyer Group Companies if sent by or to the Principal Buyer.
13.2 GOVERNING LAW AND JURISDICTION
(a) This agreement is governed by the laws of Victoria.
(b) Each party irrevocably submits to the non-exclusive jurisdiction
of the courts of Victoria.
(c) The Buyer Group Companies which are not registered in Australia
appoint the Principal Buyer in relation to proceedings in
Australia as their agent to receive service of any legal process
on their behalf.
13.3 PROHIBITION AND ENFORCEABILITY
(a) Any provision of, or the application of any provision of, this
agreement which is void, illegal, unenforceable or prohibited in
any jurisdiction does not affect the validity, legality or
enforceability of that provision in any other jurisdiction or of
the remaining provisions in that or any other jurisdiction.
(b) The application of this clause 13.3 is not limited by any other
provision of this agreement in relation to severability,
prohibition or enforceability.
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13.4 WAIVERS
(a) Waiver of any right, power, authority, discretion or remedy
arising on a breach of or default under this agreement must be in
writing and signed by the party granting the waiver.
(b) A party is not entitled to rely on the conduct of another party
or on a delay in the exercise or non-exercise of a right, power,
authority, discretion or remedy arising from a breach of this
agreement or default under this agreement as constituting a
waiver of that right, power, authority, discretion or remedy.
13.5 VARIATION
A variation of any term of this agreement must be in writing and
signed by the parties.
13.6 ASSIGNMENT
None of the parties may assign or transfer, or purport to assign or
transfer, any of its rights or obligations under this agreement,
except that:
(a) the Principal Buyer may assign or transfer its rights or
obligations under this agreement to a financial institution (or
an agent or trustee thereof) providing financing or other
facilities to the Principal Buyer (Security Trustee); and
(b) the Security Trustee and any agent, receiver, receiver and
manager or administrator or other Controller (as defined in the
Corporations Act 2001) appointed on its behalf may assign or
transfer the rights and obligations of the Principal Buyer under
this agreement to a third party on the enforcement of any
security over the Principal Buyer in favour of the Security
Trustee.
Such agreement or transfer must be without prejudice to any of PDL's
rights including the right to oppose a Claim and PDL's liability must
not exceed that which would have been applicable had the assignment or
transfer not taken place. For the avoidance of doubt, PDL consents to
the Principal Buyer granting security to the Security Trustee over the
Principal Buyer's rights under this agreement.
13.7 SURVIVAL OF CERTAIN PROVISIONS
If this agreement or performance of this agreement is rescinded or
terminated and Completion does not occur, no party is liable to the
other parties under this agreement or the Linked Transaction
Agreements except under clauses 11, 12 and 13 of this agreement, which
survive the rescission or termination.
13.8 DEFAULT INTEREST
If a party fails to pay any amount payable under this agreement on the
due date for payment, that party must pay interest on the amount
unpaid at 2% per annum above the Interest Rate, compounding weekly.
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13.9 FURTHER ASSURANCES
Each party must do all things necessary to give full effect to this
agreement and the transactions contemplated by this agreement.
13.10 ENTIRE AGREEMENT
This agreement supersedes all previous agreements in respect of its
subject matter and embodies the entire agreement between the parties.
13.11 NON-MERGER
No provision of this agreement merges on Completion.
13.12 COUNTERPARTS
(a) This agreement may be executed in any number of counterparts.
(b) All counterparts, taken together, constitute one instrument.
(c) A party may execute this agreement by signing any counterpart.
13.13 ATTORNEYS
Each of the attorneys executing this agreement states that the
attorney has no notice of the revocation of the power of attorney
appointing that attorney.
14 INCORPORATION BY REFERENCE
14.1 LINKED TRANSACTION AGREEMENTS
Subject to clause 14.2, the provisions of clause 11, 12 and 13 of this
agreement are incorporated by reference into and form part of each
Linked Transaction Agreement as if those provisions were fully
repeated in each such agreement.
14.2 REFERENCES TO GROUP COMPANIES
The provisions of this clause 14.2 apply so that a reference in clause
11, 12 or 13 of this agreement to the Buyer Group Companies or to the
Seller Group Companies is, when incorporated by reference pursuant to
clause 14.1, to be read and construed in the relevant Linked
Transaction Agreement as set out below:
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AGREEMENT BUYER GROUP COMPANY SELLER GROUP COMPANY
------------------------------------------------------------------------------------------------------
Assets Agreement Pacific Brands Holdings Pty Ltd Pacific Dunlop Limited
Australia
Pacific Brands Footwear Pty Ltd Textile Industrial Design and
Engineering Pty Ltd
Pacific Brands Sport & Leisure Union Knitting Xxxxx Pty Ltd
Pty Ltd
Pacific Brands Clothing Pty Ltd Boydex International Pty Limited
Pacific Brands Household Products Foamlite (Australia) Pty Ltd
Pty Ltd
PB Holdings NV Vita Pacific Pty Ltd
PD Licensing Pty Ltd
Niblick Pty Ltd
Xxxxxxx Investments Pty Ltd
Shares Agreement Pacific Brands Holdings Pty Ltd Pacific Dunlop Limited
Australia
PB Holdings NV
Assets Agreement Pacific Brands Holdings (NZ)Ltd Pacific Dunlop Holdings (NZ) Limited
New Zealand
PB Holdings NV
Shares Agreement PB Holdings NV Pacific Dunlop Holdings (Europe) Ltd
UK
Shares Agreement PB Holdings NV Pacific Dunlop Holdings (USA) Inc
USA
Shares Agreement PB Holdings NV Pacific Dunlop Holdings (Singapore)
Indonesia
Pte Ltd
Shares Agreement PB Holdings NV PD International Pty Ltd
Fiji
Shares Agreement PB Holdings NV PD International Pty Ltd
Hong Kong
Shares Agreement PB Holdings NV PD Holdings (Malaysia) Sdn Bhd
Malaysia
Novare Shares Agreement Pacific Brands Holdings Pty Ltd PD Shared Services Holdings Pty Ltd
PB Holdings NV
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15 GUARANTEE AND INDEMNITY - SELLER
15.1 GUARANTEE
The Guarantor unconditionally and irrevocably guarantees to the Buyer
Group Companies the due and punctual performance of the Seller Group
Companies' obligations under this agreement.
15.2 INDEMNITY
The Guarantor indemnifies and holds the Buyer Group Companies harmless
from and against all Loss incurred or suffered by the Buyer Group
Companies and all actions, proceedings, claims or demands made against
the Buyer Group Companies as a result of default by the Seller Group
Companies in the performance of any such obligation.
15.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 15 applies:
(1) to the present and future obligations of the Seller Group
Companies under this agreement; and
(2) to this agreement, as amended, supplemented, renewed or
replaced.
(b) The obligations of the Guarantor under this clause 15 extend to
any change in the obligations of the Seller Group Companies as a
result of any amendment, supplement, renewal or replacement of
this agreement.
(c) This clause 15 is not affected, nor are the obligations of the
Guarantor under this agreement released or discharged or
otherwise affected, by anything which, but for this provision,
might have that effect.
(d) This clause 15 applies:
(1) regardless of whether the Guarantor is aware of, or has
consented to, or is given notice of, any amendment,
supplement, renewal or replacement of any agreement to which
the Buyer Group Companies and the Seller Group Companies are
a party or the occurrence of any other thing; and
(2) irrespective of any rule of law or equity to the contrary.
15.4 CONTINUING GUARANTEE AND INDEMNITY
This clause 15 is a continuing obligation of the Guarantor, despite
any settlement of account and remains in full force and effect until
the obligations of the each Seller Group Company under this agreement
have been performed.
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Co-ordination agreement
15.5 WARRANTIES OF THE GUARANTOR
The Guarantor represents and warrants to the Buyer Group Companies
that:
(a) it has the corporate power to enter into this guarantee and
indemnity and has taken all necessary action to authorise the
execution, delivery and performance of this agreement;
(b) the execution, delivery and performance of this guarantee and
indemnity will not violate any provision of:
(1) any law or regulation or any order or decree of any
Governmental Agency of the Commonwealth of Australia or any
state or territory;
(2) the constitution of the Guarantor; or
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Guarantor is a party or which is
binding on it.
15.6 RIGHTS
The Guarantor waives any right it has under contact, tort or statute
of first requiring any of the Buyer Group Companies to commence
proceedings or enforcing any other right against PDL or any of the
Seller Group Companies or any other person before claiming under this
clause 15.
15.7 ANSELL
The Guarantor covenants with the Buyer that should the Guarantor,
within a period of 4 years after Completion, directly or indirectly
dispose of, or permit the disposal of, all or substantially all of its
interest in or all or substantially all of the assets of Ansell:
(a) for other than cash or other valuable consideration received by
the Guarantor or a Related Body Corporate of the Guarantor; or
(b) for cash or other valuable consideration which is then
distributed to parties other than the Guarantor or a Related Body
Corporate of the Guarantor,
it will first provide the Buyer with security reasonably acceptable to
the Buyer for any claims which the Buyer may have against the Seller
or Guarantor under this agreement.
16 GUARANTEE AND INDEMNITY - BUYER
16.1 GUARANTEE
The Buyer Guarantor unconditionally and irrevocably guarantees to the
Seller Group Companies the due and punctual performance of the Buyer
Group Companies' obligations under this agreement.
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Co-ordination agreement
16.2 INDEMNITY
The Buyer Guarantor indemnifies and holds the Seller Group Companies
harmless from and against all Loss incurred or suffered by the Seller
Group Companies and all actions, proceedings, claims or demands made
against the Seller Group Companies as a result of default by the Buyer
Group Companies in the performance of any such obligation.
16.3 EXTENT OF GUARANTEE AND INDEMNITY
(a) This clause 16 applies:
(1) to the present and future obligations of the Buyer Group
Companies under this agreement; and
(2) to this agreement, as amended, supplemented, renewed or
replaced.
(b) The obligations of the Buyer Guarantor under this clause 16
extend to any change in the obligations of the Buyer Group
Companies as a result of any amendment, supplement, renewal or
replacement of this agreement.
(c) This clause 16 is not affected, nor are the obligations of the
Buyer Guarantor under this agreement released or discharged or
otherwise affected, by anything which, but for this provision,
might have that effect.
(d) This clause 16 applies:
(1) regardless of whether the Buyer Guarantor is aware of, or
has consented to, or is given notice of, any amendment,
supplement, renewal or replacement of any agreement to which
the Seller Group Companies and the Buyer Group Companies are
a party or the occurrence of any other thing; and
(2) irrespective of any rule of law or equity to the contrary.
16.4 CONTINUING GUARANTEE AND INDEMNITY
This clause 16 is a continuing obligation of the Buyer Guarantor
despite any settlement of account and remains in full force and effect
until the obligations of the Buyer Group Companies under this
agreement have been performed.
16.5 WARRANTIES OF THE GUARANTOR
The Buyer Guarantor represents and warrants to the Seller Group
Companies that:
(e) it has the corporate power to enter into this guarantee and
indemnity and has taken all necessary action to authorise the
execution, delivery and performance of this agreement;
(f) the execution, delivery and performance of this guarantee and
indemnity will not violate any provision of:
(1) any law or regulation or any order or decree of any
Governmental Agency of the Commonwealth of Australia or any
state or territory;
(2) the constitution of the Buyer Guarantor; or
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Co-ordination agreement
(3) any security agreement, deed, contract, undertaking or other
instrument to which the Buyer Guarantor is a party or which
is binding on it.
16.6 RIGHTS
The Buyer Guarantor waives any right it has of first requiring the
Seller Group Companies to commence proceedings or enforce any other
right against the Buyer Group Companies or any other person before
claiming under this clause 16.
17 SPEEDS RECEIVABLE
In consideration of the Seller Group Companies retaining the Current
Speeds Receivable, it is agreed that:
(a) subject to clause 17(d), any moneys received from Speeds by any
Seller Group Company or Buyer Group Company or their Related
Corporations must be promptly paid to PDL and set in reduction of
the balance of the Current Speeds Receivable;
(b) for the avoidance of doubt, once no amount of the Current Speeds
Receivable remains outstanding, clause 17(a) will no longer apply
and any Seller Group Company or Buyer Group Company which
receives moneys from Speeds after that time in respect of amounts
owing to it, will be entitled to retain that amount;
(c) the Pacific Brands Business will continue to trade with Speeds
for so long as in its dealings with the Buyer Group Companies and
Related Corporations, Speeds trades within 60 day credit terms;
and
(d) if any person takes any action to enforce recovery of amounts
owing from Speeds while any of the Current Speeds Receivable
remains outstanding, the Seller Group Companies will and the
Buyer Group Companies and their Related Corporations will each
exercise whatever retention of title or similar rights they may
have on the basis that any amounts recovered will be divided
between the Buyer Group Companies and their Related Corporations
and PDL in the proportion A:B where:
(1) A is the amount then owing by Speeds to the Buyer Group
Companies and their Related Corporations in relation to
trading after Completion; and
(2) B is the amount of Current Speeds Receivable then
outstanding.
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Co-ordination agreement
SCHEDULE 1 - PARTIES
PART 1 - SELLER GROUP COMPANIES
1 Pacific Dunlop Limited
ABN 89 004 085 330
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
2 Textile Industrial Design and Engineering Pty Ltd
ABN 79 000 283 198
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
3 Union Knitting Xxxxx Pty Ltd
ABN 38 006 752 021
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
4 Boydex International Pty Ltd
ABN 81 004 441 758
of level 0, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
5 Foamlite (Australia) Pty Ltd
ABN 89 001 595 017
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
6 Vita Pacific Pty Ltd
ABN 65 000 000 000
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
7 Pacific Dunlop Holdings (NZ) Limited
WN 54807
of Blenheim Street, Upperhutt, New Zealand
8 Pacific Dunlop Holdings (Europe) Ltd
of 000 Xxxxx Xxxx, Xxxxxxxx, Xxxxxx XX0 0XX, Xxxxxx Xxxxxxx
0 Xxxxxxx Xxxxxx Xxxxxxxx (XXX) Inc
of 000/0 Xxxxxxxx Xxxxx, Xxxxx 000, Xxxx, Xxxxxx 00000,
Xxxxxx Xxxxxx of America
10 PD International Pty Limited
of Xxxxx 0, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00 Xxxxxxx Xxxxxx Xxxxxxxx (Xxxxxxxxx) Pte Ltd
of 6 Xxx Xxxx Way 1, 00-00, Xxx Xxxx Xxxxxxxx, Xxxxxxxxx,
000000
12 PD Holdings (Malaysia) Sdn Bhd
of Xxxxx 000, 0xx Xxxxx, Xxxxx MBF 00X, Xxxxx Xxxxxxx, 00000
Xxxxx, Xxxxx, Xxxxx, Xxxxxxxx
13 PD Licensing Pty Ltd
ABN 67 006 599 131
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
14 Niblick Pty Ltd
ABN 80 006 049 172
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
xxxx 43
Co-ordination agreement
15 Xxxxxxx Investments Pty Ltd]
ABN 69 006 298 246
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
16 PD Shared Services Holdings Pty Ltd
ABN 75 092 811 080
of level 3, 000 Xxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
PART 2 - BUYER GROUP COMPANIES
1 PB Holdings NV
1170 Brussels, Xxxxxxxxxxxxxxxxx 000, Xxxxxxx
2 Pacific Brands Holdings Pty Ltd
ACN 098 704 646
C/- Xxxxxx Xxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
3 Pacific Brands Household Products Pty Ltd
ACN 098 742 584
C/- Xxxxxx Xxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
4 Pacific Brands Footwear Pty Ltd
ACN 098 742 628
C/- Xxxxxx Xxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
5 Pacific Brands Sport & Leisure Pty Ltd
ACN 098 742 708
C/- Xxxxxx Xxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
6 Pacific Brands Clothing Pty Ltd
ACN 098 742 655
C/- Xxxxxx Xxxxxxx, 00 Xxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxxx Xxxxx
7 Pacific Brands Holdings (NZ) Ltd
WN 1174050
C/- Xxxxxx Xxxxxxx Xxxx Xxxxx, Xxxxx 00, 000 Xxx Xxxxxxx,
Xxxxxxxxxx, Xxx Xxxxxxx
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Co-ordination agreement
SCHEDULE 2 - CONSENTS
PART A - KEY CONSENTS
1. Foreign Investment Review Board approval:
(1) a notice in writing must be issued by or on behalf of the
Treasurer of the Commonwealth of Australia stating that the
Commonwealth Government does not object to the Principal
Buyer and the Seller Group Companies entering into and
completing the Assets Agreement Australia and the Shares
Agreement Australia, either unconditionally or on terms
reasonably acceptable to the Principal Buyer and the Seller
Group Companies; or
(2) the Treasurer of the Commonwealth of Australia must become
precluded from making an order in respect of the acquisition
of the assets to be transferred under the Assets Agreement
Australia under the Foreign Acquisitions and Takeovers Act
1975(Cth).
2. A notice in writing consenting to the transactions contemplated
by this agreement on terms reasonably acceptable to the Principal
Buyer being given under the New Zealand Overseas Investment
Regulations 1995.
3. The Principal Buyer entering into a binding agreement with the
relevant banks or other financiers under which such banks or
financiers agree to provide on Completion (subject only to such
conditions as are acceptable to the Principal Buyer) any funds
necessary for the Principal Buyer to purchase the Pacific Brands
Business and receipt of such funds by the Principal Buyer under
any such agreement.
4. The Principal Buyer entering into satisfactory service contracts
with the Senior Management and the Senior Management agreeing to
take an equity stake in the Principal Buyer.
5. The Principal Buyer being satisfied that at least 80% of the
employees currently employed in the Pacific Brands Business (not
including the employees employed in Australia whose employment is
governed by an award) are prepared to continue to be employed on
the same terms in the Pacific Brands Business after Completion.
6. The Principal Buyer being satisfied that the contractual
arrangements with Xxxxxx Xx/PD Enterprises Limited in respect of
those manufacturing and other services being performed by Xxxxxx
Xx/PD Enterprises Limited for the Seller Group Companies will be
assigned to the relevant Buyer Group Companies on Completion.
7. The completion deliverables specified in paragraphs (m), (n) and
(o) of clause 4.2 of the Assets Agreement Australia being capable
of delivery.
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Co-ordination agreement
PART B - SECONDARY CONSENTS
Australia
Nil
New Zealand
Nil
United Kingdom
Nil
United States of America
Nil
Indonesia (relating to sale of shares under the Shares Agreement
Indonesia)
BKPM approval
Fiji (relating to sale of shares under the Shares Agreement Fiji)
Reserve Bank approval
Fiji Trade and Investment Bureau approval
Hong Kong
Nil
Malaysia (relating to sale of shares under the Shares Agreement
Malaysia)
One of the following occurring in relation to the pre-emptive
rights held by FACB Industries Incorporated Xxxxxxx (FACB) under
the Joint Venture and Shareholders' Agreement Malaysia dated 6
April 1993 between FACB, PDL and PD Holdings Malaysia Sdn Bhd
(JVA) in relation to the shares proposed to be sold under the
Shares Agreement Malaysia:
(a) FACB waiving its pre-emptive rights; or
(b) the period of the "Second Option" (as referred to in the
JVA) expiring without FACB having exercised its rights to
purchase the shares proposed to be sold under the Shares
Agreement Malaysia.
Foreign Investment Committee (FIC) approval.
Ministry of Trade Industry (MTI) approval.
Bank Negara approval
page 46
Co-ordination agreement
SCHEDULE 3 - COMPLETION STATEMENT
PART A
See attached
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Co-ordination agreement
PART B - PURCHASE PRICE AND NET AMOUNT PAYABLE
1 PURCHASE PRICE (CLAUSE 3.1)
Fixed portion of price $ 200,700,000
plus Net Assets* $
less Receivables** (A) $
-------------
Purchase Price (B)*** $
-------------
*As shown in Completion Statement.
**An amount equal to the Receivables as defined in the Assets Agreement
Australia.
***Not including the Earn Out Amount, which is to be calculated and paid in
accordance with schedule 9.
2 NET AMOUNT PAYABLE (CLAUSE 3.4)
Purchase Price (B) $
Receivables (A) $
-------------
less Amount paid by Buyer on Completion under
clauses 3.3(a) and (b) $ 729,600,000
-------------
Net amount payable on Payment $
Date by [Buyer/Seller]
-------------
Plus interest on the amount to be paid calculated $
under clause 3.4(a)
-------------
Net amount payable on Payment $
Date by [Buyer/Seller], including
interest*
-------------
-------------
*Not including the Earn Out Amount, which is to be paid in accordance with
schedule 9.
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Co-ordination agreement
SCHEDULE 4 - NOTES FOR PREPARATION OF COMPLETION STATEMENT
AGREED ADJUSTMENTS
The Agreed Adjustments are as follows:
ELIMINATIONS
1 BRANDS AND INTANGIBLES
To be eliminated on the same basis as used to derive the Bid Accounts.
2 GROSBY CHINA
To be reclassified on the same basis as used to derive the Bid Accounts.
3 DEFERRED COSTS
To be eliminated on the same basis as used to derive the Bid Accounts.
4 SPEEDS NET DEBTORS
All Speeds debtors as at the Effective Time and any provisions against
them, to be eliminated.
5 GUILFORD PROPERTY
If necessary, eliminated to the extent that any amount is attributable to
that property in the Completion Accounts.
6 CASH, BANK DEBTS
All cash and bank debts to be excluded on the same basis as used to derive
the Bid Accounts except:
(a) any amount of Cash in Hand as defined in the Shares Agreements as
at the Effective Time;
(b) any amount of Included Cash as defined in the Assets Agreements;
(c) any overdraft balances existing at Completion in any companies
transferred under the Shares Agreements and their subsidiaries.
7 RESTONIC OEI
A 50% equity interest to be eliminated on the same basis as used to derive
the Bid Accounts, subject always to paragraph 6(a) above, if applicable.
8 BERLEI INVESTMENTS
Fixed amount of $89,554 to be eliminated.
ADDITIONS
9 PHILIPPINES INVESTMENTS
To be included at $2,905,000 adjusted for the PDL Group's share of profit
or loss since the Accounts Date.
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Co-ordination agreement
10 PBA STAMP DUTY
To be adjusted on the same basis as used to derive the Bid Accounts, except
that these eliminations/additions are to be adjusted to reflect any change
to the estimated stamp duty (as included in plant and equipment) and any
amount of stamp duty paid.
11 BONDS SPINNING
To be included on the same basis as used to derive the Bid Accounts.
12 GENERAL PROVISION
The General Provision will be included as an adjustment in the same manner
as in the Bid Accounts, except as provided under clause 5.2(c) of the
Co-ordination Agreement, in which case, the Residual Provision will be
included as an adjustment in that manner.
13 SUPER ACCRUAL
To be included on the same basis as used to derive the Bid Accounts.
INTERCOMPANY
14 TRADING BALANCES
To be eliminated on the same basis as used to derive the Bid Accounts.
15 DIVIDENDS
To be eliminated on the same basis as used to derive the Bid Accounts.
TAXATION BALANCES
16 TAX ACCOUNTS
To be eliminated on the same basis as used to derive the Bid Accounts.
17 SHARE SALE BALANCES
To be included on the same basis as used to derive the Bid Accounts.
18 BUSINESS ASSETS FITB
To be included on the same basis as used to derive the Bid Accounts.
ADDITIONAL ADJUSTMENTS
19 SIP EXCESS
To be adjusted to eliminate any SIP Excess as defined in the Coordination
Agreement.
20 OTHER ADJUSTMENTS
Any other adjustment agreed between the parties, including but not limited
to the following:
(a) the Accepted Liabilities described in paragraph (a)(2) of that
definition in the Assets Agreements and the Receivables described in
paragraph (b) of that definition in the Assets Agreements which are
not already included in the Completion Accounts, to be added.
(b) FITB relating to employees of the Pacific Brands Business employed in
New Zealand to be eliminated;
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Co-ordination agreement
SCHEDULE 5 - NOTES FOR PREPARATION OF THE APPORTIONMENT STATEMENT
PART A
1 ASSETS - AUSTRALIA AND NEW ZEALAND
The apportionment of the Purchase Price in respect of the assets to be
transferred under the Assets Agreement Australia and the Assets Agreement
New Zealand, will be made in accordance with clause 5.2(f), except as
otherwise specified below:
ASSETS AUSTRALIA NEW ZEALAND
----------------------------------------------------------------
Assets Leases $ 1 $ 1
Business Records $ 1 $ 1
Contracts $ 1 $ 1
Freehold Properties See note 1 See note 1
Goodwill See note 1 See note 1
Included Cash See note 1 See note 1
Intellectual Property Rights $ 1 $ 1
Plant and Equipment See note 1 See note 1
Property Leases $ 1 $ 1
SIP Receivable $ 5,000,000 N/A
Statutory Licences $ 1 $ 1
Stock See note 1 See note 1
Note 1 - Freehold Properties, Goodwill, Included Cash, Plant and Equipment
and Stock
All of these assets will have values allocated to them in the manner
described in clause 5.2(f).
2 RECEIVABLES - ASSETS AGREEMENT AUSTRALIA
The current and non current receivables which are attributed to the
Australian business under clause 5.2(f):
(a) will include the amount payable for the SIP Receivable under the
Assets Agreement Australia;
(b) excluding the SIP Receivable, represent the Receivables (as defined in
the Assets Agreement Australia), which are not part of the assets
transferred under the Assets Agreement Australia. The Receivables are
to be dealt with in accordance with clause 7.3 of the Assets Agreement
Australia, the relevant adjustments to be calculated in accordance
with Part B of these notes to the Completion Statement.
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Co-ordination agreement
3 OTHER ITEMS - ASSETS AGREEMENTS
(a) PAYMENTS IN ADVANCE AND OUTGOINGS (CLAUSE 5.1 ASSETS AGREEMENTS)
The prepayments and payables which are attributed to the Australian
and New Zealand businesses respectively under clause 5.2(f), include
the amounts payable by the Buyer and the Seller under clause 5.1 of
the Assets Agreements.
(b) EMPLOYEE LEAVE BENEFITS (CLAUSE 9.6 ASSETS AGREEMENTS)
The allowance to which the Buyer is entitled in respect of Employee
Leave Benefits under clause 9.6 of the Assets Agreements is included
in the current and non-current provisions and the FITB which is
attributed to the Australian business under clause 5.2(f).
(c) GENERAL PROVISION
The General Provision (as adjusted in accordance with clauses 5.2(c)
and 10.4 of the Co-ordination Agreement) will be attributed to the
Australian business to be transferred under the Assets Agreement
Australia and will be included in the non-current provisions and FITB.
PART B - MISCELLANEOUS NOTES RELATING TO THE PREPARATION OF THE COMPLETION
STATEMENT
1 PACIFIC DUNLOP (HOLDINGS) HONG KONG LIMITED
This entity will not be included in the Completion Accounts as it has not
previously been accounted for as part of the Pacific Brands Business. It
will be brought into the Apportionment Statement with nil additional value
(the value of its assets, being its subsidiaries and investments, was
included in the Bid Accounts).
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Co-ordination agreement
SCHEDULE 6 - ACCOUNTS
page 53
Co-ordination agreement
SCHEDULE 7 - BID ACCOUNTS
page 54
Co-ordination agreement
SCHEDULE 8 - SENIOR MANAGEMENT
Xxxx Xxxxx
Xxxxxxx Xxxxxxx
Xxxx Rostolis
Xxxx Xxxxx
Xxxxx Xxxxxxx
Xxx Xxxxxxx
Xxxx Padoa
Xxxxxx Xxxx
Xxxxx Xxxxxxx
Xxxxx Xxxxxxx
Xxxxxxx Xxxx
Xxx Xxxxxxxx
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Co-ordination agreement
SCHEDULE 9 - EARN OUT
PART 1
DEFINITIONS
In this schedule, the following expressions have the following
meanings:
Auditors means the auditors from time to time of the Buyer, being a
major international accounting firm.
Budget means the Seller's budget for the Business for the period to 30
June 2002.
Business means the Pacific Brands Business as carried on by the Buyer
Group Companies and their Related Corporations after the Effective
Time.
Buyer means the Buyer Group Companies and any of their Related
Corporations carrying on any part of the Business after Completion
under this agreement.
Earn Out Period means the period from the Effective Time to 30 June
2002.
EBIT means, subject to paragraph 2.1, for the Earn Out Period the
audited consolidated profit of the Buyer before interest and tax in
relation to the Business determined in accordance with the Accounting
Standards as applied in the preparation of the Completion Accounts,
except that the following shall apply:
(a) no Excluded Costs shall be brought to account;
(b) "interest" shall include, without limitation, all interest and
charges on finance leases as defined in AASB 1008 and on all
types of financial accommodation;
(c) other than in the ordinary course of business, the effect of any
acceleration of expenditure or deferral of income as compared to
practice in the Business in the period from 1 July 2001 to
Completion and which would otherwise have the effect of reducing
EBIT shall be reversed;
(d) one off items of income and expenditure (as defined in the
Accounting Standards) will be excluded and specifically any
restructuring costs not reflected in the Budget (other than
appropriate costs or amortisation of costs incurred to address
under performance relative to Budget) to the extent that such
costs are not recouped in the Earn Out Period and any advisers
fees, expenses or Loss in relation to any matter arising under
this agreement will be excluded;
(e) there will be no amortisation of intangible assets or deferred
costs;
(f) Included Revenue will be brought to account;
(g) any amounts recoverable under any loss of profits insurances in
respect of events occurring during the Earn Out Period will be
brought to account;
Excluded Costs means those costs, liabilities or expenses to be
excluded from EBIT under paragraph 1.2.
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Co-ordination agreement
First Period EBIT means the audited consolidated profit of the Seller
before interest and tax in relation to the Business for the period
from 1 July 2001 to the Effective Time, as set out in the EBIT
Statement and determined in accordance with the Agreed Accounting
Principles, except that, for the avoidance of doubt:
(a) The principles set out in paragraphs (b) and (e) in the
definition of EBIT will apply;
(b) Fees, expenses and costs (other than management time) associated
with the sale of the Pacific Brands Business will be excluded;
and
(c) Profits or losses referable to PDL's indirect ownership interest
in Restonic (M) Sdn Bhd and Dunlop Slazenger (Philippines ) Inc
will be included.
Related Party Transaction has the meaning given in paragraph 1.2(b).
1 DURING EARN OUT PERIOD
1.1 SELLER NOMINEE AND INFORMATION
(a) The Seller shall, during the Earn Out Period have the following
specific rights the right to attend by its nominee (Seller
Nominee) at a briefing meeting to be held in March 2002 between
the Seller Nominee on the one hand and a nominee of the Buyer
being the Chief Executive Officer or Chief Financial Officer of
the Business on the other hand. The purpose of this meeting shall
be to keep the Seller Nominee fully apprised of the current
operations of the Buyer (including its performance against Budget
and a review of management accounts to date) and its future
plans.
(b) The Seller undertakes that it will keep any information provided
to it under paragraph 1.1 confidential and use it only for the
purposes of this agreement and will not otherwise use or disclose
nor permit to be used or disclosed any such information.
1.2 EXCLUDED COSTS
Unless the Seller Nominee has given specific prior written approval of
the matter concerned, all costs, liabilities and expenses suffered or
incurred by the Buyer in carrying on the Business in relation to the
following matters shall be excluded from the calculation of EBIT:
(a) any management or similar fees (other than employee or normal
director remuneration) payable to any shareholder related
director of the Buyer or any Related Corporation;
(b) transactions with a shareholder of the Buyer or a Related
Corporation of the Buyer (Related Party Transaction), and other
parties if and then to the extent that the cost, liability or
expense to the Buyer based on a reasonable and customary basis of
allocation of such cost, liability or expense is more than would
be reasonable to expect between unrelated parties dealing on
normal commercial terms;
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Co-ordination agreement
(c) any marketing and selling expenses, administration expenses, and
other expenses (not including freight and distribution) (Relevant
Expense Categories) to the extent that the aggregate amount of
expenditure for the Relevant Expense Category in the Earn Out
Period exceeds the amount budgeted in the Budget for that period
except an appropriate amortisation of any expenditure in excess
of what was budgeted which was incurred to address material under
performance relative to Budget;
(d) all costs, liabilities and expenses not incurred by the Buyer in
the carrying on of the Business in the ordinary course of
business.
1.3 INCLUDED REVENUE
(a) Where a Related Party Transaction has occurred and where the
income or benefit to the Buyer is less than would be reasonable
to expect between unrelated parties dealing on normal commercial
terms, the shortfall shall be brought to account for the purpose
of determining EBIT.
(b) If any part of the Business is disposed of in the Earn Out
Period, there shall be included in EBIT from the date of disposal
the amount of EBIT budgeted for that period for that disposed
part of the Business in the Budget.
1.4 DETERMINATION
Any dispute between the parties as to the amount of any benefit,
income, expense, cost or liability which is to be treated as Included
Revenue or Excluded Cost under this paragraph 1 shall be determined on
a reference by either the Buyer or the Seller by the Valuer and the
provisions of paragraph 3.3 shall apply to such determination.
1.5 COVENANTS BY BUYER
Unless the Seller has given specific prior written approval of the
matter concerned, the Buyer must ensure that throughout the Earn Out
Period:
(a) funds managed by CVC Asia Pacific Limited and Catalyst Investment
Managers Pty Limited and executive management of the Pacific
Brands Business between them remain beneficially entitled
directly or indirectly to at least 60 per cent of the issued
share capital of the Buyer;
(b) the Buyer maintains insurance on terms usual in relation to a
business of the nature of the Business over its assets and
undertaking.
In the event of a breach of paragraph 1.5(b), there shall be taken
into account for the purposes of determining EBIT any reduction in
revenue or increase in costs resulting from such breach.
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Co-ordination agreement
2 EARLY TERMINATION OF EARN OUT PERIOD
2.1 EARLY TERMINATION
If there is a breach of paragraph 1.5(a), EBIT will be calculated as
though the Earn Out Period ended at the first month end after the
breach, grossed up by the earnings before interest and tax that would
be derived if the Business performed to Budget from that month end to
30 June 2002.
2.2 EARLY PAYMENT
The Buyer may at any time during the Earn Out Period fully discharge
all its obligations under this schedule by paying the Seller
$10,000,000 by bank cheque.
3 EARN OUT CALCULATION
3.1 REVIEW BY SELLER'S ACCOUNTANT
(a) The Buyer must procure that the Seller's Accountant is given full
access to the employees of the Buyer, to the Auditors and to all
books and records of the Buyer reasonably required to enable the
Seller's Accountant to review:
(1) the consolidated audited accounts produced for the Buyer for
the Earn Out Period; and
(2) the EBIT Certificate (as defined in paragraph 4.2) for each
that period.
(b) The Buyer must use all reasonable endeavours to ensure that the
Seller's Accountant is given access, for the purpose described in
paragraph 3.1(a), to the Auditors' relevant working papers.
3.2 ATTEMPT TO RESOLVE
(a) If the Seller disputes the content of the EBIT Certificate then
it may within 30 Business Days of receiving a copy of the EBIT
Certificate from the Buyer refer the matter to the Valuer for
determination under paragraph 3.3.
(b) If no referral is made by the Seller under paragraph 3.2(a)
within the period referred to in paragraph 3.2(a) the value
determined by the Auditors shall be final and binding on the
parties.
3.3 VALUER
The provisions of paragraph 4.2 of this agreement shall apply, with
the necessary changes, to disputes in relation to the EBIT
Certificate.
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Co-ordination agreement
4 EARN OUT
4.1 EARN OUT AMOUNTS
(a) The Buyer and Seller agree that part of the Purchase Price is to
be determined by reference to the consolidated performance of the
Business during the Earn Out Period.
(b) An additional amount of Purchase Price will be payable if
paragraph 2 applies and also in the circumstances set out in
clauses 4.1(c).
(c) An additional amount of Purchase Price will be payable (Earn Out
Amount) as follows:
(1) if the aggregate of the First Period EBIT and the EBIT over
the Earn Out Period is less than or equal to $115,000,000
the Earn Out Amount will be nil;
(2) if the aggregate of the First Period EBIT and the EBIT over
the Earn Out Period is between $115,000,000 and
$120,000,000, the Earn Out Amount will be $2 for each $1 of
aggregate of First Period EBIT and EBIT above $115,000,000;
or
(3) if the aggregate of the First Period EBIT and the EBIT over
the Earn Out Period is $120,000,000 or more, the Earn Out
Amount will be $10,000,000.
4.2 DETERMINATION OF EARN OUT AMOUNT
(a) The Buyer must procure that the Auditors provide to the Seller
and the Seller's Accountant within three months after the end of
the Earn Out Period:
(1) a consolidated audited profit and loss account for the Buyer
and a consolidated audited balance sheet of the Buyer as at
the last day of Earn Out Period; and
(2) a certificate of EBIT for the Earn Out Period (EBIT
Certificate).
(b) In preparing the EBIT Certificate the Auditor must apply all
relevant provisions of this agreement.
4.3 PAYMENT OF EARN OUT AMOUNT
(a) The Buyer must pay the Earn Out Amount to the Seller by bank
cheque on the later of 30 November 2002 and the day which is 5
Business Days after final determination of the Earn Out Amount
pursuant to paragraph 3.
(b) If the Buyer exercises or purports to exercise any right of set
off or counterclaim on any account whatsoever against the amount
of the Earn Out Amount otherwise payable and the set off or
counterclaim is not ultimately determined wholly or in part in
the Buyer's favour then, to the extent it is not determined in
the Buyer's favour, interest on that amount shall be payable at
the Interest Rate plus 2 percent from the due date for
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Co-ordination agreement
payment to the date of actual payment (both dates inclusive)
calculated on daily rests.
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Co-ordination agreement
EXECUTED AS AN AGREEMENT:
Signed for
Pacific Dunlop Limited
by its attorney in
the presence of:
/s/ Xxxx Xxxxxxxx /s/ Xxxxx Xxxxxxx
------------------------------ --------------------------------
Witness Attorney
Xxxx Xxxxxxxx Xxxxx Xxxxxxx
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Bonds Industries Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Textile Industrial Design
and Engineering Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
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Co-ordination agreement
Signed for
Union Knitting Xxxxx Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Boydex International Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Foamlite (Australia) Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Vita Pacific Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
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Co-ordination agreement
Signed for
Pacific Dunlop Holdings (NZ) Limited
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Pacific Dunlop Holdings (Europe) Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Pacific Dunlop Holdings (USA) Inc
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
PD International Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
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Co-ordination agreement
Signed for
Pacific Dunlop Holdings (Singapore) Pte Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
PD Holdings (Malaysia) Sdn Bhd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
PD Licensing Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
Niblick Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
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Co-ordination agreement
Signed for
Xxxxxxx Investments Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for
PD Shared Services Holdings Pty Ltd
by its attorney in
the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed for and on behalf of
PB Holdings NV
by its duly authorised Attorneys under Power
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Witness Attorney
------------------------------ --------------------------------
Name (please print) Name (please print)
/s/
--------------------------------
Attorney
--------------------------------
Name (please print)
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Co-ordination agreement
Signed sealed and delivered by
Pacific Brands Clothing Pty Ltd
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Director Director
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Household Products Pty Ltd
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Director Director
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Footwear Pty Ltd
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Director Director
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Sport & Leisure Pty Ltd
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Director Director
------------------------------ --------------------------------
Name (please print) Name (please print)
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Co-ordination agreement
Signed sealed and delivered by
Pacific Brands Clothing Pty Ltd
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Director Director
------------------------------ --------------------------------
Name (please print) Name (please print)
Signed sealed and delivered by
Pacific Brands Holdings (NZ) Pty Ltd
in the presence of:
/s/ /s/
------------------------------ --------------------------------
Director Director
------------------------------ --------------------------------
Name (please print) Name (please print)
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Co-ordination agreement
ANNEXURE A - ITO SERVICES AGREEMENT
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Co-ordination agreement
ANNEXURE B - TAX INDEMNITY DEED
page 70
Co-ordination agreement
ANNEXURE C - DATA ROOM
page 71
