EXHIBIT 10.17
Dated 30 April 2004
MACQUARIE LEASING (UK) LIMITED
and
MACQUARIE BANK LIMITED
and
MACQUARIE LUXEMBOURG WATER SARL
SHARE PURCHASE AGREEMENT
Linklaters
Xxx Xxxx Xxxxxx
Xxxxxx XX0X 0XX
Telephone (00-00) 0000 0000
Facsimile (00-00) 0000 0000
Ref Xxxx Xxxxxxx
TABLE OF CONTENTS
CONTENTS PAGE
1 Interpretation........................................................................ 1
2 Agreement to Sell the Shares.......................................................... 4
3 Consideration......................................................................... 5
4 Closing............................................................................... 5
5 Warranties............................................................................ 6
6 Limitation of Seller's Liability...................................................... 7
7 Claims................................................................................ 9
8 Guarantee and indemnity............................................................... 10
9 Confidentiality....................................................................... 13
10 Other Provisions...................................................................... 14
Schedule 1 The Company and the Subsidiaries............................................. 22
Schedule 2 The Seller's Closing Obligations (Clause 4).................................. 23
Schedule 3 Warranties given by the Seller under Clause 5.1.............................. 24
Schedule 4 (Clause 5.1.4)............................................................... 29
Schedule 5 (Clause 5.2)................................................................. 30
Schedule 6 (Clause 5.7) Warranties given by the Purchaser............................... 31
Schedule 7 Warranties given by the Seller under Clause 10.15............................ 32
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SHARE PURCHASE AGREEMENT
THIS AGREEMENT is made on 30 April 2004
BETWEEN:
(1) MACQUARIE LEASING (UK) LIMITED a company incorporated in England whose
registered office is at Xxxxx 00, 0 Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
(the "SELLER");
(2) MACQUARIE BANK LIMITED a company incorporated in Australia (acting
through its London branch at Xxxxx 00, XxxxXxxxx, 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX) (the "GUARANTOR"); and
(3) MACQUARIE LUXEMBOURG WATER SARL a company incorporated In Luxembourg
whose registered office is at 0, xxx Xxxxxxxxx Xxxxx - XX0000, X-0000
Xxxxxxxxxx (xxx "PURCHASER").
WHEREAS:
(A) The Seller has agreed to sell the Shares (as defined below) and to
assume the obligations imposed on the Seller under this Agreement.
(B) The Purchaser has agreed to purchase the Shares and to assume the
obligations imposed on the Purchaser under this Agreement.
(C) The Guarantor has agreed to guarantee the Seller's obligations under
this Agreement.
IT IS AGREED AS FOLLOWS:
1 INTERPRETATION
In this Agreement, unless the context otherwise requires, the
provisions in this Clause 1 apply:
1.1 DEFINITIONS
"BARCLAYS CONSENT" means the consent dated 6 April 2004 of Barclays
Bank PLC, pursuant to the Bridge Facility, in relation to the issue by
the Company of the New Loan Notes and related matters;
BRIDGE FACILITY means the facility agreement dated 1 October 2003 made
between inter alia, Barclays Bank PLC and the Company for the loan of
(pound)359,000,000 on the terms referred to therein for the purposes
therein mentioned;
"BUSINESS DAY" means a day which is not a Saturday, Sunday or a public
holiday in England or Luxembourg;
"CALL OPTION" has the meaning given in Clause 10.15;
"CLOSING" means the completion of the sale of the Shares pursuant to
Clause 4;
"CLOSING DATE" means the date Closing occurs;
"CLOSING DOCUMENTS" has the meaning given in Schedule 2;
"COMPANY" means Macquarie Water (UK) Limited, details of which are set
out In Schedule 1;
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"DEED OF SUBORDINATION" means the deed of subordination to be entered
into by the Purchaser, the Company and Barclays Bank PLC, relating to
the New Loan Notes;
"DISCLOSURE SCHEDULE" means Schedule 5 to this Agreement;
"ENCUMBRANCE" means any claim, charge, mortgage, lien, option, equity,
power of sale, hypothecation, retention of title, right of pre-emption,
right of first refusal or other third party right or security interest
of any kind or an agreement, arrangement or obligation to create any of
the foregoing;
"EXISTING LOAN NOTE INSTRUMENT" means the loan note instrument dated 1
October 2003 pursuant to which the Company issued the Existing Loan
Notes;
"EXISTING LOAN NOTES" means the loan notes issued by the Company to the
Guarantor pursuant to the Existing Loan Note Instrument;
"GROUP" means the Group Companies, taken as a whole;
"GROUP COMPANIES" means the Company and the Subsidiaries and "GROUP
COMPANY" means any one of them;
"LOAN NOTE REPAYMENT" means the proposed repayment by the Company to
the Guarantor of (pound)41,680,500 nominal of the Existing Loan Notes
on the Closing Date;
"LOSSES" means all losses, liabilities, costs, charges, expenses,
actions, proceedings, claims and demands;
"NEW LOAN NOTE INSTRUMENT" means the instrument to be entered into on
or about Closing between the Company and the Purchaser for the issue of
the New Loan Notes;
"NEW LOAN NOTES" means (pound)41,680,500 nominal of loan notes to be
issued by the Company to the Purchaser on Closing in accordance with
Clause 4.2.2 and Schedule 2 and on the terms of the New Loan Note
Instrument;
"PRE-CLOSING DIVIDEND" means the dividend of(pound)2.6 million paid by
the Company on 7 April 2004;
"PURCHASER'S GROUP" means the Purchaser, its subsidiaries and
subsidiary undertakings, any holding company of the Purchaser and all
other subsidiaries or subsidiary undertakings of any such holding
company from time to time;
"RETAINED SHARES" means the 13,819,500 ordinary shares in the capital
of the Company legally and beneficially owned by the Seller and not
being sold by the Seller to the Purchaser pursuant to this Agreement;
"SELLER'S GROUP" means the Seller, its subsidiaries and subsidiary
undertakings, any holding company of the Seller and all other
subsidiaries or subsidiary undertakings of any such holding company
from time to time (but excluding members of the Group);
"SELLER'S WARRANTIES" means the warranties and representations given by
the Seller pursuant to Clause 5 and Schedule 3 and, if applicable,
pursuant to Clause 10.15.7 and Schedule 7 and "SELLER'S WARRANTY" means
any one of them;
"SHARES" means 41,680,501 ordinary shares of(pound)1 each in the
capital of the Company;
"SUBORDINATED LOAN AGREEMENT" means the subordinated loan agreement
dated 7 April 2004 between the Company and the Guarantor in respect of
the funds required to pay the Pre-Closing Dividend;
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"SUBSIDIARIES" means the subsidiaries listed in paragraph 2 of Schedule
1 and "SUBSIDIARY" means any one of them;
"TAXATION" or "TAX" means all forms of taxation whether direct or
indirect and whether levied by reference to income, profits, gains, net
wealth, asset values, turnover, added value or other reference and
statutory, governmental, state, provincial, local governmental or
municipal impositions, duties, contributions, rates and levies
(including without limitation social security contributions and any
other payroll taxes), whenever and wherever imposed (whether imposed by
way of a withholding or deduction for or on account of tax or
otherwise) and in respect of any person and all penalties, charges,
costs and interest relating thereto;
"TAX AUTHORITY" means any taxing or other authority competent to impose
any liability in respect of Taxation or responsible for the
administration and/or collection of Taxation or enforcement of any law
in relation to Taxation; and
"VAT" means United Kingdom Value Added Tax.
1.2 MODIFICATION ETC. OF STATUTES
References to a statute or statutory provision include:
1.2.1 that statute or provision as from time to time modified,
re-enacted or consolidated whether before or after the date of
this Agreement;
1.2.2 any past statute or statutory provision (as from time to time
modified, re-enacted or consolidated) which that statute or
provision has directly or indirectly replaced; and
1.2.3 any subordinate legislation made from time to time under that
statute or statutory provision,
except to the extent that any statute, statutory provision or
subordinate legislation made or enacted after the date of this
Agreement would create or increase a liability of the Seller or the
Purchaser under this Agreement.
1.3 SINGULAR, PLURAL, GENDER
References to one gender include all genders and references to the
singular include the plural and vice versa.
1.4 REFERENCES TO PERSONS AND COMPANIES
References to:
1.4.1 a person include any company, partnership or unincorporated
association (whether or not having separate legal
personality); and
1.4.2 a company shall include any company, corporation or any body
corporate, wherever incorporated.
1.5 REFERENCES TO SUBSIDIARIES AND HOLDING COMPANIES
The words "HOLDING COMPANY" and "SUBSIDIARY" and shall have the same
meaning in this Agreement as their respective definitions in the
Companies Xxx 0000.
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1.6 CONNECTED PERSONS
A person shall be deemed to be connected with another if that person is
connected with such other within the meaning of Section 839 of the
Income and Corporation Taxes Act 1988 and "Connected Person" shall be
construed accordingly.
1.7 SCHEDULES ETC.
References to this Agreement shall include any Recitals and Schedules
to it and references to Clauses and Schedules are to Clauses of, and
Schedules to, this Agreement. References to paragraphs and Parts are to
paragraphs and Parts of the Schedules.
1.8 HEADINGS
Headings shall be ignored in interpreting this Agreement.
2 AGREEMENT TO SELL THE SHARES
2.1 AGREEMENT
On and subject to the terms of this Agreement, the Seller agrees to
sell, and the Purchaser agrees to purchase, the Shares.
2.2 FREE FROM ENCUMBRANCE
The Shares shall be sold by the Seller with full title guarantee free
from Encumbrances and together with all rights and advantages attaching
to them as at Closing (including, without limitation, the right to
receive all dividends or distributions declared, made or paid on or
after Closing).
2.3 PRE-EMPTION ETC.
The Seller shall procure that on or prior to Closing any and all rights
of pre-emption over the Shares are waived irrevocably by the persons
entitled thereto.
3 CONSIDERATION
3.1 AMOUNT
The consideration for the purchase of the Shares under this Agreement
shall be an amount in cash equal (pound)41,680,501.
3.2 REDUCTION OF CONSIDERATION
If any payment is made by the Seller to the Purchaser in respect of any
claim for any breach of this Agreement, including pursuant to any of
the Seller's Warranties, the payment shall so far as practicable be
made by way of adjustment of the consideration paid by the Purchaser
for the Shares (and, if the Call Option is exercised, the Retained
Shares) under this Agreement and the consideration shall be deemed to
have been reduced by the amount of such payment.
4 CLOSING
Closing shall take place immediately following execution of this
Agreement. On Closing:
4.1 the Seller shall comply with its obligations In Schedule 2; and
4
4.2 the Purchaser shall (against compliance by the Seller with Clause 4.1):
4.2.1 pay to the Seller the consideration specified in Clause 3.1;
4.2.2 subscribe at par for(pound)41,680,500 in nominal amount of New
Loan Notes; and
4.2.3 enter into the Deed of Subordination.
5 WARRANTIES
5.1 THE SELLER'S WARRANTIES
5.1.1 Subject to Clause 5.2, the Seller warrants and represents to
the Purchaser that the statements set out in Schedule 3 are
true and accurate and not misleading as of the date of this
Agreement.
5.1.2 The Seller acknowledges that the Purchaser has entered into
this Agreement in reliance upon the Seller's Warranties.
5.1.3 Each of the Seller's Warranties shall be separate and
independent and shall not be limited by reference to any other
paragraph of Schedule 3 (or, as applicable, Schedule 7) or by
anything in this Agreement.
5.1.4 Any Seller's Warranty qualified by the expression "to the best
of the Seller's knowledge, information and belief" or any
similar expression shall, unless otherwise stated, be deemed
to refer to the knowledge of the persons whose names and
addresses are set out in Schedule 4 who shall be deemed to
have knowledge of such matters as they would have discovered,
had they made reasonable enquiries of the Managing Director,
the Director of Finance and Investment, the Company Secretary
and the Legal Manager of Southern Utilities (Holdings)
Limited.
5.2 SELLER'S DISCLOSURES
The Seller's Warranties are subject to the matters fairly disclosed in
the Disclosure Schedule.
5.3 THE SELLER'S WAIVER OF RIGHTS AGAINST THE GROUP
Save in the case of fraud, the Seller undertakes to the Purchaser for
itself and as trustee for the Group Companies and their respective
directors, officers and agents to waive any rights, remedies or claims
which it may have in respect of any misrepresentation, inaccuracy or
omission in or from any information or advice supplied or given by the
Group Companies or their respective directors, officers or agents in
connection with assisting the Seller in the giving of any Seller's
Warranty or the preparation of the Disclosure Schedule.
5.4 EFFECT OF CLOSING
The Seller's Warranties and all other provisions of this Agreement, to
the extent that they have not been performed by Closing, shall not be
extinguished or affected by Closing, by completion of the transfer of
any Retained Shares pursuant to Clause 10.15 or by any other event or
matter, except by a specific and duly authorised written waiver or
release by the Purchaser.
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5.5 BREACH OF ACQUISITION DOCUMENTS
6
In the event that the Purchaser or any holding company or subsidiary of
the Purchaser becomes aware of any contravention or non-compliance by
any Vendor Party of any Acquisition Document (each such term as defined
in paragraph 7.2 of Schedule 3) or of any matter or circumstance which
could entitle a claim to be made against a Vendor Party pursuant to the
Acquisition Documents, then the Purchaser or (as applicable) its
holding company or subsidiary shall be entitled, in its absolute
discretion, to take such action as it shall deem necessary to pursue
such claim but shall, so far as practicable, consult with the Seller
before taking any such action.
5.6 PURCHASER'S WARRANTIES
The Purchaser warrants and represents to the Seller that the statements
in Schedule 6 are true and accurate and not misleading as of the date
of this Agreement.
6 LIMITATION OF SELLER'S LIABILITY
6.1 TIME LIMITATION FOR CLAIMS
The Seller shall not be liable in respect of any claim for breach of
any Seller's Warranty in respect of any claim unless a notice of the
claim is given by the Purchaser to the Seller within, in the case of
the Seller's Warranties in Schedule 3, two years of the Closing Date
and, in the case of the Seller's Warranties in Schedule 7, two years of
the date of the relevant transfer of Retained Shares pursuant to Clause
10.15. Any claim notified by the Purchaser to the Seller pursuant to
this Clause shall specify the matters set out in Clause 7.2.
6.2 MINIMUM CLAIMS
6.2.1 The Seller shall not be liable in respect of any individual
claim (or a series of claims arising from substantially
identical facts or circumstances) for breach of any Seller's
Warranty where the liability agreed or determined
(disregarding the provisions of this Clause 6.2) in respect of
any such claim or series of claims does not exceed
(pound)50,000.
6.2.2 Where the liability agreed or determined in respect of any
such claim or series of claims exceeds (pound)50,000, subject
as provided elsewhere in this Clause 6, the Seller shall be
liable for the amount of the claim or series of claims as
agreed or determined.
6.3 AGGREGATE MINIMUM CLAIMS
6.3.1 The Seller shall not be liable in respect of any claim for
breach of any Seller's Warranty unless the aggregate amount of
all claims for which the Seller would otherwise be liable for
breach of any Seller's Warranty (disregarding the provisions
of this Clause 6.3) exceeds (pound)500,000.
6.3.2 Where the liability agreed or determined in respect of all
claims referred to in Clause 6.3.1 exceeds (pound)500,000
subject as provided elsewhere in this Clause 6, the Seller
shall be liable for the aggregate amount of all claims as
agreed or determined.
6.4 MAXIMUM LIABILITY
The aggregate liability of the Seller in respect of all breaches of the
Seller's Warranties shall not exceed the aggregate of the consideration
paid for the Shares pursuant to Clause
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3.1 and, if the Call Option is exercised pursuant to Clause 10.15, the
consideration paid for the relevant Retained Shares pursuant to Clause
10.15.
6.5 MATTERS ARISING SUBSEQUENT TO THIS AGREEMENT
The Seller shall not be liable for breach of any Seller's Warranty in
respect of any matter to the extent that the same would not have
occurred but for:
6.5.1 any matter or thing done or omitted to be done pursuant to and
in compliance with this Agreement or otherwise at the request
in writing or with the approval in writing of the Purchaser;
6.5.2 the passing of, or any change in, after Closing, any law,
rule, regulation or administrative practice of any government,
governmental department, agency or regulatory body including
(without prejudice to the generality of the foregoing) any
increase in the rates of Taxation or any imposition of
Taxation or any withdrawal of relief from Taxation not
actually (or prospectively) in effect at the date of Closing;
6.5.3 any change after Closing of any generally accepted
interpretation or application of any legislation; or
6.5.4 any change in accounting or Taxation policy, bases or practice
of the Purchaser or any of the Group Companies introduced or
having effect after Closing.
6.6 RECOVERY FROM THIRD PARTIES FOLLOWING RECOVERY FROM THE SELLER
If the Seller has paid an amount in discharge of any claim for breach
of any Seller's Warranty and the Purchaser or any Group Company is
entitled to recover (whether by payment, discount, credit, relief,
insurance or otherwise) from a third party a sum which indemnifies or
compensates the Purchaser or Group Company (in whole or in part) in
respect of the loss or liability which is the subject matter of the
claim, the Purchaser shall, or shall procure that the relevant Group
Company shall, pay to the Seller as soon as practicable after receipt
an amount equal to (i) any sum recovered from the third party less any
costs and expenses incurred in obtaining such recovery less any
Taxation attributable to the recovery after taking account of any tax
relief available in respect of any matter giving rise to the claim or
if less (ii) the amount previously paid by the Seller to the Purchaser
less any Taxation attributable to it.
6.7 MITIGATION OF LOSSES
The Purchaser shall procure that all reasonable steps are taken and all
reasonable assistance is given to avoid or mitigate any Losses which in
the absence of mitigation might give rise to a liability in respect of
any claim for breach of any Seller's Warranty.
6.8 FRAUD
None of the limitations contained in this Clause 6 shall apply to any
claim which arises or is increased, or to the extent to which it arises
or is increased, as the consequence of, or which is delayed as a result
of, fraud or wilful concealment by the Seller or any of its directors,
officers, employees or agents.
7 CLAIMS
7.1 NOTIFICATION OF POTENTIAL CLAIMS
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If the Purchaser becomes aware of any fact, matter or circumstance that
may give rise to a claim against the Seller for breach of any Seller's
Warranty, the Purchaser shall as soon as reasonably practicable give a
notice in writing to the Seller setting out such information as is
available to the Purchaser as is reasonably necessary to enable the
Seller to assess the merits of the claim and shall use its reasonable
endeavours to preserve such evidence as the Seller may consider
necessary. Failure to give notice within such period shall not affect
the rights of the Purchaser except to the extent that the Seller is
prejudiced by the failure.
7.2 NOTIFICATION OF CLAIMS UNDER THIS AGREEMENT
Notices of claims for breach of Seller's Warranty shall be given by the
Purchaser to the Seller within the time limits specified in Clause 6.1,
specifying in reasonable detail the legal and factual basis of the
claim and the evidence on which the Purchaser relies and, if
practicable, an estimate of the amount of Losses which are, or are to
be, the subject of the claim (including any Losses which are contingent
on the occurrence of any future event).
7.3 COMMENCEMENT OF PROCEEDINGS
Any claim notified pursuant to Clause 7.2 shall (if it has not been
previously satisfied, settled or withdrawn) be deemed to be irrevocably
withdrawn twelve months after the notice is given pursuant to Clause
7.2 or, in the case of any contingent liability, twelve months after
such contingent liability becomes an actual liability and is due and
payable unless legal proceedings in respect of it have been commenced
by being both issued and served.
7.4 INVESTIGATION BY THE SELLER
In connection with any matter or circumstance that may give rise to a
claim against the Seller for breach of any Seller's Warranty:
7.4.1 the Purchaser shall allow, and shall procure that the relevant
Group Company allows, the Seller and its financial, accounting
or legal advisers to investigate the matter or circumstance
alleged to give rise to a claim and whether and to what extent
any amount is payable in respect of such claim; and
7.4.2 the Purchaser shall disclose to the Seller all material of
which the Purchaser is aware which relates to the claim and
shall, and shall procure that the relevant Group Company
shall, give, subject to their being paid all reasonable costs
and expenses, all such information and assistance, including
access to premises and personnel, and the right to examine and
copy or photograph any assets, accounts, documents and
records, as the Seller or its professional advisers may
reasonably request subject to the Seller agreeing in such form
as the Purchaser may reasonably require to keep all such
information confidential and to use it only for the purpose of
investigating and defending the claim in question.
7.5 CONDUCT OF THIRD PARTY CLAIMS
If the matter or circumstance that may give rise to a claim against the
Seller for breach of any Seller's Warranty is a result of or in
connection with a claim by or liability to a third party then the
Purchaser or other member of the Purchaser's Group shall, subject to
the next sentence, be entitled, in its absolute discretion, to take
such action as it shall deem necessary to avoid, dispute, deny, defend,
resist, appeal, compromise or contest such claim or liability
(including, without limitation, making counterclaims or other claims
against third parties) but shall, so far as practicable, without
prejudice to the rights of the insurers
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of the Purchaser's Group, consult with the Seller and with the
Guarantor before taking any such action. No such claim shall be settled
by the Purchaser without the prior written consent of the Guarantor.
8 GUARANTEE AND INDEMNITY
8.1 In consideration of the Purchaser entering into this Agreement, the
Guarantor irrevocably and unconditionally:
8.1.1 guarantees to the Purchaser the due and punctual performance
and discharge by the Seller of all its obligations and
liabilities (including without limitation the obligation to
pay money) under this Agreement and the Closing Documents
(together, the "GUARANTEED OBLIGATIONS") and agrees to pay on
demand from time to time each sum which the Seller is liable
to pay under this Agreement and the Closing Documents; and
8.1.2 agrees, as an additional and independent obligation, that if
any of the Guaranteed Obligations are not recoverable from the
Guarantor under the guarantee in Clause 8.1.1 for any reason
the Guarantor will be liable to the Purchaser as a principal
debtor by way of indemnity for the same amount as that for
which it would have been liable had those Guaranteed
Obligations been recoverable and further agrees to discharge
that liability on demand from time to time.
8.2 The guarantee in Clause 8.1.1 shall be a continuing security until the
performance and discharge in full of the Guaranteed Obligations.
8.3 The Guarantor's obligations to the Purchaser shall not be reduced,
discharged, impaired or adversely affected by reason of:
8.3.1 any time, indulgence, waiver or other concession which the
Purchaser may grant to the Seller or any other person;
8.3.2 the insolvency, incapacity, lack of authority, death or
disability of the Seller or the Guarantor or of any person
purporting to act on behalf of either of them;
8.3.3 any termination, amendment, variation, release, novation or
supplement of or to this Agreement or the terms of any of the
Guaranteed Obligations;
8.3.4 any variation, extension, discharge or compromise of any right
or remedy which the Purchaser may now or hereafter have from
or against the Seller and any other person in respect of any
of the obligations and liabilities of the Seller and any other
person under and in respect of this Agreement;
8.3.5 any act or omission by the Purchaser or any other person in
perfecting or enforcing any security, guarantee, assurance
against loss or indemnity present or future from or against
the Seller and any other person or any such security,
guarantee, assurance against loss or indemnity being
defective, void or unenforceable;
8.3.6 any claim or enforcement of payment from the Seller and any
other person;
8.3.7 any defect, irregularity, unenforceability, invalidity,
illegality, frustration or discharge by operation of law of
any of the obligations of the Purchaser or the Guarantor;
8.3.8 any change of control of the Seller or the occurrence of any
circumstance affecting the liability of the Seller to
discharge any Guaranteed Obligations;
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8.3.9 any security given or payment made to the Purchaser by the
Seller or any other person being avoided or reduced under any
law (whether English or foreign) relating to bankruptcy,
liquidation or analogous circumstances in force from time to
time;
8.3.10 any change in the Seller's or the Guarantor's constitution or
any statutory or other compromise or arrangement with
creditors affecting the Seller; or
8.3.11 any act or omission which would not have discharged or
affected the obligations of the Guarantor had it been a
principal debtor instead of a guarantor.
8.4 The obligations and liabilities expressed to be undertaken by the
Guarantor under the guarantee in Clause 8.1.1 are those of primary
obligor and not merely as a surety.
8.5 The Purchaser shall not be obliged before taking steps to enforce any
of its rights and remedies under the guarantee in Clause 8.1.1:
8.5.1 to take action or obtain judgment in any court against the
Seller and any other person;
8.5.2 to make or file any claim in a bankruptcy, liquidation,
administration or insolvency of the Seller and any other
person; or
8.5.3 to make demand, enforce or seek to enforce any claim, right or
remedy against the Seller and any other person.
8.6 The guarantee in Clause 8.1.1 shall be in addition to any other
security, guarantee, assurance against loss or indemnity held by the
Purchaser at any time from the Seller or any other person and shall not
merge with or prejudice or be prejudiced by any security, guarantee,
assurance against loss or indemnity or any other contractual or legal
rights of the Purchaser.
8.7 Any settlement or discharge in whole or in part by the Purchaser of the
Guaranteed Obligations shall be deemed to be given or made on condition
that it shall be of no effect as a settlement or discharge if the
assurance, security or payment on the faith of which it was made shall
afterwards be avoided, set aside or ordered to be refunded by virtue of
any law (whether English or foreign) relating to bankruptcy,
liquidation or analogous circumstances in force from time to time or
for any other reason so that at any time after such avoidance, setting
aside or order for refund the Purchaser shall be entitled to exercise
its rights under the guarantee in Clause 8.1.1 as if no such settlement
or discharge had been made.
8.8 All payments by the Guarantor shall be made in immediately available
funds to the credit of such account as the Purchaser may designate and
in full without any set-off, counterclaim or other deduction. If any
such deduction is so required, the Guarantor shall simultaneously pay
to the Purchaser such amount as is necessary to ensure that the
Purchaser receives a net sum equal to what it would have received had
no deduction been made.
8.9 No claim may be made against the Guarantor pursuant to this Clause 8
more than three years after the date of this Agreement, or, in the case
of a claim related to any Seller's Warranty in Schedule 7 given
pursuant to Clause 10.15, more than three years after the date on which
the relevant Seller's Warranty is given.
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8.10 The aggregate liability of the Guarantor pursuant to this Clause 8
shall not exceed the aggregate of the consideration paid for the Shares
pursuant to Clause 3 and, if the Call Option is exercised pursuant to
Clause 10.15, the consideration paid by the Purchaser for the relevant
Retained Shares pursuant to Clause 10.15.
9 CONFIDENTIALITY
9.1 UNDERTAKING
Subject to Clause 9.2:
9.1.1 each of the Seller and the Purchaser shall treat as strictly
confidential and not disclose or use any information received
or obtained as a result of entering into this Agreement (or
any agreement entered into pursuant to this Agreement) which
relates to the provisions of this Agreement and any agreement
entered into pursuant to this Agreement; and
9.1.2 the Seller shall treat as strictly confidential and not
disclose or use any information relating to the Group
Companies following Closing.
9.2 EXCEPTIONS
Clause 9.1 shall not prohibit disclosure or use of any information if
and to the extent:
9.2.1 the disclosure or use is required by law, any regulatory body
or any recognised stock exchange;
9.2.2 the disclosure is made to a Tax Authority in connection with
the Tax affairs of the disclosing party,
9.2.3 the disclosure is made to professional advisers or investment
managers of the Seller or the Purchaser;
9.2.4 the Information is or becomes publicly available (other than
by breach of this Agreement);
9.2.5 the other party has given prior written approval for the
disclosure or use;
9.2.6 the information is independently developed by the disclosing
party after Closing;
9.2.7 the disclosure is by the Seller to other members of its group
of information relating to the Group Companies received by the
Seller as a shareholder in the Company;
9.2.8 the disclosure is by the Purchaser to any investor or
potential investor in the Purchaser or any holding company or
other controlling body of the Purchaser; or
9.2.9 the disclosure is for the purpose of or in connection with the
listing on any investment exchange of any debt or equity
securities of Macquarie Infrastructure Assets Trust (for which
purpose the parties agree that any of the parties to this
Agreement or any third party shall be entitled to make any
disclosure otherwise prohibited by Clause 9.1)
10 OTHER PROVISIONS
10.1 FURTHER ASSURANCES
12
10.1.1 Each of the Seller and the Purchaser shall, and shall use
reasonable endeavours to procure that any necessary third
party shall, from time to time execute such documents and
perform such acts and things as either of the Seller or the
Purchaser may reasonably require to transfer the Shares and,
if applicable, the Retained Shares to the Purchaser and to
give each of them the full benefit of this Agreement.
10.1.2 Pending registration of the Purchaser as owner of the Shares
and, if applicable, the Retained Shares, the Seller shall
exercise all voting and other rights in relation to the Shares
and, if applicable, the Retained Shares in accordance with the
Purchaser's Instructions.
10.2 WHOLE AGREEMENT
10.2.1 This Agreement contains the whole agreement between the
parties relating to the sale of the Shares and, If applicable,
the Retained Shares at the date of this Agreement to the
exclusion of any terms implied by law which may be excluded by
contract and supersedes any previous written or oral agreement
between the parties in relation to the matters dealt with in
this Agreement.
10.2.2 The Purchaser acknowledges that it has not been induced to
enter this Agreement by any representation, warranty or
undertaking not expressly incorporated into it.
10.2.3 So far as is permitted by law and except in the case of fraud,
each of the Seller and the Purchaser agrees and acknowledges
that its only right and remedy in relation to any
representation, warranty or undertaking made or given in
connection with this Agreement shall be for breach of the
terms of this Agreement to the exclusion of all other rights
and remedies (including those in tort or arising under
statute).
10.3 ASSIGNMENT
10.3.1 Each of the Seller and the Guarantor agrees that the benefit
of every provision in this Agreement is given to the Purchaser
for itself and its successors in title and assigns.
Accordingly, the Purchaser (and its successors and permitted
assigns) may, without the consent of the Seller or of the
Guarantor, assign to the beneficial owner for the time being
of the Shares and, if applicable, the Retained Shares the
benefit of all or any of the Seller's and the Guarantor's
obligations under this Agreement, and/or any benefit arising
under or out of this Agreement, provided that the assignee
shall not be entitled to receive under this Clause any greater
amount than that to which the Purchaser would have been
entitled.
10.3.2 Each of the Seller and the Guarantor agrees that, upon the
request of the Purchaser or its successors in title or
permitted assigns, this Agreement may be novated (in whole but
not in part) in favour of the beneficial owner for the time
being of the Shares and, if applicable, the Retained Shares
and the Seller and the Guarantor shall execute a novation
agreement in terms to be agreed at the time between the
Seller, the Purchaser and the Guarantor.
10.4 THIRD PARTY RIGHTS
10.4.1 A person who is not a party to this Agreement has no right
under the Contracts (Rights of Third Parties) Xxx 0000 to
enforce any term of, or enjoy any benefit under, this
Agreement, except to the extent set out in this Clause 10.4.
13
10.4.2 A Group Company (whilst the Group Company remains in the
Purchaser's Group) may enforce and rely on Clause 5.3 to the
same extent as if it were a party.
10.4.3 This Agreement may be terminated and any term may be amended
or waived without the consent of any Group Company.
10.5 VARIATION
No variation of this Agreement shall be effective unless in writing and
signed by or on behalf of each of the parties.
10.6 METHOD OF PAYMENT
Wherever in this Agreement provision is made for the payment by one
party to the other, such payment shall be effected by crediting for
same day value the account specified by the payee to the payer
reasonably in advance and in sufficient detail to enable payment by
telegraphic or other electronic means to be effected on or before the
due date for payment.
10.7 COSTS
Each party shall bear its own costs in connection with the preparation,
negotiation and entry into of this Agreement and the sale of the Shares
and, if applicable, the Retained Shares.
10.8 INTEREST
If a party to this Agreement defaults in the payment when due of any
sum payable under this Agreement, its liability shall be increased to
include interest on such sum from the date when such payment is due
until the date of actual payment (after as well as before judgment) at
a rate per annum of two per cent above the base rate from time to time
of Barclays Bank PLC. Such interest shall accrue from day to day and
shall be compounded monthly.
10.9 GROSSING-UP OF INDEMNITY PAYMENTS, VAT
10.9.1 Where any payment is made under this Agreement pursuant to an
indemnity, compensation or reimbursement provision (including
for the avoidance of doubt any claim pursuant to Clauses 5, 7
or 8) and that sum is subject to a charge to Taxation in the
hands of the recipient (other than Taxation attributable to a
payment being properly treated as an adjustment to the
consideration paid by the Purchaser for the Shares) the sum
payable shall be increased to such sum as will ensure that
after payment of such Taxation (and after giving credit for
any tax relief available to the recipient in respect of the
matter giving rise to the payment) the recipient shall be left
with a sum equal to the sum that it would have received in the
absence of such a charge to taxation.
10.9.2 Where under the terms of this Agreement one party is liable to
indemnify or reimburse another party in respect of any costs,
charges or expenses, the payment shall include an amount equal
to any VAT thereon not otherwise recoverable by the other
party, subject to that party using all reasonable endeavours
to recover such amount of VAT as may be practicable.
10.9.3 If any payment under this Agreement constitutes the
consideration for a taxable supply for VAT purposes, then in
addition to that payment the payer shall pay any VAT due.
14
10.10 NOTICES
10.10.1 Any notice or other communication in connection with this
Agreement (each, a "NOTICE") shall be:
(i) in writing;
(ii) delivered by hand, fax, pre-paid first class post or
courier;
10.10.2 A Notice to the Seller shall be sent to the following address,
or such other person or address as the Seller may notify to
the Purchaser from time to time:
the Seller
Address: Xxxxx 00, XxxxXxxxx, Xxx Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX
Fax: 000 0000
Attention: Xxx Xxxxxxxxxx
10.10.3 A Notice to the Purchaser shall be sent to the following
address, or such other person or address as the Purchaser may
notify to the Seller from time to time:
the Purchaser
Address: 0, xxx Xxxxxxxxx Xxxxx - XX0000, X-0000
Xxxxxxxxxx
Fax: +352 (48) 18 63
Attention: Xx Xxxxx Bagnouls
With a copy to:
Address: Xxxxx 00, XxxxXxxxx, Xxx Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX
Fax: 000 0000 0000
Attention: Annabelle Helps
10.10.4 A Notice to the Guarantor shall be sent to the following
address, or such other person or address as the Seller may
notify to the Purchaser from time to time:
MBL:
Address: Xxxxx 00, XxxxXxxxx, 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX
Fax:
Attention: Xxxxxx Xxxxxxxxxx
10.10.5 A Notice shall be effective upon receipt and shall be deemed
to have been received:
(i) two Business Days after posting, if delivered by
pre-paid first class post;
(ii) at the time of delivery, if delivered by hand or
courier;
(iii) at the time of transmission in legible form, if
delivered by fax.
10.11 INVALIDITY
10.11.1 If any provision in this Agreement shall be held to be
illegal, invalid or unenforceable, in whole or in part, the
provision shall apply with whatever deletion
15
or modification is necessary so that the provision is legal,
valid and enforceable and gives effect to the commercial
intention of the parties.
10.11.2 To the extent it is not possible to delete or modify the
provision, in whole or in part, under Clause 10.11.1, then
such provision or part of it shall, to the extent that it is
illegal, invalid or unenforceable, be deemed not to form part
of this Agreement and the legality, validity and
enforceability of the remainder of this Agreement shall,
subject to any deletion or modification made under Clause
10.11.1, not be affected.
10.12 COUNTERPARTS
This Agreement may be entered into in any number of counterparts, all
of which taken together shall constitute one and the same instrument.
Any party to this Agreement may enter into this Agreement by executing
any such counterpart.
10.13 GOVERNING LAW AND SUBMISSION TO JURISDICTION
10.13.1 This Agreement shall be governed by and construed in
accordance with English law.
10.13.2 Each of the parties to this Agreement irrevocably agrees that
the courts of England are to have exclusive jurisdiction to
settle any dispute which may arise out of or in connection
with this Agreement and that accordingly any proceedings
arising out of or in connection with this Agreement shall be
brought in such courts. Each of the parties irrevocably
submits to the jurisdiction of such courts and waives any
objection to proceedings in any such court on the ground of
venue or on the ground that proceedings have been brought in
an inconvenient forum.
10.14 APPOINTMENT OF PROCESS AGENT
10.14.1 The Purchaser hereby irrevocably appoints Macquarie Investment
Management (UK) Limited of Xxxxx 00, 0 Xxxxxxxxx Xxxxxx,
Xxxxxx XX0X 0XX and the Guarantor hereby appoints the Seller
as their respective agents to accept service of process in
England in any legal action or proceedings arising out of this
Agreement, service upon whom shall be deemed completed whether
or not forwarded to or received by (as applicable) the
Purchaser or the Guarantor.
10.14.2 The Purchaser agrees to inform the Seller, and the Guarantor
agrees to inform the Purchaser, in writing of any change of
address of such process agent within 28 days of such change.
10.14.3 If such process agent ceases to be able to act as such or to
have an address in England, the Purchaser or (as applicable)
the Guarantor irrevocably agrees to appoint a new process
agent in England acceptable to the Seller or the Purchaser,
respectively, and to deliver to the Seller or the Purchaser,
respectively, within 14 days a copy of a written acceptance of
appointment by the process agent.
10.14.4 Nothing in this Agreement shall affect the right to serve
process in any other manner permitted by law or the right to
bring proceedings in any other jurisdiction for the purposes
of the enforcement or execution of any judgment or other
settlement in any other courts.
10.15 CALL OPTION OVER THE RETAINED SHARES
16
10.15.1 The Seller hereby grants the Purchaser, in consideration of
the Purchaser's execution of this Agreement, a call option
(the "CALL OPTION") over the Retained Shares, upon the terms
of this Clause 10.15.
10.15.2 The Call Option may be exercised by the Purchaser by notice in
writing to the Purchaser served at any time up to and
including 31 December 2004.
10.15.3 The Call Option may be exercised either in respect of all the
Retained Shares at the same time, or in two separate tranches
of 4,107,000 Retained Shares and 9,712,500 Retained Shares
each.
10.15.4 The price payable by the Purchaser on exercise of the Call
Option shall be an amount in cash equal to (pound)1 per
Retained Share the subject of the exercise of the Call Option
plus an amount calculated as follows:
(A x 12% x (T)/365) - (B + C)
where:
A = (pound)2 x the number of Retained Shares the subject of
the exercise of the Call Option;
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 the Company in the
period comprised in T in respect 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 the Retained Shares the subject of the
exercise of the Call Option; and
T = the number of days elapsed from (and including) 30 April
2004 to (but excluding) the date of completion of the transfer
of Shares by the Seller to the Purchaser (or as it may direct)
upon exercise of the Call Option.
10.15.5 The transfer of Retained Shares shall take place within five
Business Days after exercise of the Call Option at such place
as the Purchaser and the Seller may agree. On that transfer,
the Purchaser shall pay the Seller the Call Option price for
the relevant Retained Shares. Against that payment, the Seller
shall execute, and deliver to the Purchaser or as it may
direct, a duly executed stock transfer form in respect of the
relevant Retained Shares in favour of the Purchaser or as it
may direct accompanied by the relative share certificate.
10.15.6 The provisions of Clauses 2.2 and 2.3 shall apply to the sale
of Retained Shares, as if the references in them to Shares
were to Retained Shares and to Closing were to the date of
transfer of the Retained Shares.
10.15.7 On the transfer of Retained Shares to the Purchaser, the
Seller shall be deemed to represent and warrant to the
Purchaser that the statements set out in Schedule 7 are true
and accurate and not misleading as of the date of that
transfer.
10.15.8 While the Call Option remains exercisable the Seller shall not
create any Encumbrance on, or dispose of, the Retained Shares
or any interest in them except in accordance with this Clause.
17
10.15.9 On the transfer of Retained Shares pursuant to this Clause
10.15, the Purchaser shall also subscribe for New Loan Notes
with a nominal amount equal to the nominal value of the
Retained Shares being transferred at that time. On receipt of
the proceeds of that subscription, the Company shall forthwith
repay the same nominal amount of Existing Loan Notes.
10.15.10 The Purchaser may not exercise the Call Option in respect of
all the Retained Shares or in respect of the tranche of
9,712,500 of the Retained Shares unless and until debt or
equity securities of Macquarie Infrastructure Assets Trust are
admitted to trading on an investment exchange.
10.15.11 The Seller agrees with the Purchaser, in consideration for the
Purchaser's execution of this Agreement, not to sell, transfer
or otherwise dispose of any interest that it may have in any
of the Retained Shares at any time (other than to the
Purchaser) without first ensuring that the proposed transferee
enters into a shareholder's agreement with the Purchaser, its
shareholders and the Company substantially in the form of the
shareholders agreement between the Purchaser and its
shareholders (a copy of which is available to the Seller on
request to the Purchaser).
In witness whereof this Agreement has been duly executed.
SIGNED by } /s/ Illegible
on behalf of MACQUARIE } /s/ Illegible
LEASING (UK) LIMITED: }
SIGNED by } /s/ Illegible
on behalf of MACQUARIE BANK } /s/ Illegible
LIMITED: }
SIGNED by } /s/ Illegible
on behalf of MACQUARIE } /s/ Illegible
LUXEMBOURG WATER SARL: }
18
SCHEDULE 1
THE COMPANY AND THE SUBSIDIARIES
1 PARTICULARS OF THE COMPANY
NAME OF COMPANY:
Registered number: 4866277
Registered office: Xxxxx 00, XxxxXxxxx, Xxx
Xxxxxxxxx
Xxxxxx, Xxxxxx XX0X 0XX
Date and place of incorporation: 00 Xxxxxx 0000, Xxxxxxx & Xxxxx
Issued share capital: 55,500,001 ordinary shares
@(pound)1.00
Registered and beneficial shareholder: Macquarie Leasing (UK) Limited
2 NAMES OF THE SUBSIDIARIES
Southern Utilities (Holdings) Limited
(formerly Xxxx Water Services Plc)
South East Water Limited
Optimum Information Services Limited
Dynamco Limited
Mid-Sussex Water Limited
Xxxx Xxxx Water Plc
Eastbourne Water Plc
Mid-Southern Water Plc
Watercall Limited
Southern Utilities Limited
19
SCHEDULE 2
THE SELLER'S CLOSING OBLIGATIONS
(CLAUSE 4)
On Closing, the Seller shall deliver or procure that the Company
delivers or makes available to the Purchaser the following (together
the "CLOSING DOCUMENTS"):
1 a transfer of the Shares duly executed by the Seller in favour of the
Purchaser or as it may direct accompanied by the relative share
certificate;
2 a board resolution of the Company approving the registration of the
share transfer referred to in paragraph 1 of this Schedule subject only
to its being duly stamped, the issue of the New Loan Notes to the
Purchaser and the execution of the Deed of Subordination;
3 documents evidencing:
(a) the drawdown under the Subordinated Loan Agreement to fund
payment of the Pre-Closing Dividend; and
(b) the declaration and payment of the Pre-Closing Dividend;
4 against performance by the Purchaser of its obligations pursuant to
Clause 4.2.2, a copy of the New Loan Note Instrument and the original
certificate for the New Loan Notes;
5 against performance by the Purchaser of its obligations pursuant to
Clause 4.2.2, documents, in a form agreed with the Purchaser,
evidencing the Loan Note Repayment;
6 in relation to the Company: certificate of incorporation, certificates
of incorporation on change of name (if applicable), common seal (if
applicable), statutory registers, minute books, share certificate
books, books of account and all other books (all duly written up to
date);
7 acknowledgements, in a form agreed with the Purchaser, from the Seller
and the Company confirming that at and immediately after Closing, save
for the (pound)13,819,500 of Existing Loan Notes issued by the Company
to the Guarantor and not repaid at Closing and save for (pound)2.6
million owed by the Company pursuant to the Subordinated Loan
Agreement, nothing is owed by, on the one hand, the Company or any of
its Subsidiaries to, on the other hand, the Seller, any member of the
Seller's Group and any Connected Person of the Seller, and that there
are no outstanding claims by any such person against the Company or any
of its Subsidiaries or that, to the extent that there are any such sums
due or possible claims, these are waived; and
8 any power of attorney under which any document required to be delivered
under this Schedule 2 has been executed.
20
SCHEDULE 3
WARRANTIES GIVEN BY THE SELLER UNDER CLAUSE 5.1
1 THE SHARES
1.1 The Seller:
1.1.1 is the sole legal and beneficial owner of the Shares; and
1.1.2 has the right to exercise all voting and other rights over the
Shares.
1.2 The Seller is the sole legal and beneficial owner of the entire issued
share capital of the Company
1.3 To the best of the Seller's knowledge, information and belief, the
Seller or a Group Company is the sole legal and beneficial owner of the
entire issued share capital of each Subsidiary (the "SUBSIDIARY
Shares").
1.4 The Shares, together with the Retained Shares, comprise the whole of
the issued and allotted share capital of the Company.
1.5 The Shares have been properly and validly issued and allotted and are
each fully paid or credited as fully paid.
1.6 No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, conversion,
issue, registration, sale or transfer, of any share or loan capital or
any other security giving rise to a right over, or an interest in, the
capital of the Company nor, to the best of the Seller's knowledge,
information and belief, of any Group Company under any option,
agreement or other arrangement (including conversion rights and rights
of pre-emption).
1.7 There are no Encumbrances on the Shares or, to the best of the
knowledge, information and belief of the Seller, on the Subsidiary
Shares.
1.8 All consents for the transfer of the Shares have been obtained.
2 GENERAL
2.1 AUTHORITY AND CAPACITY
2.1.1 The Seller is validly existing and is a company duly
incorporated under the laws of England and Wales.
2.1.2 The Seller has the legal right and full power and authority to
enter into and perform this Agreement.
2.1.3 This Agreement constitutes valid and binding obligations on
the Seller, in accordance with its terms.
2.1.4 The Seller has taken all corporate action required by it to
authorise it to enter into and to perform this Agreement.
21
3.4 No order has been made, petition or application presented, resolution
passed or meeting convened for the purpose of winding-up the Company
or, to the best of the Seller's knowledge, information and belief, any
of the Subsidiaries or whereby the assets of the Company (or, as
applicable, the relevant Subsidiary) are to be distributed to creditors
or shareholders or other contributories of the Company (or, as
applicable, the relevant Subsidiary).
3.5 No receiver (including an administrative receiver), liquidator,
trustee, administrator, supervisor, nominee, custodian or similar
official has been appointed in respect of the whole or any part of the
business or assets of the Company nor, to the best of the Seller's
knowledge, information and belief, of any of the Subsidiaries nor has
any step been taken for or with a view to the appointment of such a
person nor has any event taken place or is likely to take place as a
consequence of which such an appointment might be made.
3.6 No creditor of the Company or, to the best of the knowledge,
information and belief of the Seller, of any of the Subsidiaries has
taken, or is entitled to take any steps to enforce, or has enforced any
security over any assets of the Company (or, as applicable, of the
relevant Subsidiary).
4 BUSINESS ISSUES SINCE 1 OCTOBER 2003
To the best of the Seller's knowledge, information and belief, since 1
October 2003 (the date on which the Company acquired the whole of the
issued share capital of Southern Utilities (Holdings) Limited -
formerly XXXX Water Services plc):
4.1 there has been no material adverse change in the financial or trading
position of the Group when taken as a whole;
4.2 each Group Company's business has been carried on as a going concern in
its normal course;
4.3 no Group Company has entered into any contract or commitment other than
on arms' length terms and in the ordinary course of business;
4.4 no capital commitment involving expenditure in excess of
(pound)1,000,000 (exclusive of VAT) has been entered into by any Group
Company;
4.5 no Group Company has declared, made or paid any dividend or other
distribution to its members (other than the Pre-Closing Dividend or to
another Group Company);
4.6 no Group Company has issued or allotted or agreed to issue or allot any
share capital or any other security giving rise to a right over its
capital nor has it repaid, redeemed or purchased (or agreed to do so)
any securities of any class of its share capital;
4.7 otherwise than in the normal course of carrying on the Group's
business, no Group Company has incurred any indebtedness for borrowed
money;
4.8 other than to another Group Company, no Group Company has disposed of
any interest in any of the shares in the capital of any other Group
Company;
4.9 no Group Company has granted to any person the right (whether
exercisable now or in the future and whether contingent or not) to call
for the allotment, conversion, issue, registration, sale or transfer of
any share or loan capital of any Group Company under any
23
SCHEDULE 3
WARRANTIES GIVEN BY THE SELLER UNDER CLAUSE 5.1
1 THE SHARES
1.1 The Seller:
1.1.1 is the sole legal and beneficial owner of the Shares; and
1.1.2 has the right to exercise all voting and other rights over the
Shares.
1.2 The Seller is the sole legal and beneficial owner of the entire issued
share capital of the Company
1.3 To the best of the Seller's knowledge, information and belief, the
Seller or a Group Company is the sole legal and beneficial owner of the
entire issued share capital of each Subsidiary (the "SUBSIDIARY
Shares").
1.4 The Shares, together with the Retained Shares, comprise the whole of
the issued and allotted share capital of the Company.
1.5 The Shares have been properly and validly issued and allotted and are
each fully paid or credited as fully paid.
1.6 No person has the right (whether exercisable now or in the future and
whether contingent or not) to call for the allotment, conversion,
issue, registration, sale or transfer, of any share or loan capital or
any other security giving rise to a right over, or an interest in, the
capital of the Company nor, to the best of the Seller's knowledge,
information and belief, of any Group Company under any option,
agreement or other arrangement (including conversion rights and rights
of pre-emption).
1.7 There are no Encumbrances on the Shares or, to the best of the
knowledge, information and belief of the Seller, on the Subsidiary
Shares.
1.8 All consents for the transfer of the Shares have been obtained.
2 GENERAL
2.1 AUTHORITY AND CAPACITY
2.1.1 The Seller is validly existing and is a company duly
incorporated under the laws of England and Wales.
2.1.2 The Seller has the legal right and full power and authority to
enter into and perform this Agreement.
2.1.3 This Agreement constitutes valid and binding obligations on
the Seller, in accordance with its terms.
23
option, agreement or other arrangement (including conversion rights and
rights of pre-emption);
4.10 no Group Company has created any Encumbrances on its shares or on the
shares in any other Group Company;
4.11 no Group Company has acquired or agreed to acquire any interest in any
share capital or other security referred to in paragraph 4.9 above of
any other company (wherever incorporated) other than of another Group
Company;
4.12 no Group Company has established any branch, division, establishment or
operations outside England;
4.13 no Group Company has granted any guarantee, indemnity or suretyship in
respect of any material obligation of any third party;
4.14 the Group is not engaged in, and has not been threatened with, any
litigation or arbitration or similar proceedings which individually or
collectively are regarded or ought reasonably to be regarded by the
Seller as likely to have a material adverse effect on the financial
position of the Group as a whole; or
4.15 the Group is not engaged in any dispute with, and has not received
notices in writing from, Ofwat, the Environment Agency or the Office of
Fair Trading which individually or collectively are regarded or ought
reasonably to be regarded by the Seller as likely to have a material
adverse effect on the financial position of the Group as a whole.
5 CHANGE OF CONTROL
As a result of the acquisition of the Shares by the Purchaser no party
(other than the Company) will be relieved from its obligations under or
entitled to terminate any material agreement or arrangement with the
Company.
6 ACCURACY OF INFORMATION
The information contained or referred to in Schedule 1 is true,
complete and accurate and not misleading and the information contained
in the Disclosure Schedule is true and accurate and not misleading.
7 CONTRACTUAL ARRANGEMENTS
7.1 To the best of the Seller's knowledge, information and belief:
7.1.1 no Group Company is in contravention of, or non-compliance
with, any provision of any document relating to the Bridge
Facility and the Existing Loan Note Instrument;
7.1.2 no steps for the early repayment of any outstanding
indebtedness of any Group Company have been taken or
threatened in writing; and
7.1.3 no circumstances exist (other than the Loan Note Repayment) as
a result of which the continuation of the Bridge Facility or
the Existing Loan Note Instrument might cease or be
prejudiced, or which may give rise to any alteration in the
terms and conditions of any of the Bridge Facility or the
Existing Loan Note Instrument.
24
7.2 To the best of the Seller's knowledge, information and belief:
no Group Company is in contravention of, or non-compliance with, any
provision of any document relating to the acquisition by the Company of
Southern Utilities (Holdings) Limited in October 2003 (the "ACQUISITION
DOCUMENTS"); no counterparty to any of such documents ("VENDOR
PARTIES") is in contravention of, or non-compliance with, any provision
of such documents; and neither the Company nor the Seller is entitled
to make any claim against any Vendor Party pursuant to the Acquisition
Documents, whether for breach of warranty or otherwise.
8 PRE-CLOSING DIVIDEND AND LOAN NOTE REPAYMENT
Payment of the Pre-Closing Dividend and effecting the Loan Note
Repayment by the Company is lawful and, other than the Barclays
Consent, does not require the consent of any third party.
SCHEDULE 4
(CLAUSE 5.1.4)
The following are the persons referred to in Clause 5.1.4:
Xxxx Stent
Xxx Xxxxx
Xxxxxx Xxxxx
Xxxxxx Xxxxxx
, all of c/o Macquarie Bank Limited, (London branch), Xxxxx 00, XxxxXxxxx, 0
Xxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
25
SCHEDULE 5
(CLAUSE 5.2)
The following matters are disclosed for the purpose of Clause 5
1 On 7 November 2003, Pipeway Limited, then a subsidiary of Southern
Utilities (Holdings) Limited (formerly Xxxx Water Services plc), was
sold to an unconnected third party by Southern Utilities (Holdings)
Limited for (pound)1.35 million.
2 On 29 February 2004, Optimum Information Services Limited transferred
its business and assets to South East Water Limited.
3 On 8 January 0000, Xxxxx Xxxx Xxxxx Limited and the Guarantor entered
into an agreement for the provision by the Guarantor of financial and
corporate strategy advice for a charge of (pound)2.4 million per annum.
0 Xxxxx Xxxx Xxxxx Limited is in dispute with one of its contractors.
Thus far, there has been exchange of correspondence with the threat of
litigation from the contractor, but no proceedings have as yet been
issued. The contractor alleges breaches of procurement rules in
relation to the award of a contract in 2001 and is claiming loss of
profit and bid costs of just over (pound)5 million. The management of
South East Water Limited are confident there is no legitimate basis to
this claim.
5 South East Water Limited has entered into two capital commitments in
excess of(pound)1 million since 1 October 2003, being:
5.1 in relation to the Bewil-Darwell link, with a value of(pound)4.3
million; and
5.2 in relation to the Cowbeech Water Treatment Works project, with a value
of(pound)2.4 million.
6 A former employee of South East Water Limited has alleged false
reporting of a failure of chlorination at Beenham Heath Treatment Works
in November 1999. Management of South East Water Limited have
investigated the claim and are confident that there is no legitimate
basis to it.
7 The two issued shares in Southern Utilities Limited (a dormant company)
are registered in the name of Xxxxxxxx Xxxxxx (Managing Director of
South East Water Limited) and Xxxxxxxx Xxxxxxx (formerly Deputy
Chairman of South East Water Limited). They are to be transferred to
Southern Utilities (Holdings) Limited shortly after Closing.
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SCHEDULE 6
(CLAUSE 5.7)
WARRANTIES GIVEN BY THE PURCHASER
1 The Purchaser is validly existing and is a company duly incorporated
under the laws of Luxembourg.
2 The Purchaser has the legal right and full power and authority to enter
into and perform this Agreement.
3 This Agreement constitutes valid and binding obligations on the
Purchaser, in accordance with its terms.
4 The Purchaser has taken all corporate action required by it to
authorise it to enter into and to perform this Agreement.
5 No consent, approval, authorisation or order of any court or government
or local agency or body or any other person is required by the
Purchaser for the execution or implementation of this Agreement and
compliance with the terms of this Agreement does not and will not
conflict with, result in the breach of or constitute a default under
any agreement, instrument or obligation by which it may be bound or any
provision of its constitutional documents.
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SCHEDULE 7
WARRANTIES GIVEN BY THE SELLER UNDER CLAUSE 10.15
1 The Seller is the sole legal and beneficial owner of the Retained
Shares being sold by the Seller to the Purchaser pursuant to Clause
10.15 (the "RELEVANT RETAINED SHARES") and has the right to exercise
all voting and other rights over the Relevant Retained Shares.
2 The Relevant Retained Shares have been properly and validly issued and
allotted and are each fully paid or credited as fully paid.
3 There are no Encumbrances on the Relevant Retained Shares
4 All consents for the transfer of the Relevant Retained Shares have been
obtained.
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