Exhibit 2.5
CONFORMED COPY
CONTRIBUTION AND SUBSCRIPTION AGREEMENT
BETWEEN
MACQUARIE INFRASTRUCTURE ASSETS LLC
as Contributor
MACQUARIE LUXEMBOURG WATER S.A.R.L.
as Contributee
LOYENS XXXXXXX
LUXEMBOURG
THIS CONTRIBUTION AND SUBSCRIPTION AGREEMENT (the AGREEMENT) is made as of
June 7, 2004
BETWEEN
Macquarie Infrastructure Assets LLC, a Delaware limited liability company whose
principal executive office is at 000 Xxxxx Xxxxxx, 00xx xxxxx, 00000, Xxx Xxxx,
XXX (the CONTRIBUTOR), and
Macquarie Luxembourg Water S.A.R.L., a Luxembourg private limited liability
company (societe a responsabilite limitee), incorporated in Luxembourg whose
registered office at 0, xxx Xxxxxxxxx Xxxxx - XX 0000, X-0000, Xxxxxxxxxx,
registered number R.C.S. Luxembourg B 100.413 (the CONTRIBUTEE).
The Contributor and the Contributee are hereinafter, as the context so requires,
collectively referred to as the PARTIES and each individually as a PARTY.
WHEREAS:
(A) Macquarie Water (UK) Limited (UK WATER) is the holding company of
Southern Utilities (Holdings) Limited.
(B) The Contributee and the existing shareholders of the Contributee
have entered into a Shareholders Agreement governing the management
of the Contributee (SHAREHOLDERS AGREEMENT) (a copy of which is
attached to this Agreement at Schedule 1).
(C) Pursuant to a Share Purchase Agreement dated 30 April 2004 between
the Contributee as Purchaser, Macquarie Bank Limited as Guarantor
and Macquarie Leasing (UK) Limited as Seller(SHARE PURCHASE
AGREEMENT) (a copy of which is attached to this Agreement at
Schedule 2), the Contributee became a 75.1% shareholder of UK Water.
(D) Pursuant to the Share Purchase Agreement the Contributee has the
option to acquire the remaining shares in UK Water held by Macquarie
Leasing (UK) Limited and subscribe for certain loans in UK Water.
(E) The Contributor wishes to invest in UK Water via the Contributee.
(F) To that end, the Contributor shall subscribe for ordinary shares in
the capital of the Contributee and the Contributor shall also
subscribe for Preferred Equity Certificates (PECS) in the
Contributee.
(G) Terms which are not defined in this Agreement shall have the meaning
attributed to them in the Share Purchase Agreement and in the
Shareholders' Agreement.
IT IS AGREED AS FOLLOWS:
1. CONTRIBUTION
1.1 Subject to the satisfaction of the Conditions Precedent as defined
in clause 4 of this Agreement, the Contributor hereby agrees to
contribute a contribution (the CONTRIBUTOR'S COMMITMENT) in cash in
GBP to the Contributee of the aggregate of (i) 17.5 per cent. of one
hundred and eleven million pounds ((pound)111,000,000) plus the
Carry, (ii) the applicable UK stamp duty payable on the transfer of
9,712,500 shares in UK Water (the STAMP DUTY) and (iii) (pound)23,
302 in respect of a working capital funding requirement for the
Contributee (the WORKING CAPITAL REQUIREMENT).
1.2 In exchange for the Contributor's Commitment, the Contributee shall
issue and allot to the Contributor, subject also to the satisfaction
of the Conditions Precedent as defined in clause 4 of this Agreement
- 175 new ordinary shares with a par value of twenty five
euro ((euro)25.00) each in the share capital of tHe
Contributee (the CONSIDERATION SHARES);
- 9,712,500 B PECS with a par value of one pound
((pound)1.00) each (the CONSIDERATION B-PECS); and
- such number of A PECS (the CONSIDERATION A-PECS) with a
par value of one euro ((euro)1.00) each so as to ensure
that following the satisfaction by the parties of their
respective obligations in clauses 1, 2 and 3 of this
Agreement the entitlement of the A PECs held by the
Contributor expressed as a percentage of all of the A
PECs issued by the Contributee is the
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same as the proportion of Consideration Shares expressed
as a percentage of the entire issued ordinary shares of
twenty five euro ((euro)25.00) each in the Contributee.
The Consideration A PECs and the Consideration B PECs together are
referred to herein as the CONSIDERATION PECS.
1.3 The Contributor's Commitment shall be apportioned among the
Consideration Shares and the Consideration PECs as follows:
- Euro 4,418.75 in aggregate in respect of the
Consideration Shares, comprising Euro 4,375 in respect
of the ordinary shares and Euro 43.75 in respect of the
capital duty payable on such shares;
- (pound)9,712,500 in respect of the Consideration B PECs;
and
- the remaining balance in aggregate in respect of the
Consideration A PECs.
1.4 The Contributor's Commitment shall be paid by the Contributor in one
installment as soon as possible after the satisfaction of the
Conditions Precedent, and in any event no later than 14 days after
the satisfaction of the Conditions Precedent. In exchange for the
contribution and transfer of the Contributor's Commitment the
Contributee shall issue and allot to the Contributor the
Consideration Shares and the Consideration PECS (and the Contributor
shall execute preferred equity certificate agreements in respect of
both the A PECs and the B PECs, such agreements setting out the
terms and conditions of the A PECs and B PECs respectively).
For the purposes of this clause 1 the following term has the meaning given to it
below:
CARRY is an amount calculated as follows
(A x 12% x T / 365) - (B + C)
where :
A = 17.5 per cent. of(pound)111,000,000 (111 million pounds);
B = the amount of interest on P, calculated in accordance with the terms of the
Existing Loan Note Instrument, for the period comprised in T;
C = the amount of any dividends paid by UK Water in the period comprised in T in
respect of 9,712,500 of the Retained Shares the subject of the exercise of the
Call Option;
P = the nominal amount of Existing Loan Notes equal to the nominal value of
9,712,500 of the Retained Shares the subject of the Call Option; and
T = the number of days elapsed from (and including) 30 April 2004 to (but
excluding) the Transfer Date.
2 TRANSFER OF THE CONTRIBUTEE'S COMMITMENT - ALLOTMENT OF THE SHARES
2.1 The transfer of the Contributee's Commitment to the Contributor
shall take place within 14 days of the satisfaction of the
Conditions Precedent.
2.2. The issue and the allotment of the Consideration Shares and the
Consideration PECS shall take place at an extraordinary general
meeting to be held before a notary in Luxembourg on or after the day
the Contributor's Commitment has arrived on the Contributee's bank
account (the TRANSFER DATE).
2.3 The Contributor instructs and authorizes the Contributee to register
on the Transfer Date, in its name and on its behalf, the allotment
and the issue of the Consideration Shares in the partners' register
of the Contributee and the Contributee shall issue to the
Contributor evidence of its ownership of the Consideration Shares.
2.4 The Contributor instructs and authorizes the Contributee to register
on the Transfer Date, in its name and on its behalf, the allotment
and the issue of the Consideration PECS in the register and transfer
book maintained by the Contributee for each of the A PECS and the B
PECS and the Contributee shall issue to the Contributor evidence of
its ownership of the Consideration PECS.
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2.5 This ownership to the Consideration Shares and the Consideration
PECS and all rights and obligations attached thereto, including the
right to dividends or other distributions attached to the
Consideration Shares and the right to returns and redemption
attached to the Consideration PECs, will vest with the Contributor
as from the Transfer Date.
3 USE OF CONTRIBUTOR'S COMMITMENT
3.1 On the Transfer Date the Contributee shall:
(a) exercise the Call Option in accordance with the provisions of
Clause 10.15 of the Share Purchase Agreement in order to
acquire certain shares and subscribe for certain loan notes in
UK Water of an aggregate amount equal to the Contributor's
Commitment as reduced by the Stamp Duty and the Working
Capital Requirement; and
(b) other than with respect to the Working Capital Requirement,
use the Contributor's Commitment in order to satisfy the (i)
consideration payable by the Contributee to Macquarie Leasing
(UK) Limited on the exercise of the Call Option, (ii) the
amount payable to UK Water in respect of the Contributee's
subscription of New Loan Notes and (iii) the payment of the
Stamp Duty.
3.2 Save for the Working Capital Requirement, the Contributee shall not
use the Contributor's Commitment for any purpose except in
accordance with this clause 3.
4 CONDITIONS PRECEDENT
4.1 The obligation to contribute the Contributor's Commitment,
respectively to issue and allot the Consideration Shares and the
Consideration PECS according to clauses 1 and 2 is conditional upon
satisfaction of the completion of the following conditions:
4.1.1 initial public offering of Macquarie Infrastructure Assets
Trust, the ultimate parent of the Contributor (the IPO); and
4.1.2 the legal and intra-group financing structure of the
Contributee and its subsidiaries subsequent to the proposed
refinancing of the current borrowings of Water UK and prior to
the Transfer Date being in a form that, subject to the
Contributee and certain direct and indirect subsidiaries of
the Contributee making an election under US Treasury
Regulations Section 301.7701-3 (as required pursuant to Clause
9), in the reasonable opinion of the Contributor (i) all cash
distributions received by the Contributor in relation to its
investment in the Contributee will be treated as qualifying
dividends for US federal income tax purposes and (ii) the
Contributor, in the ordinary course of business or as a result
of any financial transactions or legal actions then
contemplated by the Contributee or any of its direct or
indirect subsidiaries, will not be required to take into
account in a taxable year, for US federal income tax purposes,
net taxable income in excess of cash distributions.
The Contributee will provide the Contributor with the
information necessary for the Contributor to confirm that this
condition precedent has been met.
(together the CONDITIONS PRECEDENT)
4.2 The Contributor will give notice to the Contributee within 1 day of
the occurrence of the satisfaction of the Conditions Precedent. Upon
receipt of such notice the Contributee will, in accordance with the
provisions of the Shareholders Agreement, ensure that the necessary
corporate steps are taken to allow for the issuance of the
Consideration Shares and the Consideration PECs to the Contributor
in accordance with clause 2.
4.3 If the Conditions Precedent are not satisfied on or before the date
falling twelve months after the date hereof or such later period of
time as the Contributor and Contributee may agree in writing then
this Agreement shall terminate and no party shall have any claim
against the other party under it.
5 CONDUCT OF BUSINESS
5.1 Prior to the Transfer Date, the Contributee undertakes that it shall
and will procure that each of its subsidiaries shall continue to
carry on the Business as a going concern in a manner consistent with
the ordinary course of the Business and shall refrain from taking
any action that would be contrary to the commercial interests of the
Business or would be contrary to any applicable laws or regulations.
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For the purposes of this sub-clause BUSINESS means the business
carried on by the Contributee and its subsidiaries as at, and prior
to, the date of this Agreement and includes any part or parts of
such business.
5.2 If prior to the Transfer Date, any event shall occur which affects
or is likely to affect adversely to a material degree the financial
position or turnover or profitability of UK Water and its
subsidiaries (taken as a whole), not being an event affecting or
likely to affect generally all companies carrying on similar
business in the United Kingdom, the Contributor shall be entitled by
notice in writing to the Contributee to terminate this Agreement but
the occurrence of such event shall not give rise to any right to
damages or compensation. The Contributee undertakes to promptly
notify the Contributor in writing if, in their reasonable opinion,
any event as described in this sub-clause has occurred or is
reasonably likely to occur.
5.3 The Contributee further undertakes and warrants to the Contributor
that prior to the Transfer Date, it will not carry on or be
interested or otherwise involved in any business other than the
holding of shares in UK Water.
6 REPRESENTATION AND WARRANTIES OF CONTRIBUTOR
The Contributor hereby represents and warrants to the Contributee
that:
(a) The Contributor has the legal right and full power and
authority to enter into this Agreement;
(b) The signing and the performance by the Contributor of this
Agreement is not contrary to any law or court order applicable
to the Contributor and do not constitute a breach of any
agreement to which the Contributor is a party or of the
constitutional documents of the Contributor; and
(c) The execution and delivery of this Agreement by the
Contributor has been duly authorised by the proper corporate
bodies and this Agreement constitutes legally binding
obligations of the Contributor in accordance with its terms.
7 REPRESENTATION AND WARRANTIES OF CONTRIBUTEE
The Contributee hereby represents and warrants to the Contributor
that:
(a) The Contributee has the legal right and full power and
authority to enter into and to perform this Agreement and to
issue the Consideration Shares and the Consideration PECs to
the Contributor in accordance with this Agreement;
(b) The signing and the performance by the Contributee of this
Agreement is not contrary to any law or court order applicable
to the Contributee and do not constitute a breach of any
agreement to which the Contributee is a party or of the
constitutional documents of the Contributee;
(c) The execution and delivery of this Agreement by the
Contributee has been duly authorised by the proper corporate
bodies and this Agreement constitutes legally binding
obligations of the Contributee in accordance with its terms;
(d) Upon the issuance of the Consideration Shares to the
Contributor in accordance with this Agreement and pursuant to
an extraordinary general meeting of the shareholders of the
Contributee to be held before a notary in Luxembourg, the
Consideration Shares will be validly issued to the Contributor
as fully paid shares in the capital of the Contributee; and
(e) Upon the issuance of the Consideration PECS to the Contributor
in accordance with this Agreement the Consideration PECS will
be validly issued to the Contributor and will be subject to
the same terms and conditions as any existing PECS issued by
the Contributee and as set out in the Terms and Conditions of
Class A Preferred Equity Certificates and the Terms and
Conditions of Class B Preferred Equity Certificates, both
dated 30 April 2004 and will be enforceable in accordance with
their terms.
8 SHAREHOLDERS AGREEMENT
Upon the issue and allotment of the Consideration Shares and the
Consideration PECs on the Transfer Date the Contributor will execute
a Deed of Adherence (as such term is defined in the Shareholders
Agreement) substantially in the form attached to this Agreement as
Schedule 3 and thereby become a party to the
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Shareholders Agreement and assume the rights and obligations of a
shareholder under the Shareholders Agreement (a copy of which is
attached to this Agreement as Schedule 1).
9 US TAXATION ELECTION
Upon request by the Contributor, the Contributee shall file, or
cause to be filed, in a form acceptable to the Contributor an
election under U.S. Treasury Regulations Section 301.7701-3 with
respect to the Contributee and any company or other entity under the
direct or indirect control of the Contributee except for South East
Water Limited (unless an election is not made under U.S. Treasury
Regulations Section 301.7701-3 in relation to at least one entity
that is a direct or indirect parent entity of South East Water
Limited) and any other entity where such election would, in the
reasonable opinion of Contributee, have a negative effect on the
interests of the majority shareholder in the Contributee (each an
ELECTION) such Elections to be effective at a time notified to the
Contributee by the Contributor. Upon receipt of such request, the
Contributee shall, and shall procure that any companies or other
entities controlled by the Contributee shall, sign such forms and do
all such acts as are necessary or appropriate to make the Election
within a reasonable time.
10 ANNOUNCEMENTS
No announcement or circular in connection with the existence or the
subject matter of this Agreement shall be made or issued by or on
behalf of the Contributor or the Contributee without (insofar as
such consultation is reasonably practicable) prior consultation with
the other party and the other party shall act reasonably during any
such consultation process.
11 NOTICES
11.1 Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in person,
transmitted by facsimile or similar means of recorded electronic
communication or sent by registered mail, charges prepaid, addressed
as follows:
(a) in the case of the Contributor:
MACQUARIE INFRASTRUCTURE ASSETS LLC
Attention: Xxxxx Xxxxxx
Facsimile: x0 000 000 0000
(b) in the case of the Contributee:
MACQUARIE LUXEMBOURG WATER S.A.R.L.
Attention: Xxxxxx Xxxxxxx
Facsimile: x000 00 00 00 0000
with a copy (which shall not constitute notice) to:
Attention: Annabelle Helps
Facsimile: x00 000 000 0000
11.2 Any such notice or other communication shall be deemed to have been
given and received on the day on which it was delivered or
transmitted if so delivered or transmitted prior to 5:00 p.m. local
time at the place of the receipt or, if mailed, on the fifth day
following the date of mailing.
11.3 Any Party may at any time change its address for service from time
to time by giving notice to the other Party in accordance with this
clause.
12 SEVERABILITY
If any clause of this Agreement is or becomes void, unenforceable or
prohibited in any jurisdiction, this shall not affect the validity
and enforceability of the other terms of this Agreement or the
validity and enforceability of such
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clause in any other jurisdiction. In any such event, the parties to
this Agreement will substitute a valid and enforceable clause in the
place of the invalid, unenforceable or prohibited clause in the
spirit and to the effect of the latter.
13 COUNTERPARTS
This Agreement may be executed in any number of counterparts all of
which when taken together shall constitute one and the same
instrument. Either party may enter into this Agreement by executing
any such counterpart.
14 NOVATION
14.1 The Contributee agrees that upon request by the Contributor this
Agreement shall be novated by having an entity to be nominated by
the Contributor substituted for the Contributor, such entity to be
either a (i) subsidiary of the Contributor or (ii) a holding company
of the Contributor or (iii) any subsidiary of a holding company
under (ii) (such entity a NEW PARTY) and the Contributee shall
execute a novation agreement in terms to be agreed at that time
between the Contributee and the Contributor.
14.2 Following any novation pursuant to clause 14.1 above, the
Contributor agrees to guarantee to the Contributee the due and
punctual performance and discharge of the obligations of any new
party under this Agreement.
15 GOVERNING LAW AND JURISDICTION
15.1 This Agreement is governed by, and shall be construed in accordance
with, the laws of the Grand Duchy of Luxembourg.
15.2 Any dispute arising in connection with this Agreement shall be
submitted to the competent courts of the District of Luxembourg.
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IN WITNESS WHEREOF, the Parties hereto have duly executed this Agreement or have
caused it to be duly executed in three originals as of the date first set forth:
THE CONTRIBUTOR
MACQUARIE INFRASTRUCTURE ASSETS LLC
/s/ XXXXX XXXXXX
----------------------
By: Xxxxx Xxxxxx
Title: Chief Executive Officer
THE CONTRIBUTEE
MACQUARIE LUXEMBOURG WATER S.A.R.L.
/s/ XXX XXXXX /s/ XXXXX XXXXXX
------------------ ----------------------
By: Xxx Xxxxx By: Xxxxx Xxxxxx
Title: Manager Title: Manager
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