Exhibit 2.1
-----------------------------------------------------------
Dated 16 December 2000
Agreement for Sale of Business
The ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MLC,
Minister for Transport exercising
powers under section 13 and section 44
of the Rail Freight System ▇▇▇ ▇▇▇▇
(WA)
("Minister")
The Western Australian Government
Railways Commission
("Commission")
The ▇▇▇ ▇▇▇▇▇▇▇ Fairfax Court,
MLA, Treasurer, exercising power
under section 20 of the Rail Freight
System ▇▇▇ ▇▇▇▇ (WA)
("Treasurer")
Westrail Freight Employment Pty Ltd
ACN 087 891 601
("Westrail Freight Employment")
AWR Holdings WA Pty Ltd
ACN 094 693 562 and
Australian Western Railroad Pty Ltd
ACN 094 792 275
(together "Purchaser")
WestNet StandardGauge Pty Ltd
ACN ▇▇▇ ▇▇▇ ▇▇▇ and
WestNet NarrowGauge Pty Ltd
ACN 094 736 9000
(together "Network Lessees")
AWR Lease Co. Pty Ltd
ACN 094 792 159
("Substitute Sublessee")
Australian Railroad Group Pty Ltd
ACN 080 579 308
("Guarantor")
Mallesons ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Solicitors
▇▇▇▇▇ ▇▇
▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Telephone (▇▇ ▇) ▇▇▇▇ ▇▇▇▇
Fax (▇▇ ▇) ▇▇▇▇ ▇▇▇▇
DX 91049 Perth
Ref: ML 09 5002 5009
Table of Contents
Agreement for Sale of Business
Page
1. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . 2
2. Sale and purchase of Assets, Access Assets and assumption of
Liabilities and Access Liabilities . . . . . . . . . . . . . . 16
Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Access Assets . . . . . . . . . . . . . . . . . . . . . . . . . 16
Encumbrances . . . . . . . . . . . . . . . . . . . . . . . . . 16
Assumption of Liabilities . . . . . . . . . . . . . . . . . . . 16
3. Purchase Price and GST . . . . . . . . . . . . . . . . . . . . 17
GST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4. Completion . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5. Conditions Precedent . . . . . . . . . . . . . . . . . . . . . 23
6. Adjustment of Purchase Price . . . . . . . . . . . . . . . . . 24
Post completion adjustment . . . . . . . . . . . . . . . . . . 24
Adjustment for certain employee entitlements . . . . . . . . . 25
Capex adjustment . . . . . . . . . . . . . . . . . . . . . . . 25
Commission to maintain accounts . . . . . . . . . . . . . . . . 26
KPMG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7. Payment of the Purchase Price . . . . . . . . . . . . . . . . . 26
8. Apportionment of Income & Book Debts . . . . . . . . . . . . . 27
Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Book Debts . . . . . . . . . . . . . . . . . . . . . . . . . . 27
9. Conduct of Business pending Completion . . . . . . . . . . . . 27
10. Risk and insurance . . . . . . . . . . . . . . . . . . . . . . 28
11. Fleet Lease and Cross Border Leases . . . . . . . . . . . . . . 29
12. Contracts, Access Agreements and Intellectual Property Licences 29
Joint Contracts . . . . . . . . . . . . . . . . . . . . . . . . 30
Intellectual Property Licences . . . . . . . . . . . . . . . . 30
Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Accounts Payable . . . . . . . . . . . . . . . . . . . . . . . 31
Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . 31
13. State Agreements . . . . . . . . . . . . . . . . . . . . . . . 31
Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
-i-
Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
14. There is no clause 14 . . . . . . . . . . . . . . . . . . . . . 32
15. Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
16. Freight Terminals and Staff Houses . . . . . . . . . . . . . . 33
Native Title . . . . . . . . . . . . . . . . . . . . . . . . . 35
Leased Houses . . . . . . . . . . . . . . . . . . . . . . . . . 36
17. Customers, name, Westrail Centre and other matters . . . . . . 36
Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and other places . . . . . . . . . . . . . . . 36
19. Guarantee and indemnity . . . . . . . . . . . . . . . . . . . . 44
20. Costs and stamp duty . . . . . . . . . . . . . . . . . . . . . 46
21. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
22. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . 49
23. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . 49
Exercise of rights . . . . . . . . . . . . . . . . . . . . . . 49
Waiver and variation . . . . . . . . . . . . . . . . . . . . . 49
Approvals and consent . . . . . . . . . . . . . . . . . . . . . 50
Remedies cumulative . . . . . . . . . . . . . . . . . . . . . . 50
No merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Indemnities . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Enforcement of indemnities . . . . . . . . . . . . . . . . . . 50
Further assurances . . . . . . . . . . . . . . . . . . . . . . 50
Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Entire agreement . . . . . . . . . . . . . . . . . . . . . . . 51
Sovereign immunity . . . . . . . . . . . . . . . . . . . . . . 52
24. Governing law, jurisdiction and service of process . . . . . . 52
25. Treasurer's guarantee and indemnity . . . . . . . . . . . . . . 52
-ii-
Agreement for Sale of Business
Date: 16 December 2000
Parties: The ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MLC, ("Minister") exercising powers
under section 13 and section 44 of the Rail Freight System ▇▇▇
▇▇▇▇ (WA)
The Western Australian Government Railways Commission
established under the Government Railways Act 1904 (WA)
("Commission") exercising power under section 16 of the Rail
Freight System ▇▇▇ ▇▇▇▇ (WA) ABN 44 143 660 866
The ▇▇▇ ▇▇▇▇▇▇▇ Fairfax Court MLA, Treasurer of the State of
Western Australia, ("Treasurer"), exercising power under
section 20 of the Rail Freight System Act 2000 (WA)
Westrail Freight Employment Pty Ltd ACN 087 891 601 having its
registered office at ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ("Westrail Freight Employment")
AWR Holdings WA Pty Ltd ACN 094 693 562 ("AWR Holdings")
and Australian Western Railroad Pty Ltd ACN 094 792 275
("Australian Western Railroad") each having its registered
office at ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, QVI Building,
▇▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
together "Purchaser")
WestNet StandardGauge Pty Ltd ACN ▇▇▇ ▇▇▇ ▇▇▇ ("WestNet
StandardGauge") and WestNet NarrowGauge Pty Ltd ACN
094 736 900 ("WestNet NarrowGauge") each having its
registered office at ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇,
QVI Building, ▇▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇.
("Network Lessees")
AWR Lease Co. Pty Ltd ACN 094 792 159 having its registered
office at ▇/▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, QVI Building,
▇▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
("Substitute Sublessee")
Australian Railroad Group Pty Ltd ACN 080 579 308 having its
registered office at Kilburn, South Australia
("Guarantor")
Recitals:
A. The Commission, under the Government Railways ▇▇▇ ▇▇▇▇,
carries on a business transporting freight by rail and
road in Western Australia and is the agency through which
the State has developed railway infrastructure.
B. The Government of Western Australia has decided that it
is no longer necessary for the State through the
Commission to be involved in the Business. Accordingly,
it has decided that the State and the Commission should
sell the Business.
C. The Rail Freight System Act 2000 will facilitate the sale
of the Business and the use of certain land and railway
infrastructure by the Network Lessees.
D. The Minister on behalf of Western Australia, through the
Rail Freight Sale Task Force, has undertaken a process of
selling the Business and has selected the Purchaser as
purchaser of the Business.
E. Accordingly, the Minister has agreed (with the consent of
the Treasurer under section 13 of the Act) to sell and
each of the Purchaser, the Network Lessees and the
Substitute Sublessee has agreed to purchase certain
assets and assume certain liabilities of the Business on
the terms and conditions of this agreement.
F. The Guarantor and the Treasurer acknowledge giving the
guarantee and indemnities in this agreement in
consideration for the Commission, the Minister, the
Purchaser, the Network Lessees and the Substitute
Sublessee entering into this agreement.
Operative provisions:
1. Interpretation
1.1 The following words have these meanings in this agreement
unless the contrary intention appears:
Access Agreements means the access agreements described as
such in Schedules 3 and 14 and the private sidings agreements
described as such in Schedules 3 and 14 and which are to be
wholly or partly novated to the Network Lessees under the
Transfer Order.
Access Assets means that part of the benefit of the Access
Agreements to be novated to the Network Lessees under the
-2-
Transfer Order and those assets described in Schedule 14 which
are associated with the Commission's access related functions.
Access Liabilities means the liabilities of the Commission
under the Access Agreements which are to be assumed by the
Network Lessees under the Transfer Order and which arise after
the Completion Time.
Accounting Standards means the Australian Accounting Standards
from time to time and if and to the extent that any matter is
not covered by Australian Accounting Standards means generally
accepted accounting principles applied from time to time in
Australia for a business similar to the Business.
Accounts Payable means the liabilities more particularly
described in the Commission's financial statements to the
extent that they relate to the Business and which remain
payable by the Commission as at the Completion Date under the
Contracts or to suppliers to the Business.
Act means the Rail Freight System ▇▇▇ ▇▇▇▇ (WA).
Actual Accrued Employee Entitlements means the actual opening
balance at Completion Date of the liability of Westrail
Freight Employment for annual leave and long service leave
entitlements of Employees.
Ancillary Agreements means:
(a) the Corporate and Financial Systems Services Agreement
between the Purchaser and the Commission in the form of
Annexure F;
(b) the Signalling, Train Control and Communications Systems
Services Agreement between the Network Lesses, the
Purchaser and the Commission in the form of the protocols
set out in Annexure H;
(c) the Country Passenger Access Agreement which by virtue of
the Transfer Order will take effect at Completion between
the Network Lessees and the Commission in the form of the
protocols set out in Annexure H;
(d) the Urban Train Maintenance Agreement which by vitrue of
the Transfer Order ill take effect at Completion between
the Commission and the Purchaser contained in the
memorandum set out in Annexure I;
(e) the Country Passenger Maintenance Agreement which by vitrue
of the Transfer Order will take effect at Completion
between the Commission and the Purchaser in the form of the
protocols set out in Annexure J;
-3-
(f) the Operating Agreement; and
(g) the Fleet Sublicence.
Assets means the following assets:
(a) Goodwill;
(b) Plant and Equipment;
(c) Inventory;
(d) Staff Houses;
(e) Freight Terminals;
(f) Intellectual Property Rights;
(g) Shares;
(h) Cross Border Lease Equipment, subject to the Cross Border
Lease Transaction Documents;
(i) Cross Border Lease Rights;
(j) Statutory Licences;
(k) Contracts;
(l) Records;
(m) Capital Works in Progress;
(n) all other property and assets of the Commission necessary
for the continued operation of the Business, except the
Excluded Assets and the Access Assets;
(o) the Design Licences; and
(p) Leased Vehicle Rights.
Authorisation includes:
(a) any authorisation, approval, agreement, indemnity,
guarantee, consent, licence, permit, franchise,
permission, filing, registration, resolution, direction,
declaration and exemption, of a Government Agency; or
(b) in relation to anything which will be prohibited or
restricted in whole or in part by Law if a Government
Agency intervenes or acts in any manner within a
specified period after notification to it, the expiry of
that period without intervention or action of the
relevant Government Agency.
Basic Lease Term in respect of the Cross Border Lease
Equipment, has the same meaning as is given to that term in
the Cross Border Lease Transaction Documents.
Book Debts means trade debts and other receivables owed to the
Commission in respect of the Business on the Completion Date
and notes and securities for them then held by the Commission.
-4-
Business means the business of carrying goods by rail and road
and handling and storing goods presently conducted by the
Commission and the provision of access to third parties to the
Network under the Access Agreements.
Business Day means a day on which trading banks are open for
general banking business in Perth.
Business Names means the registered and unregistered business
names (if any) specified in Schedule 2 and all associated
goodwill.
Capital Expenditure Amount means the amount of $54,152,000
which the Commission proposes to spend on capital expenditure
from the Last Balance Date to the Completion Date in
accordance with the Capital Works Programme.
Capital Works in Progress means the value of capital
expenditure incurred by the Commission in respect of Plant and
Equipment and railway infrastructure which as at the
Completion Date is yet to be completed and has not been
transferred to Plant and Equipment.
Capital Works Programme means the capital works programme of
the Commission in respect of the Business set out in Annexure
M.
Completion means settlement of the sale and purchase of the
Assets and Access Assets and the assumption of the Liabilities
and Access Liabilities in accordance with clause 4 and
Complete has a corresponding meaning.
Completion Date means subject to clause 5.5(b) 9 December 2000
or any other date agreed by the Minister and the Purchaser.
Completion Time means one minute past midnight (Western
Standard Time) on the Completion Date.
Confidential Information means all trade secrets and all
financial, marketing and technical information, ideas,
concepts, knowhow, technology, processes and knowledge which
is confidential or of a sensitive nature in the possession of
the Commission and used in and necessary for the conduct of
the Business, but excludes that which is in the public domain
(or which is part of an asset referred to in paragraph (d) of
the definition of Excluded Asset).
Contaminant means a solid, liquid, gas, odour, heat, sound,
vibration, radiation or substance which makes or may make
Freight Terminals or any other land or the surrounding
Environment:
(a) unsafe or unfit for habitation or occupation by persons
or animals;
-5-
(b) degraded in its capacity to support plant life; or
(c) otherwise environmentally degraded.
Contracts means the contracts, commitments and rights of the
Commission in the course of conducting the Business before the
Completion Date (including those described in Schedule 3 but
excluding the Access Agreements, the Cross Border Lease
Transaction Documents, the Fleet Lease and Ancillary
Agreements) which are not fully performed as at the Completion
Date and which are novated to the Purchaser from Completion
under the Transfer Order or, in the case of contract
commitments and rights not governed by Western Australian law,
with the consent of each other party to the contract,
commitment or right.
Contractors' Deposits means the deposits paid by parties under
Contracts to Westrail as security for their obligations and as
at 30 June 2000 are shown in Schedule 8.
Corridor Land has the same meaning as in the Lease Agreement.
Cross Border Lease Equipment means the plant and equipment
listed in Annexure E.
Cross Border Lease Rights means the Commission's right of
possession and to call for possession and ownership and all
other right, title and interest of the Commission under the
Cross Border Lease Transaction Documents and in the Cross
Border Lease Equipment.
Cross Border Lease Substitution Documents means the documents
referred to in Part 3 of Schedule 4.
Cross Border Lease Transaction Documents means the documents
referred to in Part 1 of Schedule 4 and includes, where the
context requires, those documents as amended and novated by
the Cross Border Lease Substitution Documents.
Cross Border Lease Westrail Documents means the documents
referred to in Part 2 of Schedule 4.
Data Room means the specific room situated at ▇▇▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ allocated to
the Purchaser for the purpose of examining the Data Room
Documentation.
-6-
Data Room Documentation means all documentation or microfiche
or electronically stored data contained in, or accessible from
a computer terminal located in, the Data Room or otherwise
provided to the Purchaser during the due diligence process
leading to this agreement.
Design Licence means a perpetual non-exclusive licence to use
the designs specified in Schedule 2.
DOLA means the Department of Land Administration of Western
Australia.
dollar and $ means dollar in the lawful currency of Australia.
Employees means the employees of the Commission in relation to
the Business who have accepted an offer of employment from
Westrail Freight Employment and who are listed in Schedule 5.
Employment Guarantee means the Deed for the benefit of the
Employees, the form of which is set out in Annexure B.
Employment Offer means the offer made by Westrail Freight
Employment to the Employees, in the form set out in Annexure
C.
Encumbrance means any Native Title, mortgage, charge, ▇▇▇▇ of
sale, pledge, easement, restrictive covenant, building
condition, writ, warrant, caveat (and the claims stated in the
caveat) deposit, lien, encumbrance, hypothecation and any
other right, interest, power or arrangement of any nature
affecting any property or right and includes but is not
limited to, any agreement to grant or create any of the above,
but excludes any Permitted Encumbrance.
Environment means the physical factors of the surroundings of
persons including the land, waters, atmosphere, climate,
sound, odours, taste, the biological factors of animals and
plants and the social factor of aesthetics.
Estimated Accrued Employee Entitlements means $5,080,000 being
the estimated opening balance as at the Completion Date of the
liability of Westrail Freight Employment for annual leave and
long service leave entitlements of Employees.
Excluded Assets means:
(a) the Leased Railway Infrastructure;
-7-
(b) cash at bank, on deposit or on hand and Book Debts;
(c) insurance policies owned by the Commission and rights to
participate in self insurance arrangements and the
benefit of any claims under them; and
(d) the assets which, as contemplated by the Ancillary
Agreements, are to remain the property of the Commission.
Fit for Purpose has the same meaning as in the Lease
Agreement.
Fleet Lease means the Fleet Lease Transaction entered into by
the State Supply Commission on 27 June 1996 with, amongst
others, Matrix Facility Management Pty Ltd, Matrix Group
Limited and Matrix Fleet Pty Limited.
Fleet Sublicence means the Sublicence of the Fleet Vehicles in
the form of Annexure K.
Fleet Vehicles means the motor vehicles listed in Schedule 6
which are used by the Commission in the Business under the
Fleet Lease.
Freight Terminals means the freight terminals referred to in
Schedule 7.
General Conditions means the general conditions for the sale
of land set out in Schedule 13.
Goodwill means the goodwill of the Business including, but not
limited to, the exclusive right of the Purchaser to represent
itself as carrying on the Business as the successor to the
Commission.
Government Agency means, in respect of the relevant country,
any government or governmental, semi-governmental,
administrative, fiscal or judicial body, responsible minister,
department, office, commission, delegate, authority,
instrumentality, tribunal, board, agency, entity or organ of
government, whether federal, state, territorial or local,
statutory or otherwise, anywhere in the world.
Government Gazette means the Government Gazette of Western
Australia printed and published, or purporting to be printed
and published, by the Government Printer and includes any
supplement to it.
-8-
Indirect Loss means loss or damage which does not flow
directly and immediately from the relevant event,
circumstance, act or omission, and includes:
(a) any special, indirect or incidental loss or damage; and
(b) loss or damage arising from loss or denial of
opportunity,
whether the claim for such loss or damage is based in
contract, in negligence, or any other tort of any kind, under
warranty or otherwise.
Information Memorandum means the document of that name issued
by the Rail Freight Sale Task Force in respect of the Business
and dated 30 June 2000.
Initial Rent means:
(a) the amount of $292,470,570.70; or
(b) if the date of the execution of this agreement is 1
November 2000 or later and on that date the Five Year
Swap Rate is 6.75% or higher then the amount in paragraph
(a) reduced by $60 million for every 1% (or part thereof)
in excess of 6.55% where the Five Year Swap Rate is that
rate published by the Australian Financial Markets
Association (AFMA) Receive Swap Reference Rate as
published on Reuters page SWAPREF at 10am Eastern
Standard Time on the day of the swap
which the Network Lessees have agreed to pay as a prepayment
of rent under the Lease Agreement.
Intellectual Property Licences means all agreements under
which the Commission obtains the right to use, but not
ownership of, any of the Design Licences, the Business Names
or Trade Marks or any Confidential Information, patents,
patent applications, discoveries, inventions, registered or
unregistered designs, copyright or similar rights used in and
necessary for the conduct of or used in connection with the
Business including copyright in the software comprised in the
corporate and financial systems referred to in Annexure F.
Intellectual Property Rights means:
(a) the Business Names;
-9-
(b) all Trade Marks owned by the Commission used in and
which are necessary for the conduct of the Business;
(c) all Confidential Information owned by the Commission;
(d) all patents, patent applications, discoveries,
inventions, registered and unregistered designs,
copyright and similar rights owned by the Commission and
which are used in and are necessary for the conduct of
the Business; and
(e) the Intellectual Property Licences.
Inventory means as at the Completion Date all consumables,
spare parts, office supplies, inventory and stock (including
raw materials, wheelsets, uninstalled sleepers, packaging and
containers, work in progress and finished goods and other
stock and consumables) which are in use or intended for use
and necessary for the conduct of the Business including items
owned by the Commission which are in transit to the Commission
but, for the avoidance of doubt, excludes inventory and stock
used by the Commission in its passenger business.
Joint Contracts means those contracts listed in Schedule 15.
Land means the land on which the Freight Terminals and Staff
Houses are located.
Last Balance Date means 30 June 2000.
Law includes any constitutional provision, treaty, decree,
convention, statute, Act of Parliament, Act, regulation, rule,
ordinance, proclamation, subordinate legislation, by-law,
judgment, rule of common law or equity, rule, ruling or
guideline by a competent entity exercising jurisdiction in the
relevant matter, including a rule, ruling or guideline of the
Federal Treasurer, Foreign Investment Review Board, the
Australian Competition & Consumer Commission or National
Competition Council or any other Government Agency.
Lease Agreement means the Rail Freight Network Use Agreement
and Railway Infrastructure Lease to be entered into between
the Minister, the Commission, the Treasurer, the Network
Lessees, the Purchaser and the Guarantor, substantially in the
form set out in Annexure A and as may be modified in
accordance with clause 4.7.
-10-
Leased Railway Infrastructure means all Leased Railway
Infrastructure (as defined in the Lease Agreement) and which
is leased to the Network Lessees under the Lease Agreement.
Leased Vehicle Rights means the right to use and possess the
Fleet Vehicles (subject to the Fleet Sublicence) and to use
and possess the other motor vehicles exclusively used by the
Commission and necessary for the conduct of the Business
(subject to the terms on which those vehicles are leased by
the Commission).
Leased Vehicles means the Fleet Vehicles and other leased
vehicles exclusively used by the Commission in and necessary
for the conduct of the Business.
Liabilities means the liabilities of the Commission which are
to be assumed by the Purchaser under the Transfer Order (and
which arise after the Completion Time), but not including the
Access Liabilities.
Material Contract means a contract where the liability (if
fully performed or by way of damages if repudiated the day
after Completion Date) of or to the Commission is likely to
exceed $500,000.
Minister's Warranties means the warranties set out in Schedule
1 and in Schedule 13.
Name Companies means Westrail Freight Pty Ltd ACN 087 734 094,
Westrail Freight Services Pty Ltd ACN ▇▇▇ ▇▇▇ ▇▇▇, and
Westrail Logistics Pty Ltd ACN 087 647 916.
Native Title means native title as that term is defined in the
Native ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ (Cth).
Native Title Claims Group has the meaning given in the Native
Title Act (Cth).
Network means Corridor Land and Leased Railway Infrastructure
(as defined in the Lease Agreement).
Network Lessees means in the context of:
(a) that part of the Network which comprises standard gauge
and dual gauge track, WestNet StandardGauge; and
-11-
(b) that part of the Network as comprises narrow gauge track,
WestNet NarrowGauge,
to the intent that a separate Lease Agreement will be entered
into under clause 4.7(c) in respect of each of the foregoing.
Operating Agreement means each of:
(a) Operating Agreement (PNC2) to be entered into between the
Minister, the Treasurer, the Commission, the Purchaser,
the Substitute Sublessee, the Operator, the Network
Lessees and the other parties named in it; and
(b) Operating Agreement (FB No. 2) to be entered into between
the Minister, the Treasurer, the Commission, the
Purchaser, the Substitute Sublessee, the Operator, the
Network Lessees and the other parties named in it,
substantially in the form set out in Annexure N.
Period means the period used by the Commission for management
accounting purposes and being 1/13th of a year.
Permitted Encumbrance means:
(a) a Cross Border Lease Transaction Document, which is
otherwise an Encumbrance;
(b) a lien arising by operation of law in good faith securing
money owing in respect of goods or services provided in
the ordinary course of business where there is no default
in connection with the relevant provision of goods or
services; and
(c) a right of title retention in connection with the
acquisition of trading stock in the ordinary course of
business on the usual terms of sale of the supplier where
there is no default in connection with the relevant
acquisition.
Plant and Equipment means all locomotives, rollingstock,
plant, equipment, motor vehicles, machinery, tools, furniture,
fixtures and fittings owned and used by the Commission
exclusively in carrying on the Business on the Completion Date
including the plant and equipment listed in Schedule 9 and the
-12-
corporate and financial systems hardware referred to in
Annexure F, but excluding all:
(a) Leased Vehicles;
(b) Cross Border Lease Equipment;
(c) Leased Railway Infrastructure; and
(d) Inventory.
Proforma Accounts means the proforma statement of assets and
liabilities of the Business.
Property Encumbrances means the encumbrances specified in this
agreement as affecting the relevant parcel of Land and
includes the encumbrances set out under the heading "Property
Encumbrances" in Schedule 13.
Property Report means the Property Due Diligence Report
prepared by Mallesons ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for the Rail Freight Sale
Task Force, a copy of which has been placed in the Data Room.
Property Rights means the rights specified in this agreement
as affecting the relevant parcel of Land and includes the
rights set out under the heading "Property Rights" in Schedule
13.
Purchaser means in the context of:
(a) the right to acquire the Shares in Westrail Freight
Employment, AWR Holdings; and
(b) the right to acquire the Assets, other than the Shares in
paragraph (a), Australian Western Railroad,
but otherwise means Australian Western Railroad.
Purchase Price means the consideration for the Assets and
Access Assets calculated in accordance with clause 3.
Rail Freight Sale Task Force means the task force established
by the Minister to advise the Minister on the sale of the
Business and includes each of its members.
Rail Safety Act means the Rail Safety ▇▇▇ ▇▇▇▇ (WA).
-13-
Records means originals and copies, in machine readable or
printed form, of books, files, reports, records,
correspondence, documents and other material used in and
necessary for the conduct of the Business, or used or held in
connection with the Assets, Access Assets or the Liabilities
or the Access Liabilities but excluding the Fleet Lease, the
Cross Border Lease Equipment and the Leased Vehicles.
Related Body Corporate of a body corporate means another body
corporate which is related to the first within the meaning of
section 50 of the Corporations Law.
Shares means all of the shares in Westrail Freight Employment
and all of the shares in the Name Companies.
Staff Houses means the houses and barracks listed in Schedule
10.
State means the State of Western Australia.
State Agreements means those agreements made between the State
and various parties and listed in Schedule 11.
State Agreement Obligations means the obligations of the
Purchaser from Completion in respect of the State Agreements
and set out in Schedule 11.
State Agreement Party means a party to a State Agreement
(other than the State).
State Agreement Rights means the rights described in Schedule
11 which are created by this agreement for the benefit of the
Purchaser.
Statutory Licences means all licences, consents, rights,
permits and certificates relating to any aspect of the
Business issued by any governmental authority (whether
Commonwealth, State or Local), including the items described
in Schedule 12, in so far as they may be transferred to the
Purchaser.
Sub-Sublease means the documents described at item B of Parts
3A and 3B of Schedule 4.
Trade Marks means all logos, symbols, get up, trademarks,
tradenames, service marks, brand names and similar rights,
-14-
whether registered or unregistered, and all associated
goodwill, including those items specified in Schedule 2.
Transfer Order means the order in the form of Annexure D to be
made under section 23 of the Act transferring certain of the
Assets and Liabilities to the Purchaser from Completion and
transferring certain of the Access Assets and the Access
Liabilities to the Network Lessees.
Warranties means the warranties, representations and
indemnities contained in this agreement, including those in
clause 18.
Westrail Centre means the buildings and improvements located
at the ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇.
Westrail Freight Employment means Westrail Freight Employment
Pty Ltd ACN 087 891 601.
Work Trains means the Plant and Equipment described as such in
Schedule 9.
1.2 In this agreement unless the contrary intention appears:
(a) a reference to a clause, schedule, annexure or appendix
is a reference to a clause of or schedule, annexure or
appendix to this agreement and references to this
agreement include any recital, schedule, annexure or
appendix;
(b) a reference to this agreement or another instrument
includes any variation or replacement of either of them;
(c) a reference to a statute, ordinance, code or other Law
includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements
of any of them;
(d) the singular includes the plural and vice versa;
(e) the word person includes a firm, a body corporate, an
unincorporated association or an authority;
(f) a reference to a person includes a reference to the
person's executors, administrators, successors,
-15-
substitutes (including, but not limited to, persons
taking by novation) and assigns;
(g) an agreement, representation or warranty in favour of two
or more persons is for the benefit of them jointly and
severally;
(h) an agreement, representation or warranty on the part of
two or more persons binds them jointly and severally;
(i) if a period of time is specified and dates from a given
day or the day of an act or event, it is to be calculated
exclusive of that day;
(j) a reference to a day is to be interpreted as the period
of time commencing at midnight and ending 24 hours later;
(k) the words "include", "includes" and "including" are
deemed to be immediately followed by "without
limitation"; and
1.3 Headings are inserted for convenience and do not affect the
interpretation of this agreement.
1.4 In clauses 2 and 3 the terms going concern, GST,
consideration, tax invoices, adjustment event, recipient,
supply, supplier and taxable supply have the meanings given to
them in the A New Tax System (Goods and Services Tax) ▇▇▇
▇▇▇▇, as amended from time to time.
1.5 For the avoidance of doubt a reference in this agreement to
the Minister is to the Minister as agent of the State and not
in any personal capacity.
2. Sale and purchase of Assets, Access Assets and assumption of
Liabilities and Access Liabilities
Assets
2.1 The Minister, the Purchaser and the Substitute Sublessee agree
that the Business is to be sold to the Purchaser and the
Substitute Sublessee as a going concern, on the terms of this
agreement. The Minister agrees to sell and the Purchaser
agrees to purchase the Assets for the Purchase Price on the
terms and conditions of this agreement with effect from the
Completion Time on the Completion Date.
-16-
Access Assets
2.2 The Minister agrees to sell and the Network Lessees agrees to
purchase the Access Assets on the terms and conditions of this
agreement with effect from the Completion Time on the
Completion Date.
Encumbrances
2.3 The Assets and the Access Assets must be transferred to the
Purchaser, the Substitute Sublessee and the Network Lessees
free from any Encumbrance.
Assumption of Liabilities
2.4 Subject to Completion, as from the Completion Time on the
Completion Date:
(a) the Purchaser accepts responsibility for the Liabilities;
(b) the Network Lessees accept responsibility for the Access
Liabilities; and
(c) the Substitute Sublessee accepts responsibility for the
Cross Border Lease Equipment subject to the respective
Cross Border Lease Transaction Documents and on the terms
and conditions of the Cross Border Lease Substitution
Documents.
3. Purchase Price and GST
3.1 The Purchase Price for the Assets and the Access Assets is the
aggregate of:
(a) for Goodwill, $6,506;
(b) for the Plant and Equipment, $55,700,000 apportioned in
accordance with Schedule 9;
(c) for the Inventory, $18,993,386 adjusted in accordance
with clause 6, valuing Inventory at the lower of:
(i) its cost (excluding indirect overhead costs) to the
Commission determined in accordance with the
Accounting Standards; and
(ii) its net realisable value;
-17-
(d) for the Intellectual Property Rights, $1;
(e) for the Shares, $100;
(f) for the Cross Border Lease Rights, $1;
(g) for the ownership rights in the Cross Border Lease
Equipment, subject to the Cross Border Lease Transaction
Documents, $118,200,000;
(h) for the Statutory Licences, $1;
(i) for the Contracts, $1;
(j) for the Staff Houses, $1,700,000;
(k) for the Freight Terminals, $38,000,000;
(l) for the Records, $1;
(m) for the Capital Works in Progress $32,400,000;
(n) for the Access Assets $1;
(o) for the Design Licence $1; and
(p) for the Leased Vehicle Rights $1.
GST
3.2 The Purchase Price does not include GST. GST is not payable
in respect of the Purchase Price and clause 3.3 does not apply
to the Purchase Price.
3.3
(a) Unless expressly included, the consideration for any
supply under or in connection with this agreement does
not include GST.
(b) To the extent that any supply made under or in connection
with this agreement is a taxable supply, the
consideration for that supply is increased by an amount
determined by the supplier, not exceeding the amount of
that consideration (or its GST exclusive market value, in
-18-
the case of non-monetary consideration) multiplied by the
rate at which GST is imposed in respect of the supply.
(c) The amount so determined must be paid by the recipient of
the supply even if the recipient disputes the
determination.
(d) If an adjustment event occurs following a determination
under clause 3.3(b):
(i) the supplier must make a further determination under
clause 3.3 of the amount of consideration payable;
and
(ii) if the GST component of that consideration differs
from the amount originally determined, the amount of
the difference must be paid by, refunded to or
credited to the recipient as the case may be.
(e) An amount payable under this clause 3.3 in respect of GST
must be paid on or before the 14th day of the month after
the month in which the taxable supply to which it relates
was made, provided that if at any time the day on which
GST is payable to the Australian Taxation Office by
suppliers who are required to pay GST on a monthly basis
to the Australian Taxation Office alters from the 21st
day of the month after the month in which the taxable
supply was made, then an amount payable under this clause
3.3 in respect of GST must be paid at least 7 days before
the day on which the supplier must pay the GST to the
Australian Taxation Office. Notwithstanding the
foregoing point of this clause 3.3(e) an amount payable
in respect of GST on the Purchase Price must be paid at
Completion.
(f) The Substitute Sublessee and the Purchaser acknowledge
that as from Completion each will be responsible for the
payment of amounts in respect of GST in respect of the
Cross Border Lease Equipment and the Leased Vehicles
respectively.
(g) Except to the extent the parties have agreed to the
contrary in accordance with clause 3.3(h), the parties to
this agreement will in respect of any supply to which
this clause 3.3 applies, provide a tax invoice to the
other relevant party within 7 days after the date of the
supply so that that party can claim an input tax credit
-19-
(or seek a refund of) any amount paid under this
agreement in respect of GST.
(h) The parties will use their respective best endeavours to
agree protocols for the provision of tax invoices in
respect of supplies to be made under this agreement and
any such protocols as are agreed shall take precedence
over the provisions of clause 3.3(g) in relation to the
supplies to which those protocols relate.
(i) The Purchaser, Network Lessees, Substitute Sublessee and
Guarantor agree to remain registered for GST purposes
under the A New Tax System (Goods and Services) Tax ▇▇▇
▇▇▇▇, for the term of the Lease Agreement.
4. Completion
4.1 Completion is to take place at 10.00am on the Completion Date
at the offices of Mallesons ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, Solicitors, Level
10, Central Park, ▇▇▇ ▇▇ ▇▇▇▇▇▇'▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ or any other time and place agreed by the Minister
and the Purchaser.
4.2 The Minister agrees to do the following on Completion:
(a) deliver to the Purchaser or its solicitors:
(i) evidence that the Transfer Order has been properly
made and published in the Government Gazette so as
to (with effect from Completion), vest the Assets
referred to in it in the Purchaser, ensure the
Liabilities referred to in it are assumed by the
Purchaser, vest the Access Assets referred to in it
in the Network Lessees and ensure the Access
Liabilities referred to in it are assumed by the
Network Lessees and evidence that all of the
requirements of sections 11, 12, 13(1), 16(4) and 23
of the Act have been complied with to the extent
necessary to give effect to this agreement and the
transactions contemplated by it;
(ii) the Cross Border Lease Substitution Documents
executed as required by the Commission, the
Minister, the Treasurer and the Western Australian
Treasury Corporation;
-20-
(iii) all deeds and documents of title (if any)
relating to the Assets and Access Assets
including without limitation copies of all of
the Material Contracts and the Cross Border
Lease Transaction Documents in Westrail's
possession and the original executed Cross
Border Lease Transaction Documents in
Westrail's possession but excluding the Fleet
Lease;
(iv) assignments of each of the Intellectual Property
Rights and all forms necessary to record the change
of their ownership;
(v) completed transfer of ownership forms for each of
the motor vehicles which form part of the Plant and
Equipment;
(vi) the Lease Agreement executed by the Minister, the
Commission and the Treasurer;
(vii) executed transfers in respect of the Shares
together with such other instruments as the
Purchaser may reasonably require to gain
control of those companies from Completion;
(viii) a resolution of the director of Westrail
Freight Employment and the Name Companies
approving (subject to the payment of stamp
duty) the transfer of the Shares and the entry
into the register of those companies of the
Purchaser as shareholder; and
(ix) resignations of the officers of Westrail Freight
Employment and the Name Companies and confirmation
that they have no claims against those companies,
(b) arrange for the Commission to deliver to the Purchaser
all Records, except that if the Commission is required by
Law to retain any of the Records the Commission may
deliver copies of those documents to the Purchaser;
(c) make formal delivery of all chattels forming part of the
Assets, where they are currently then situated, and
permit the Purchaser to take possession of the Assets;
-21-
(d) assist the Purchaser with the necessary forms and
consents to enable the utility services provided to the
Business, including those telephone or facsimile and
other communication services (with the benefit of the
same numbers) requested by the Purchaser to be
transferred to the Purchaser with effect from the
Completion Date without interruption of those services;
(e) deliver to the Purchaser the Ancillary Agreements
executed by the Commission; and
(f) deliver to the Purchaser the registers, records and seals
of Westrail Freight Employment and the Name Companies.
4.3 Each of the Purchaser and the Network Lessees agree to make
payment on Completion in accordance with clauses 7.2 or 7.3 if
the Minister complies with clause 4.2.
4.4 Each of the Purchaser, the Substitute Sublessee and the
Network Lessees agree to execute and deliver and to cause any
other party they control to execute and deliver to the
Minister at Completion each of the Ancillary Agreements to
which it is a party. The Guarantor agrees to execute and
deliver at Completion the Employment Guarantee in the form of
Annexure B.
4.5 Each of the Purchaser, the Guarantor and the Substitute
Sublessee agrees to execute and deliver to the Minister
(whether in Perth or in New York) at or before Completion,
each of the Cross Border Lease Substitution Documents to which
each is respectively a party.
4.6 Where any agreement referred to in this agreement is required
to be executed by or at Completion and that agreement contains
blanks, those blanks will be completed by the parties prior to
its execution.
4.7 (a) The Lease Agreement is to be entered into by WestNet
StandardGauge in respect of that part of the Network which
comprises standard gauge and dual gauge track and by WestNet
NarrowGauge in respect of that part of the Network which
comprises narrow gauge track.
(b) Between the date of this agreement and Completion Date,
the Network Lessees will as soon as reasonably
practicable advise the Minister of changes that they
require to the Lease Agreement to reflect:
-22-
(i) the creation of two leases, one for the standard
gauge and dual gauge part of the Network and one for
the narrow gauge part of the Network;
(ii) consequential changes to parties and definitions;
(iii) an allocation of leased railway infrastructure
and responsibility for the matters referred to
in the schedules between WestNet StandardGauge
and WestNet NarrowGauge;
(iv) to amend the definition of "Material Events of
Default" to add:
"(f) termination of the [Standard Gauge Lease
Agreement/Narrow Gauge Lease Agreement] for a
Material Event of Default under that
agreement."
(c) So long as the two leases prepared in accordance with
this clause 4.7:
(i) are guaranteed by the Guarantor;
(ii) contain the cross default provision referred to in
clause 4.7(b)(iv); and
(iii) reflect only changes reasonably required due to
the separation of the narrow gauge and standard
gauge into separate leases;
the Minister will agree that those lease agreements will
replace the Lease Agreement set out in Annexure A to be
signed and delivered at Completion.
(d) The Network Lessees may also propose completion of the
Transfer Order to show the allocation of Access Assets
and Access Liabilities between the two lessees.
5. Conditions Precedent
5.1 Completion is conditional on:
(a) the execution by the Guarantor, the Purchaser and the
Network Lessees of the Lease Agreement;
-23-
(b) the designation by order, made under Division 2 of the
Act, of Corridor Land as contemplated by the Lease
Agreement;
(c) the making and publishing in the Government Gazette of
the Transfer Order;
(d) execution of the Cross Border Lease Substitution
Documents by all parties, following satisfaction of the
conditions precedent referred to in those documents;
(e) execution of the Ancillary Agreements by all parties;
(f) original executed consents being obtained from all
relevant counterparties for the execution of the
Ancillary Agreements and satisfaction of all conditions
in each of them; and
(g) the Purchaser and the Network Lessees receiving
confirmation in a form reasonably acceptable to them that
they will (as from the Completion Date) be accredited as
an operator and owner respectively under the Rail Safety
Act.
5.2 Clause 5.1(a) is for the benefit of the Minister.
5.3 Each of the parties must use reasonable endeavours to obtain
the fulfilment of the conditions in clause 5.1.
5.4 If any of the conditions in clause 5.1, other than clause
5.1(a) , is not fulfilled by 31 March 2001 or a later date
agreed on by the Minister and the Purchaser then, provided it
has complied with clause 5.3, any party may terminate this
agreement at any time before Completion by giving notice to
the other parties.
5.5 If the condition in clause 5.1(a) has not been satisfied or
waived by 31 March 2001, then:
(a) the Minister may terminate this agreement at any time
before Completion by notice to the Purchaser; or
(b) the Completion Date will be extended until such time as
they are satisfied.
-24-
5.6 If this agreement is terminated under clauses 5.4 or 5.5 then,
in addition to any other rights, powers or remedies provided
by Law:
(a) each party is released from its obligation to further
perform the agreement except those imposing on it
obligations of confidentiality;
(b) each party retains the rights it has against any other
party in respect of any past breach; and
(c) each of the Purchaser, the Guarantor, the Substitute
Sublessee and the Network Lessees must return to the
Minister all documents and other materials in any medium
in its possession, power or control which contain
information relating to the business, including the
Records.
5.7 If this agreement is terminated under clause 5.4, the
deposit paid under clause 7.1 (plus any interest accrued)
will be refunded to the Purchaser.
6. Adjustment of Purchase Price
Post completion adjustment
6.1 The Commission and the Minister agree to instruct KPMG to
undertake a post Completion adjustment to the components of
the Purchase Price referred to in clause 3.1(c) (Inventory).
6.2 The amount specified in clause 3.1(c), has been taken from the
Proforma Accounts as at the Last Balance Date. KPMG will
within 5 business days of their preparation examine the
Proforma Accounts as at the Completion Date and will, based on
the information it obtains from such examination, advise the
Minister and the Purchaser of the amounts of Inventory as at
that date.
6.3 The Purchase Price will be adjusted by deducting from the
amount referred to in clauses 3.1(c), the amount advised by
KPMG under clause 6.2.
6.4 If the difference referred to in clause 6.3 is a positive
number, the Minister will within 14 Business Days of being
advised of the number, pay that amount to the Purchaser, and
if the difference is a negative number, the Purchaser will pay
-25-
that amount to the Minister within 14 Business Days of being
advised of it.
Adjustment for certain employee entitlements
6.5 The Commission and the Minister agree to instruct KPMG to
calculate Actual Accrued Employee Entitlements.
6.6 In calculating Actual Accrued Employee Entitlements, KPMG will
take account of:
(a) annual leave and long service leave entitlements accrued
by Employees;
(b) annual leave and long service leave entitlements taken by
Employees;
(c) annual leave and long service leave entitlements that
have been paid out to Employees in connection with their
transfer to Westrail Freight Employment; and
(d) the requirements of Australian Accounting Standard
AASB1028.
6.7 If Actual Accrued Employee Entitlements are greater than
Estimated Accrued Employee Entitlements, the Commission will
within 10 Business Days of being advised of the difference pay
to the Purchaser an amount equivalent to the difference and
such payment will be taken to be an adjustment of the amount
paid under clause 3.1(a).
If Actual Accrued Employee Entitlements are less than
Estimated Accrued Employee Entitlements, the Purchaser will
within 10 Business Days of being advised of the difference pay
to the Commission an amount equivalent to the difference and
such payment will be taken to be an adjustment of the amount
paid under clause 3.1(a).
Capex adjustment
6.8 Within 20 Business Days of Completion the Commission will
provide a certificate in terms reasonably satisfactory to the
Purchaser warranting the amount of money it has spent from the
Last Balance Date to the Completion Date in accordance with
the Capital Works Programme.
-26-
6.9 If the amount set out in the certificate provided under clause
6.8 is less than the Capital Expenditure Amount, the
certificate will be accompanied by a bank cheque payable to
the Purchaser of an amount equal to that difference.
Commission to maintain accounts
6.10 For the purposes of this clause 6 the Commission agrees that
it will maintain its accounts and will prepare Proforma
Accounts as at Completion Date in a manner consistent with the
way it has maintained its review of operations accounts prior
to the date of this agreement.
KPMG
6.11 In the absence of manifest error, the amounts advised by KPMG
are final and conclusive and binding on the parties.
6.12 The cost of engaging KPMG to perform work for the purposes of
this clause 6 will be borne by the Purchaser and the Minister
jointly.
7. Payment of the Purchase Price
7.1 The Purchaser agrees to pay to the Minister, on execution of
this agreement, the sum of $10,000,000 as a deposit and part
payment of the Purchase Price. Pending Completion the
Minister is to invest the deposit at call with "the
Commonwealth Bank". On Completion the deposit vests in the
State and the interest accruing on the deposit is to be paid
to the State (Treasury). Interest is not part payment of the
Purchase Price.
7.2 The Purchaser agrees to pay to the Minister at Completion the
balance of the Purchase Price (less the amounts payable under
clause 3.1(n) which will be paid by the Network Lessees).
7.3 The Network Lessees agree to pay to the Minister at Completion
the sum of $292,470,570.70 for the Initial Rent in accordance
with the Lease Agreement plus any GST amount which may be
payable in respect of supply under the Lease Agreement upon
presentation at Completion of a tax invoice (and
notwithstanding the time stated for presentation of a tax
invoice under clause 3.3 of this agreement or clause 17.3 of
the Lease Agreement). Alternatively if at Completion the
Minister presents an Australian Taxation Office tax ruling
that GST is not payable on any supply under the Lease
-27-
Agreement which is in a form which has been accepted in
writing by the Network Lessees immediately prior to Completion
then no payment of an amount in respect of GST will be made by
the Network Lessees at Completion.
7.4 Each payment referred to in this clause 7 and in clause 6 must
be made by bank cheque.
8. Apportionment of Income & Book Debts
Income
8.1 The parties acknowledge that the Commission is entitled to
income derived from conducting the Business before the
Completion Date and the Purchaser is entitled to all the
rights and benefits of the Business (including the income
derived in connection with the Business) from and including
the Completion Date.
Book Debts
8.2 The Purchaser agrees to use its best endeavours to collect the
Book Debts as at the Completion Date for a period of 120 days
from the Completion Date, as agent of the Commission.
8.3 The Commission must provide the Purchaser with an itemised
schedule of the Book Debts as at the Completion Date, showing
details of each debtor's name and address and the amount owing
by each debtor.
8.4 The Purchaser must account on the fifth Business Day of each
month for Book Debts recovered during the previous month. All
sums received by the Purchaser from a debtor must be applied
to reduce debts owing to the Commission in priority to debts
owing to the Purchaser.
8.5 The Purchaser is not obliged to take any legal proceedings
against debtors to recover the Book Debts.
8.6 The Commission may continue to collect the Book Debts of the
Business in the ordinary manner before and following
Completion.
-28-
9. Conduct of Business pending Completion
Until Completion the Commission must carry on the Business in
the normal manner and:
(a) conduct the Business diligently and with reasonable care
and skill;
(b) will not create any new Access Liabilities or Liabilities
prior to Completion Time, without the reasonable consent
of the Purchaser or the Network Lesses;
(c) will not dispose of any Asset or Access Asset;
(d) will not create any Encumbrance over any Asset or Access
Asset other than in the ordinary course of business;
(e) will comply with all of its obligations and take
reasonable steps to enforce all of its rights in respect
of each Material Contract;
(f) will not enter into any new Material Contract, agree to
any modification, variation to or waiver of any Material
Contract, without the prior consent of the Purchaser or
the Network Lessees and such new Material Contract or
modification, variation or waiver will then be included
in the Transfer Order;
(g) will take reasonable steps to ensure that all of its
dealings are on arm's length terms;
(h) will not make a material change to the Business or make
any material acquisition or commit any further capital
expenditure, other than in accordance with the Capital
Works Programme;
(i) will take reasonable steps to maintain all key Plant and
Equipment in the state of repair, working order and
condition existing at the date of this agreement;
(j) in the conduct of the Business, will comply with all
Laws;
(k) ensure that neither of Westrail Freight Employment Pty
Ltd or the Name Companies issue any shares, alter their
capital or declare any dividend; and
(l) afford the Purchaser and the Network Lessees and their
representatives reasonable access (with prior agreement
of the Rail Freight Sale Task Force) to the Business for
-29-
the purpose of doing anything reasonably required to be
done by them between the date of this agreement and
Completion in respect of the matters contemplated by this
agreement.
10. Risk and insurance
10.1 Until Completion the Commission remains the owner and bears
all risks in connection with the Business, the Assets and the
Access Assets.
10.2 On Completion, property in and the risk of the Business and
the Assets and the Access Assets passes to the Purchaser and
the Network Lessees respectively, without prejudice to the
obligations of the Commission and the Treasurer under the
Operating Agreement.
10.3 The Purchaser and the Substitute Sublessee acknowledge that
the Cross Border Lease Transaction Documents include
obligations in relation to insurance of the Cross Border Lease
Equipment which may be applicable after Completion.
11. Fleet Lease and Cross Border Leases
11.1 The Purchaser acknowledges that at Completion it accepts the
Fleet Vehicles on the terms of the Fleet Sublicence.
11.2 Each of the Purchaser and the Substitute Sublessee
acknowledges that:
(a) at Completion it accepts the Cross Border Lease Equipment
subject to the respective Cross Border Lease Transaction
Documents and on the terms and conditions of the Cross
Border Lease Substitution Documents; and
(b) the substitution effected by the Cross Border Lease
Substitution Documents does not permit the Substitute
Sublessee to take any action, or permit any action to be
taken, not permitted to be taken by the Commission under
the Cross Border Lease Transaction Documents; and
(c) the substitution effected by the Cross Border Lease
Substitution Documents is subject to each Encumbrance
effected under the Cross Border Lease Transaction
Documents.
-30-
12. Contracts, Access Agreements and Intellectual Property Licences
12.1 The Purchaser accepts responsibility for the performance
of the Contracts and the Intellectual Property Licences
as from the Completion Time. The Purchaser must properly
perform the obligations of the Commission and of it under
the Contracts and Intellectual Property Licences. The
Purchaser accepts the benefit and burden of the
Contractor's Deposits as from the Completion Time.
12.2 The Purchaser indemnifies the Minister and the Commission
against any liability or loss incurred by the Minister or
by the Commission arising under any of the Contracts or
Intellectual Property Licences as a result of any act or
omission of the Purchaser on or after the Completion
Time.
12.3 The Network Lessees accept responsibility for the Access
Liabilities as from the Completion Time.
12.4 The Network Lessees indemnify the Minister and the
Commission against any liability or loss arising under
any of the Access Agreements as a result of any act or
omission of the Network Lessees on or after the
Completion Time.
Joint Contracts
12.5 The parties must use their best endeavours to procure the
successful division of the Joint Contracts, and for the
provision, in the meantime of services between the
Commission and the Purchaser and in that regard will co-
operate to the fullest extent possible with each other
and with any third parties in the negotiation of such
division for the mutual benefit of the parties.
Intellectual Property Licences
12.6 The parties agree that as from the Completion Time:
(a) the Commission grants to the Purchaser and the
Network Lessees a non-exclusive, royalty free,
perpetual licence to use the Design Licence and all
of the Intellectual Property Rights of the
Commission comprised in the systems to be used to
provide services to the Purchaser under the
Signalling, Train Control and Communications Systems
Services Agreement set out in Annexure G; and
-31-
(b) the Purchaser grants to the Commission a non-
exclusive, royalty free, perpetual licence to
use all of the Intellectual Property Rights of
the Purchaser comprised in the systems to be
used to provide services to the Commission
under the Corporate and Financial Systems
Services Agreement set out in Annexure F.
12.7 For the purposes of clause 12.6 the Commission and
the Purchaser will provide to each other a hard copy
of the source codes in respect of software comprised
in the licences granted under clause 12.6.
Indemnity
12.8 The Minister indemnifies the Purchaser and the Network
Lessees against any liability or loss arising under any
of the Contracts, Intellectual Property Licences or
Access Agreements as a result of any act or omission of
the Commission before the Completion Date, except for any
liability or loss suffered by reason of the recission,
avoidance, repudiation or termination of a Contract,
Intellectual Property Licence or Access Agreement by any
party to it.
Accounts Payable
12.9 The Commission agrees that it will promptly pay the
Accounts Payable when due.
Copyright
12.10 Notwithstanding any other provision of this
agreement, where at the date of this agreement
copyright owned by the Commission (or where the
Commission has an enforceable right to use
copyright), is used by the Commission in the
Business and in its other businesses or functions as
at the date of this agreement, the Purchaser and the
Commission will grant to each other a non-exclusive,
royalty free, perpetual licence to use all of such
copyright owned (or where they have an enforceable
right to use) after Completion:
-32-
(a) in the case of the Purchaser and Network Lessees,
for use in connection with the Business; and
(b) in the case of the Commission, for use in connection
with its functions.
13. State Agreements
Obligations
13.1 From Completion the Purchaser and the Network Lessees
accept responsibility for the State Agreement Obligations
in respect of which reference is made to them in Schedule
11 and agree to properly perform the State Agreement
Obligations as from the Completion Time in the manner
described in Schedule 11.
13.2 The Purchaser indemnifies the Minister against any
liability or loss to the State arising under any of the
State Agreements as a result of any act or omission of
the Purchaser on or after the Completion Date in respect
of the State Agreement Obligations.
Rights
13.3 From Completion the Minister grants to the Purchaser, and
the Purchaser accepts, the State Agreement Rights in the
manner described in Schedule 11.
Indemnity
13.4 The Minister indemnifies the Purchaser and the Network
Lessees against any liability or loss arising under any
of the State Agreements as a result of any act or
omission of the Commission or the State before the
Completion Date.
14. There is no clause 14
15. Safety
15.1 Without limiting the obligations of the parties to obtain
fulfilment of the condition set out in clause 5.1(f), the
parties will, as soon as possible after execution of this
agreement and in good faith take all reasonable steps to:
-33-
(a) work co-operatively with; and
(b) produce documentation as required by,
the Department of Transport in order for the Purchaser
and the Network Lessees to gain accreditation as operator
and owner respectively under the Rail Safety Act,
including but not limited to:
(c) updating and, if required, replacing the
Commission's rail safety manuals; and
(d) preparing and finalising suitable interface
agreements.
15.2 In addition to the insurance required under clause 19.1
of the Lease Agreement, the Purchaser and the Network
Lessees, as operator and owner respectively under the
Rail Safety Act, will maintain during the term of the
Lease Agreement such insurance (if any) as is required
from time to time under the Rail Safety Act.
16. Freight Terminals and Staff Houses
16.1 The Purchaser acknowledges that:
(a) the boundaries of the Freight Terminals have not been
surveyed;
(b) the Freight Terminals and Staff Houses are sold subject
to the Property Encumbrances and with the benefit of the
Property Rights referred to in Schedule 13;
(c) legal title to the Freight Terminals cannot be registered
at DOLA until freehold titles for the Freight Terminals
have been created;
(d) legal title to the Staff Houses, except as provided in
Schedule 10 , cannot be registered at DOLA until freehold
titles for the Staff Houses have been created; and
(e) the transfer of legal title to the Freight Terminals and
Staff Houses will not occur at Completion but will occur
in accordance with the General Conditions referred to in
Schedule 13 following Completion.
-34-
16.2 The Purchaser and the Minister will (at the request of the
Purchaser at any time after the Completion Date and at the
cost of the Purchaser) take reasonable steps to procure the
creation of registered freehold title in respect of the
Freight Terminals and in respect of those of the Staff Houses
which are not the subject of registered freehold title and
which are specified in the Purchaser's request. Until such
time as freehold title is transferred to the Purchaser or a
lease granted under clause 16.4 the Minister hereby grants to
the Purchaser a licence to occupy the Freight Terminals and
Staff Houses to the exclusion of the Commission and subject
only to the Property Encumbrances.
16.3 The Purchaser and the Minister will in the process of creating
freehold title to land take all reasonable steps to ensure
that the burden of the Property Encumbrances are properly
acknowledged and the benefit of the Property Rights are
properly secured, including where necessary by the creation
and registration of formal easements and covenants.
16.4 If in respect of any Freight Terminal or Staff House the
Purchaser for any reason decides within a period of five years
from the date of this agreement that it does not wish to
acquire freehold title or continue with the licence under
clause 16.2 to any particular land then:
(a) it will give written notice to the Minister of that
decision and the Purchaser will be entitled to a lease of
that Freight Terminal or Staff House;
(b) the Minister and the Purchaser will negotiate in good
faith the terms of such lease, which lease must contain
the following terms:
(i) the State is to be indemnified for all liabilities
in respect of such land to the extent that it is to
be placed in the same position as if freehold title
in the land had been transferred to the Purchaser;
(ii) the lease will be for a term nominated by the
Purchaser of up to 99 years and for a peppercorn
rental;
(iii) the lease will contain an option on the part of
the Purchaser to acquire freehold title without
-35-
any additional consideration, upon reasonable
notice to the Minister provided that the costs
of creating such title are borne by the
Purchaser and the principles set out in clause
16.3 are observed; and
(iv) the lease will be assignable with the consent of the
Minister, which consent will not be unreasonably
withheld.
16.5 The Purchaser will indemnify the Minister for any loss or
liability of the Minister in connection with Native
Title, which arises out of or in connection with the
process of creation of freehold title over the Freight
Terminals and Staff Houses or of a lease granted under
clause 16.4.
16.6 The licence granted under clause 16.2 will be on the
following terms:
(i) subject to clause 16.7 the State is to be
indemnified for all liabilities in respect of
such land to the extent that it is to be placed
in the same position as if freehold title in
the land had been transferred to the Purchaser;
(ii) the licence will be for a term nominated by the
Purchaser of up to 99 years and for a peppercorn
rental;
(iii) the licence will contain an option on the part
of the Purchaser to acquire freehold title
without any additional consideration, upon
reasonable notice to the Minister provided that
the costs of creating such title are borne by
the Purchaser and the principles set out in
clause 16.3 are observed; and
(iv) the licence will be assignable with the consent of
the Minister, which consent will not be unreasonably
withheld.
Native Title
16.7 In the event that any Native Title (or claim made for
Native Title by a Native Title Claim Group) in respect of
a Freight Terminal or Staff House unreasonably interferes
-36-
with the use by the Purchaser of the Freight Terminal or
the Staff House under a licence granted under clause
16.2, then the following provisions of this clause 16
applies.
16.8 The Purchaser will:
(a) give to the Minister as soon as reasonably practical
notice of any Native Title (or claim by a Native
Title Claim Group);
(b) take all reasonable steps to negate the impact on
the Purchaser of any such Native Title (or claim by
a Native Title Claim Group) but the Purchaser is not
obliged to incur any material financial obligation
in taking such steps and will not do so, without the
consent of the Minister; and
(c) afford the State a reasonable opportunity and
cooperate with the State to (at the cost of the
State) negotiate a settlement or other appropriate
response to any such Native Title (or claim by a
Native Title Group).
16.9 If within a period of 30 days from receipt of the notice
under clause 16.8(a) such Native Title is still adversely
affecting the use of the freight terminal or staff house
in the manner described in clause 16.8, then the State
will take all steps available to it to mitigate the
affect of that Native Title, including the negotiation
and payment of compensation by it in respect of an
extinguishment (negotiated or otherwise) of any such
Native Title.
16.10 The Minister and the Commission will not do anything
(including create any or allow to subsist an
Encumbrance) in respect of a Freight Terminal or
Staff House which would be inconsistent with the
interests of the Purchaser under this clause 16.
Leased Houses
16.11 The Commission will lease to the Purchaser the 42 houses
listed in Table D of Schedule 10 (presently occupied by
Employees) for a total rental of $2,376 per week for a
-37-
term of 12 months and otherwise on terms to be agreed in
good faith between the Commission and the Purchaser.
17. Customers, name, Westrail Centre and other matters
Customers
17.1 At or immediately following the Completion Date the Purchaser
must, at its expense, send to each of the customers and
suppliers of the Commission in the Business a circular or
notice announcing the sale of the Business to the Purchaser.
Name
17.2 The Purchaser must not use the name of the Commission in any
advertisement or circular or stationery without the prior
written consent of the Commission. The Purchaser must display
its name on all stationery used by it in connection with the
Business after the Completion Date.
17.3 From Completion the Commission will cease to use the name
"Westrail" in its correspondence and will not affix the name
"Westrail" to any equipment provided that nothing in this
clause 17.3 or otherwise requires the Commission to remove,
obscure, obliterate or cover up the name "Westrail" from any
thing to which it was affixed prior to the date of this
agreement. For the avoidance of doubt, the Purchaser may
continue to use any Plant and Equipment which has the name
"Westrail" on it and is under no obligation to remove the
name.
Westrail Centre and other places
17.4 From Completion the Commission will provide licences to the
Purchaser, the Network Lessees and Westrail Freight Employment
for:
(a) them and each of their officers, employees and agents to
use the areas of the Westrail Centre, Kalgoorlie Country
Passenger Station Building, Northam Country Passenger
Station Building, Guildford Training School and Midland
Country Passenger Station Building hatched green in the
case of the Kalgoorlie Country Passenger Station
Building, the Guildford Training School and the Midland
Passenger Station Building and hatched black in the case
of the Westrail Centre and the Northam Country Passenger
Station Building on the diagrams in Annexure L;
-38-
(b) their train control staff, maintenance staff and senior
management to access the train control room at the
Westrail Centre;
(c) their maintenance staff and senior management to access
the train control equipment room, the communications
equipment room, MDF, cables chamber, floor distribution
frames, local area network closets, roof of the Westrail
Centre and radio tower at the Westrail Centre; and
(d) them and each of their officers, employees and agents to
use the areas of the ▇▇▇▇ ▇▇▇▇▇▇▇ Maintenance Depot and
C&CS Depot at Northam hatched black on the diagram on
Annexure L.
17.5 The licences granted under clause 17.4:
(a) are for a term of 24 months for the licences under clause
17.4(a), (b) and (c) and for the term of the Lease
Agreement for the licence under clause 17.4(d);
(b) may each be terminated on three months' notice by the
Purchaser to the Commission without affecting the
obligations of the Purchaser to pay the fees and
estimated outgoings referred to in clause 17.6 under the
remaining Licences;
(c) in respect of the areas hatched black are exclusive
licences to access that area for the purpose of carrying
on the Business;
(d) in respect of the areas outlined in blue are non-
exclusive licences to access those areas for their usual
purpose; and
(e) are to allow access and use for the purpose of carrying
on the Business.
17.6 On the Last Business Day of each month the Purchaser will pay
to the Commission the following monthly fees in arrears for
the licences granted under clause 17.4:
(a) $23,483.33 in respect of the Westrail Centre;
(b) $2,666.67 in respect of the Midland Country Passenger
Station Building;
-39-
(c) $2,500 in respect of the Northam Country Passenger
Station Building;
(d) nil in respect of the ▇▇▇▇ ▇▇▇▇▇▇▇ Maintenance Depot and
C&CS Depot at Northam;
(e) $1,000 in respect of the Kalgoorlie Country Passenger
Station Building; and
(f) $6,583.33 in respect of the Guildford Training School,
and will pay each month in arrears the following amounts on
account of the Purchaser's share of the estimated outgoings
payable by the Commission in respect of the premises:
(g) $27,480 in respect of the Westrail Centre;
(h) $666.67 in respect of the Midland Country Passenger
Station Building;
(i) $625 in respect of the Northam Country Passenger Station
Building;
(j) nil in respect of the ▇▇▇▇ ▇▇▇▇▇▇▇ Maintenance Depot and
C&CS Depot at Northam;
(k) $250 in respect of the Kalgoorlie Country Passenger
Station Building; and
(l) $833.33 in respect of the Guildford Training School.
Provision of Work Trains
17.7 For a period of 5 years following Completion, the Purchaser
will make available to the Commission at times reasonably
required by the Commission the Work Trains for use by the
Commission or its contractors in maintaining railway
infrastructure of the Commission.
17.8 The Work Trains will be made available to the Commission
in priority to their use by the Purchaser at a rate of
$360 per hour that the Work Trains are used, including
for the cost of crews, locomotives and rolling stock and
thereafter at reasonable rates and charges to be agreed
between the Commission and the Purchaser from time to
time.
-40-
17.9 The Commission will:
(a) use the Work Trains in a manner that is consistent with
good railway practice;
(b) obey the reasonable directions of the Purchaser in
respect of the use of the Work Trains; and
(c) indemnify the Purchaser for all damage to the Work Trains
and liability of the Purchaser for damage to other
property or for personal injury which occurs whilst they
are being used by or under the control of the Commission
or which is caused by the Commission's use of the Work
Trains.
18. Warranties, representations and indemnities
Minister's Warranties
18.1 The Minister represents and warrants to the Purchaser, the
Network Lessees, the Guarantor and the Substitute Sublessee
that each of the statements set out in Schedule 1 of this
agreement is accurate on the date of execution of this
agreement and at Completion. Each of the statements is to be
treated as a separate representation and warranty and the
interpretation of any statement made may not be restricted by
reference to or inference from any other statement.
18.2 Subject to any Law to the contrary and except as expressly
provided in the Warranties, all terms, conditions, warranties
and statements, whether express, implied, written, oral,
collateral, statutory or otherwise, are excluded and each of
the Minister and the Commission disclaims all liability in
relation to these to the maximum extent permitted by law.
18.3 For the avoidance of doubt, the Commission does not make any
representations or warranties to the Purchaser, the Network
Lessees or the Guarantor.
18.4 Subject to the qualifications contained in the Trade Practices
▇▇▇ ▇▇▇▇ and all corresponding state and territory
legislation, the Minister's liability for breach of a
condition or warranty implied by that legislation in relation
to the Assets or Access Assets is limited to one or more of
the following, as determined by the Minister:
-41-
(a) the replacement of the Asset or Access Asset or
supply of an equivalent;
(b) the repair of the Asset or Access Asset;
(c) the payment of the cost of replacing the Asset or Access
Asset or of acquiring an equivalent; or
(d) the payment of the cost of having the Asset or Access
Asset repaired.
18.5 If a claim is made by a person against the Purchaser, the
Network Lessees, the Guarantor or the Substitute Sublessee
which if satisfied by the Purchaser, the Network Lessees, the
Guarantor or the Substitute Sublessee would result in a claim
under the Warranties:
(a) the Purchaser or the Network Lessees must immediately
give notice of the claim to the Minister; and
(b) at the expense and direction of the Minister, the
Purchaser or the Network Lessees must take such action
(including legal proceedings) as the Minister may require
to avoid, dispute, defend, appeal or compromise the claim
and any adjudication of it.
18.6 If payment is made for a breach of any Warranty that relates
to one or more of the Assets or Access Assets, the payment is
to be treated as a reduction in the Purchase Price attributed
to each relevant Asset or Access Asset in clause 3.1. If a
Warranty does not relate to specific Assets or Access Assets
any payment made is to be treated as a reduction in the
Purchase Price attributed to all of the Assets and Access
Assets. The reduction in Purchase Price is to be apportioned
between relevant Assets or Access Assets in the same ratio as
the Purchase Price attributed to each relevant Asset or Access
Assets bears to the total Purchase Price attributed to all
relevant Assets and Access Assets.
18.7 Each of the Purchaser and the Network Lessees agree not to
make and waives any right it may have to make any claim
against the Minister, the Rail Freight Sale Taskforce or the
Commission or any of their officers, employees, agents or
advisers under section 52 of the Trade Practices ▇▇▇ ▇▇▇▇, or
the corresponding provision of any State or Territory
enactment, for any statement or representation made concerning
the Business.
-42-
18.8 Neither the Purchaser nor the Network Lessees may make a claim
for any breach of the Warranties unless full details of the
claim have been given to the Minister within 12 months from
the Completion Date.
18.9 Neither the Purchaser nor the Network Lessees may make a claim
for any breach of the Warranties if the amount of that claim
is less than $100,000 and the total of all claims for breach
of the Warranties is less than $500,000.
18.10 Notwithstanding any other provision of this agreement or
Law to the contrary, the maximum liability of the
Minister for breach of the Warranties is $10,000,000 in
aggregate and for all time.
18.11 The Minister agrees to notify the Purchaser as soon as
reasonably practicable after he becomes aware of a breach
of any Warranty. Such notice will contain the material
details of the breach known to the Minister.
Purchaser's and Guarantor's warranties
18.12 Each of the Guarantor, the Purchaser, the Substitute
Sublessee and the Network Lessees acknowledge that, in
entering into this agreement and in proceeding to
Completion, it does not rely on any statement,
representation, warranty, condition or other conduct
which may have been made by the Minister, the Rail
Freight Task Force or the Commission, or any person
purporting to act on behalf of them, except the
Warranties.
18.13 Each of the Guarantor, the Purchaser, the Substitute
Sublessee and the Network Lessees acknowledge on the
basis that they receive the Warranties given by the
Minister under this Agreement and under the Lease
Agreement that it has had the opportunity to make and has
made reasonable enquiries in relation to matters it
considers to be material to it which are not covered by
the Warranties and has satisfied itself in relation to
the matters arising from those investigations.
18.14 The Purchaser, the Network Lessees, the Substitute
Sublessee and the Guarantor each represent, warrant and
agree with the Minister and the Commission that each of
the following statements in paragraphs (a) to (i) are
true and correct on the date of this agreement and at
-43-
Completion and the Guarantor and Purchaser each
represent, warrant and agree that the statement in
paragraph (m) is true and correct as at the date of this
agreement:
(a) it has been duly incorporated as a company limited by
shares in accordance with the laws of Australia, is
validly existing under those laws and has power and
authority to carry on its business as it is now being
conducted; and
(b) it has power to enter into and observe its obligations
under this agreement; and
(c) it has in full force and effect the authorisations
necessary to enter into this agreement, observe
obligations under them and allow them to be enforced; and
(d) its obligations under this agreement are valid and
binding and are enforceable against it in accordance with
its terms; and
(e) this agreement and the transactions under it do not
contravene its constituent documents (if any) or any Law,
regulation or official directive or any of its
obligations or undertakings by which it or any of its
assets are bound or cause a limitation on its powers or
the powers of its directors to be exceeded; and
(f) the most recent audited financial statements of it (if
any) and audited consolidated financial statements of it
and its subsidiaries (if any) are a true, fair and
accurate statement of its financial position and their
consolidated financial position as at the date to which
they are prepared and disclose or reflect all their
actual and contingent liabilities; and
(g) there has been no material adverse change in the
financial position of it or in the consolidated financial
position of it and its subsidiaries since the date (if
any) to which the audited financial statements of it and
the audited consolidated financial statements of it and
its subsidiaries were last prepared before the date of
this agreement nor is any such material adverse change
considered likely, expected or threatened; and
-44-
(h) as far as it is aware it has fully disclosed in writing
to the Minister all facts relating to it and its
subsidiaries and anything in connection with them which
are material to the assessment of the nature and amount
of the risk undertaken by the Minister in entering into
this agreement and doing anything in connection with
them; and
(i) as far as they are aware, there is no pending or
threatened action or proceeding affecting it or any of
its subsidiaries or any of their respective assets before
a court, governmental agency, commission or arbitrator
which is material to its performance of its obligations
under this agreement; and
(j) neither it nor any of its subsidiaries has or is seeking
or expected to have immunity from the jurisdiction of a
court or from legal process (whether through service of
notice, attachment prior to judgment, attachment in aid
of execution, execution or otherwise); and
(k) it does not enter into this agreement in the capacity of
a trustee of any trust or settlement; and
(l) it is the beneficial owner of and has good title to all
property held by it or on its behalf and all undertakings
carried on by it subject to Encumbrances in favour of its
financiers; and
(m) as far as they are aware each of the written statements
made by the Guarantor or by the Purchaser:
(i) about its intention in respect of the Business; or
(ii) about its capacity to perform its obligations under
this agreement,
in its submission of materials to the Task Force as part
of the process of selling the Business, were true as at
the time they were submitted.
18.15 For the avoidance of doubt this clause 18 does not apply
to the Warranties in clause 21 of the Lease Agreement.
-45-
Environmental Matters
18.16 The Minister will indemnify the Purchaser for any loss or
liability suffered by the Purchaser in respect of any
Contamination which exists as at Completion of any
Freight Terminal and which has not been disclosed in the
materials contained in the Data Room or which could not
by a reasonably diligent Purchaser be deduced from such
materials. The Minister's liability under this clause
18.16 will be limited as follows:
(a) the Purchaser may not make a claim under this clause
18.16 unless full details of the claim have been given to
the Minister within seven years from the Completion Date;
(b) the Purchaser may not make a claim under this clause
18.16 if the amount of that claim is less than $100,000
and the total of all claims for such indemnity is less
than $500,000; and
(c) notwithstanding any other provision of this agreement or
Law to the contrary, the maximum liability of the
Minister under this clause 18.16 is $10,000,000 in
aggregate and for all time.
18.17 The Purchaser will as soon as reasonably practicable
after becoming aware of any matter which may give rise to
a claim for indemnity under clause 18.16, give notice to
the Minister of the possibility of such claim together
with reasonable details of the relevant Contamination.
The Purchaser will allow the Minister access to the
Freight Terminal to take all steps reasonably necessary
to be taken by the Minister to mitigate any actual or
possible liability under clause 18.16.
18.18 The Minister will not be liable under clause 18.16 for
any loss or liability to the extent that such loss or
liability is increased by:
(a) any act of the Purchaser or of any Related Body Corporate
of the Purchaser after the Completion Date; or
(b) any omission by the Purchaser to take any step in respect
of any Contamination, which a reasonably prudent occupier
of land equivalent to the relevant Freight Terminal would
take in those circumstances to mitigate any loss or
liability to the Purchaser arising out of such
Contamination.
-46-
19. Guarantee and indemnity
19.1 The Guarantor acknowledges that it is a condition of the
Minister entering into this agreement that the Guarantor gives
the guarantee and indemnity in clause 19. The Guarantor also
acknowledges that the Guarantor has received valuable
consideration.
19.2 The Guarantor unconditionally and irrevocably guarantees to
the Minister the due and punctual performance by the
Purchaser, the Substitute Sublessee and the Network Lessees of
their obligations under this agreement, the Ancillary
Agreements and the Cross Border Lease Substitution Documents
including the obligation to pay any amount provided that
nothing in this clause obliges the Guarantor to do anything
which it can not do by reason of the provision of section 12
of the Act.
19.3 As a separate undertaking, the Guarantor indemnifies the
Minister, the Commission, the Rail Freight Sale Task Force and
each of their employees, agents or advisers (the "Indemnified
Parties") against all liability or loss arising from, and any
costs, charges or expenses incurred by the Indemnified Parties
in connection with:
(a) a breach by the Guarantor, the Purchaser, the Substitute
Sublessee or the Network Lessees of this agreement
(including clause 18) or any Ancillary Agreement or the
Cross Border Lease Substitution Documents ; or
(b) any liability of the Indemnified Parties in respect of
damages payable under section 52 of the Trade Practices
Act or its equivalent provision under State fair trading
legislation to the Purchaser, the Network Lessees or the
Substitute Sublessee in connection with or arising out of
a claim by the Purchaser, Network Lessees or Substitute
Sublessee against the Indemnified Parties in relation to:
(i) this agreement, any Ancillary Agreement or the Cross
Border Lease Substitution Documents; or
(ii) the Lease Agreement; or
(iii) the sale process and negotiations leading to
this agreement, any Ancillary Agreement or the
Cross Border Lease Substitution Documents.
-47-
19.4 The Guarantor's liability under this guarantee and indemnity
is not affected by anything which might release or exonerate
or otherwise affect it at law or in equity, including one or
more of the following:
(a) the Minister granting time or other indulgence to,
compromising with or partially releasing in any way the
Purchaser, the Network Lessees, the Substitute Sublessee
or any other Guarantor;
(b) laches, acquiescence, delay, acts or omissions on the
part of the Minister;
(c) any variation or novation of a right of the Minister;
(d) any alteration of this agreement or any agreement entered
into in the performance of this agreement any Ancillary
Agreement or any Cross Border Lease Substitution
Documents with or without the consent of the Guarantor;
and
(e) the invalidity or unenforceability of an obligation or
liability of a person other than the Guarantor.
19.5 This guarantee and indemnity is a continuing guarantee and
indemnity and is not discharged by any one payment. This
guarantee and indemnity does not merge on Completion.
19.6 The Guarantor waives any right it may have of first requiring
the Minister to commence proceedings or enforce its rights
against the Purchaser, the Network Lessees, the Substitute
Sublessee or the Guarantor before claiming under this
guarantee and indemnity provided that this waiver does not
permit the Minister to do anything which it cannot do by
reason of section 12 of the Act.
19.7 The Guarantor may not, without the prior consent of the
Minister raise a set-off or counter-claim available to it
against the Minister in reduction of liability under this
guarantee and indemnity for 49 years from the date of this
agreement (including any Ancillary Agreement) or until all of
its obligations under this agreement including the obligations
to pay all moneys due under or in relation to this agreement
are performed or paid, whichever is the longer.
19.8 If a claim that payment or transfer by the Purchaser or
Network Lessees in connection with this agreement, any
-48-
Ancillary Agreement or Cross Border Lease Substitution
Documents is void or voidable under Laws relating to
insolvency or protection of creditors is upheld, conceded or
compromised then the Minister is entitled immediately as
against the Guarantor to the rights to which it would have
been entitled under this guarantee and indemnity if all or
part of the payment or transfer had not occurred.
19.9 The Guarantor agrees to pay or reimburse the Minister on
demand for all its costs, charges and expenses (including
legal costs and expenses on a full indemnity basis or
solicitor and own client basis, whichever is the higher) in
connection with enforcing its rights under this agreement,
any Ancillary Agreement or any Cross Border Lease Substitution
Documents, including this guarantee and indemnity. Money paid
to the Minister by the Guarantor must be applied first against
payment of costs, charges and expenses under clause 19.9 then
against other obligations under the guarantee and indemnity.
20. Costs and stamp duty
20.1 The Minister and the Purchaser agree, except as provided in
clause 20.2, respectively to bear their own legal and other
costs and expenses of and incidental to the preparation,
execution and completion of this agreement and of other
related documentation.
20.2 The Purchaser and the Minister agree:
(a) that in addition to the Purchase Price the Purchaser will
pay to the Treasurer on Completion $27,529,429.30 for all
stamp duty payable in relation to this agreement, the
Ancillary Agreements, the Cross Border Lease Substitution
Documents, the transfer of the Assets to the Purchaser,
the transfer of the Access Assets to the Network Lessees
and the Lease Agreement;
(b) any other stamp duty on this agreement, the Lease
Agreement, the Ancillary Agreements, the Cross Border
Lease Substitution Documents, and any other document
contemplated by this agreement will be paid by the
Minister; and
(c) neither the Purchaser, the Guarantor or the Substitute
Sublessee will take any steps to challenge the assessment
of stamp duty on this agreement, the Lease Agreement, the
Ancillary Agreements, the Cross Border Lease Substitution
-49-
Documents, or any other document contemplated by this
agreement or the amount of such duty.
21. Notices
21.1 A notice, approval, consent or other communication in
connection with this agreement:
(a) must be in writing in English;
(b) must be marked for the attention of in respect of a party
the person referred to below; and
(c) must be left at the address of the addressee, or sent by
prepaid ordinary post (airmail if posted to or from a
place outside Australia) to the address of the addressee
or sent by facsimile to the facsimile number of the
addressee which is specified in this clause or if the
addressee notifies another address or facsimile number
then to that address or facsimile number.
The address and facsimile number of each party is:
Minister
Address: 12th ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
Attention: ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Commission
Address: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
Attention: ▇▇ ▇▇▇▇ ▇▇▇▇▇
Treasurer
Address: ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
Attention: Under Treasurer
Westrail Freight Employment
Address: ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile:
Attention:
-50-
Purchaser
Address: ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile:
Attention:
Network Lessees
Address: ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile:
Attention:
Substitute Sublessee
Address: ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile:
Attention:
Guarantor
Address: ▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇
Facsimile:
Attention:
21.2 A notice, approval, consent or other communication
takes effect from the time it is received unless a
later time is specified in it.
21.3 A letter or facsimile is taken to be received:
(a) in the case of a posted letter, on the third (seventh, if
posted to or from a place outside Australia) day after
posting; or
(b) in the case of facsimile, on production of a transmission
report by the machine from which the facsimile was sent
which indicates that the facsimile was sent in its
entirety to the facsimile number of the recipient.
22. Assignment
A party may not assign its rights under this agreement without
the consent of each other party, such consent not to be
unreasonably withheld.
-51-
23. Miscellaneous
Exercise of rights
23.1 A party may exercise a right, power or remedy at its
discretion, and separately or concurrently with another right,
power or remedy. A single or partial exercise of a right,
power or remedy by a party does not prevent a further exercise
of that or of any other right, power or remedy. Failure by a
party to exercise or delay in exercising a right, power or
remedy does not prevent its exercise.
Waiver and variation
23.2 A provision of or a right created under this agreement may not
be:
(a) waived except in writing signed by the party granting the
waiver; or
(b) varied except in writing signed by the parties.
Approvals and consent
23.3 A party may give conditionally or unconditionally or withhold
its approval or consent in its absolute discretion unless this
agreement expressly provides otherwise.
Remedies cumulative
23.4 Except where the contrary is stated or implied in this
agreement, the rights, powers and remedies provided in this
agreement are cumulative with and not exclusive of the rights,
powers or remedies provided by Law independently of this
agreement.
No merger
23.5 The Warranties do not merge on Completion.
Indemnities
23.6 Each indemnity in this agreement is a continuing obligation,
separate and independent from the other obligations of the
parties and survives termination of this agreement.
23.7 Each indemnity in this agreement does not extend to any
Indirect Loss in any circumstances whatsoever.
-52-
Enforcement of indemnities
23.8 It is not necessary for a party to incur expense or make
payment before enforcing a right of indemnity conferred by
this agreement.
Further assurances
23.9 Each party agrees, at its own expense, on the request of the
other party, to do everything reasonably necessary to give
effect to this agreement and the transactions contemplated by
it (including the execution of documents) and to use all
reasonable endeavours to cause relevant third parties to do
likewise.
Publicity
23.10 The terms of this agreement and of the transactions the
subject of this agreement and the offers, proposals,
responses, representations and negotiations made in reaching
or varying this agreement are confidential. A party may not
directly or indirectly make any press or other announcements
or releases relating to this agreement or otherwise directly
or indirectly disclose, publish or comment on the terms of
this agreement or of the transactions the subject of this
agreement or the offers, proposals, responses, representations
or negotiations made in reaching or varying this agreement
without the prior approval of all other parties to the form
and manner of the announcement, release or other disclosure,
unless and to the extent that:
(a) the announcement, release or disclosure is required to be
made by the party by Law or the rules of any stock
exchange, provided that, to the extent the party is
legally permitted to do so, before the party discloses
any such information under any such Law or rule, it must
provide the other party with:
(i) sufficient notice as is reasonable to enable that
other party to seek a protective order or other
remedy; and
(ii) such assistance or cooperation which that other
party reasonably considers necessary to prevent or
minimise that disclosure of the information; or
-53-
(b) the disclosure is made to the party's lawyers,
accountants, auditors or other professional advisers or
its bank or other provider of substantial finance, in
circumstances where those advisers, bankers or financiers
have a bona fide need to know and use that information
for the purposes of providing their services in relation
to the party, keep the information confidential and are
bound by Law or rules of professional conduct to keep
that information confidential; or
(c) the terms of this agreement and of the transactions the
subject of this agreement are or have become part of the
public domain, unless they become or have become so
because they have been disclosed in breach of any
obligation (whether existing or future) of a party or of
any other person, or otherwise without authority of the
parties; or
(d) disclosure is made to actual or potential purchasers (and
their actual or potential financiers) of the Business
after Completion provided that such persons have agreed
to be bound by similar obligations as set out in this
clause 23.10.
Entire agreement
23.11 This agreement constitutes the entire agreement of the parties
about its subject matter and any previous agreements,
understandings and negotiations on that subject matter cease
to have any effect.
Sovereign immunity
23.12 The State (including the Minister and the Treasurer) is not
entitled to claim immunity from legal proceedings for itself
or any of its properties and assets (other than property and
assets not in use or intended for use for business purposes)
on the grounds of sovereignty or otherwise under a law or in a
jurisdiction where an action may be brought for the
enforcement of any of the obligations under this agreement.
23.13 The Minister irrevocably waives to the fullest extent
permitted by the laws of any jurisdiction any right to
immunity from set-off, legal proceedings, attachment prior to
judgment, other attachment or execution of judgment on the
grounds of sovereignty or otherwise, for the State and its
property in respect of its obligations under this agreement.
-54-
24. Governing law, jurisdiction and service of process
24.1 This agreement and the transactions contemplated by this
agreement are governed by the law in force in Western
Australia.
24.2 Each party irrevocably and unconditionally submits to the non-
exclusive jurisdiction of the courts of Western Australia and
courts of appeal from them for determining any dispute
concerning this agreement or the transactions contemplated by
this agreement. Each party waives any right it has to object
to an action being brought in those courts, to claim that the
action has been brought in an inconvenient forum, or to claim
that those courts do not have jurisdiction.
24.3 Without preventing any other mode of service, any document in
an action (including, but not limited to, any writ of summons
or other originating process or any third or other party
notice) may be served on any party by being delivered to or
left for that party at its address for service of notices
under clause 21.
25. Treasurer's guarantee and indemnity
25.1 The Treasurer exercising power under section 20 of the Act,
unconditionally and irrevocably guarantees to the Purchaser,
the Network Lessees, the Guarantor and the Substitute
Sublessee, the due and punctual performance by the Minister
and the Commission of their obligations under this agreement
the Ancillary Agreements or the Cross Border Lease
Substitution Documents including the obligation to pay any
amount.
25.2 As a separate undertaking the Treasurer indemnifies the
Purchaser, the Network Lessees, the Guarantor and the
Substitute Sublessee against all loss or liability arising
from and any costs charges and expenses incurred in connection
with a breach by the Minister or the Commission of this
agreement (including clause 18 and the Ancillary Agreements or
the Cross Border Lease Substitution Documents), including the
obligation to pay any amount.
25.3 The Treasurer's liability under this guarantee and indemnity
is not affected by anything which might release or exonerate
or otherwise affect him at law or in equity, including one or
more of the following:
-55-
(a) the Purchaser, the Network Lessees, the Guarantor and the
Substitute Sublessee granting time or other indulgence
to, compromising with or partially releasing in any way
the Commission, the Minister or the Treasurer;
(b) laches, acquiescence, delay, acts or omissions on the
part of the Purchaser, the Network Lessees, the Guarantor
or the Substitute Sublessee;
(c) any variation or novation of a right of the Purchaser,
the Network Lessees, the Guarantor or the Substitute
Sublessee;
(d) any alteration of this agreement or any agreement entered
into in the performance of this agreement, (any Ancillary
Agreement or any Cross Border Lease Substitution
Documents, with or without the consent of the Treasurer;
and
(e) the invalidity or unenforceability of an obligation or
liability of a person other than the Treasurer.
25.4 This guarantee and indemnity is a continuing guarantee and
indemnity and is not discharged by any one payment. This
guarantee and indemnity does not merge on Completion.
EXECUTED as an agreement
-56-
Execution Page
SIGNED by the said )
THE HONOURABLE ▇▇▇▇▇▇ ▇▇▇▇▇ )
▇▇▇▇▇▇▇ MLC, Minister for )
Transport, in the presence of: )
)
)
_________________________________
Signature of witness
_________________________________
Full name of witness
_________________________________
Address of witness
_________________________________
Occupation of witness
THE COMMON SEAL of THE WESTERN )
AUSTRALIAN GOVERNMENT RAILWAYS )
COMMISSION )
was hereunto affixed in the )
presence of: )
)
_____________________
Commissioner
_____________________
Secretary
SIGNED by the said )
THE HONOURABLE ▇▇▇▇▇▇▇ FAIRFAX )
COURT MLA Treasurer of the State )
of Western Australia, in the )
presence of: )
)
)
_________________________________
Signature of witness
_________________________________
Full name of witness
_________________________________
Address of witness
_________________________________
Occupation of witness
EXECUTED by WESTRAIL FREIGHT )
EMPLOYMENT PTY LTD ACN 087 891 )
601 in accordance with section )
127(1) of the Corporations Law )
by authority of its director in )
the presence of: )
)
)
)
)
)
________________________________
Signature of Ian ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
sole director/company secretary
who states that they are the
sole director and sole company
_________________________________ secretary of Westrail Freight
Signature of witness Employment Pty Ltd
_________________________________
Name of witness (block letters)
THE COMMON SEAL of AWR HOLDINGS )
WA PTY LTD ACN is )
duly affixed )
by authority of its directors in )
the presence of: )
)
)
________________________________ _______________________________
Signature of authorised person Signature of authorised person
________________________________ ________________________________
Office held Office held
________________________________ _________________________________
Name of authorised person (block Name of authorised person (block
letters) letters)
THE COMMON SEAL of AUSTRALIAN )
WESTERN RAILROAD PTY LTD ACN )
)
is duly affixed by authority of )
its directors in the presence )
of: )
)
_________________________________ _________________________________
Signature of authorised person Signature of authorised person
_________________________________ _________________________________
Office held Office held
_________________________________ _________________________________
Name of authorised person (block Name of authorised person (block
letters) letters)
THE COMMON SEAL of WESTNET )
STANDARDGAUGE PTY LTD ACN )
is duly )
affixed by authority of its )
directors in the presence of: )
)
)
________________________________ _______________________________
Signature of authorised person Signature of authorised person
________________________________ ________________________________
Office held Office held
________________________________ _________________________________
Name of authorised person (block Name of authorised person (block
letters) letters)
THE COMMON SEAL of WESTNET )
NARROWGAUGE PTY LTD ACN )
is duly affixed )
by authority of its directors in )
the presence of: )
)
)
________________________________ _______________________________
Signature of authorised person Signature of authorised person
________________________________ ________________________________
Office held Office held
________________________________ _________________________________
Name of authorised person (block Name of authorised person (block
letters) letters)
THE COMMON SEAL of AWR LEASE CO )
PTY LTD )
)
ACN is duly )
affixed )
by authority of its directors in )
the presence of:
________________________________ _______________________________
Signature of authorised person Signature of authorised person
________________________________ ________________________________
Office held Office held
________________________________ _________________________________
Name of authorised person (block Name of authorised person (block
letters) letters)
THE COMMON SEAL of AUSTRALIAN )
RAILROAD GROUP PTY LTD )
)
ACN 080 579 308 is duly affixed )
)
by authority of its directors in )
the presence of:
________________________________ _______________________________
Signature of authorised person Signature of authorised person
________________________________ ________________________________
Office held Office held
________________________________ _________________________________
Name of authorised person (block Name of authorised person (block
letters) letters)
